Sunday, March 1, 2015

Bolivia's Tin Tales


In J.C. Chasteen's Born in Blood & Fire: A Concise History of Latin America (266), we learn that the National Revolutionary Movement (MNR) came to power in Bolivia in 1952, and subsequently took control of that country's tin mines from fabulously wealthy absentee owners. The MNR nationalized the tin industry and rewarded the miners and their unions with higher wages and benefits. In one of his first acts, President Entenssora, head of the MNR, stood outside the Siglo XX or “Twentieth Century Mine” and gave the good news to the celebrating miners and their many supporters (www.normangall.com/bolivia_art2.htm). The future seemed bright, but they were wrong. The state mining corporation (COMIBOL), formed in 1952 to run the mines, was gaining control of an industry beset by problems (www.normanall.com/bolivia_art3.htm).

According to Gall (www.normanall.com/bolivia_art3.htm), many of the Bolivian tin mines were already depleted of high-grade ore and had outdated equipment. In the years following nationalization, the workforce grew, drawn by better wages and benefits, but tin production dropped. Then, the National Mine Workers' Union, which had aided the MNR's rise to power, began exerting control on COMIBOL management through their Control Obrero, which even had veto power.

These factors caused a decline in Bolivia's tin exports and thus increased poverty for miners, their families, and the nation overall. (www.normanall.com/bolivia_art3.htm) Political unrest followed, with Estenssora and his government toppled and military rule established until the 1980's (upsidedownworld.org/maincontent/view/445/1). Then, in October 1985, the London Metal Exchange suddenly cut the price of tin by 50%; repercussions were world-wide, but particularly in Bolivia. (www.economist.com/node/181369). According to The Economist, COMIBOL laid off about 60% of its workers in the first year, until only 2,000 remained. Laid-off workers received payouts of $1,000 for each year of service. The COMIBOL then tried to sell its tin assets to private buyers to pay Bolivia's burgeoning debt to the International Monetary Fund (upsidedownworld.org/main/content/view/455/1/).

Privatization of the mining industry did not run smoothly. In 1994, under President Sanchez de Lozada, many of the state-run companies were sold; the objective was to strengthen Bolivia's economy, but it actually caused a crisis (www.counterpunch.org/2006/10/11/tin-war-in-bolivia). When tin prices began rising in the 1990's, the miners who had left during the 1980's economic downturn returned, but they overwhelmingly joined independent cooperatives instead of the original mine unions (www.counterpunch.org/2006/10/11/tin-war-in-bolivia). Then, when COMIBOL obtained ownership of the rich tin mine Posokoni from international companies, it tried to keep cooperatives out of the lucrative arrangement (www.mineweb.com/archive/bolivian-tin-miners-to-march-on-la-paz-again/). However, when the government pressured the union and cooperative workers to cooperate, results were devastating. On October 4-5, 2006, violence erupted, killing 16, injuring more than 60, and destroying over $4 million in property. The government and the Catholic Church needed to quell the violence.

More recently, Bolivia has returned to nationalization. (www.economist.com/node/8727212) In February, 2007, President Evo Morales announced that he was retaking under state control Empresa Metalúrgica Vinto, a large tin smelter owned by the Swiss Glencore. (www.economist.com/node/8727212). According to The Economist, Glencore will not be compensated for Vinto. Is this an isolated case, or are other foreign-owned tin companies next? Stay tuned.

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