VZCZCXYZ0000
RR RUEHWEB

DE RUEHLP #2860/01 2971055
ZNR UUUUU ZZH
R 241055Z OCT 06
FM AMEMBASSY LA PAZ
TO RUEHC/SECSTATE WASHDC 0997
INFO RUEHAC/AMEMBASSY ASUNCION 6206
RUEHBO/AMEMBASSY BOGOTA 3521
RUEHBR/AMEMBASSY BRASILIA 7385
RUEHBU/AMEMBASSY BUENOS AIRES 4643
RUEHBY/AMEMBASSY CANBERRA 0039
RUEHCV/AMEMBASSY CARACAS 1894
RUEHPE/AMEMBASSY LIMA 1941
RUEHME/AMEMBASSY MEXICO 1831
RUEHMN/AMEMBASSY MONTEVIDEO 4103
RUEHOT/AMEMBASSY OTTAWA 0450
RUEHQT/AMEMBASSY QUITO 4532
RUEHSG/AMEMBASSY SANTIAGO 9108
RUEHKO/AMEMBASSY TOKYO 0256
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHEBAAA/DEPT OF ENERGY WASHINGTON DC
RHEHNSC/NSC WASHINGTON DC

UNCLAS LA PAZ 002860 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR WHA/AND LPETRONI 
COMMERCE FOR JANGLIN 
TREASURY FOR SGOOCH 
ENERGY FOR CDAY AND SLADISLAW 
 
E.O. 12958: N/A 
TAGS: EMIN ELAB EINV ECON PREL PGOV BL
SUBJECT: GOB, MINERS SIGN AGREEMENT ENDING STAND-OFF 
 
REF: LA PAZ 2798 
 
¶1. (SBU) Summary: The GOB and miners signed an agreement 
October 23 ending the political stand-off that emerged after 
October 5-6 clashes between cooperative miners and state 
mining employees in Huanuni (reftel).  Radio reports indicate 
that members of the region's four cooperatives accepted the 
GOB's offer to convert independent miners into salaried 
employees of Empresa Minera Huanuni, the firm overseeing the 
region's tin operations.  Despite this, important questions 
concerning mine ownership and control remain unresolved.  End 
summary. 
 
FINALLY AN AGREEMENT 
-------------------- 
 
¶2. (U) The GOB and miners' groups signed an agreement October 
23 ending the political stand-off that emerged after October 
5-6 clashes between cooperative miners and state mining 
employees in Huanuni, a tin mining center in the western 
department of Oruro (reftel).  The agreement followed more 
than two weeks of dialogue, several threats of nationwide 
road blockades, and the National Federation of Cooperative 
Miners' decision to withdraw support from the Morales 
administration (partly as a result of the GOB's slow response 
to the Huanuni conflict and partly in retaliation for GOB 
officials' failure to provide concrete proposals for the 
reactivation of Bolivia's mining sector). 
 
¶3. (U) Radio reports indicate that members of Huanuni's four 
cooperatives accepted the GOB's October 13 offer to convert 
independent miners into salaried employees of Empresa Minera 
Huanuni, the firm overseeing the region's tin mining 
operations.  The GOB agreed to pay newly converted miners 
approximately $412 per month, an amount close to miners' 
estimated average incomes, and provide related employment 
benefits.  The GOB also reportedly reaffirmed its commitment 
to the "refounding" of Comibol, Bolivia's state-owned mining 
company. 
 
IMPORTANT QUESTIONS UNRESOLVED 
------------------------------ 
 
¶4. (SBU) Despite this, important questions concerning mine 
ownership and control remain unresolved.  Huanuni's four 
cooperatives have tried for months to acquire control of 
Empresa Minera Huanuni, owned by UK-based RBG Resources but 
managed since June by Comibol, which assumed oversight after 
RBG declared bankruptcy.  Cooperative leaders announced 
September 20 that they completed the purchase of RBG's shares 
and demanded that they be allowed to take control of Empresa 
Minera Huanuni, thereby threatening existing employees' jobs 
and their demand that Comibol assume ownership of the firm. 
Tensions between the two groups exploded into violence 
October 5, a day after Comibol representatives declared that 
RBG could not transfer its shares to the cooperatives.  The 
transaction remains in limbo, with cooperatives asserting 
their lawful ownership and salaried miners disputing their 
claim. 
 
COMMENT 
------- 
 
¶5. (SBU) The conversion of cooperative miners into salaried 
employees of Empresa Minera Huanuni may temporarily ease the 
region's tensions, but confusion remains, as it is unclear 
whether former cooperative workers plan to pursue their claim 
to ownership of the firm.  As long as the power struggle 
continues, the potential for violence remains - with possible 
repercussions for the Morales administration, which now finds 
itself at odds with what was once one of its strongest 
sources of support and has opened itself to demands from 
other cooperatives for regular salaries and similar 
employment benefits. 
GOLDBERG