Feasibility and Fair Business Relations?
by Potential Investor
I am thinking of investing in a mineral processing plant in Bolivia. Here is a little background. The business will be operated and managed by Bolivians. Silver ore will be and process using a unique process at the plant to sell.
In terms of business relations, the Bolivians are coming into the business with certain skill sets:
-knowledge and expertise in the mining industry
-contacts and can draw on personal friends in industry to fill critical human resources positions
-the unique process not used by anyone else (claimed by persons initiating the opportunity)
My role will be to input 100% of the money for the complete business (that's the proposal given to me). I am offered 30% of net profits after the repayment of the principal investment. The money will be used to purchase the land, equipment, ore, processing materials and wages.
It has been proposed that production would not take long (though no clear timeline has been established) and once it is up and going the principal investment would be repaid (less land and equipment) with in 4-5 months.
My questions are:
1. Is this a feasible investment given the political/economic context of Bolivia?
2. What are the legal considerations around this type of business and this investment structure?
3. Is the proposed allocation of net profit shares reasonable or fair, with consideration of 'human' resources (risk time and effort) and monetary funding (risk 100% of money)?
There are a few other concerns, but those are the main questions right now. I would appreciate any insight into these questions or the the business idea. I look forward to hearing from you.