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
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RUEHC/DEPT OF LABOR WASHINGTON DC
RUMIAAA/USCINCSO MIAMI FL
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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