Renegotiating Nationalization in Bolivia Colquiri Mine

     Rival mineworker factions have signed an agreement with the Bolivian government to end a violent dispute at the Colquiri tin mine, Bolivia’s second largest, which has rocked the country for months. The conflict offers a window into the complexity of Bolivia’s mining sector, and the challenges faced by the government as it seeks to balance the contradictory expectations of different constituencies in reasserting popular control over Bolivia’s mineral wealth.

Mr Mario Virreira mining minister of Bolivia said that “What’s happening now is an example of the contradictions and difficulties that we face after nationalization. The conflict at Colquiri centers around competing demands for control of the site’s most lucrative minefields by salaried, unionized mineworkers and independent, cooperative miners, each having long standing historical claims to the site.”

Under an prior agreement reached with both groups last June, President Mr Evo Morales revoked the mining license of Swiss commodities giant Glencore at Colquiri and turned its operations over to COMIBOL, the state mining company. At the same time, COMIBOL granted a 30 year lease to cooperative miners at the site’s Rosario vein, worth an estimated USD 5 billion honoring a prior concession made by Glencore in an effort to ally with the cooperative against nationalization.

A subsequent dispute over the boundaries of the cooperative’s concession led to renewed clashes and work stoppages at the mine, with production losses exceeding USD 5 million. The head of COMIBOL resigned. In late September, road blockades mounted by the National Federation of Mining Cooperatives (FENCOMIN) in solidarity with Colquiri’s cooperative miners disrupted commerce throughout the country.

The entire nation was shaken on September 18 when a march by cooperative miners in La Paz turned violent. A Colquiri mineworker, an ex cooperative miner recently hired by the nationalized mining company, was killed in a dynamite explosion at the headquarters of the national mineworkers’ union federation.

The episode evoked bitter memories of the 1980s, when revolutionary union leaders were assassinated at the same site by the dictatorship only this time it was miners killing miners. Despite occasional differences both the FSTMB and FENCOMIN have been strong political allies of Morales.

While the new agreement resolves the immediate dispute by dividing the Rosario vein more equitably between the parties, the events at Colquiri reveal the broader conflicts and contradictions within Bolivia’s mining sector and the historical forces that have shaped them.

The history of the Colquiri mine dates back to colonial times through the era of tin baron Simon Patiño and nationalization after Bolivia’s Revolution of 1952. In the 1980s, pressure from international financial institutions and a catastrophic fall in world-wide mineral prices led to a shutdown of the government mines including Colquiri displacing 25,000 unionized miners nationwide.

Privatization of the mines in the 1990s under neoliberal structural adjustment policies further weakened COMIBOL and destroyed Bolivia’s miner led revolutionary trade union movement, once the most combative in Latin America. The Colquiri mine was sold in 1999 to a company owned by ex-president Gonzalo Sánchez de Lozada, the primary architect of structural adjustment who would be ousted by a coalition of popular movements four years later. Colquiri was purchased by Glencore in 2004, after Sánchez de Lozada fled the country.

The cooperative mining sector began to flourish at Colquiri when the government mines shut down, encouraged by successive neoliberal governments to buffer the consequences of massive mining dislocations. Associations organized with virtually no investment allowed ex-miners to eke out a modest existence by exploiting accessible veins and selling their products at depressed prices.

The Colquiri conflict has brought competing visions for Bolivia’s mining sector into renewed focus. While the 2009 Constitution recognizes a plural mining economy, a Supreme Decree promulgated by Morales on May 1st 2007 declares all of Bolivia’s mineral wealth to be a patrimony of the state.

According to some estimates up to 75% of cooperative miners do not receive health insurance or pension benefits. The sector commonly ignores health and safety laws and uses primitive extraction techniques that exploit the environment and shorten the life of the mine. Cooperative miners are also exempt from paying taxes to the state.

Still, cooperative mining is a reality in Bolivia. Defenders of the sector argue that it generates 85% of mining employment, absorbing cyclical dislocations, strengthening domestic demand, and bolstering the local economy. For many in neglected peripheral zones, it is the only available means of subsistence and social mobility.

Supporters of cooperative mining note that the sector works primarily in zones that COMIBOL lacks the capacity to exploit, constituting only 4% of the state’s total mining area. Additionally, mining cooperatives do pay departmental royalties as well as annual fees for their lease concessions.

Unlike the resolution of the Huanuni conflict, where the government nationalized 100% of the mine and successfully absorbed virtually the entire cooperative workforce, the Colquiri settlement appears to grant significant concessions to the cooperative sector. In addition to bifurcating control of the site, COMIBOL has only committed to add another 800 workers to its payroll, in addition to the 400 inherited from Glencore. Some 700 cooperative workers have already signed on with COMIBOL, taking advantage of the opportunity for stable employment and benefits. The workforce limitations guarantee that Colquiri’s cooperative sector will continue.

Posted By: Eunice N