Bolivian Miners Split on Nationalization Plan

by Julie McCarthy

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Adrian Althoff

More than 20,000 cooperative miners descended on the capital La Paz this past week, tossing dynamite into the air that set off explosions which echoed through the city.

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Adrian Althoff

Miners line up for the bus to the graveyard shift at Huanuni. Many of the cooperative miners who joined the state operation say that salaries, health insurance and safety precautions improved their lives.

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Julie McCarthy, NPR

Sunset over the tin-rich Posokony mountain in Huanuni.

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Adrian Althoff

The town of Huanuni springs to life on a Saturday night.

Julie McCarthy, NPR

Cooperative miner Cesar Porco took two bullets to the back during the conflict that raged in October among competing miners at the tin-rich mine in the Bolivian altiplano.

Weekend Edition Sunday, February 11, 2007 · Throughout Latin America, leftist leaders are seeking greater state control over their industries while also trying to keep them profitable. In the continent's poorest country, Bolivia, the government of President Evo Morales has decreed one of the largest tin mines an exclusive state enterprise. In the mining town of Huanuni, Bolivia's newest experiment in nationalization has had a tumultuous start.

Long-suffering and poor, Bolivia's miners have been in the vanguard of the country's social and political revolutions. But they turned on each other this fall in a grisly fight over a rich tin mine located in the altiplano, near the frigid passes of the Andes.

Bloody Battle over Tin

Competing factions of miners battled it out with dynamite and firearms at the colossal Huanuni mine. On one side were miners who work in cooperatives sharing profits. On the other, salaried miners employed by the state. By agreement, both were mining Huanuni's vast tin lode. Local news video of the conflict showed armed security guards firing on cooperative miners, who had ignited the three-day skirmish by seizing a greater share of the mine on Oct. 5. Sixteen people — mostly cooperative miners — were killed. When it was over, the state banned cooperative miners and took over the mine.

Cesar Porco, a 42-year-old cooperative miner, lifts his shirt to reveal the two bullets lodged in his back from the conflict. He concedes that his fellow cooperative miners badly miscalculated in seizing the mine. But he says that the state used the fighting as a pretext to take exclusive control of the lucrative operation, now that the price of tin is back up.

"As a cooperative miner," Porco says, "I feel like the government has betrayed me, robbed me. The years I've worked have been for nothing, and now the government is practically taking away the bread that my children eat. I feel like they've taken something from inside of me."

State miners have a different version of events: They say the cooperatives are the villains. Teresa Rollano de Chino speaks for the committee of housewives of state miners. She says "ambition" is what pitted the poor against the poor in this mining town.

"And higher tin prices caused this bloodshed," she says. "The cooperatives wanted to devour the best part of the mine for themselves and use it all up in a year. But we want to extend the life of this mine, and mine it properly."

In a bid to ease tensions, the government offered jobs in the Huanuni mine to the town's 4,000 cooperative miners if they became salaried miners for the state. The injured Cesar Porco rejected the deal. A father of four, Porco says the wages are less than half what he earned as a cooperative miner. But 3,000 other cooperative miners took up the offer, quadrupling the salaried work force.

Better off as State Employees?

Cooperatives make up the bulk of Bolivia's miners, who number about 40,000. After tin prices crashed in the 1980s, throwing thousands of miners out of work, many banded together in cooperatives. Armed with little more than picks, shovels and gumption, they continued to work the abandoned mines. Free-wheeling free marketers, they lend an air of high-spiritedness to Huanuni. Music flows and so does the alcohol on a Saturday night in the town of Huanuni, where younger cooperative miners flaunt their cash in cars and bars. But former cooperative miner Banafilio Beltran is among those who switched to the state's side. Amid the frivolity of a Saturday night, he stands on a curb with his fellow miners, waiting for the bus to take them to the graveyard shift.

"When we were in the cooperative," he says, "it was like we were drowning: We couldn't breathe, there wasn't ventilation in the mine. The passages were full of cargo. It was tough. We didn't have any security, no safety. Now, it's much better with the state company."

Mining Vice Minister Luis Alberto Echazu says former cooperative miners are better off as state employees, even if they now earn less money.

"Most of the cooperative miners might have a free-market vision," he says. "But I think that very quickly they will learn that, for them, it is better to have a fixed salary, to have health insurance, social security and industrial security that they don't often have in cooperatives."

Despite the addition of 3,000 new employees, production at the mine (which dates back to the 19th century), remains at 750 tons a day, the same as it was before the October conflict. It hasn't increased because the new employees are still working the same thin veins.

Profits Seen as Compromised

Rolando Jordan says the government may have quelled social unrest when it hired thousands of cooperative miners. But he says all those new salaries are sure to reduce profits.

"This government, like previous leftist governments, has assigned the state mining company contradictory roles," Jordan says. "It tells the company, 'Solve the social unrest, generate employment and raise salaries.' But the state also says: 'Run a surplus and make profits.' These are contradictions. The mining company must have one clear goal, which is to generate profits."

But Huanuni's directors are not looking for foreign capital to improve their productivity. Mining Vice Minister Echazu says Huanuni had foreign investors who committed fraud by failing to make the promised investments.

"Our experience with private investors is very negative," Echazu says. "We don't need foreign investors there." He says that the reserves are rich and the state will succeed on its own.

Abandoning the 'Neo-Liberal' Vision

Leftist governments throughout Latin America are asserting greater state control over lucrative industries such as oil and gas, turning their back on the free-market reforms of the past 20 years and the painful shock therapy that came with them. Mining Vice Minister Echazu says the region is in the midst of transition.

"Let us not forget that we are now passing through the dawn after a dark night," he says, "and that the neo-liberal vision that promoted freedom and individual success took root among our poor people as well. But I think that the people of Huanuni will soon see which way is best for them."

While Haununi was taken over by the state, the Bolivian government has other indirect ways of "nationalizing" the country's mines. It has proposed increasing taxes on foreign-owned operations by as much as 600 percent.

"The world needs to understand that a new mentality is arising," Vice Minister Echazu says.

But the cooperative miners of Huanuni who assembled for a raucous meeting to elect a new leadership recently say the government needs to grasp that they feel diminished, and officials need to oppose any overhaul of the mining industry, including a tax increase.

In their thousands, Bolivia's discontented cooperative miners continue to pose a threat to government plans to take greater control over the country's mining industry.