Category Archives: Mining

Kathryn Ledebur participates in Latin American Advisor Q & A on Mining Conflict

In September 9th’s edition of the Inter-American Dialogue’s Daily Publication “The Latin American Advisor”, Kathryn Ledebur, along with academics and policy analysts on Bolivia, participated in a featured Q & A on Bolivia’s mining conflict.

Read Kathryn’s response below:

 

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Latin American Advisor Q&A: What is Behind the Strife Between Bolivia & Miners?

                                                                                                September 9, 2016

Q: Bolivian President Evo Morales’ government on Sept. 1 increased control over the country’s mining cooperatives following violent demonstrations the previous week that resulted in the deaths of four workers and Deputy Interior Minister Rodolfo Illanes. The government plans to take some land concessions back from cooperatives and also banned the use of dynamite during protests. What is at the heart of the disputes between mining cooperatives and the government? What are the political and economic consequences of the unrest? Will miners receive the better working conditions and pay that they have been demanding?

 A: Kathryn Ledebur, director of the Andean Information Network in Cochabamba: “Although four miners also died from bullet wounds during the protests, Illanes’ brutal murder violated unspoken rules of Bolivian political confl ict and eroded public sympathy for the National Federation of Mining Cooperatives of Bolivia (Fencomin). Prosecution of key leaders has also demobilized the group. Cooperatives began as loose organizations of freelance miners after mineral prices hit rock bottom, but have, in some cases, grown into profi table private enterprises that oppose unionization of their workforce. Nationalization, reinforced by the 2009 Constitution, coincided with a surge in mineral prices, which reactivated the state mining sector and limited Fencomin’s concessions. As prices slump, the pie grows smaller for both groups. On Sept. 1, the Bolivian government took executive action to regulate the sector, including reverting cooperatives’ joint ventures, subleases and contracts with domestic and international companies. Cooperatives now must report earnings, profi t distribution and payroll to state monitoring agencies. According to the national cooperative law, organizations that fail to equitably distribute profi ts must be registered as private businesses. The decrees also mandate social benefi ts and legal guarantees for employees in compliance with the national labor legislation. The action also establishes prison sentences for the use of dynamite in protests. It is premature to speculate on the long-term political impact for the Morales administration. In spite of recurring violent protests against state regulation during the past decade, Fencomin has continued to support the ruling MAS party electorally. Furthermore, public outrage over the vice minister’s death and approval for MAS’ regulation of the combative group could offset any loss of support from a sector of approximately 60,000.”

To read the full Q & A, visit the Latin American Advisor online and provide a donation.

AIN’s Kathryn Ledebur shares updates on the Cooperative Miners Conflict with Real News Network

On September 8, 2016, AIN Executive Director Kathryn Ledebur spoke with the Real News Network about updates in the Cooperative Miners Conflict. In particular, she explored the possibilities of future negotiations, investigations for the deaths of the 5 miners and Vice Minister Rodolfo Illanes, and the impacts of the conflict on future political developments.

To watch the full interview, click here.

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Bolivian Government Regulates Cooperative Mining Sector with Executive Actions

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Bolivian Government Regulates Cooperative Mining Sector with Executive Actions

                                                                                                        September 2, 2016

Following the recent conflict with mining cooperatives, the Morales administration issued 5 decrees in a special cabinet meeting on September 1, 2016. Mining cooperatives escalated protests in August 2016 in retaliation against the new Mining Law and modifications to the Cooperatives Law. In particular, the mining cooperatives opposed efforts to limit direct contracts with private multilateral companies and allow unionization among cooperative members. The escalation of protests resulted in the murder of Deputy Interior Minister Rodolfo Illanes and five miners, four from bullet wounds.

The government decrees issued on September 1, 2016 declare the following:

  • DS 2888: Using dynamite at protests is now punishable with a 1-4 year sentence. According to Government Minister Carlos Romero dynamite and explosive can be used as lethal weapons. In May of this year, the government inexplicably repealed a 2012 Supreme Decree prohibiting the possession or use of explosives at social mobilizations. Article 211 of the Criminal Code criminalizes the possession, production and sale of explosive materials for violence with a 2 to 6 year sentence.
  • DS 2889: Cooperatives must report their members, the volume and value of production, and earnings distributions to the Administrative Mining Authority (AJAM) and the Cooperatives Tax and Control Authority (AFCOOP). If profits are not distributed equitably, as mandated by Article 6 of the Cooperatives Law, the cooperative will be obligated to readjust or be classified as a private company.
  • DS 2890: Inactive mining concessions will revert to State control.
  • DS 2891: Joint ventures, leases, or subleases between cooperative mines and private companies (national or international) will return to State control.
  • DS 2892: Anyone employed by or providing services to cooperatives will be protected by the General Labor Law, and thus be on the payroll, have the right to unionize, receive health subsidies (including lactation subsidies), and other social benefits. In the past only cooperative members received benefits.
  • Resolution 08/2016: SENARECOM (National Service for Registration and Control of Mineral and Metal Commercialization) will nullify its contracts with regional departments and local governments that allow cooperatives to maintain 1, 3, or 5% deductions for production.

The Bolivian government is demanding accountability from this ambiguously-defined sector, especially following August’s violent confrontations. Bolivia’s mining cooperatives have historically functioned in an unregulated gray area between private and state-owned systems. These decrees seek to provide some oversight to ensure lawful activity among these groups. Mining cooperatives will have to prove that they are distinct from private entities, offer more transparent information about their operations, and provide social benefits mandated by the Nation’s Labor Law.

Despite a decade of electoral support for the MAS government, the cooperative miners have clashed violently with the Morales administration’s tenure.

 Timeline of Cooperative Miners Conflicts during Morales Administration

 TImeline

 

 

 

 

 

 

AIN in WSJ Coverage of Bolivia’s Mining Conflict

In a Wall Street Journal article entitled “Bolivia Aims to Boost Mining Oversight After Deadly Protests” (Sep. 1, 2016), AIN’s Kathryn Ledebur explains:

“‘Right now their case is significantly weakened,’ Kathryn Ledebur, an analyst and executive director of the Andean Information Network in Cochabamba, said of the cooperatives. ‘The government decrees within the current framework are reasonable. They are taking away some concessions but also providing social benefits and bringing people into the formal work force.'”

To read the full article, click here.

Bolivian Political and Social Landscape: Primer for Pending Presidential Elections

As the presidential campaigns gain momentum, AIN outlines the political and social landscape in Bolivia to provide background to understand upcoming electoral debates.

President Evo Morales is running for a third term in the October 12, 2014 elections.  Critics argue he is not eligible to run for another consecutive term, but the Plurinational Constitutional Tribunal ruled in his favor, and the opposition across the political spectrum lacks a strong, unifying candidate.  Four candidates have formally registered to run against Morales.

Bolivian Government Achievements

  • Macroeconomic success:
    • From 2009 to 2013, Bolivia’s economy experienced steady growth.

1 GDP growth

The population living in extreme poverty fell from 38% in 2005 to 24% in 2011.

2 poverty

  • Bolivia has accrued a significant “rainy day fund.”  According to the New York Times,  “Bolivia has the highest ratio in the world of international reserves to the size of its economy, having recently surpassed China.”
  • Employment rates and wages have both steadily increased under Morales. The minimum wage increased in 2013 from about $145 USD (1,000Bs) to about $174 USD (1,200Bs) a month.
  • Double holiday bonus: In November 2013, President Evo Morales decreed that all employers must pay a double holiday bonus to all employees.  Previously, the bonus was one month’s salary paid in December.  The double holiday bonushad a mixed reception, celebrated by workers, but criticized by many employers and small business owners.
  • Social programs: The Morales administration started several popular cash transfer programs, including benefits to school children and pregnant mothers, which have promoted significant decreases in maternal and infant mortality as well as increases in school attendance and high school graduation.
  • Gas income: The Bolivian government has strengthened the economy by increasing state hydrocarbons revenues as a result of the 2004 hydocarbons law, the 2006 Nationalization Decree, and high gas prices.  This income has permitted significant investment in infrastructure and social programs.

Coca Leaf and Drug Control

  • In 2013, Bolivia successfully petitioned the United Nations to recognize legal coca cultivation and uses within its borders.
  • The Morales administration has achieved sustained reductions in the cultivation of illicit coca leaf using a system of community coca control. (26% reduction from 2010-2013).
  • Unlike previous military forced eradication, this innovative model relies on coca grower participation.  This model guarantees subsistence and enables coca growers to diversify their income, leading to greatly reduced human rights violations.  For more information see this WOLA-AIN memo.

3 eradication
Source: Bolivian Vice-Ministry of Social Defense

  • Bolivia currently has less than half as much coca as Colombia and Peru.  Yet inexpensive and abundant Peruvian cocaine paste base floods through Bolivia to Brazil and other consumer countries, offsetting national control efforts.
  • The Morales’ administration has diligently pursued drug interdiction after the 2009 expulsion of the US Drug Enforcement Agency, reporting significantly increased seizures. However, the great bulk of cocaine sales and profits trafficking occur outside Bolivia’s border, limiting the impact of these initiatives.
  • In spite of tensions, US-Bolivian on-the-ground collaboration on coca reduction continued productively until September 2013, including a trilateral agreement, including Brazil, to improve monitoring technology.

Challenges facing the Morales Administration 

  • TIPNIS issue: In spite of much rhetoric about protecting the rights of Mother Earth, the Morales administration has gone ahead with plans to build a highway through the Amazon, including the TIPNIS, a national park and indigenous territory.
    • This is an enduring point of contention in the country, most notably among lowland indigenous peoples who led two marches to La Paz to protest the lack of prior consultation of TIPNIS resident about the project, which is guaranteed by the 2009 Bolivian constitution.  Both marches, in 2011 and 2012, were met with police repression from the government. The segment of the construction project within the territory is on hold, but may be resumed.  Critics highlighted contradictions with the administration’s pro-indigenous and environmental discourse and its handling of the incident.
  • The lowland indigenous umbrella organization, CIDOB, and its highland counterpart CONAMAQ are both split between factions that support the MAS ruling party and its vocal opponents.
  • Policies of extraction vs. environment: One of the most significant challenges for the MAS administration has been balancing multi-sector demands for basic services financed primarily by extractive industries with its rhetoric of protecting and living in harmony with nature.
    • Bolivia’s economy has always been heavily reliant on extractive industries such as mining and hydrocarbons that have a substantial environmental impact.  Conflicts often arise in mining communities over the benefits of mining income versus the damage to the environment.  In addition, continuing contamination, such as the recent bursting of a damn holding toxic mining tailings in the Chuquisaca department, exacerbates the Morales administration’s inherited legacy of environmental degradations from centuries of mineral exploitation.
  • Violence Against Women: Violence against women and children has always been startlingly prevalent in Bolivia.  In March 2013, the Bolivian Congress passed a comprehensive a law to address these issues, which contained progressive ideas and preventative measures.  However, the government lacks the resources and political will to fully implement the law.  See this AIN update for more information.

4 violence stat

  • Unsafe abortions: This is another concern for women in Bolivia.  Abortions are illegal except in the case of incest, rape, or if the mother’s life is in danger. Pro-choice advocates had a partial victory in a February 2014 constitutional tribunal ruling that upheld the illegality of abortion, but threw out the rule that requires women to get a judge’s consent in the three permitted exceptions.  (See Emily Achtenberg’s article in NACLA for more information on this ruling.)  Lack of access to and information about sexual and reproductive health combined with cultural taboos and widespread sexual violence put women’s health at risk and severely limit their choices.  Although they are illegal, an estimated 60,000 abortions are performed in Bolivia each year, and only 46% of them are performed without complication.  See this AIN update for more information.

5 abortions
Source: La Razón

  • Judicial delay and prison overcrowding: The Bolivian justice system suffers from tremendous judicial delay, resulting in lengthy pretrial detention, as well as severe prison overcrowding.  Only 17% of prisoners in Bolivia are actually serving their sentence, while the other 83% are merely awaiting trial, which could take years.  After prison riot and fire that killed 35 people, Morales a pardon and amnesty decree in September 2013.  However, to date the pardon has benefitted only about 800 people. More comprehensive reforms, including the reduction of disproportionately high drug sentences (drug war prisoners make up almost half of all inmates) need to be enacted.

6 prisoners
Source: La Opinión

  • Legacy of dictatorships: Unlike neighboring Chile and Argentina, which initiated some legal action against those involved, impunity for authors of human rights violations continues in Bolivia.   A group of survivors of the dictatorship have maintained a vigil for more than two years outside the Ministry of Justice, demanding acknowledgment for the crimes of the dictatorship and the declassification of military files from the dictatorship era.  In 2004, the Bolivian government passed a law guaranteeing compensation to victims, but modifications have reduced the initial promised aid to 20%, and only 1,714 of the 8,000 who applied were approved to receive benefits.  See this AIN update for more information, as well as this Amnesty International report and BBC article.

 

7 dictatorship march
Photo: Gonzalo Ordoñez for AIN

Bolivian-US Bilateral Relations

  • A mutual lack of trust is the single largest impediment to improved bilateral relations.  This lack of confidence should be addressed as a prerequisite for reinstatement of ambassadors. In spite of a lack of ambassadors, bilateral relations have varied, depending on the skill of the Chargés and other officials from both nations.
  • A lack of transparency on the part of USAID and credible allegations that the agency was inappropriately aiding lowland opposition led Morales to expel Ambassador Goldberg in 2008.  USAID in Bolivia did not follow international agreements on development. See AIN background.
  • The Morales administration responds positively to genuine diplomatic gestures.  For example, November 2008 meetings with US congressional leaders permitted the sort of frank exchanges that can create rapport and lay the basis for more regular dialogue and better mutual understanding. See WOLA and AIN analysis on bilateral relations.
  • US decisions to “decertify” Bolivian drug control efforts since 2008 are increasingly disconnected from reality. Governments in the region continue to see the US determinations as offensive and politically motivated. More information here.
  • US funding steadily decreased since 2008.  Although the Narcotics Affairs Section, the Drug Enforcement Agency, and USAID are now gone, Bolivia has compensated with funds from its own treasury and increased support from the European Union.
  • Request for extradition of ex-President Gonzalo Sánchez de Lozada: Widespread resentment continues for the US refusal to extradite the ex-president for the death of 69 protestors in October 2003. Although US officials claim the charges are politically motivated, two-thirds of the Bolivian congress, where Sánchez de Lozada’s own coalition had a majority, voted to indict him. The Bolivian government submitted a new extradition request on July 10th, 2014 and the US has promised to respond within sixty days. The US is expected to reject this initiative.
  • US citizen Jacob Ostreicher accused of money laundering:  Although US representatives and Sean Penn have argued for Ostreicher’s innocence, charges against Ostreicher appear credible. He was subject to protracted pre-trial detention in violation of his due process rights, as is every Bolivian arrested on drug charges under drug legislation imposed by the US in 1988.  There was also a great deal of corruption around his case on the part of some Bolivian government officials.  He escaped from Bolivia at the end of 2013 and is considered a fugitive by Interpol.

Conclusion

Recurring protests and strikes from diverse sectors, including transportation workers, university students, and milk and meat producers have characterized the political and social landscape in the past few months.  However, this does not necessarily equate to discontent with the Morales administration.  Rather, many sectors are strategically taking advantage of election momentum to leverage to get demands met.  As one indigenous protester explained, “We’re not the opposition.  We just want the respect of our people and our rights and a solution.”

Although the administration’s performance has been mixed, Morales still enjoys widespread support and his party will most likely retain a majority in both houses of congress.  Furthermore, the opposition on both the left and the right lack a strong, representative, unifying candidate.  It is likely that Bolivian voters will opt for continuing the status quo.

Colquiri Conflict Continues

In late May 2012, conflict erupted in Colquiri, a mining district about 350km south of La Paz.  Salaried and cooperative miners who work in different areas of the same mine struggled to control territory.  Although the government, salaried workers, and cooperative miners reached an agreement on June 19th, conflict reemerged in September as cooperative and salaried workers continued to fight for control of the richest vein.  Tensions flared after cooperative miners killed a salaried miner and injured seven others during a march in La Paz, and Colquiri threatened to be a repeat of an incident in 2006 in Huanuni, Oruro that left sixteen people dead and 115 injured in a conflict over access to the richest veins.  The government issued a new decree that divided the mining rights equally between the salaried and cooperative miners, but tensions remain high in Colquiri.

Competition for mining rights

Violent competition for access to mining territory has become increasingly frequent in Bolivia.  The government’s closure of hundreds of mines in 1985 and the subsequent privatization of the mining industry throughout the 1990s gave rise to competition between newly formed, private cooperatives and the small number of remaining state-employed, salaried miners.  This dramatically changed the dynamics of mining and miners’ political power, there have since been many conflicts over access to resources.  (For background see AIN’s 2007 update, “Cooperative Miners in the Nationalization Process: Explosive Politics.”)

Salaried miner during a protest in La Paz; “Cooperativists – pay your taxes!”
Photo credit: Gonzalo Ordóñez

The government mining agency, COMIBOL, and Sinchi Wari, a subsidiary of Swiss corporation Glencore jointly administered Colquiri up until late June.  Cooperative miners are independent, artisanal miners whose income comes from the amount of minerals they extract rather than a fixed salary.

At the center of the conflict is the Rosario Vein, believed to be the richest in tin and zinc.  However, the government recently admitted its production potential is unknown, since Sinchi Wari took the only documentation when the mine was nationalized.

Violence Erupts Over Rosario Vein

On May 30th, cooperative miners forcefully took over the mine, occupying it until June 8th.  In response, salaried miners called for total nationalization.  Critics claimed that the government favors the cooperative miners because the incumbent Movement Towards Socialism (MAS) views the cooperativists’ support in the upcoming congressional elections to be more important.

 

“100% Nationalization of the Colquiri mine for Bolivia now!”
Photo credit: Gonzalo Ordóñez

In June, the government, cooperativists, salaried miners, and Sinchi Wari signed agreements, some of which were contradictory and resulted in blockades, marches, and threats from both cooperative and salaried miners.   In rejection of the government’s proposal to grant the most profitable vein to cooperative miners, salaried miners violently retook the mine on June 14th, leaving 22 people injured.  Over the next several days, cooperative miners blockaded, marched, and took over another mine operated by Glencore affiliate, Sinchi Wayra.

Cooperative miners refused to relinquish the Rosario vein.  On June 19th, the parties finally reached an agreement to nationalize the entire mine, but allowing cooperatives to still continue to exploit designated areas. The government allocated the majority of the Rosario vein to the cooperative miners and left a small portion for the salaried workers.

Source: La Razon
Caption: Characteristics of the Rosario Vein

  • The government handed over the greater part of the vein to cooperative miners.
  • A decree granted the southern sector to state mining company.
  • The 26th of February Cooperative obtained the concession for the northern sector.

The agreement failed to satisfy cooperative or salaried miners, and tensions boiled over into another violent confrontation on August 9th.  The armed forces confiscated explosives to prevent an escalation of violence.

After a brief period of peace, on August 30th, salaried miners forcefully took over the Rosario vein, demanding a reversal of the June agreement and threatening to detonate explosives and destroy the mine if their conditions were not met.  Shortly after, salaried miners went on strike and blocked access to the Colquiri Mine, installing guards around the mountain who threatened to throw dynamite at anyone who tried to pass the blockade.

Throughout September, salaried workers maintained their strike and blockade of the mine while cooperative miners held road blockades countrywide.  Both groups staged protests and marches in La Paz.  On September 18th, cooperative miners marched to the headquarters of the salaried miners’ union where salaried miners were stationed.  A confrontation ensued, and cooperative miners launched dynamite at the salaried miners, killing one and injuring at least seven more.

Salaried miner protest with the Bolivian Workers Central in La Paz
Photo credit: Gonzalo Ordóñez

Salaried miners retaliated in Colquiri by taking over cooperative facilities, blocking the entrance to the cooperative sections of the mine, burning two vehicles that belong to cooperative leaders, and threatening cooperative miners and their families.  Families of salaried miners also joined the retaliation.

Government Response

As per usual in these types of conflict, the government’s reaction was tardy.  After the death of the salaried miner, the government sent some 500 police officers to the area.  Police confiscated dynamite from both cooperative and salaried miners on multiple occasions, including once when cooperative miners tried to transport dynamite in an ambulance to use in a march.  Although the government responded late, it seems that government involvement may have helped avoid further violence; shortly after the death of the salaried miner in La Paz, cooperative miners arrived with eight buses of people, and salaried miners prepared to “resist the incursion,” but ultimately the cooperative miners decided against initiating a confrontation.

In the following weeks, there was strained dialogue between the government and both parties.  Cooperative miners from other areas joined the Colquiri cooperativists in installing blockades around the entire country.  The Bolivian Workers Central, the main union in Bolivia to which salaried miners belong, initiated a 72-hour strike in solidarity with the miners.

Salaried miner protest with the Bolivian Workers Central in La Paz
Photo credit: Gonzalo Ordóñez

In response to the death of the salaried miner, the government passed a decree criminalizing the possession and use of dynamite in protests.

On October 3rd, the government passed Supreme Decree 1368, which demarcated the zones of work for salaried and cooperative miners in the Rosario Vein and expanded the area miners are allowed to work.

For now, the conflict seems to have subsided.  However, with such tension between both groups who are working in close quarters, it is likely reemerge.

Mallku Khota Mining Mess: Analysis

Bolivian Mining Conflict in Mallku Khota: Analysis

The violent conflict around the Mallku Khota mining area and subsequent nationalization of the mineral deposit highlight the recurring issues in Bolivia of consultation, resource competition, and the role of transnational corporations.  The conflict is complex, and many aspects remain unclear.  An administration that ran on a platform against foreign exploitation of Bolivia’s rich resources inherited a contract with a corporation seeking to profit from one of the largest undeveloped silver and indium deposits in the world.  Communities with pre-existing conflicts in the area became further divided between those promised benefits from mineral exploitation and those that stood to lose more than they would gain if the project advanced to the exploitation stage.  Months of tension and hostility resulted between communities, police, and the mining company, causing in multiple injuries and the death of a protester.

South American Silver Corporation

In 2003, the North American company, General Minerals Corporation (GMC), bought the rights to the Mallku Khota concession and began exploring the area in 2004 under the subsidiary Compañía Minera Malku Khota  [sic](CMMK).  GMC formed the South American Silver Corporation (SAC) in 2006, which took over CMMK and began operating in Mallku Khota that same year.  According to SAC, the company has completed half of the exploration; extraction has not yet begun.

SAC’s contract extends to 2015, and the company projected to invest $50 million dollars during this period.[1]  SAC says it has invested over $16 million dollars since 2007.[2]  Its 2011 Preliminary Economic Assessment estimated that $411.4 million dollars of initial capital would be required for the extraction phase of the project.[3]  As a small, speculative company, SAC may have been planning on selling its investment or joining with a larger company to begin exploitation.  Substantial outside investment and guarantees against nationalization would have been necessary to continue the project .  Interestingly, SAC did not release a statement regarding the conflict until June 14th, two and a half months after the first kidnapping incident.[4]  Even then, the company downplayed the conflict, describing it as, “a small group of people carrying out illegal artisanal mining on exploration concessions owned by South American Silver” and “activists from outside the local community” that “have been encouraging confrontations between communities and attempting to interfere with work on the project.” [5][i]  SAC also echoed the erroneous assertion of Minister of Government Carlos Romero that the man who was killed during the conflict with police on July 5th died by his own hands.[6]

 

Mineral Deposit

Mallku Khota has one of the world’s largest undeveloped silver deposits and possibly the largest undeveloped indium deposit.[7]  Indium is a semiconductor used in touchscreens and liquid crystal displays (LCD) like computer monitors and flat screen televisions, making it a highly desirable resource with the rising popularity of these technologies.  There is estimated to be 140-230 million ounces of silver and 935-1,480 tons of indium in Mallku Khota.[8]  SAC also reports the existence of gallium (a semiconductor), copper, lead, and zinc.

Independent cooperativist miners also  illegally mine gold,[9] although, SAC did not previously report the existence of gold in their public reports.[10]  As recently as July 13th, SAC reported that gold makes up about 0.1% of the mineral deposit.[11]  Potosí governor Félix Gonzáles claimed the company’s failure to report the gold or the illegal exploitation helped fuel conflict between communities.[12]  In an interview several days later, SAC CEO Greg Johnson stated that they had not reported illegal cooperativist gold mining on the  concession, because it was “not economically that significant to our project.”[13]  He added that “it was causing conflict with other communities in the area,” and that there were accusations of environmental damage. [14]

 

Community Support and Opposition

Community support for SAC is highly disputed.  The Bolivian press and SAC report conflicting and inconsistent figures about the number of surrounding communities, as well as how many were in support of or opposition to SAC.  Los Tiempos quoted a report that estimated the opposition to SAC to be around 600 people,[15] but it also reported a week earlier that 8,000 anti-SAC protesters marched from Mallku Khota to La Paz.[16]  SAC maintains that 43 of 46 surrounding communities “strongly support” the company.[17]  Newspapers report between 44[18] and 45[19] communities in favor of SAC, comprising five[20][21] or six ayllus, but do not list the overall population or a total number of communities or ayllus in the area.[22]  SAC also asserted that several petitions have been signed supporting the company, although the press reported none of these.[23]

SAC claims to have undertaken development projects in local communities, but it is unclear how many or which communities benefitted from these initiatives.  The projects may have been unevenly distributed among communities, contributing to the conflict.  One local leader said SAC’s presence provoked divisions, noting, “They’ve played us against each other by putting money into our own social organizations.”[24] Employment opportunities with SAC also exacerbated friction.  It is unclear how local employment with the company is distributed in the communities.  On June 12th, anti-SAC protestors attacked three communities who had allegedly defended the company.  The Potosí governor identified some of the victims as SAC mine employees.[25]

It appears some communities received job training and education about the benefits of SAC’s project.  A non-governmental organization documented three projects funded by SAC– two educational programs about the benefits of the company’s project and one training participants for basic mining jobs.[26]

Environmental Issues

The environmental concerns about the mining project are considerable.  Because of the nature of the deposit, the minerals would have to be extracted using open sky exploitation, a technique with a high environmental impact.  Community members fear that mineral exploitation will contaminate the three major lakes in the area, which residents use to raise trout and water sheep and cattle.[27]  A government study revealed that there is already pollution in Mallku Khota Lake and other water sources in the area. Its causes, however, are contested.  The Bolivian government faults some 400 to 600 local families who use mercury in the process of illegally exploiting gold.[28]  However, the National Council of Ayllus and Markas of Qullasuyo (CONAMAQ), a confederation of highland Aymara-, Quechua-, and Uru- speaking indigenous communities, maintains that the contamination is from SAC.[29]

 

Prior Consultation

Protesters denounced that the community was not consulted prior to the initiation of SAC’s project.  According to the new Bolivian constitution passed in 2009, indigenous communities have the right to consulta previa, or “prior consultation,” before any exploitation of natural resources on indigenous territories occurs.[ii]  The state must consult residents of any communally held indigenous land title (TCO, tierra comunitaria de origen) before agreeing to any activity in the area.  The SAC concession directly affects 42 TCOs, and many residents understandably feel entitled to a consultation; it was a repeated demand in negotiations.[30]  Even communities who supported SAC asked that a prior consultation be carried about before the actual exploitation began.[31]

However, there are two complications.  First, GMC and subsequently SAC obtained the rights to the concession prior to the passage of the new constitution.  Second, the legislation specifies that consultation must be done before exploitation takes place, and the SAC project is still in its exploratory phase.  The lack of legislation interpreting prior consultation for projects that predate the new constitution creates a legal gray area in the conflict.

Celia Garcés  and the Center for Documentation and Investigation (CEDIB)

 Government’s Late Intervention

The Morales administration ignored requests of the governor of Potosí and local indigenous leaders to intercede before tensions exploded into violence.[32]  The government intervened only after the second hostage situation and outbreak of violence between community members in mid-June.

When several thousand Mallku Khota protesters marched to La Paz to demand the reversal of SAC’s concession, the police tear-gassed protesters, including children.[33] Vice-Minister of the Interior and Police Jorge Pérez claimed that unnamed outside sources funded the march and denied that police had detained the 15 protesters unaccounted for after the skirmish.[34]

On June 13th, after protesters took over a mining camp and attacked three pro-SAC communities, the government dispatched 230 police officers to the area,[35] which gradually rose to 500.[36]

On July 5th, anti-SAC protesters clashed with police. Four protesters sustained bullet wounds, and one was fatally wounded.  Medical professionals as well as representatives from the Permanent Human Rights Assembly confirmed that protester José Mamani Mamani died from a bullet that entered the nape of his neck.[37]  Minster of Government Carlos Romero denied that there was any confrontation with police.[38]  He also asserted that Mamani Mamani died because he drunkenly mishandled dynamite.[39]

In addition, at the site of Mamani’s death, a joint inspection by local authorities, including the Human Rights Ombudsman, revealed 24 used tear gas canisters, 30 bullet casings, four loaded bullet shells, 13 rounds of used 9-millimeter casings, a shotgun, and other police paraphernalia.[40]

Conclusion

Resource management issues have plagued the Morales administration, and are likely to continue to generate conflict .  The tension in Mallku Khota unfolded concurrently with a clash between miners in Colquiri, La Paz, as well as a series of protests in Cajamarca, Peru against a US mining company that left several dead.[41]

The Morales administration has consistently expressed the desire to develop Bolivia’s rich natural resources to bring social benefits to the population.  The strong anti-transnational platform that Evo Morales campaigned on makes it politically difficult to appear in favor of companies like South American Silver.  However, financial and technological limitations make it difficult to move forward with massive projects such as Mallku Khota without external investment, in spite of Vice-President Alvaro García Linera’s claim that the government willing and able to spend up to $1 billion dollars to develop this project.[42]

With the rising silver prices and the increasingly high demand for indium, Mallku Khota has the potential to generate substantial state income.  The challenge remains to figure out how the state can utilize Bolivia’s rich natural resources with minimal environmental impact and maximal benefit to Bolivians, only with the consensus and participation of the communities surrounding these resources.


[ii] Bolivian Political Constitution of the State, Feb 2009.

CAPÍTULO CUARTO
DERECHOS DE LAS NACIONES Y PUEBLOS INDÍGENA ORIGINARIO CAMPESINOS. ARTICULO 30.-I. Es nación y pueblo indígena originario campesino toda la colectividad humana que comparta identidad cultural, idioma, tradición histórica, instituciones, territorialidad y cosmovisión, cuya existencia es anterior a la invasión colonial española.II. En el marco de la unidad del Estado y de acuerdo con esta Constitución las naciones y pueblos indígena originario campesinos gozan de los siguientes derechos:
A existir libremente……4. A la libre determinación y territorialidad….6. A la titulación colectiva de tierras y territorios….7. A la protección de sus lugares sagrados…..10. A vivir en un medio ambiente sano, con manejo y aprovechamiento adecuado de los ecosistemas…. A ser consultados mediante procedimientos apropiados, y en particular a través de sus instituciones, cada vez que se prevean medidas legislativas o administrativas susceptibles de afectarles. En este marco, se respetará y garantizará el derecho a la consulta previa obligatoria, realizada por el Estado, de buena fe y concertada, respecto a la explotación de los recursos naturales no renovables en el territorio que habitan..16. A la participación en los beneficios de la explotación de los recursos naturales en sus territorios.  17. A la gestión territorial indígena autónoma, y al uso y aprovechamiento exclusivo de los recursos naturales renovables existentes en su territorio sin perjuicio de los derechos legítimamente adquiridos por terceros…III. El Estado garantiza, respeta y protege los derechos de las naciones y pueblos indígena originario campesinos consagrados en esta Constitución y la ley.

 


[1] http://erbol.com.bo/noticia.php?identificador=2147483961006
[2] http://www.soamsilver.com/july-10-2012-news-release.asp
[3] http://www.soamsilver.com/upload/Technical_Reports/110511_MK_PEA_Update_SEDAR.pdf
[4] http://www.soamsilver.com/june-14–2012-news-release.asp
[5] http://www.soamsilver.com/june-14–2012-news-release.asp
[6] http://www.soamsilver.com/july-8-2012-news-release.asp
http://www.lostiempos.com/diario/actualidad/economia/20120706/gobierno-muerte-en-mallku-khota-no-fue-por_177567_374938.html
[7] http://www.soamsilver.com/section.asp?pageid=14615
[8] http://www.swissinfo.ch/spa/suiza_y_el_mundo/internacional/Bolivia:_diez_heridos_en_choque_entre_indigenas_por_yacimiento_minero.html?cid=32729060
[9] http://www.lostiempos.com/diario/actualidad/economia/20120613/aumenta-tension-en-mallku-khota-por-toma-de-mina_174914_368565.html
http://www.nacionaldehuanuni.com/index.php?option=com_content&view=article&id=1155:curaca-cancio-rojas-es-enviado-a-la-carcel-por-gobernacion-potosina&catid=3:bolivia&Itemid=2
http://www.lostiempos.com/diario/opiniones/columnistas/20120612/mallku-khota-mineria-moderna-o-tradicional_174682_368107.html
[10] http://www.soamsilver.com/upload/pdfs/Investor-Materials/SAC_Corporate_Report_2011.pdf
http://www.soamsilver.com/upload/pdfs/Investor-Materials/Fact_Sheet_May_2012.pdf
http://soamsilver.com/section.asp?catid=3898&subid=3899
[11] http://www.la-razon.com/economia/Garcia-invertira-necesario-Mallku-Khota_0_1649835030.html
[12] http://erbol.com.bo/noticia.php?identificador=2147483961006
[13] http://www.cbc.ca/thecurrent/popupaudio.html?clipIds=2255563707
[14] http://www.cbc.ca/thecurrent/popupaudio.html?clipIds=2255563707
[15] http://www.lostiempos.com/diario/actualidad/economia/20120615/toman-megayacimiento-minero-en-mallku-khota_175154_369102.html
[16] http://www.lostiempos.com/diario/actualidad/economia/20120607/comunarios-de-mallku-kota-llegan-a-la-paz-piden-expulsion-de-empresa_174180_366928.html
[17] http://www.cbc.ca/thecurrent/popupaudio.html?clipIds=2255563707
http://www.soamsilver.com/july-10-2012-news-release.asp
[18] http://www.opinion.com.bo/opinion/articulos/2012/0608/noticias.php?id=59385
[19] http://www.lostiempos.com/diario/actualidad/economia/20120710/santalla-dice-que-rehenes-agredieron-a-comunarios_177952_375800.html
[20] http://www.eldiario.net/noticias/2012/2012_06/nt120629/nacional.php?n=21&-denuncian-secuestro-de-dos-trabajadores-de-la-companiia-minera-mallku
[21] http://www.lostiempos.com/diario/actualidad/economia/20120703/piden-intervenir-mina-y-gobierno-envia-comision_177161_373989.html
[22] http://www.opinion.com.bo/opinion/articulos/2012/0608/noticias.php?id=59385
[23] http://www.cbc.ca/thecurrent/popupaudio.html?clipIds=2255563707
[24] http://www.cbc.ca/thecurrent/popupaudio.html?clipIds=2255563707
[25] http://www.lostiempos.com/diario/actualidad/nacional/20120520/gobernador-pide-militarizar-zona-minera-en_172065_361903.html
[26] http://cumbredelsajama.com/es/?opc=ofertas
[27] http://www.la-razon.com/economia/Evo-Morales-concesion-Mallku-Khota_0_1646835305.html
http://www.la-razon.com/economia/Garcia-invertira-necesario-Mallku-Khota_0_1649835030.html
http://www.erbol.com.bo/noticia.php?identificador=2147483959256
[28] http://www.la-razon.com/economia/Denuncian-contaminacion-ambiental-Mallku-Khota_0_1621037925.html
[29] http://www.la-razon.com/economia/Denuncian-contaminacion-ambiental-Mallku-Khota_0_1621037925.html
[30] http://www.lostiempos.com/diario/actualidad/nacional/20120510/liberan-a-los-dos-policias-rehenes-en-mallku-khota_170951_359311.html
[31] http://www.opinion.com.bo/opinion/articulos/2012/0612/noticias.php?id=59780
[32] http://www.lostiempos.com/diario/actualidad/economia/20120703/piden-intervenir-mina-y-gobierno-envia-comision_177161_373989.html
http://www.la-razon.com/economia/comunarios-Mallku-Khota-presencia-autoridades_0_1631836901.html
http://www.eldiario.net/noticias/2012/2012_06/nt120611/politica.php?n=33&-pobladores-de-mallku-khota-exigen-seguridad-ante-los-avasallamientos
[33] http://www.opinion.com.bo/opinion/articulos/2012/0608/noticias.php?id=59375
[34] http://www.opinion.com.bo/opinion/articulos/2012/0608/noticias.php?id=59385
[35] http://www.la-razon.com/economia/comunarios-Mallku-Khota-presencia-autoridades_0_1631836901.html
[36] http://erbol.com.bo/noticia.php?identificador=2147483961000
[37] http://erbol.com.bo/noticia.php?identificador=2147483961000
http://www.la-razon.com/economia/Evo-Morales-concesion-Mallku-Khota_0_1646835305.html
[38] http://www.lostiempos.com/diario/actualidad/economia/20120706/gobierno-muerte-en-mallku-khota-no-fue-por_177567_374938.html
[39] http://www.lostiempos.com/diario/actualidad/economia/20120706/gobierno-muerte-en-mallku-khota-no-fue-por_177567_374938.html
[40] http://erbol.com.bo/noticia.php?identificador=2147483960978
[41] http://www.aljazeera.com/video/americas/2012/07/201278114549256192.html
http://www.bbc.co.uk/mundo/ultimas_noticias/2012/07/120704_ultnot_peru_declara_estado_emergencia_protestas_proyecto_minero_conga_jr.shtml
[42] http://www.la-razon.com/economia/Garcia-invertira-necesario-Mallku-Khota_0_1649835030.html

Timeline of Bolivian Mining Conflict in Mallku Khota

The several violent, reoccurring conflicts in northern Potosí over the presence of a Canadian mining company have finally been at least temporarily resolved by an agreement by the Morales government to rescind South American Silver’s mining concession.  After multiple violent clashes between community members, various demonstrations, a march to La Paz, three different hostage situations, and the shooting death of one community member during police intervention, the situation was finally resolved on July 10th with the signing of an agreement between community members and the government.  Among other things, the agreement reversed the Canadian company’s mining concession, promised compensation for injured community members, and guaranteed that the government would not take legal action against protesters, including those involved in the hostage situations.  An in-depth analysis of the events will follow this update.

 

Timeline of Incidents in Mallku Khota

April

  • April 1st: A group of community members opposed to the Canadian mining company, South American Silver (SAS), briefly took a community relations representative from the company hostage, but the incident did not receive much attention nationally.[1]

May

  • May 5th: Community members took a police officer hostage.
    • Police entered the community with arrest warrants for some community authorities.  The charges were initiated by SAS and presumably related to the kidnapping in April but the press did not specify.[2]
    • Community leader Cancio Rojas explained that the community was opposed to SAS because the community was not consulted before the concession was given and it feared that SAS would contaminate water sources in the area once exploitation of the minerals began.[3]
  • May 7th: Community members took a second police officer hostage.
  • May 9th: Protesters release police hostages after Potosí governor made vague promises of a community consultation. [4]
  • May 18th: A community meeting to discuss the fate of SAS turned into a violent confrontation that left dozens wounded.  Some 200 community members who are hostile to SAS arrived to the meeting unexpectedly, wielding dynamite and shouting accusations at meeting attendees.[5]
  • May 28th: Thousands of people Mallku Khota residents marched from their communities in northern Potosí to La Paz to demand the eviction of SAS.
  • May 31st: The Bolivian government reaffirmed that it would respect the Canadian company´s mining concession.[6]

June

  • June 7th: Protesters demanding the reversal of SAS’s mining concession arrive in La Paz.
  • June 8th: Police tear-gassed protesters, including children, in the Plaza Murillo.[7]  Protesters wounded some police officers.[8]
  • June 10th: Representatives from five Mallku Khota ayllus asked the government to send security forces to the area to avoid conflicts between local communities.  These ayllus claimed marchers represent Mallku Khota.[9]
  • June 12th: A group of approximately 700 anti-SAS community members attacked three pro-SAS communities.[10]  According to reports, the attackers included cooperative miners who supposedly illegally exploit gold in the area.
  • June 12th: Some 6,000 community members opposed to SAS took over a mining camp in the area.  Using dynamite and trenches they had dug, they impeded access to the entrance.[11]
  • June 13th: The government dispatched 230 police officers to the area.
  • June 28th: The government released Cancio Rojas from prison and put him under house arrest in Potosí.  The community authority was accused of damaging the SAS’s equipment and kidnapping police officers in May.
  • June 28th: Community members took  two engineers from SAS hostage, accusing them of spying.[12]  The engineers admitted to dressing up in traditional clothes from the area, considered a serious offense for an outsider, and taking pictures during a community meeting.[13]

July

  • July 2nd: Anit-SAS community members took three more SAS employees hostage, presumably  when they raided and burned a mining site in Sacani. [14][15]
  • July 3rd: The Cochabamba police commander sent 150 officers to the area.[16]
  • July 5th:  Three SAS hostages escaped.[17]  By this date, there were 380 police officers stationed in the area.
  • July 5th: Four community members sustained gunshot wounds, and one died during a conflict with police.[18]  Protesters took one police hostage.
    • The Morales administration staunchly denied that any confrontation with police, and insisted that the fatally wounded protester, José Mamani Mamani, died because he drunkenly mishandled dynamite.[19]
    • Medical examiners, however, confirmed he died from a bullet entering the nape of his neck.[20]
    • A joint inspection by local authorities found 24 used tear gas cans, 30 bullet casings, four loaded bullets shells, 13 rounds of used 9 millimeter casings, and other police paraphernalia at the site of Mamani Mamani’s death.[21]
  • July 7th: State entered dialogue with community members.[22]
  • June 8th: Community members and government reached a preliminary agreement and liberated remaining hostages.[23]
  • July 10th: Community members and the government signed an official agreement.[24]  The agreement included: [25]
    • Reversion of mining concession
    • Compensation for the family of José Mamani Mamani
    • A job for a relative of Mamani Mamani
    • That the government pays for all the medical expenses for the four community members who were shot by police
    • A guarantee that no legal action will be taken by the government against any of the community members
    • An investigation looking into the police officers and corresponding legal action if merited
    • Compliance with community justice sentence for engineers
      • In a local trial, community authorities mandated that the engineers must build 1,000 adobe houses in 30 days after they recover for injuries sustained in their captivity.[26]
    • Legal support for community authority Cancio Rojas, who has been charged with several crimes related to the conflict.


[1] http://www.la-razon.com/economia/Mallku-Khota-SA-denuncia-rehenes_0_1641435885.html
[2] http://www.lostiempos.com/diario/actualidad/nacional/20120510/liberan-a-los-dos-policias-rehenes-en-mallku-khota_170951_359311.html
[3] http://www.lostiempos.com/diario/actualidad/nacional/20120510/liberan-a-los-dos-policias-rehenes-en-mallku-khota_170951_359311.html
[4] http://www.lostiempos.com/diario/actualidad/nacional/20120510/liberan-a-los-dos-policias-rehenes-en-mallku-khota_170951_359311.html
[5] http://www.la-razon.com/ciudades/Pelea-Mallku-Khota-heridos-desaparecidos_0_1616838339.html
http://www.lostiempos.com/diario/actualidad/politica/20120519/violencia-entre-ayllus-del-norte-de-potosi_171996_361733.html
[6] http://www.paginasiete.bo/2012-06-01/Nacional/Destacados/29Cul00101-06-12-P720120601VIE.aspx
[7] http://www.opinion.com.bo/opinion/articulos/2012/0608/noticias.php?id=59375
[8] http://www.opinion.com.bo/opinion/articulos/2012/0608/noticias.php?id=59364
[9] http://www.eldiario.net/noticias/2012/2012_06/nt120611/politica.php?n=33&-pobladores-de-mallku-khota-exigen-seguridad-ante-los-avasallamientos
[10] http://www.lostiempos.com/diario/actualidad/economia/20120613/cooperativistas-atacan-tres-comunidades-en-mallku_174878_368477.html
[11] http://www.la-razon.com/economia/comunarios-Mallku-Khota-presencia-autoridades_0_1631836901.html
[12] http://www.la-razon.com/economia/Comunarios-condicionan-libertad-ingenieros-Presidente_0_1641435905.html
[13] http://www.opinion.com.bo/opinion/articulos/2012/0710/noticias.php?id=63236
[14] http://www.la-razon.com/economia/Comunarios-secuestran-tecnicos-Mallku-Khota_0_1643835662.html
[15] http://www.eldiario.net/noticias/2012/2012_07/nt120703/sociedad.php?n=71&-campamento-de-empresa-minera-es-saqueada-y-quemada-por-comunarios
[16] http://www.lostiempos.com/diario/actualidad/economia/20120704/secuestran-a-otras-3-personas-en-mina_177274_374204.html
[17] http://www.la-razon.com/economia/Evo-concesion-compania-Mallku-Khota_0_1648635155.html
[18] http://www.lostiempos.com/diario/actualidad/economia/20120706/mallku-khota-cuatro-heridos-de-bala-son-atendidos-en_177578_374958.html
[19] http://www.lostiempos.com/diario/actualidad/economia/20120706/gobierno-muerte-en-mallku-khota-no-fue-por_177567_374938.html
[20] http://erbol.com.bo/noticia.php?identificador=2147483960926
[21] http://erbol.com.bo/noticia.php?identificador=2147483960978
[22] http://www.la-razon.com/economia/comunarios-Mallku-Khota-liberan-rehenes_0_1647435266.html
[23] http://www.lostiempos.com/diario/actualidad/economia/20120709/gobierno-logra-acuerdo-y-liberan-a-tres-rehenes_177841_375577.html
[24] http://www.la-razon.com/economia/Evo-concesion-compania-Mallku-Khota_0_1648635155.html
[25] http://www.la-razon.com/economia/comunarios-Mallku-Khota-liberan-rehenes_0_1647435266.html
[26] http://www.eldiario.net/noticias/2012/2012_07/nt120709/sociedad.php?n=39&-tres-ultimos-rehenes-son-liberados-tras-diez-dias

Is Bolivia Ready to Export Lithium?

On October 11, Bolivia’s Mining Minister Jose Pimentel stated that Bolivia plans to start production of lithium carbonate and potassium chloride for export this month, and expects a finalized product by January or February.[i] However, it is unlikely that Bolivia’s lithium carbonate will be available on the international market in the near future.

At an isolated pilot plant, Bolivian and international scientists have been working to develop a process to separate lithium from other minerals present in Bolivia’s Salar de Uyuni salt flats.  The unique climatic conditions and mineral concentration of the Salar present special challenges, and it is unclear whether the extraction process has been perfected.  Between October and March the region receives significant rainfall, which could negatively affect evaporation and separation.  This separation process can take up to 18 months, even without foreseeable rainy season delays.[ii] Furthermore, a successful trial run at the pilot plant would represent the first time lithium carbonate has been produced outside a laboratory in Bolivia.

The pilot plant, when fully functioning, should produce up to 480 metric tons of lithium carbonate per year, a small amount in comparison to regional competitor Chile’s annual production of 40,000 metric tons.  With lithium carbonate prices at five dollars per kilogram (April 2010), the potential sale of 40 tons a month seems fiscally feasible for a pilot plant that cost the Bolivian government $5.7 million.  Moreover, Bolivia and South Korea signed a deal for future investment in lithium in August 2010.

However, information about the Bolivian government’s economic strategy to get its lithium to market is not readily available.  Aside from the challenges of locating the “best market,” Bolivia faces immediate infrastructure hurdles.  The logistics of transporting the lithium to port in a region where roads and electricity are limited further complicate exploratory efforts.

Rebecca Hollender is lead author of “Bolivia and its Lithium; Can the ‘Gold of the 20th Century’ Help Lift a Nation out of Poverty,” (May 2010).  The report is available in English and Spanish at: http://www.democracyctr.org/bolivia/investigations/lithio.htm.


[i] “Bolivia to Start Producing Lithium in October for Export, Minister Says.” Bloomberg. 12 October 2010.

[ii] Estimate based on Chile’s lithium carbonate production methods.