By Paul Harris in Huanuni
Hundreds of miners pack into a courtyard outside the offices of the Huanuni mining company in the high plains of Bolivia’s Oruro department, pushing past nervous riot police with semi-automatic rifles to register with state mining company Comibol, as part of a government plan to end a month of bloody confrontation that saw its 6,000 tin miners explosively set against each other.
Huanuni, 13,700 feet above sea level, seems like just another run-down and impoverished Andean town whose 19,000 largely indigenous inhabitants cling to existence under the punishing sun, but it shouldn’t by this way as Cerro Possokoni that rises over the town is one of the richest tin deposits in the world.
Tin is a metal used in solder for electrical appliances and electronics, and that forms the corrosion resistant coating on steel cans used for food preservation that sells for $9,700 a tonne.
Sargent Carlos Quenallata, 42, the latest victim of this internecine struggle, was taken hostage by self-employed cooperative miners, beaten and died two days after an explosive charge detonated near his stomach November 13.
Natural resources have a key role as President Evo Morales attempts to jump start Bolivia’s economy and spark desperately needed growth for the country to climb out of the poverty trap. The mining cooperatives were key supporters in Morales’ ascendancy to the presidency but the country was rocked when 16 people were killed at the Huanuni mine as opposing groups of miners threw dynamite at each other October 5 and 6 to gain control of the deposit.
“The miners are cold-blooded, they are not afraid of dying. They are the most powerful and disruptive element in the country. The cooperatives think that because [President Morales] is one of them that they own the mine. When they protest the people are scared, said Luis Mansuda, an Oruro taxi driver.
Morales responded to the violence with a decree nationalizing the Cerro Possokoni deposit October 31, terminating access to cooperative miners and forcing them to become employees of state mining company Comibol that operates the Huanuni mine. Over 3,200 cooperative miners have so far signed up and judging by the crowds thronging the company's offices to register, they appear to be in good spirits about it, all smiles and relief. "We are destroying ourselves as we work as small miners," said Fermin Calgue president of Karazapoto, one of four cooperative unions at Huanuni.
Once registered and trained cooperative miners will swap 15-hour shifts under extreme physical conditions for eight-hour shifts earning average pay of 3,300 bolivianos ($413) with health insurance, pensions and other benefits a month compared to 500-10,000 bolivianos as cooperative miners. "The idea is to absorb workers from the four cooperatives that work the upper levels of Cerro Posokoni,” said general manager Hector Arandia, which has been well received by many miners. "The majority are in agreement with joining Comibol because we suffer too much loading the mineral on our backs. Eighty-five percent of our miners are from Huanuni so we cannot go anywhere else to work. We will now work as brothers," said Calgue.
Not all the cooperatives are happy, with up to 400 members of the Playa Verde cooperative seeking continued access to the deposit, although the government has given a firm no. "At Huanuni there is not one square meter or one minute more for the cooperatives," said mining minister Guillermo Dalence, who said the request is from miners that have "the privilege to access high grade places inside the mine where they can take very rich mineral and with just two shifts earn their monthly income". "They think only of themselves. They want to get rich in a couple of years and leave," said Calgue.
Government action may solve the social/political problem at Huanuni but it creates a pending economic problem that could erupt in the future. Implementation of the decree increases Huanuni's workforce from 800 to 5,000 workers, quadrupling payroll costs, eating into its $800,000 a month profit and threaten its long-term viability if production does not increase. "This is a political solution, not a technical solution. We have tried for eight months to work out a technical solution but the government wants all the cooperatives to enter the mining company. Five thousand people is inefficient," said Calgue.
The government will pump $9.67 million dollars into the company to fund development and increase production from 800 to 1,500 tonnes per day of ore by mid 2007, although it is unlikely that the company will receive future government funding. "There are only the funds in the decree," said ministry spokeswoman Romina Montoya. Mine manager Hector Arandia admits that his biggest challenge will be generating investment capital from profits going forward. "We have to be self-sustaining after this initial investment," he said.
For Calgue, $9.6 million will not be enough. "The company needs more heavy machinery and equipment, and to condition all areas of the deposit for mining as it is full of holes," he said adding that wood is needed to shore up the tunnels made as miners worked along veins in an unplanned and uncontrolled manner.
Access to foreign investment is out of the question due to the political nature of Huanuni. Huanuni is an emblematic project on which the government has staked its political capital as it establishes it as a mining sector development model. "This will be a model of how we can have mining success in Bolivia in state hands. We can be self-sustaining so it is not necessary to have foreign or private investment. We will demonstrate that Huanuni is profitable," Arandia said.
Whether Huanuni can deliver is open to question. "With 5,000 employees, if they don't increase their production [soon] they are threatening their future," said David Rivero, general manager of the Vinto smelter/refinery that buys tin concentrate from Huanuni.
Finding a workable solution to the mining problems could be the key to stabilizing Bolivia. Miners have become the predominant social protest group, emerging as widespread mine closures forced laid-off miners to scrape a living from metal rich veins after metal prices sank during the 1980s. The other main choice was to migrate to the eastern Chapare region to grow coca.
The question now is whether President Morales can follow the political and social success he scored with the nationalization of the hydrocarbons sector that saw energy companies such as BG Group and YPF Repsol pass controlling stakes in their projects to the state, with a turnaround in mining. He may find that rolling over international oil and gas companies is a walk in the park compared to confronting 60,000 cooperative miners that are disposed to take things into their own hands to further their aims. "We are worried about [nationalization]," Calgue said.
ENDS
