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Cablegate: Bolivian Mining: Conflictive "Cooperatives"

VZCZCXYZ0025
RR RUEHWEB

DE RUEHLP #0661/01 0852058
ZNR UUUUU ZZH
R 252058Z MAR 08
FM AMEMBASSY LA PAZ
TO RUEHC/SECSTATE WASHDC 6931
INFO RUEHAC/AMEMBASSY ASUNCION 7735
RUEHSW/AMEMBASSY BERN 0167
RUEHBO/AMEMBASSY BOGOTA 5091
RUEHBR/AMEMBASSY BRASILIA 9003
RUEHBU/AMEMBASSY BUENOS AIRES 6224
RUEHBY/AMEMBASSY CANBERRA 0097
RUEHCV/AMEMBASSY CARACAS 3434
RUEHPE/AMEMBASSY LIMA 3660
RUEHMD/AMEMBASSY MADRID 3945
RUEHMN/AMEMBASSY MONTEVIDEO 5345
RUEHNE/AMEMBASSY NEW DELHI 0169
RUEHNY/AMEMBASSY OSLO 0156
RUEHOT/AMEMBASSY OTTAWA 0525
RUEHQT/AMEMBASSY QUITO 6058
RUEHSG/AMEMBASSY SANTIAGO 0692
RUEHKO/AMEMBASSY TOKYO 0359
RUEHWL/AMEMBASSY WELLINGTON 0026
RUEHC/DEPT OF LABOR WASHINGTON DC
RUMIAAA/USCINCSO MIAMI FL
RUEHC/DEPT OF INTERIOR WASHINGTON DC
RUEHUB/USINT HAVANA 1011
RHEHNSC/NSC WASHINGTON DC
RHMFIUU/HQ USSOUTHCOM MIAMI FL

UNCLAS LA PAZ 000661

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ECON EMIN EINV ELAB BL
SUBJECT: BOLIVIAN MINING: CONFLICTIVE "COOPERATIVES"

1. (SBU) Summary: As high world mineral prices encourage
the re-opening of areas previously considered "mined out",
Bolivia's cooperative miners have regained political street
power. Various estimates suggest that up to 100,000 miners
work in cooperatives, semi-socialist organizations that are
viewed as "social groups" under the draft constitution and
are given special tax breaks under the 2007 mining tax law.
The miners' special status under the draft constitution was
granted in response to threats of street violence against the
ruling Movement Toward Socialism (MAS) government, a sign of
the miners' power. Cooperative mines are generally
understood to avoid most if not all applicable taxes, and
they are not effectively regulated, leading to miserable
safety conditions and high death rates. In the past year, a
number of conflicts between local communities and small
(often cooperative) mines have led to deaths and "takings" of
the mines. Emboffs visited a local cooperative mine after
the resolution of such a "taking" conflict. This cable also
provides an outline of the organizational structure of
cooperative mines and a description of working conditions.
End summary.

- - - - - - - - - - - - - - - -
Milluni Mine: A Common Example
- - - - - - - - - - - - - - - -

2. (SBU) A cemetery guards the road to Milluni mine, known in
La Paz department for its resistance to a national coup in
the sixties (when miners escaped through tunnels and the
airforce bombed llamas.) After years of inactivity, the mine
has re-opened due to rising world zinc prices: from its high
of thousands of employees, the mine now supports about twenty
cooperative miners and forty-five residents of nearby
subsistence farms--these community members attacked the mine
and stopped production for roughly a week before the
cooperative agreed to let them join in the mining operation.
(Note: Where the community members are working as contracted
labor, this arrangement is legal and fairly common. Where the
cooperative gave the community members permission to mine by
themselves, this arrangement is questionable, since the state
officially grants mining concessions. End note.)

3. (SBU) Cooperative mines are some of Bolivia's most
dangerous places to work: there is no effective safety
regulation, conditions are dreadful, and many miners wear no
safety equipment or buy fake safety equipment that offers no
actual protection. At Milluni, Emboffs watched as a
contracted miner (paid a daily salary by a cooperative
partner) entered the mine bare-headed and in flip-flops.
From a brief examination, the mine seemed to be operating
with insufficient roof support, a problem since the ore at
Milluni fractures easily.

4. (SBU) The miners explained that, after the resolution of
the conflict with the community, roughly forty-five community
members were now working in various areas of the mine. Of
the approximately twenty cooperative miners, some have
extensive mining experience: the current boss is the son of
the mine boss who worked the operation during the coup in the
sixties. The inexperience of the community members is
another source of danger, however, since statistics show
(even in the United States) that the first year of working in
a mine is generally the most dangerous. One miner mentioned
that the mine did not allow the community children to work:
"Everyone is at least fourteen."

- - - - - - - - - - - - - - - -
The Bigger (Depressing) Picture
- - - - - - - - - - - - - - - -

5. (SBU) Milluni is in some ways a model of the Bolivian
mining industry at present. Rising world mineral prices have
encouraged the re-opening or re-exploration of many deposits
previously considered mined-out. A South Korean state mining
entity is reportedly already at work on restarting the
defunct copper deposit at Coro Coro (under the auspices of
the state mining company COMIBOL), and the city of Potosi is
booming as old workings are re-opened on the famous "rich
hill." Although larger mines like Coro Coro, with
international investors and COMIBOL presence, will probably
work at international safety standards, most cooperative
mines are unregulated and unsafe. Miners work with little
ventilation and usually no respiratory protection: silicosis
is one of the leading non-accident causes of death in the
Bolivian mining sector. According to non-official police and
NGO estimates, on average twenty miners a month in Potosi die
from mine related accidents and illnesses such as silicosis.


- - - - - - - - - - -
Children Underground
- - - - - - - - - - -

6. (SBU) The mines often employ children as assistants to
carry equipment, control drill air pressure, and load
dynamite into drillholes. Children also work as beasts of
burden, carrying ore on their backs or pushing ore cars. As
veins thin out, children are sometimes employed at the
farthest reaches of the tunnels, their small size allowing
them to enter into the most dangerous areas of the mine.
Some children work in family operations, helping out before
or after school. Other children take their fathers' place
when their fathers are incapacitated or killed in the mines.
With no social safety net, the cooperatives often view this
employment of children as a type of 'widows and orphans
fund': without the mine income, the family would often be
unable to feed itself. A Senator from Potosi explained to
Emboff that he entered the cooperative mines at age twelve
after his fathers' death: "It was my right and my duty," he
said, "and here I am now." Most children will not work their
way through a cooperative's internal power structure and rise
to a national elected post, of course.

- - - - - - - - - - - - - - - - - - - - - - - -
Women Not Underground...but Not Much Better Off
- - - - - - - - - - - - - - - - - - - - - - - -

7. (SBU) Women generally do not officially work underground,
although some do enter the mines to work. More, however, are
hired as guards, living near the mine mouth all day every day
so as to discourage the local thieves who attempt to steal
ore. For an average of USD50 per month, these women and
their children are expected to drive off thieves with no
weapons other than rocks: the thieves, on the other hand,
have been getting increasingly violent and are reportedly
beginning to threaten guards with dynamite and other weapons.
Women also work in support roles, cooking and washing for
the miners. A recent press report described a miner's widow
cooking over an open fire in a mine storage area only feet
from boxes of dynamite.

8. (SBU) Although some miners describe ideal cooperative
structure as a three-musketeers-like system of 'all for one
and one for all', the widows of miners often end up being

victimized by their husbands' former colleagues. They are
rarely allowed any claim on their husbands' percentage of the
cooperative and often are not even allowed to take their
husbands' equipment for resale or to outfit sons who must
take their fathers' place. Many of the wives of the new
influx of miners--recently arrived from the countryside and
speaking only Quechua--do not have legal papers to prove
their marital status or to establish that their children are
also their husbands' children. Illiterate and unaware of
their (admittedly limited) options, they end up pushed into
the most marginal of positions within Potosi's social
structure.

- - - - - - - - - - - - - - - -
Worth a Potosi, Worth the Pain?
- - - - - - - - - - - - - - - -

9. (SBU) Rene Joaquino, Mayor of Potosi, explains that the
population of his city is growing at a rate that the
municipality cannot support, and that salaries are
increasingly above the municipality's ability to pay.
Economics thus suggest that cooperative mining is a
comparatively good option in Bolivia, despite the inherent
hazards. Potosi's streets, clogged with SUVs and currently
home to a number of expensive imported Humvees, show that
some are getting rich from the mining boom. To buy a
partnership in a cooperative, individuals must generally
invest at least USD2000 (roughly twice the average annual
salary in Bolivia) to gain "ownership" of a vein or section
of a mine. Reportedly some partners are currently making
over USD3000 per month. Drillers can earn over a thousand
dollars a month (out of which they pay their young
assistants), partially because their job requires skill and
experience, but partially because it bears the highest risk
of lung disease and roof-falls, and the salary reflects this
danger. Average workers are paid either a daily salary or
sums based on their production level: salaries average
between USD15 and US25 for an eighteen-hour day. According
to Mayor Joaquino, municipal projects are left undone
because, even after tripling the offered salaries to USD13
per day, the city cannot compete with the mines.

10. (SBU) The increasing economic power of the cooperatives
has also led to accusations of strong-arm tactics in Potosi.
Local police have said that cooperative leaders often forbid
them from investigating mine-related deaths, only allowing
the police rescue teams to enter into the mines to retrieve
corpses. Community members who express anger at increased
prices and crime-rates due to the mining boom have reportedly
been threatened by cooperative members. Local reporters who
have printed articles about the coercive nature of some
cooperatives have been visited by dynamite-wielding miners.
On a national level, the cooperative miner associations have
extensive political power, partially thanks to their
willingness to engage in mass street-blockades armed with
dynamite. The day before an important Constituent Assembly
vote in 2007, Emboffs met with Andres Villca, president of
the National Federation of Cooperative Miners (FENCOMIN).
Villca told Emboffs that his members planned to "take" La Paz
if their demands were not met, and that they had a meeting
with President Evo Morales that evening. The next day, the
text of the MAS draft constitution had been amended to grant
special rights to cooperative miners, and FENCOMIN supported
the MAS government in a protest in Oruro that blocked
opposition participation in a critical vote on the draft
constitution.
- - - -
Comment
- - - -

11. (SBU) The MAS draft constitution gives special status to
cooperative mines, and the MAS has recently reaffirmed its
alliance with the FENCOMIN, using that alliance to assemble
dynamite-armed crowds in Oruro to force through the draft
constitution by blocking opposition politicians. This close
relationship between the current government and the
cooperative miners suggests that cooperative mining will
continue to have a special status under Bolivian law.
Despite the unmitigated environmental effects of cooperative
mines (the run-off from Milluni, for example, has spread an
untreated orange sludge directly above one of the main
drinking-water reservoirs for the capital city of La Paz) and
the dangerous work conditions, cooperative mining will
continue to be part of Bolivian mining and Bolivian politics
for the foreseeable future. End comment.

GOLDBERG

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