Rodrigo Paz, Bolivia’s first investor-friendly president in more than 20 years, wants global miners to extract the nation’s copper, gold, silver and other critical mineral deposits. Almost half a million local miners stand in his way.
The cooperatives that represent those miners are one of the country’s most formidable political forces, representing as much as 8% of the workforce and half of Bolivia’s mineral extraction. They have exploited the country’s mineral riches with little oversight and regulation for decades, and repeatedly brought governments to heel through protests that effectively shut the country down.
But Paz is undeterred. “Why do we want to be poor if we have everything we need to become a highly developed country?” he said, referring to the mineral potential of Bolivia, whose export revenues pale in comparison with those of neighboring Peru and Chile.
His challenge was laid bare in May, when thousands of cooperative miners barreled toward the presidential palace in La Paz, some hurling sticks of dynamite. Eventually, the first non-socialist government in decades had largely yielded to the miners’ demands for greater access to fuel, explosives and new areas to dig. Tensions resurfaced in July, when infighting among rival cooperatives forced officials to abandon plans for a rare summit bringing together local and state miners with private firms to chart the industry’s future.
“You can’t just rub them out,” said Tom Larsen, chairman and CEO of Eloro Resources Ltd., a Toronto-based explorer looking to develop a large silver-tin discovery in Bolivia. “They’re a big contingent in the Bolivian fabric.”
A full-blown overhaul of Bolivia’s nationalistic mining laws would erode many privileges enjoyed by cooperatives. So Paz’s government, already reeling after unrest earlier this year, is instead pursuing more incremental changes. It plans to submit targeted amendments to Congress, including allowing private firms to partner with cooperatives, strengthening development rights for explorers and easing taxes, an official said. In parallel, it’s working on a broader rewrite of the mining code to modernize the industry and improve legal certainty.
(By James Attwood and Sergio Mendoza)
