Identifier
Created
Classification
Origin
07LAPAZ334
2007-02-07 19:27:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy La Paz
Cable title:
MINERS' COOPERATIVES CONVERGE ON LA PAZ
how-toVZCZCXYZ0000 RR RUEHWEB DE RUEHLP #0334 0381927 ZNR UUUUU ZZH R 071927Z FEB 07 FM AMEMBASSY LA PAZ TO RUEHC/SECSTATE WASHDC 2389 INFO RUEHAC/AMEMBASSY ASUNCION 6513 RUEHBO/AMEMBASSY BOGOTA 3837 RUEHBR/AMEMBASSY BRASILIA 7719 RUEHBU/AMEMBASSY BUENOS AIRES 4965 RUEHCV/AMEMBASSY CARACAS 2206 RUEHPE/AMEMBASSY LIMA 2295 RUEHMD/AMEMBASSY MADRID 3301 RUEHMN/AMEMBASSY MONTEVIDEO 4387 RUEHNE/AMEMBASSY NEW DELHI 0101 RUEHQT/AMEMBASSY QUITO 4849 RUEHSG/AMEMBASSY SANTIAGO 9437 RUEHKO/AMEMBASSY TOKYO 0281 RUEHUB/USINT HAVANA 0127 RHMFIUU/HQ USSOUTHCOM MIAMI FL RUMIAAA/USCINCSO MIAMI FL RUCPDOC/DEPT OF COMMERCE WASHINGTON DC RUEATRS/DEPT OF TREASURY WASHINGTON DC RUEHC/DEPT OF INTERIOR WASHINGTON DC RUEHC/DEPT OF LABOR WASHINGTON DC RHEHNSC/NSC WASHINGTON DC
UNCLAS LA PAZ 000334
SIPDIS
SENSITIVE
SIPDIS
STATE FOR WHA/AND LPETRONI
COMMERCE FOR JANGLIN
TREASURY FOR SGOOCH
E.O. 12958: N/A
TAGS: EMIN EINV ECON PREL PGOV BL
SUBJECT: MINERS' COOPERATIVES CONVERGE ON LA PAZ
REF: A. LA PAZ 137
B. 06 LA PAZ 2860
-------
SUMMARY
-------
UNCLAS LA PAZ 000334
SIPDIS
SENSITIVE
SIPDIS
STATE FOR WHA/AND LPETRONI
COMMERCE FOR JANGLIN
TREASURY FOR SGOOCH
E.O. 12958: N/A
TAGS: EMIN EINV ECON PREL PGOV BL
SUBJECT: MINERS' COOPERATIVES CONVERGE ON LA PAZ
REF: A. LA PAZ 137
B. 06 LA PAZ 2860
--------------
SUMMARY
--------------
1. (U) An estimated 10,000 cooperative-affiliated miners
converged on La Paz February 6 to protest proposed mining tax
increases (ref A),vowing to remain in the city until the GOB
accedes to their demands. Marchers brandished sticks of
dynamite and threatened nationwide road blockades and other
measures. The protest occurred despite GOB officials'
January 30 offer to exempt cooperatives from tax increases
while negotiating an agreed solution. End summary.
--------------
MINERS CONVERGE ON LA PAZ
--------------
2. (U) An estimated 10,000 cooperative-affiliated miners
converged on La Paz February 6 to protest proposed mining tax
increases (ref A),vowing to remain in the city until the GOB
agrees not to raise taxes. Miners' cooperatives are
currently subject to the complementary mining tax (ICM),set
on a sliding scale that varies by mineral, imposes different
tax rates at different mineral prices, and sets minimum and
maximum tax rates. Cooperatives have repeatedly opposed the
GOB's proposed tax hikes, arguing that narrow profit margins
on cooperative-operated mines make it impossible to pay
higher taxes.
3. (U) Marchers brandished sticks of dynamite and threatened
nationwide road blockades and other measures if the GOB moves
ahead with tax increases. National Federation of Cooperative
Miners (FENCOMIN) President Andres Villca suggested February
6 that cooperatives could take control of Huanuni's Cerro
Posokoni, site of October 2006 clashes between cooperative
miners and state mining employees (ref B),and seize
properties held by Comibol, Bolivia's state-owned mining
company.
4. (U) The miners' protest occurred despite GOB officials'
January 30 offer to exempt cooperatives from tax increases
while negotiating a mutually acceptable solution. Minister
of Mining Jose Dalence reportedly made the offer in hopes of
encouraging miners' cooperatives to restart stalled
negotiations. FENCOMIN rejected the minister's appeal,
calling instead for his resignation and declaring that
cooperatives would talk only to President Morales.
--------------
COMMENT
--------------
5. (SBU) Press reports indicate that the cooperatives'
"pressure measures" may continue, raising the potential for
violence not only in La Paz, but also in mining-dependent
cities like Potosi and Oruro. Prolonged demonstrations and
nationwide road blockades could, as in the past, bring the
country to a halt, exacerbating already high tensions and
presenting yet another challenge for the Morales
administration. In the face of this threat, the GOB may have
every incentive to accede to miners' demands, but achieving
consensus may be a long and difficult process. End comment.
GOLDBERG
SIPDIS
SENSITIVE
SIPDIS
STATE FOR WHA/AND LPETRONI
COMMERCE FOR JANGLIN
TREASURY FOR SGOOCH
E.O. 12958: N/A
TAGS: EMIN EINV ECON PREL PGOV BL
SUBJECT: MINERS' COOPERATIVES CONVERGE ON LA PAZ
REF: A. LA PAZ 137
B. 06 LA PAZ 2860
--------------
SUMMARY
--------------
1. (U) An estimated 10,000 cooperative-affiliated miners
converged on La Paz February 6 to protest proposed mining tax
increases (ref A),vowing to remain in the city until the GOB
accedes to their demands. Marchers brandished sticks of
dynamite and threatened nationwide road blockades and other
measures. The protest occurred despite GOB officials'
January 30 offer to exempt cooperatives from tax increases
while negotiating an agreed solution. End summary.
--------------
MINERS CONVERGE ON LA PAZ
--------------
2. (U) An estimated 10,000 cooperative-affiliated miners
converged on La Paz February 6 to protest proposed mining tax
increases (ref A),vowing to remain in the city until the GOB
agrees not to raise taxes. Miners' cooperatives are
currently subject to the complementary mining tax (ICM),set
on a sliding scale that varies by mineral, imposes different
tax rates at different mineral prices, and sets minimum and
maximum tax rates. Cooperatives have repeatedly opposed the
GOB's proposed tax hikes, arguing that narrow profit margins
on cooperative-operated mines make it impossible to pay
higher taxes.
3. (U) Marchers brandished sticks of dynamite and threatened
nationwide road blockades and other measures if the GOB moves
ahead with tax increases. National Federation of Cooperative
Miners (FENCOMIN) President Andres Villca suggested February
6 that cooperatives could take control of Huanuni's Cerro
Posokoni, site of October 2006 clashes between cooperative
miners and state mining employees (ref B),and seize
properties held by Comibol, Bolivia's state-owned mining
company.
4. (U) The miners' protest occurred despite GOB officials'
January 30 offer to exempt cooperatives from tax increases
while negotiating a mutually acceptable solution. Minister
of Mining Jose Dalence reportedly made the offer in hopes of
encouraging miners' cooperatives to restart stalled
negotiations. FENCOMIN rejected the minister's appeal,
calling instead for his resignation and declaring that
cooperatives would talk only to President Morales.
--------------
COMMENT
--------------
5. (SBU) Press reports indicate that the cooperatives'
"pressure measures" may continue, raising the potential for
violence not only in La Paz, but also in mining-dependent
cities like Potosi and Oruro. Prolonged demonstrations and
nationwide road blockades could, as in the past, bring the
country to a halt, exacerbating already high tensions and
presenting yet another challenge for the Morales
administration. In the face of this threat, the GOB may have
every incentive to accede to miners' demands, but achieving
consensus may be a long and difficult process. End comment.
GOLDBERG