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Independent cooperatives fight nationalizing mines in Bolivia

Section: Daily Dispatches

Independent Miners
Confronted in Bolivia

By Dan Keane
Associated Press
via Yahoo News
Sunday, May 13, 2007;_y...

POTOSI, Bolivia -- The silver, zinc, and other metals under Bolivian soil are fetching their highest prices in decades, and Evo Morales has dedicated his presidency to claiming a larger share of the money for his country's people.

But first he'll have to deal with miners like Marco Taboada.

Swinging a sledgehammer, a plug of coca leaves in his cheek, Taboada is a formidable sight and one of about 60,000 independent Bolivian miners organized into small cooperatives. These men mostly backed Morales' 2005 landslide election but are ready to fight the president's efforts to impose more state control over their industry.

"We're like a time bomb," Taboada said. "Throw it and you'll see."

Bolivia is the world's fourth largest tin producer and a significant source of silver and zinc but kept less than 5 percent of the profits from mining last year.

Morales aims to change that by raising taxes and seizing the occasional foreign-owned business, such as the smelter he took back from Swiss mining giant Glencore in February.

But going after foreign interests is an easier sell than challenging the independents, proud workers willing to risk their short, hard lives defending their piece of the mineral boom.

"We don't have much of a life. It's not like outside," Taboada, 23, said during an interview deep inside the Cerro Rico, a rust-colored peak looming over Bolivia's historic mining city of Potosi. "If we all went up there" -- to the capital of La Paz -- "all the miners, we could kill all the police with dynamite."

It's no empty threat.

In October miners from the cooperatives stormed the state-operated Huanuni mine demanding more access to its rich tin deposits. State-employed miners fought back, and the two sides exchanged gunfire and threw dynamite. Sixteen died before riot police restored order.

And when Morales announced a tax increase on mineral revenues in February, more than 20,000 cooperative miners converged on La Paz, hurling dynamite through the downtown streets.

The government quickly made peace, freezing taxes at current levels and pledging $20 million in badly needed new technology for the cooperatives.

Months later, Morales is still eyeing a tax hike -- and hoping the miners have outgrown their dynamite displays.

"They have to realize that sort of thing has its limits, not only with the government, but also with the people," mining minister Alberto Echazu told The Associated Press. "They have to realize that everyone has to pay their share."

Cooperatives produce roughly a third of the nation's mineral ore and employ more than 80 percent of its miners -- an immense bloc with a record of squeezing concessions from Bolivian leaders.

"Each administration thinks it can use the cooperatives to its own political ends, but it's the cooperatives who end up using the government," said mining analyst Jorge Lema Patino.

And mistrust of the government runs deep in the cooperatives, many of which formed after the state mining company Comibol laid off some 27,000 miners during a 1980s crash in global mineral prices. Determined to survive where the state failed, many banded together and returned to work the mines with their own rudimentary tools.

Though many miners are too young to remember it, the Comibol collapse still inspires their fierce pride in carrying the industry through its darkest hours -- and righteous indignation over the state's efforts to take it back.

"In Bolivia it has been demonstrated historically that the state is not a good administrator of its own property," said Antonio Pardo, Potosi security director for the National Federation of Mining Cooperatives. "If they want a fight, we'll give them a fight, because we're fighting for our livelihood, and they're fighting for fortune."

Though Morales repeatedly vows to "nationalize" mining, the entire industry has been at least nominally under state control since Bolivia's 1952 revolution. Both cooperatives and international companies operate under Comibol concessions.

Morales is seeking to regain control the government lost after the 1980s crash and a run of privatizations in the 1990s, while claiming a bigger share of mineral export revenues that soared from $547 million in 2005 to more than $1 billion last year, mostly because zinc prices doubled.

Despite the windfall, the government collected only $48 million in mineral taxes in 2006, and $14 million the year before.

Echazu, the mining minister, says the government is preparing a bill that would impose safety standards and fair labor practices on the cooperatives -- a move never dared by Morales' predecessors.

Traditions and methods have changed little in the nearly 500 years since Potosi's huge lode of silver made it, for a time, the richest city in the New World.

Working conditions in the cooperatives are often grim, with teenage miners chasing narrow veins through asbestos-choked wormholes in the rock. Most still work with hammer and chisel, and use wheelbarrows to haul the ore out to trucks.

Many cooperatives pay minimal wages and treat employees like slaves, Morales says. The salaries have jumped with today's high mineral prices, to between $9 and $20 per day.

But for all the inefficiency and danger -- no one keeps count of the injuries and deaths -- the cooperatives provide jobs that South America's poorest country can hardly replace.

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