GOB, MINERS SIGN AGREEMENT ENDING STAND-OFF

UNCLAS LA PAZ 002860 SIPDIS SENSITIVE SIPDIS STATE FOR WHA/AND LPETRONI COMMERCE FOR JANGLIN TREASURY FOR SGOOCH ENERGY FOR CDAY AND SLADISLAW E.O. 12958: N/A TAGS: EMIN ELAB EINV ECON PREL PGOV BL SUBJECT: GOB, MINERS SIGN AGREEMENT ENDING STAND-OFF REF: LA PAZ 2798 ¶1. (SBU) Summary: The GOB and miners signed an agreement October 23 ending the political stand-off that emerged after October 5-6 clashes between cooperative miners and state mining employees in Huanuni (reftel). Radio reports indicate that members of the region's four cooperatives accepted the GOB's offer to convert independent miners into salaried employees of Empresa Minera Huanuni, the firm overseeing the region's tin operations. Despite this, important questions concerning mine ownership and control remain unresolved. End summary. FINALLY AN AGREEMENT -------------- ¶2. (U) The GOB and miners' groups signed an agreement October 23 ending the political stand-off that emerged after October 5-6 clashes between cooperative miners and state mining employees in Huanuni, a tin mining center in the western department of Oruro (reftel). The agreement followed more than two weeks of dialogue, several threats of nationwide road blockades, and the National Federation of Cooperative Miners' decision to withdraw support from the Morales administration (partly as a result of the GOB's slow response to the Huanuni conflict and partly in retaliation for GOB officials' failure to provide concrete proposals for the reactivation of Bolivia's mining sector). ¶3. (U) Radio reports indicate that members of Huanuni's four cooperatives accepted the GOB's October 13 offer to convert independent miners into salaried employees of Empresa Minera Huanuni, the firm overseeing the region's tin mining operations. The GOB agreed to pay newly converted miners approximately $412 per month, an amount close to miners' estimated average incomes, and provide related employment benefits. The GOB also reportedly reaffirmed its commitment to the "refounding" of Comibol, Bolivia's state-owned mining company. IMPORTANT QUESTIONS UNRESOLVED -------------- ¶4. (SBU) Despite this, important questions concerning mine ownership and control remain unresolved. Huanuni's four cooperatives have tried for months to acquire control of Empresa Minera Huanuni, owned by UK-based RBG Resources but managed since June by Comibol, which assumed oversight after RBG declared bankruptcy. Cooperative leaders announced September 20 that they completed the purchase of RBG's shares and demanded that they be allowed to take control of Empresa Minera Huanuni, thereby threatening existing employees' jobs and their demand that Comibol assume ownership of the firm. Tensions between the two groups exploded into violence October 5, a day after Comibol representatives declared that RBG could not transfer its shares to the cooperatives. The transaction remains in limbo, with cooperatives asserting their lawful ownership and salaried miners disputing their claim. COMMENT -------------- ¶5. (SBU) The conversion of cooperative miners into salaried employees of Empresa Minera Huanuni may temporarily ease the region's tensions, but confusion remains, as it is unclear whether former cooperative workers plan to pursue their claim to ownership of the firm. As long as the power struggle continues, the potential for violence remains - with possible repercussions for the Morales administration, which now finds itself at odds with what was once one of its strongest sources of support and has opened itself to demands from other cooperatives for regular salaries and similar employment benefits. GOLDBERG