Bolivian Miners Protest Tax Increase

The Associated Press
Tuesday, February 6, 2007; 4:44 PM

LA PAZ, Bolivia -- More than 20,000 miners from across Bolivia marched into the capital Tuesday, tossing sticks of dynamite that sent booming explosions echoing through the streets in a protest of President Evo Morales' plans for a steep hike in mining taxes.

The hard-hatted miners whistled and chanted as they marched through the center of La Paz to protest the tax proposal, which they say would unfairly burden hundreds of small independent miners' cooperatives.

Police said they confiscated some 284 sticks of dynamite, along with hundreds of detonators and rolls of fuse.

After negotiations with the miners Monday night, the government announced the cooperatives' taxes would be frozen at current levels until further notice. The proposed tax increase would be directed instead at larger private mining companies operating in Bolivia, officials said.

But the concession failed to deter thousands of miners already gathered in La Paz's poorer twin city of El Alto from marching into the capital early Tuesday.

The tax freeze "seems reasonable to us," Interior Minister Alfredo Rada said at a news conference Tuesday. "We hope that this proposal will not continue to be met with intolerance and irrational actions like those of the ... miners this morning."

The miners' cooperatives argue the government should not penalize their labor with higher taxes but instead focus on the mineral dealers who buy and sell their ore.

"We have asked the government not to impose this tax," Andres Villca, leader of the National Federation of Mining Cooperatives. "Instead, we have asked them to look for a way to control the sale of the minerals, which is the fundamental part."

Rising international metal prices, fed in part by spiraling demand from China, have doubled the value of Bolivia's mineral exports, from $547 million in 2005 to over $1 billion last year, with cooperatives accounting for just over a third. The metals _ mostly zinc, silver, gold and tin _ together represent Bolivia's largest export after natural gas.

But the Bolivian government only collected $45.5 million in mining taxes in 2006 and aims to dramatically increase its collections this year, perhaps to as much as $300 million.

The proposed tax increase is a first step toward Morales' announced goal of "nationalizing" Bolivia's mining sector, though how that will proceed beyond the tax increase is unclear.

Bolivia's extensive mineral deposits are already owned by the state, which operates a handful of mines through state mining company Comibol. The rest are mined through concessions granted to the cooperatives or to international companies such as U.S.-based Coeur d'Alene Mines and Apex Silver Mines, Ltd.

Morales has said that any concessions left idle or lacking in investment should be returned to the state.

© 2007 The Associated Press