Bolivia’s Colquiri mine to restart operation after historic agreement

The rival groups of Bolivian miners fighting over control of the Andean silver, tin and zinc Colquiri mine, reached an agreement over the weekend that was qualified as “historic” by Government Minister Carlos Romero.

"We are signing an agreement that I think is historic, because it's ending one of the most significant and complicated conflicts that we've had to deal with in the last few years," he told local reporters, as quoted by Emol.com.

The dispute, which rocked the country for months and cost it over $1 million, centred around the right to a mine that used to belong to commodity trader Glencore (LON:GLEN) but was nationalized by President Evo Morales last June.

Months of demonstrations and riots over Colquiri paralyzed parts of the South American country for days at a time, cutting off access routes to the capital city La Paz.

Thanks to the agreement, the Rosario vein at the Colquiri mine, located about 160km south of La Paz, will now be split into seven smaller sections, and miners from both sides will be able to exploit Colquiri for minerals.

While the settlement resolves the immediate differences by dividing the disputed vein more equitably between the parties, the events at Colquiri reveal the broader conflicts and paradoxes within Bolivia’s mining sector and the historical forces that have shaped them.

To avoid further conflict, expert say, Morales needs to formulate a clear policy, in the form of a mining code, that defines the respective roles and opportunities of each component of the mining sector.

The task, which has been stuck for some time by the inability to reconcile competing interests, represents a major political challenge for Morales. Losing the support from either the cooperative or the salaried mining sector could have serious effects in the President’s political future.

Morales has raised taxes and nationalized the key natural gas industry as well as the telecommunications and electricity sectors, since taking power in 2006. Earlier this year, Bolivia also took over assets from Spain’s Red Eléctrica Corp. (REE) and Pan American Energy LLC.

Image: Colquiri miners march in La Paz/ La Razón.com