Dec 28 - (digitalwarriormedia) As the growing global financial crisis drives down commodity prices, Bolivia is increasingly feeling the pinch. Most recently the number of unemployed miners increased by several hundred as the Sinchi Wayra company laid off workers on Friday.
On Dec. 26 La Prensa reported that 700 dismissal letters were delivered to workers at the Porco mine in Potosi.
With last week's layoffs, the number of unemployed miners at Sinchi Wayra exceeds 1,300 people says the Trade Union Federation of Mine Workers of Bolivia.
Sinchi Wayra is the operator of 5 mines in the Oruro and Potosi regions of Bolivia - producing zinc, lead, tin, gold and silver. The holding group was acquired by Swiss-based Glencore International AG in 2005.
Some claim that the company was aleady on the verge of bankruptcy. Rene Velásquez leader of the workers' union at Sinchi Wayra, said the company was using the drop in prices of minerals as a pretext in order to dismiss "50% of workers" but that the company is at the point of "going into liquidation". Velásquez called dismissals by the mining company unfair because tin and other minerals have not experienced a deep drop in prices.
Despite the falling value of mineral commodities in the last three months, 2008 was quite a good year for the mining sector, as reflected in the quantity and volumes of exports, said Director General of Mines Freddy Beltran.
Referring to Sinchi Wayra, Beltran said mining companies would have to demonstrate that their financial losses were due to the fall in mineral prices.
Beltran also said the government would try to find an interim solution to the problems facing the miners, but that intervention is limited due to the fact that Sinchi Wayra is a private company.
The Morales administration urged mining companies to respect the labor and social stability of their employees and renegotiate the benefits of their employees instead of resorting to massive layoffs.
AP reports that miners are threatening to take over several mines to protest their firing, which came the day after Christmas.
Expected Shocks
Zinc is Bolivia's second highest export after natural gas. Bloomberg reports that in 2008 the sale of zinc generated $665 million by October, with mineral exports reaching $1.3 billion during the same time.
The price of zinc has dropped nearly a third in the last month. In Potosi, where the majority of Bolivia’s zinc, lead and silver exports are mined, 11 small mining operations have closed as the value of mineral exports has fallen 47 percent in the fourth quarter.
In October the government announced that it would make available $5 million in subsidies to help keep zinc mines in operation. And similar government subsidies may be made for other minerals in the near future.
Governmental Guarantees
On Sunday, Finance Minister Luis Arce Catacora announced that despite falling gas prices and the international financial crisis, the Bolivian government guaranteed the payment of the Juancito Pinto bond for school-age children and the Dignity Income - a pension for people over 60.
According to Arce, the fall in the international price of oil has already been considered in the national general budget for 2009, which allocated for the eventual decline in revenue and does not affect projected government investment in the public sector.
While speaking on the program "The People in the News" on Red Patria Nueva, Arce confirmed that Bolivia’s international reserves more than $7.77 billion – up from $1.71 billion during the first year of President Morales' administration in 2006.
In October, the Central Bank of Bolivia (BCB) confirmed that the level of international reserves will be enough to absorb the shock of any international financial crisis afflicting the country.
Sources: ABI, AP, Bloomberg, La Prensa, Reuters
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1 Comments:
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