Bolivia's Silver Mountain Regains Lost Lustre
Date: 29-Feb-08
Country: BOLIVIA
Author: Kevin Gray
Now, Bolivians are hoping that Potosi, devastated by a collapse of tin prices in the 1980s, will regain some of its lost lustre.
High international mineral prices fed largely by demand from China and India have ignited a mining boom in this impoverished colonial city perched atop the Andes Mountains.
Thousands of miners have returned to its mines, hoping to cash in on the world's thirst for silver, zinc, and tin -- and bringing some prosperity to Potosi, one of Bolivia's poorest regions.
"This is the best outlook Potosi has had in decades," said German Elias, mining director for Potosi's local government.
Some miners cruise the streets in shiny new sport utility vehicles, a sign that a few are already enjoying some of the best prices for Bolivian minerals in decades. Real estate prices have also shot up.
The boom is drawing new prospectors. One-time construction workers, mechanics and other labourers have all been lured by the mines, where even the lowest wages, around $460 a month, are considered relatively good in South America's poorest country.
That has led to a labour shortage in the city of Potosi, where help-wanted signs hang from restaurants and storefronts.
The economic revival is a reversal of fortunes for many in Potosi, once a centre of Bolivia's tin and lead industries.
When the world tin market crashed in the 1980s, thousands of miners who once enjoyed steady pay and benefits with the state mining company lost their jobs, and the local economy slumped.
"It was one of the darkest times I remember. Suddenly you saw kids working in the streets. Many people just left," said Jaime Marca, a former miner who now leads tours of the area's mines.
To compensate for the layoffs, the government agreed to allow independent and cooperative miners who remained to work the mines through government concessions.
RICH MOUNTAIN
Mining has long been a pillar of the Bolivian economy, and Potosi a symbol of Bolivia's mineral wealth.
In the 1600s, Potosi was the crown jewel of the Spanish colonial empire.
With more than 120,000 people, Potosi was at the time bigger -- and richer -- than London or Paris. Historians say locals ate from silver plates and dressed in gold and silk.
The wealth was rooted in the rich silver deposits in the Cerro Rico, or "Rich Mountain", which looms over Potosi. But it came at a brutal cost. Spanish conquerors forced indigenous labourers to work the mines in appalling conditions, where millions are believed to have died.
Today some 15,000 miners head into the mines at Cerro Rico every day in round-the-clock shifts. Conditions remain harsh and dangerous, especially in mines run by cooperatives formed by mine workers.
Deep in the Rosario mine, Nicanor Mendoza, 21, said he abandoned his job as a potato and wheat farmer to take his chances in the mines two years ago.
"It is difficult work, but I'm making almost double what I made in the fields," he said. "Working here is the only way I can get ahead."
Potosi also has drawn interest from foreign investors. Recent investments including the $700 million San Cristobal silver, zinc and lead project by Apex Silver Mines Ltd and the $135 million San Bartolome silver plant by Couer d'Alene Mines Corp. Canada's Atlas Precious Metals also recently announced a $141 million investment in the Karachipampa lead-silver plant.
Some critics warn the increased independent mining activity -- by cooperatives that get tax breaks -- is doing little to boost state coffers.
Many miners' groups have resisted President Evo Morales' attempts to increase state control over the industry and raise taxes on their earnings.
Others warn of the environmental effects of more mining in Potosi, where toxic water flows down Cerro Rico's mountainside.
Still, many are simply relishing the boom.
Making his way through the tunnels of Cerro Rico, Marca, the tour guide, stopped to l