Bolivia: struggle for future of mines sees workers killed and injured

Jim Jepps


The clashes took place in Oruro provinceSince Thursday 5th Oct. there have been violent confrontations between workers at the Huanuni mine in the Oruro province of Bolivia. These confrontations have seen at least 16 people killed and dozens seriously injured in clashes between private-sector workers and members of the state-run mining company (COMIBOL).

The violence began after an attempt on Thursday by members of local mining cooperatives to occupy the state-operated mine, which is the largest tin mine in Bolivia.

The mining industry in Bolivia is essentially divided into three sectors. The privately owned mines, those mines owned by COMIBOL, which was set up during the 1952 revolution to take the mining industry into public ownership, and those run by so called cooperatives.

The cooperatives were set up in the eighties when there were mass lay offs from both the private and state mining sectors when the price of tin collapsed. Whilst many workers sought work outside the industry others clubbed together and formed cooperatives to buy the mines that would otherwise have become disused. Today these cooperatives have two tiers, those who are part of the managerial / owning clique and the "salaried workers", so the term cooperative can be confusing in that it implies common ownership, but in fact it is another form of private company, that has a board drawn from those who used to be miners and employs a workforce in the same way as any private company would.

The "salaried workers" of the cooperatives actually work on piece rate and have conditions well below those working for COMIBOL, partially because unionisation among COMIBOL workers is extremely high and militant. Both sections of workers are identified as supporters of leftist President Morales, but it was the COMIBOL workers who have provided a hard core of cadre for the revolutionary movements in Bolivia over the last decade.


RBG Resources

Whilst both sides have been strong supporters of Morales it was the miners of the state owned tin mines that have provided a backbone to the social movementsThe Huanuni mine was, until 2002, a joint venture between COMIBOL and UK based RBG Resources. However, RBG went into liquidation with "deficiencies" of $445,524,000. Viren Rastogi and Anand Jain, two directors of RBG, have been found guilty of fraud, by the UK High Court, against the company to the tune of  US $345 million and other directors are currently under investigation for false accounting, involving sums in excess of $300 million.

When RBG went into liquidation COMIBOL took over sole operation of the mine to ensure job security and retain public control over the mine. RBG's role in the mine was terminated as they were no longer able to fulfil their obligations (e.g. they could not provide the agreed investment) and the contract was null and void. However, Grant Thornton, a multinational firm of accountants, acting as the liquidators of RBG through their UK offices, have taken it on themselves to sell RBG's rights over the mine to one of these cooperatives for around $2.5 million, despite the fact that these rights no longer exist.

The state courts have already ruled that RBG had broken its contract with the government and its holdings in the Huanuni mine were taken into state ownership in 2002. So in essence Grant Thornton, at a meeting in London, has sold its share of a legal dispute it has already lost.

Last week, when news of the deal between Grant Thornton and the cooperatives came out, 2,000 miners demonstrated and threatened to go on hunger strike to ensure the company is retained in public hands. Union leaders fear that the Morales government wants to make concessions to the cooperatives and hand over mining rights currently held by COMIBOL, rolling back the renationalisation of Bolivia's natural resources.

The ruling party, Movement Towards Socialism (MAS), has proposed a bill in La Paz which would open the door to the creation of a joint mining company that incorporates both “cooperativistas” and state workers. This would be a real step backwards.

Negotiations ended on Wednesday with no agreement that the cooperatives could begin mining in Huanuni. Clearly, those who work for the cooperatives on piece rate and those miners who have no work have been led, through dire poverty, to feel that if the cooperatives can take a slice of the state pie some of the crumbs will come their way. The heavily unionised and militant state workers have said in a clear voice "You are not re-privatising the Huanuni tin mine."


Clashes end with dozens killed and injured

Stamp celebrating the 25th anniversary of the formation of Comibol in the 1952 revolutionReports say that more that 4,000 members of the miners cooperatives (some of them very young) descended on the mine in order to occupy it and force a renegotiation, in the hope of winning joint control over the mine. 1,000 unionised miners were there to meet them and defend their workplace, for some at the cost of their lives.

The miners clashed violently. Shots were fired (and police reports say that there were snipers in the mountains) and both groups threw sticks of dynamite. Some cooperative members packed dynamite into tires, which they rolled down to explode near state-employed miners guarding mine entrances.

Many miners on both sides were killed or injured  and the mine's ventilation system has been damaged in the fighting although it's unclear how badly.

COMIBOL miners had called on the police to prevent the murderous actions of those who sought to seize the mine by force, but the government refused to reinforce the 70 strong police force of Oruro who maintained a guard on COMIBOL's headquarters but did not come to the assistance of the miners being killed at the mine.

A ceasefire has now been called and a meeting between the government, union and cooperatives is due to take place on Saturday. It's unclear how long this ceasefire will last as a previous cessation of hostilities on Thursday broke down almost as soon as it was called, but the Morales government has now sent 700 police to the area to try to prevent further fighting.

UPDATE: There have been major upheavals in the government over the affair, the Minister for mines Villaroel has been replaced with an ex-leader of the Huanuni Miners, Guillerme Dalenze, much to the disgust of the cooperativists, and the President of COMIBOL has been sacked. The Bolivian trade union Federation, the COB, has called a general strike for this coming Tuesday after COB members were assaulted by the police when they attempted to see President Morales in La Paz about his refusal to stand up to the cooperativists.


Grant Thornton Thornton's decision to try to sell property it did not own precipitated a blood bath between workers desperate for work on the one hand and those determined to maintain decent working conditions and public control on the other.

Vice President Alvaro Garcia Linera bemoaned the situation on Thursday saying "What should have been a blessing for the country, to possess such natural riches, today has become a curse."

Grant Thornton, under pressure from the UK Bolivia Solidarity Campaign (BSC), have written to the Bolivian embassy saying that they were "sorry" about the deaths and hoped that a negotiated settlement could be reached. That is a settlement that involves selling publicly owned property to the private sector "cooperatives" and that leaves Grant Thornton pocketing millions of dollars.

Perhaps a more sensible solution would be for Grant Thornton to hold up its hands and say it had no right to try to sell state assets it has no legal claim over and precipitate a bloody conflict in one of the poorest regions on the planet just to make a fast buck. An official statement from Grant Thornton, as the liquidator of RBG, would be genuinely useful to prevent more blood shed.

The BSC intends to stand in support with the Huanuni miners by targeting the London offices of Grant Thornton (watch this space for updates). If Grant Thornton wants to help, they can, by getting the hell out of Bolivia once and for all.


October 2006

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