Bolivian mines halt as metal prices plummet

The Associated Press, October 30, 2008

POTOSI, Bolivia: Falling mineral prices have Bolivian miners digging in the hard Andean earth for a humbler means of survival: potatoes.

The global financial crisis is driving a decline in metal prices that has idled thousands of miners here in recent weeks — just in time for the Southern Hemisphere's spring planting season in nearby rural villages once all but abandoned during a recent mineral boom.

"They can no longer earn anything in the mines, but at least they can plant their crops so they have something to eat," Roman Rodriguez, spokesman for the Potosi state Federation of Mining Cooperatives, told The Associated Press recently.

The price of zinc, Bolivia's largest export after oil and gas, has dropped nearly a third in the last month, and is 70 percent off its peak in late 2006. Falling prices for silver, tin and lead have also hit the key mining industry hard in this poor Andean nation.

The Potosi federation reported this week that 80 percent of region's mining cooperatives have halted operations until zinc and silver prices recover. In the state's colonial capital, whose treeless, rust-colored hills tower 13,300 feet (4,000 meters) above sea level, a work force of 25,000 miners has been cut in half. Those still working have seen daily paychecks drop from more than $20 to about $7.

Another telling economic indicator is the disappearance of more than a dozen Hummers that mine owners once drove through the city's narrow streets. Miners here say many of the vehicles were sold for cash at a swap meet.

President Evo Morales has announced $5 million in zinc subsidies to help keep mines open, and his government is considering similar funds for other minerals.

The money aims to appease the estimated 80,000 members of independent miners' cooperatives, a volatile political bloc known for showing up at street protests with hardhats and dynamite.

"The government will do everything possible to prevent more cooperatives from halting operations," mining director Freddy Beltran said Tuesday.

1 comment:

sarodgz said...

What does the market for iron ore and steel products look like?

Let’s remember that Bolivia signed a contract with India’s Jindal Steel to develop El Mutun, the biggest untapped iron ore deposit in the world - with an estimated 40 billion tons of iron ore reserve - along with steel making facilities. Jindal will invest $2.1 billion during the first eight years of the 40-year deal while the government expects revenues of $200 million annually after Jindal starts commercial production of steel by 2010. There were economic reasons for choosing Jindal over other possible investors, but there were also considerations regarding the environment, such as Jindal having received India’s National Energy Conservation Award in 2007. Check it out:

Jindal Steel to invest $2 billion in Bolivia

Jindal Steel & Power Ltd awarded First Prize at the 'National Energy Conservation Award 2007'