Bolivia's Morales Declares Emergency in Zinc Mining (Update2)
bloomberg.com
By Alex Emery
Oct. 24 (Bloomberg) -- Bolivian President Evo Morales declared a state of emergency in the Andean country's zinc- mining industry after prices fell by more than half this year.
The government will add $5 million to a $12.7 million fund to help small-scale zinc producers, state news service ABI cited Mining Minister Luis Alberto Echazu as saying. Morales will seek more markets abroad for Bolivia's zinc, ABI said.
Bolivia's 3,300 small-scale zinc mines produce about 45,000 tons of the metal a year, according to the country's Mining Ministry. More funding is needed to prevent operations from closing down, said Ramiro Aguilar, president of Bolivia's National Mining Chamber, which represents about 33,000 miners.
``This debacle has caught us unprepared,'' Aguilar said in a telephone interview from La Paz. ``This funding is insufficient to help the industry get through this period of low prices, and we lack conditions to invest in mining.''
Morales last year raised mining taxes, seized Glencore International AG's tin smelter and seeks a 50 percent stake in the company's zinc mines in a bid to take greater control of Bolivia's natural resources. Zinc, silver and tin sales rose 30 percent to $1.39 billion last year, accounting for a third of the country's exports, according to the ministry Web site.
``Bolivia's continued political, legal and social instability is discouraging foreign and private investment,'' analyst Carlos Alberto Lopez wrote in an October report for Cambridge Energy Research Associates. ``The escalation of protests, roadblocks and violence between factions for and against the government are doing little to inspire confidence in the future.''
Protests for greater autonomy in Bolivia's province of Pando left at least nine dead last month. The government arrested opposition leaders and declared a ``state of siege'' in the region.
Zinc fell $45, or 3.8 percent, to $1,155 per ton at 4:01 p.m. local time on the London Metal Exchange.
To contact the reporter on this story: Alex Emery in Lima at aemery1@bloomberg.net
Last Updated: October 24, 2008 19:43 EDT |
