U.S. company Coeur D'Alene on Wednesday will inaugurate the massive San Bartolome silver mine, set to produce 6 million ounces of the metal this year and ramping up to 9 million ounces a year from 2010, the company's Bolivian unit told Reuters on Tuesday.

For the remainder of 2008, San Bartolome will produce around 6 million ounces of silver, and a similar amount in 2009, but by 2010, the mine will reach full production at 9 million ounces of silver, said Edmundo Zogbi, the communications manager of Manquiri, Coeur's 100 percent-owned Bolivian subsidiary.

Investment to date amounts to some US$220 million ... We are going to produce 98.8 to 99 percent pure silver (in ingots), Zogbi said.

San Bartolome will have an estimated mine life of 14.5 years, the Manquiri official said.

San Bartolome includes a mining crusher, a lixiviation unit to separate the silver ore from other minerals, and a smelter, and will mainly extract silver from the tailings left behind after 500 years of mining the legendary Cerro Rico mountain in the southern Bolivian region of Potosi.

Zogbi said that Bolivia's state-run mining company Comibol and organizations of independent miners will receive a share of the project's revenues but could not give exact figures.

He also said that Coeur plans to invest in exploration in the Potosi in the future and that the firm's relationship with the government of Evo Morales, which is striving to increase state control over the mining sector, is very good.

Last year Morales nationalized the country's largest tin smelter, previously owned by Swiss commodity trader Glencore, but Zogbi said that his firm feels safe because San Bartolome is a social project that will employ hundreds of people.

Coeur operates mines in the United States, Argentina, Chile and Australia. According to the company, San Bartolome will be the world's largest pure-play silver mine.

The company's Palmarejo project in Mexico is scheduled to begin production in early 2009 at an annualized rate of approximately 10.4 million ounces of silver and 115,000 ounces of gold per year. (Reporting by Eduardo Garcia; Editing by Christian Wiessner and Carol Bishopric)

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