Document of The World Bank
FOR OFFICIAL USE ONLY
Ca- ZC~ / 3 7
Public Disclosure Authorized Report No. 7630-BO
STAFF APPRAISALREPORT Public Disclosure Authorized REPUBLICOF BOLIVIA
MINING SECTORREHABILITATION PROJECT
APRIL 17, 1989 Public Disclosure Authorized
Industry,Trade and FinanceOperations Division Country DepartmentIII Public Disclosure Authorized Latin America and the CaribbeanRegion
This document hasa resticted dsibuto0vand may be used by oenpienlsoly In the perdonnanoe of their official duties. Its contents may - A otherwise be disclosed wt World Bank authorizatin CURRENCYEQUIVALENTS
Currency Name - Boliviano US$1.00 - Bolivianos 2.47 Bolivianos 1.00 - US$0.405
FISCAL YEAR
January 1 to December 31
WEIGHTS AND MEASURES
1 meter (m) G 3.281 feet (ft) 1 kilometer (km) = 0.622 miles (mi) 1 kilogram (kg) 2.205 pounds (lb) 1 troy ounce (troy oz) - 31.: grams 1 gram (g) - .032 troy ox 1 metric tonne (mt) - S2,151 troy oz | 2.205 lbs 1 short ton (T) - 2,000 lbs
PRINCIPAL ABBREVIATIONS AND ACRONYMS
BAMIN - Banco Minero BCB - Banco Central de Bolivia SA - Banco Industrial SA . - Centro de Investigacion Minero Metalurgica IMITBOL - Corporacion Hinera de Bolivia -'D - Development Credit Department (Central Bank) ,TAW - Empresa Nacional de Fundiciones FCNEM - Fondo Nacional de Exploracion Minera FSE - Fondo Social de Emergencia FSTMN - Federacion Sindical de Trabajadores Mineros de Bolivia GEOBOL - Servicio Geologico de Bolivia IDB - Interamerican Developi*ent Bank IDM - Instituto de Desarrollo Minero INK - Instituto de Investigacion Minero Metalurgica MMK - Ministry of Mining and Metallurgy STCM - Servicio Tecnico del Cadastro Minero FOR OMFCIL USE ONLY
STAFF APPRAISAL REPORT
BOLIVIA
MINING SECTOR REHABILITATION PROJECT
TABLE OF CONTENTS
Page No.
CREDIT AND PROJECT SUMMARY ...... i
I. THE MINING SECTOR ...... 1
A. Background and Recent. Developments ...... 1 B. Mineral Resources and Reserves ...... 3
II. INSTITUTIONS, PRODUCERS, AND SECTORAL STRATEGY ...... 4
A. Government Institutions ...... 4 B. Private Producers ...... 6 C-. COMIBOL ... o...... * 7 D. Health, Safety and Environment ...... 10 E. Financing of Mining Investments ...... * ... 11 F. Sectoral Strategy ...... 13 G. Outlook for the Sector ...... *...* 16
III. THE PROJECT ...... 17
A. Role of IDA ...... 17 B. Project Objectives ...... 18 1. Promotion of Mining Investment .#...... 18 2. Rehabilitation of COMIBOL ...... 19 C. Project Description ...... 20 1. Institutional Strengthening ...... **O..# 20 2. Financing of Private Mines and Cooperatives . 21 3. COMIBOL ...... 23 D. Project Implementation Arrangements and Schedule 27 1. Project Coordination ...... 27 2. Financing of Private Mines ...... 28 3. COMIBOL ...... 31
IV. PROJECT COST, FINANCING PLAN. PROCUREMENT AND DISBURSEMENT ...... 31
A. Project Cost ...... 31 B. Financing Plan ...... 33 C. Procurement ...... 35 D. Allocation and Disbursement of IDA Credit ...... 37
l ~~~~Thisdocument has a festricted distribution and may be used by recipients only in the porformace of their officialduties. Its contents may not otherwise be disclosedwithout Wofi et, authoroun. -2-
Page No.
V. FINANCIAL ANALYSIS OF COMIBOL ...... 38
A. Financial Projections ...... 38 B. Breakeven Analysis ...... 40 C. Sensitivity Analysis ...... 41 D. Financial Rate of Return and Sensitivity Tests .. 42 E. FinancialCovenants ...... 43 F. Auditing and Reporting Requirements ...... 43
VI. ECONOMIC ANALYSIS ...... 44
A. Economic Benefits of the Project ...... 44 B. Economic Rates of Return ...... 45 C. Risks ...... 46
V£II. AGREEMENTS AND RECOMMENDATION ...... 47 A. Agreements ...... 47 B. Recomendation ...... 50
TABLES IN TEXT
Bolivia - Mineral Exports and Mining Sector Contribution to GDP ...... Bolivia - Value of Mineral Exports by Product ...... Bolivia - Contribution of Mining Sector to Government Revenues ...... Bolivia - Employment in Mining ...... Bolivia - Estimated Mineral Reserves ...... Bolivia - Indicators of the Medium Mines ...... Bolivia - Production of Medium Mines ...... Bolivia - Production by Small Miners ...... COMIBOL - Tin Production and Workforce ...... COMIBOL - Production Costs ...... COMIBOL - Financial Results ...... Summary of Project Costs ...... Financing Plan ...... Procurement Arrangements ...... Allocation of IDA Credit ...... COMIBOL - Summary of Financial Projections, 1989-93 COMIBOL - Breakeven Price for Tin, 1989-93 ...... COMIBOL - Sensitivity Analysis of Cash Flow and Profitability ...... Switching Values of Critical Variables ......
-ANEXS
1-1 Bolivia - Production of Minerals 1973-1987 ...... 51 1-2 Bolivia - Estimated Mineral Resources and Reserves 52
2-1 Bolivia - Mining Sector Institutions ...... 55 2-2 Bolivia - COMIBOL - Historical Cost Breakdown, 1979-1987 ...... 58 2-3 Bolivia - COMIBOL - Summary of Historical Income Statements, 1980-1988 ...... 59 2-4 BolivJia - COMIBOL - Summary of Historical Cash Flows, 1980-1984 ...... 60 2-5 Bolivia - COMIBCL - Summary of Historical Balance Sheets, 1980-1988 ...... 61 2-6 Bolivia - GOB Mining 3ector Policy ...... 62 2-7 Bolivia - Mining Export Projections, 1987-1997 ... 91
3-1 Bolivia - InstitutionalMaster Plan Organigram ... 92 3-2 Bolivia - MMM Organizational Structure ...... 93 3-3 Bolivia - GEOBOL Organizational Structure ...... 94 3-4 Bolivia - Institutional Strengthening Program .... 95 3-5 Bolivia - New Institutional Relatione'hips...... 110 3-6 Bolivia - COMIBOL - Rehabilitation Sub-component . 111 3-7 Bolivia - COMIBOL - Environmental Program ...... 113 3-8 Bolivia - COMIBOL - Management Strengthening Sub-component...... 115 3-9 Bolivia - COMIBOL - Training Sub-component... 116 3-10 Bolivia - COMIBOL - Management Development (Training) Program Model ...... 118 3-11 Bolivia - COMIBOL - Management (Training) Course t ~~~~~~~~~~Outline ...... $ ...... 119 3-12 Bolivia - COMIBOL - Training Manual Format... 122 3-13 Bolivia - COMIBOL - Training Profile ...... 124 3-14 Bolivia - COMIBOL - Project Implementation Scheaule 129 3-15 Bolivia - Project Management ...... 131 3-16 Main Elements of Credit Guarantee Scheme..... 132 3-17 Guidelinesand OperatingRegulations of Credit Line...... 137
4-1 Summary of Five Year Program ...... 145 4-2 Detailed Cost Tables...... 146 4-3 Flow Chart of Project Funding ...... 160 4-4 Procurement Packages ...... 161 4-5 Disbursement Schedule for IDA Credit ...... 162
5-1 Metal Markets ...... 163 5-2 COMIBOL Assumptionsfor FinancialProjections and Projected Financial Statements...... 171 5-3 Financial Rate of Return Calculations ...... 176
Documents in the Project File ...... 181
MAP IBRD No. 21474 - i -
REPUBLICOF BOLIV$A
MNING SECTOR1anBILIT&UION PROJECT
CREDITAND PROJECT SUMNIRY
Borrowers Republic of Bolivia
Beneficiariess Ministry of Mining ana Metallurgy tMM) Geological Service of Bolivia (GEOBOL) Institute for Mining Deve3opmeut (IDMK Small and Medium Miners and Cooperatives State Mining Corporation(COMIBOL)
Amounts SDR 26.5 million (US$35.0million equivalent)
Terms: Standard,with 40 years maturity
OnlendingTerms: The Governmentwill make availableas grant up to US$3.7 million to the Ministry of Mining and Metallurgy and its dependencies. US$ 7.3 million would be onlent to the Central Bank at IDA terms. The Central Bank would onlend these funds to financialintermediaries including the Minins Bank (BAMIN) at LIBOR + 12. The intermediarieswould in turn lend to subborrowersat LIBOR + 62, with maturities and grace periods adapted to individual mining projects. The Government would onlend US$22.7 million to the State Mining CorporationCOMIBOL at LIBOR + 22, for ten years with five years grace, with the exceptionof funds for studies and joint venture promotion which would be passed on at IDA terms.
Proiect Description: The project would assist the Government in the im.plementationof its mining sector strategy by promotingnew private mining investmentand supporting the rehabilitationof COMIBOL. The project includes three components: (i) strengtheningof the Ministry of Hining and Metallurgy and its dependenciesto improve the basic public servicesto the industry,create a reliable data base, and establish an attractive environmentfor investors; (ii) financingof private mines and cooperativesand provision of technical assistance to small miners; and (iii) rehabilitationof COMIBOL by strengtheningthe viability of core mining operations, improving management and technical capabilities,and supporting the preparation of joint ventures with the private sector.
Project Benefits: Benefits of the project include increasesin mineral production,exports and foreign exchange earnings. The project will help attract private foreign investorsand increase private Bolivian investmentin the sector by - ii -
(i) creating a conduciveinvestment climate based on new mining, tax and joint venture regulations;(ii) strengtheningthe Government'sinstitutions which provide servicesto the sector; (iii) providing funds for credit to private mines and cooperatives,and improvingthe capabilityof financial intermediariesto evaluate and financemining activities;and (iv) assistingCOMIBOL in attractingjoint venture partners for its mining prospects. Benefits will also be derived from the rehabilitetionof COMIBOL which would earn foreign exchange and generate tax revenues. tiskes The project faces severalmajor risks. First, investmentpromotion in the sector and rehabilitationof COMIBOL depend on the success of the new economic policy, economic stabilityand the provision of sufficientexternal financingto achieve the country's gruwth targets. IDA and other external financing agencies are working together with the Covernment to assure a stable macroeconomicframework and thus limit the macro risks for this and other projects. Second, the project includes an ambitious institutionbuilding program which may be more difficult and time consuming than planned. Close monitoring by IDA and the appcintment of experienced consultants to assist in implementation of this componentwill mitigate the risks involved. Third, the credit component faces risks of delay since commercial banking in Bolivia is still in a recovery phase and since the Mining Bank (BAMIN) has to undergo a thorough reorganization before becoming a viable financial intermediary. The project is designed to linmt these risks by providing technicalassistance to fina-icialintermediaries, building a reasonable spread into the onlendinginterest rate and assisting the Minirg Bank in its restructuring. Fourth, CONIBOL's rehabilitationfaces implementationrisks if production increases materialize more slowly than expacted and if management improvement and skills upgrading are less effective than foreseen. Substantialtechnical assistance has been built into the project to minimize these risks. Another risk related to the COMIBOL component is a return of Governmentpressure to reopen non-viable operationsor keep non-viable mines In operation. To limit this risk, the Governmentwill review annuallywith IDA the status of mining operations,particularly progress in joint venturing and IDA will closely superviseimplementation of these activities. _ iii -
Foreign Local Total ------US$ million…------
Estimated Proiect Costs
COMIBOL 49.4 41.2 90.6
Institutional Strengthening 8.9 7.6 16.5
Credit to Private Mines and Cooperatives 5.3 5.0 10.3
Total Base Cost 63.6 53.8 117.4
Physical Contingencies 3.2 2.7 5.9
Price Contingencies 1.9 1.6 3.5
Total Project Cost 68.7 58.1 126.8 _= _
Financing Plan
IDA 28.4 6.6 35.0
ExiEstng Financing Arrangements 10.1 - 10.1
COMIBOL (cash flow) 10.9 34.6 45.5 Government - 1.4 1.4 Cofinanciers 15.2 9.8 25.0 Joint ventures/commercial 4.1 5.7 9.8
Total 68.7 58.1 126.8
Estimated IDA Disbursements
IDA Fiscal Year -_____------US$ million------90 91 92 93 94 95
Annual 6.0 8.0 9.0 5.0 5.0 2.0 Cumulative 6.0 14.0 23.0 28.0 33.0 35.0 BOLIVIA
MINING SECTORREHABILITATION PROJECT
I. THE MINING SECTOR
A. Background and Recent Developments
1.01 Mining in Bolivia has played an importantrole in the economy since pre-Columbiantimes. After the exhaustionof the old silver mines, which formed the backbone of the sector for several centuries, tin production began to take off in the 1900s, peaking in 1929 at a production of about 47,000 tons. During the first half of the century, tin mining created high rents for mine owners due to low levels of taxation,ore with an unusuallyhigh ;etal content, and low wages. The enclave nature of the sector, however, precluded any significantbenefits to the rest of the economy. These factors explain in part the 1952 revolution,which had as one of its outcomes the nationalizationof the three largestmining companies and their merger to form the CorporacionMinera de Bolivia (COMIBOL).
1.02 The two decades after the 1952 revolution representeda difficult period for Bolivia'smining sector,and particularlyfor COMIBOL. Technicalproblems had an increasingimpact on the industry'sperformance and explorationfell behind extractionof reserves,resulting in declining ore grades and low productivity. Depressed tin prices, high inflationand exchange rate distortionsaffected the performanceof the sector. In COMIBOL, the situationwas aggravatedby the introductionof worker participationin management, resiltingin a labor force far in excess of needs.
1.03 The mining sector witnussed a significantrecovery in the 19709 in the wake of an increase in tin prices, a major adjustmentof the exchange rate, and a general stabilizationof the economic and social climate. Through the 1970s, tonemining industrymaintained its key position as the main source of Bolivia's export revenues and produced a fairly stable stream (in constant terms) of foreign exchange income. The drop of the mining sector share in export revenues from 902 in 1970 to 62Z in 1980 was principallydue to a sharp increase in exports of hydrocarbons. Export and GDP data of the mininb sector for the 1970-1987period are summarizedin the following table:
Bolivia - Mineral Exports and Mining Sector Contributionto GDP
1970 1975 1980 1985 1986 1987
Mineral Exports 205 314 641 264 197 207 (Millionsof currentUS$) Mineral Exports 589 500 641 275 174 166 (Millionsof 1980 USg) a/ Mineral Exports 90 59 62 39 3C 37 (2 of Total MerchandiseExports) Mining Sector Contributiontz GDP (Z) 9.3 8.2 10.3 6.8 5.2 4.0
Source: World Bank Economic Reports; Ministry of Mines and Metallurgy. a/ ManufacturingUnit Value (lUV) Index - 2 -
1.04 After 1980, the mining sector deterioratedrapidly. Between 1980 and 1987, total tin productiondropped from about 27,300 tonnes to 8,100 tonnes, zinc productionfrom 50,300 to 39,100 tonnes, tungsten production from 3,400 to 800 tonnes and antimony production from 15,500 to 10,600 tonnes (Annex 1-1). While mining remained a major source of foreign exchange, its significancehas diminishedprogressively since 1980. Export revenues from mining, which in 1980 amounted to US$641 million, plummetted to US$197 million in 1986, and US$207 million in 1987 as shown in the table below.
Bolivia - Value of Mineral Exports by Product (CurrentUSS Million)
1980 1985 1986 1987 a/
Tin 378.1 186.6 104.1 68.9 Zinc 36.7 29.5 28.0 32.8 Tungsten 41.4 10.3 6.7 5.1 Silver 118.3 10.2 27.3 33.4 Antimony 26.4 15.9 14.5 22.8 Lead 14.5 0.5 5.0 4.3 Gold - 5.5 7.2 37.5 Other Minerals - 5.3 4.0 2.4
Total 641.2 263.8 196.8 207.2
Source: Ministry of Mines and Metallurgy. a/ Preliminaryand forecast.
Largely due to increasinggold production,mining export revenues are estimated at about US$275 million in 1988, about 502 of total exports.
1.05 Tin is the country'smost importantmineral. Its significance, however, decreasedin the 19809. The share of tin in mineral exports was 332 in 1987 and, with increasingproduction of other metals, has probably declined to about 20Z in 1988. Other importantmineral exports are gold, zinc, tungsten, silver, and antimonv. Copper, lead, and bismuth make only small contributionsto exports.
1.06 The sectoral decline is also reflectedin the contributionof mining to Government fiscal revenues,shown in the followingtable. The current sector payments of taxes and royaltiesare negligible. - 3 -
Bolivia - Contributionof Mining Sector to GovernmentRevenues (US$ million)
1980 1985 1986 19S7
COMIBOL 59.7 2.3 0.9 0.0 PrivateMining 28.9 0.6 0.7 2.5
Total Mining 88.6 2.9 1.6 2.5
Total GovernmentRevenues 589.7 114.1 461.8 479.8
Mining as S of Government Revenues 15.0 2.9 0.3 0.5
1.07 The contributionof m;ning to employmentin Bolivia was about 52 until 1980. During 1980-87, mining employmentdecreased by 452 to 47,000 in 1987. Since then, employmentin mining has stabilized,as COMIBOL completed the major part of its manpower reductionprogram and private mining is experiencing a moderate recovery.
Bolivia - Employment in Mining
1980 1985 1986 1987
Number of Workers 86,000 8&,600 52,100 47,000
B. Mineral Resources and Reserves
1.08 Bolivia'smining industry is essentiallyconfined to remote regions of the Andes. Mines are generallylocated at high altitudes--in some instsncesabove 5,500 meters--andaccess poses infrastructuraland logistical problems resulting in difficult working conditions. Most of the major known deposits occur in a narrow belt of about 500 km extend.ng between La Paz and Potosi. The deposits are often low grade complex ores, located in narrow hard rock deep-seated veins, which require complex treatment during smeltinS and refining.
1.09 Although endowed with a favorablegeological environment, inadequate explorationand reserve development in recent decades have hindered the realizationof Bolivia'smining potential. Restrictivemining policies and political instabilitydiscouraged private investment. Large areas of the country, designatedas Fiscal Reserves,were only available for explorationand mining by Governmentinstitutions or state companies. COMIBOL, in particular, holds many promisingmining propertiesand concessionswhich have never been evaluated.
1.10 Apart from tin, Bc-.iuiahas important resourcrsof many other metals and minerals,notably gold, lead, zinc, silver, tungsten and antimony. The current estimateson mineral reserves of Bolivia are listed in detail in Annex 1-2 and summarized in the followingtaLle: Bolivia - EstimatedMineral Reserves a8 ('000 tonnes of containedmetal)
Bolivian Reserves I of World Reserves
Tin 394 12." Tungsten 76 2.1 Antimony 105 6.4 Zinc 555 i.2 Lead 111 0.1 Silver 1 1.2 Bismuth 5 5.3 Gold (tonnes) 220 n.a.
Source: GovernmentMining Sector Strategy;US Bureau of Mines. a/ Proven and probable reserves. Estimates of Bolivian reserves partly differ from U.S. Bureau of Mines estimates (MineralCommodity Summaries,1988).
Bolivia also has large lithium and boron salt deposits in the Uyuni flat. 'Whilethe above estimates indicate a good potential (US$8.0 billl'ongross in-groundvalue) they are only tentativeand further explorationwork will be required to define exploitable mineral reserves. Clearly defined plans, priorities and increasedinvestment could enlarge the reserve base.
II. INSTITUTIONS,PRODUCERS, AND SECTORALSTRATEGY
A. GovernmentInstitutions
2.01 The key institutionoverseeing the Mining Sector is the Ministry of Mining and Metallurgy (MMM) which has overall responsibilityfor the Government'smining policy as well as sector regulationand supervision. The Geological Survey of Bolivia (GEOBOL)is responsiblefor country-wide geological investigationand thp Instituteof Mining and Metallurgical Investigations(IIMM) provides support services for mineral extraction, beneficiation,metallurgy, assaying and mining methodology. The National Mining ExplorationFund (FONEM)provides financing for prospecting and explorationand the Mining Bank (BAMIN) provides mine developmentfinancing and technicalassistance as well as mineral purchasing services to small mines for resale in marketable lots to traders. A descriptionof these various institutionsis given in Annex 2-1.
2.32 Governimentservices for the mining sector have seriously deterioratedover the past decade. The difficult economic conditions, Governmentbudget constraints,and reductionof foreign assistance in critical areas made the basic Governmentpresence in the sector (regional geologicalmapping and exploration,mining and metallurgicalresearch, administrationof the mining legislationand cadastral serviceswith respect to mining claims etc.) all but non-existent. Effective promotion requires policy guidance,fair and prompt administrationof legislationand continuousdevelopment of t i mineralogicaland geological data base. Until such a support environmenthas been created the countrywill be unable to reap the benefits of its mineral resourcebase. - 5 -
2.03 The 10. has been seriouslyimpeded in the implementationof its functionsbecause of the 'ack of sufficientbudgetary allocationsand late or inadequaterelease of bidgetaryfunds. This has resulted in difficultiesin hiring and retainingqualified staff, and ineffectiveness of the differentMinistry departments. Since most of the limited budget covers salaries of staff. little is left for operating expenses. Country- wide supervisionactivities, including mine control and cadastralupdating and monitoring,are seriously affectedby these funding problems. The MMM has recently made considerableprogress in its own consolidation. It has formulatedthe main ideas of a program to strengthencritical areas such as cadastral services,mine control, coordinationof technical assistance projects,project evaLuation,and formulationof mining regulationsand fiscal legislation. In order to improve its efficiency the MMM plans to introducetraining programs for its staff, improve the incentivesystem, and reduce staff numbers over the medium term where possible.
2.04 Due to the economic decline after 1980 and the resultingbudget problems, GEOBOL has been increasinglyunable to perform its basic functions. Essential routine work is now at a standstill;no regional geologicalmaps have been published since 1968 and little basic exploration work has been accomplishedsince 1980. In part because of extremely low salary levels, staffing has been reduced from 370 in 1984 to approximately 220, of which 90 are professionals. While GEOBOL has been seriously weakened, it is an institutionwhich could and should be revived. With adequate local funding for minimum operationalrequirements and increased technicaland operationalassistance for essentialactivities, GEOBOL could play a useful role in sector developmentby providingkey data base information.
2.05 IIMM was previously funded substantiallyby a levy of 12 on medium-scaleprivate mineral sales. In 1986, this levy was abolished and the National Treasury had to take fiscal responsibilityfor basic overhead costs, with operationalfunding to be largely derived from contractwork. Since revenues from contractwork have remainedminimal, and since foreign assistancehas not been available,IIMM has remained largely defunct over the past years. Professionalstaff has beenzreduced from 42 to 27 since 1981; and, similar to GEOBOL, salary levels are inadequate to retain qualifiedand experiencedstaff and operating funds are grossly inadequate. The IIMM could also be reactivatedwith adequate local funding and increasedfinancing of essentialactivities by foreign sources.
2.06 By the end of 1988, FONEM had disbursed some US$10.5 million in credit. Only three projects could be declared successfuland, therefore, to date, FOREM has not been able to generate significantincome. This situationreflects problems in project selection, lack of private funds for developmentof successfulprojects, and the impact of the tin price crash on the viability of many projects. A basic issue facing FONEM is the validity of its role in the mine developmentand promotionalprocess. It plays no part in mine developmentfinancing after reserves have been proven and in many cases thereforeproperty owners are left facing similar problems to those which existed prior to FONEM activities;inability to obtain developmentfinancing because of credit unworthinessand th. high costs of available credit lines. A further problem is that it both acts as high-risk financer and executor of its own projects, a situationwhich may - 6 - lead to conflictsof interest. The attractivenessof the FONEM concept, its relationshipto BAMIN and its value to the small-scaleprivate sector have been reviewed during the project preparationprocess. FONEM's inability to generate income has had the net effect of Government subsidizedoperations. Strengtheningof the private sector with direct credits and limited technicalassistance by other mining sector institutionsmay have more developmentimpact than FONEM.
B. Private Producers
2.07 The private sector is composed of medium scale, small scale and cooperativemines. The performanceof the private mining sector also suffered from the general deteriorationin product prices and the macroeconomicconditi(ns in Bolivia. However, the private sector declined less than COMIBOL during the crisis of 1980-85 and gained in importance. Output of private mining is currentlylarger than COMIBOL's production.
2.08 The medium-scaleminin8 subsectortraditionally contributed about 25Z of mining productionand employed about 102 of the sector's labor force. Since 1980, the number of firms has declined from 29 tc 19. Two medium mining firms are foreign controlledand five others have minority foreign Darticipation. The table below presents key data for the subsector.
Bolivia - Indicatorsof the Medium Mines (US$ millions)
1986 1987
ProductionValue 69.1 86.0 Sales Value 67.7 95.7 Taxes 0.1 2.5 Number of People Employed ('000) 4,327 4,020
Source: Ministry of Mines and Metallurgy.
2.09 Production statisticsfor the medium-scalemines are presented in the followingtable:
Productionof Medium Mines ('0008 tonnes)
Commodity 1973 1982 1985 1986
Antimony 8.1 10.1 6.7 7.2 Tin 6.7 6.0 4.1 3.3 Lead 0.5 4.0 1.8 0.4 Tungsten 1.3 1.6 1.0 0.7 Zinc 8.3 19.0 22.9 28.3 Cadmium 0.05 0.02 Gold (tonnes) 0.127 0.296 Silver (tonnes) 27.5 35.6
Source: Annual Reports of the Associationof Medium Scale Miners. 2.10 The medium sized mining companies are generallybetter managed and more productivethan the state-ownedmines. Employment peaked at about 8.500 employees in 1976 whereafter it decreasedgradually to about 6,000 in 1985. This reductionin personnelwas part of an effort to reduce costs and avoid losses during a period of generally depressedmetal prices. The sharp drop in tin prices in 1985 acceleratedthe diversificationfrom tin into zinc, silver, and gold. It also zesulted in a reductionof the number of operating companies.
2.11 The rest of the private mining sector consists of small mines and cooperatives. While these subsectorstraditionally have contributed10-15Z of production,their share in mining employmenthas amounted to 60Z-70Z. About 5,000 small mines are registered,although probably only 2,000-3,000 are in actual operstion. The bulk of the small mines typicallyemploy seven to eight people, the operationsare rudimentaryand labor-intensive. Many small mines have absentee owners who share production revenueswith the mine workers on a contract basis. Th, is typically little explorationto increase reservasor expand okerations. Production figures fo- the small scale mining subsectorare summarizedin the table below.
Productionby Small Miners
1975 Z a/ 1985 S a/ 1986 Z a/ (tonnes) Share (tonnes) Share (tonnes) Share
Antimony 6,62 42 1,755 20 2,915 29 Bismuth 31 5 - - 2.3 5 Copper 458 7 - - 132 4 Tin 4,781 15 2,256 14 2,319 21 Silver 11 7 4.4 4 15.9 17 Lead 5,783 32 539 8 905 27 Wolfram 133 6 436 26 417 30 Zinc 4,555 9 153 - 1,086 3 a/ Share of small miners in total production in Bolivia. Source: Annual Report, Associationof Medium Miners.
Cooperativeshave grown substantiallysince 1985. They now employ about 14,000 people and produce about 80Z of Bolivia's fast rising gold production.
C. COHIBOL
2.12 COMIBOL was formed in the early 1950s when the major private tin operationswere nationalizedfollowing the 1952 revolution. At the time of nationalizationthe industry suffered from prolongedunder-investment and conditionsworsened by the departureof managementpersonnel. Investments were made in the 1960s to improveCOMIBOL's performanceas part of a major rehabilitationeffort (the 'TriangularPlan") supportedby the Uuited States, France, Germany and the Inter-AmericanDevelopment Bank (IDB). COMIBOL recoveredin the 1970s but renewed political instabilityinitiated another difficultperiod for the state mining company at the end of the decade. 2.13 Starting in 1980, COMIBOL experienceda substantialdeterioration. Due to decliningmetal prices, mounting distortionsbetween official and parallel exchange rates and runaway inflationbetween 1982 and 1985, the company'scash flow and financialsituation worsened rapidly. COMIBOL's capacity to _Jsure sufficientsupplies of inputs for its operationswas seriouslyimpaired. Labor unrest caused partly by declining real wages exacerbatedCOMIBOL's internal difficulties. Moreover, the Government's continued interferencein personneldecisions eroded the company's management capacity and impededeffective decisionmaking. The effect of Laese developmentswas a rapid deteriorationof working conditions,a decrease in productivityand production,and financial losses.
2.14 Tin productionof COMIBOL declined from 18,600 tonnes in 1980 to 10,100 tonnes in 1985. At the same time, the total labor force continued to increase. These developmentsare summarizedin the follaoingtable:
COMIBOL - Tin Productionand Workforce
1980 1981 1982 1983 1984 1985
Tin Production (tonnes) 18,621 18,586 15,492 15,970 12,533 10,060 Workforce 26,525 25,728 26,109 27,744 27,746 27,566 Productionper Employee (tonnes) 0.70 0.72 0.59 0.58 0.45 0.37
2.15 COMIBOLwas unable to implementmajor cost-cuttingmeasures and unit productioncosts rose rapidly (Annex 2-2):
COMIBOL--ProductionCosts a/
1980 1981 1982 1983 1984 1985
Production Costs (US$ million) 203.2 273.2 259.0 264.4 303.3 330.3
Share of Labor (Z) 39 41 40 46 55 49
Cost of Tin Production (US$Ilb) 3.1 4.5 5.0 5.0 8.0 9.8
London Metal Exchange Cash Price (US$Ilb) 7.6 6.4 5.8 5.9 5.6 5.4
a/ At minehead, excludingmarketing costs and royalties.
The above table shows the marked increase in the share of labor in production costs between 1980 and 1984, mainly due to strong wage increases. In addition to labor costs, rising inflationand the increasing overvaluationof the Bolivian currency contributedto rising production cost. As a consequence,unit production costs for tin at the minehead more than tripled from US$3.1/lb to US$9.8;1lbbetween 1980 and 1985. Tin prices, on the other hand, dropped from US$7.6/lb to US$5.4/lb during the -9- same period. Unit productioncosts of other mineralsproduced by COMIBOL rose in line with the costs of tin.
COMIBOL'sFinancial Performance
2.16 COMIBOL'sfinancial statements over the 1980-1985period reflect the drasticdeterioration of the company'soperations. COMIBOL'sincome statements(Annex 2-3) show a consistentdeterioration in the company's operationalresults' from a profit of about US$51 million in 1980 to a loss of US$248 million in 1985. Operationallosses after 1981 were mitigatedby favorableexchange rate movements. The rise in operationallosses is therefore more dramatic than the change in income after taxes.
COMIBOL--Financial Results a/ (USS million)
1980 1981 1982 1983 1984 1985
Operational Income 50.8 5.3 (61.7) (60.6) (144.5) (248.0) Income after Taxes (30.0) (45.5) (51.9) (51.6) (68.4) (46.6)
a/ Figures in brackets are losses.
2.17 The deteriorating financial performance also had an impact on COHIE-L'scash flow (Annex2-4). Decliningcash generationeffectively impairedthe company'sability to fVnancea reasonableshare of capital outlays,service adequately its debt, and pay taxes and royalties. Capital expendituresdecreased from US$45 million in 1980 to US$6 million in 1984, interestpayments declined from US$18 million to US$3 million,and tax and royaltypayments fell from US$127 millionto US$21 million.
2.18 In COMIBOL'sbalance sheet the above developmentsaffected fixed assets,debt and equity (Annex2-5). Net fixed assets remainedessentially unchangedafter 1981 at about US$235 millionin currentUS dollars. The company'sinability to serviceits debt resultedin the accumulation of substantialamDounts of arrearswhich were not rescheduledbut added to its long-termdebt which increasedfrom US$62 million in 1980 to US$267 million in mid-1985. Net workingcapital declined and was negativeat US$129 million in mid-1985. Losses reducedthe company'sequity to US$35 million in mid-1985 resultingin a debt/equityratio of 92s8. The extremelylow quick ratio2 (0.2 in 1984 and 0.1 in mid-1985)shows the cash squeezeon the company.
2.19 As part of the rehabilitation effort initiated in 1985 (see paras. 2.20 and 2.21), the Governmentassumed COMIBOL's long-term debt. The rehabilitation measures have helped to achieve a rapid reductionof COMIBOL's operating losses. The company's cash deficit, which amounted to about US$132 million in 1985, dropped to US$53 million in 1986, US$32 million in 1987, and US$6.8 million in 1988.
1/Operational income includesinterest payments and depreciation,but excludesexchange rate relatedprofits/losses, royalties and taxes.
2/ (Currentassets - inventories)/currentliabilities - 10 -
COMIBOL's RehabilitationProgram
2.20 In 1985 the Government initiatedthe preparationof a rehabilitationprogram for the mining industry. Supreme Decree 21060 stipulatedthe reorganizationof COMIBOL into a holding company with five independentmining subsidiaries:
- Empresa Minera Quechisla in the south to operate the San Vicente, Chocaya, Tasna, and Tatasi mines;
- Empresa Minera Potosi to operate the Unificada de'.Cerro Rico de Potosi mines;
- Empresa Minera Oruro to operate the San Jose, Huanuni, Bolivar, Maria Luisa, and Poopo mines;
- Empresa Minera La Paz to operate the Colquiri,Caracoles and Viloco mines;
- Empresa Minera Oriente to operate the Mutun iron ore deposits.
2.21 The Decree allowed COMIBOL to close non-profitableoperations and lease other holdings to cooperatives. Through provision of financial incentives,COMIBOL's work force was reduced from 27,000 to about 7,000. COMIBOLoperates currently eight mines; six mines are under evaluation to determinetheir potentialwhile eleven operationswere leased to cooperatives. Two mines were closed permanently.
2.22 To alleviate the social costs of the economic adjustmentprogram, the Governmentcreated the Social Emergency Fund (ESP). ESF was establishedto provide employmentthrough public work projects and explicitly requires that certain projects hire ex-mirners.The effect of the ESP has been considerableand in view of the on-going activities of the ESF programs,no additionalmeasures will be required for inclusionin the proposed project.
D. Health, Safety and Environment
Health and Safety
2.23 Generalworker protection in undergroundmines and surface facilitiesis governedby legislationconcerning occupational health and safety. The national Ministry of Labor has regulatoryresponsibility for worker health and safety but has not been effective in applying regulations due to staff and budgetary constraints. In practice thereforethere are no regulatoryconstraints on the mining sector relative to health and safety practices other than the internal policies of the operatingcompanies.
Environment
2.24 The mining industry in Bolivia operateswith limited environmental constraintsor regulation. This has resulted in operationalpractices which have severe impacts on the environmentto a degree that would not be acceptable in most industrialcountries. The most apparent manifestations of the lack of environmentalconstraints include the following: - 11 -
- discharge of untreatedmill tailings into river systems;
- failure to apply geotechnical,hydrologic and environmentaldesign principles to tailings and other waste disposal systems;
- discharge of untreatedmine water and seepage to water courses despite high acidity levels;
- failure to monitor the quality of discharges or their impact on receivingsystems;
- water withdrawals from streams to the point of zero base flow;
- lack of reclamationrequirements; and
- high dust levels at some of the operations.
2.25 While it is impracticalto bring the environmentalpractices of the mining industry in Bolivia to industrialcountries' standards on a fast-trackbasis, it is feasible to achieve significantimprovements. In order to initiate progress towards this objective,the project includes specific actions to be taken by COMIBOL (para. 3.23). IDA is further preparing an environmentalissues paper which will be the basis for defiuitionof an environmentalstrategy for Bolivia jointly with the Government. In the context of this strategy,environmental regulations would be developed and an environmentalaction program for the whole mining sector would be included into a follow-up mining project proposed for FY91.
E. Financin8 of Mining Investments
2.26 Bolivia's financial sector compriees the followinginstitutions: the Central Bank (BCB); three specialized public banks, the State Bank (BANEST),the AgricultureBank (BAB) and the Mining Bank (BAMIN); 13 private commercialbanks. of which 10 are domestic and three foreign; and three private specializeddevelopment banks, of which only one (Industrial Bank-BISA) is active.
2.27 A sharp reduction in economic activity in the early 1980s (GDP contractedby 16S between 1981 and 1985), accompaniedby 'dedollarization" in 1982, and a rampanthyperinflation, (24.000 for the twelve months prior to August 1985), resulted in a weakened financialsector. The shrinkage of economic activity reduced deposit levels and loan portfolios of banks. By late 1987, loan portfolios and deposits had returned to growth in real terms, but they are still below levels reached in the early 1980s.
2.28 Interest rates were set by the Government at strongly negative levels until August 1985. Interest rates were freed in 1985 and rose to high levels in real terms. At present, real interest rates in bolivianos are around 20? p.a. for deposits and 40Z p.a. for lending. Interest rates in US dollars are around 162 s.o18? p.a. for deposits and around 24? p.a. for lending.
2.29 Under a recently approved FinancialSector Adjustment Credit, IDA is assistingthe Government in carrying out a program with the purpose to - 12 _ increase confidence in the banking system through a strengtheningof the financialcondition of banks; to reduce the high cost of credit; and to strengthenbanking supervisionthrough the recently established Superintendencyof Banks.
2.30 The Central Bank which has taken a lead in the implementationof the financial sector reform is also being strengthened. The Central Bank receives support from IDA, the IMF and the IDB, includingstrengthening of banking supervisionand improvementsin Central Bank accounting,audit controls,management informationsystem, economic study program and staff training. Of particular interest to the proposed project is the reorganizationand strengtheningof the Central Bank's DevelopmentCredit Departmentwhich receives technicalassistance from the IDB. The reorganization,which began with the appointmentof a new Department Manager, is already well advanced in the streamliningand speeding-upof operations with commercialbanks as well as in the organizationof an efficientmanagement informationsystem. The Department is now equipped to effectively handle its program of credit lines which it operates under consistent and adequate Policies and Procedures.
2.31 The three major public sector banks (BANEST,BAB, and BAMIN), are in need of restructuring. BANESTand BAB are being assisted under the Bank's Public Financial Management Operation and BAMIN's restructuring would be supportedunder the proposed project. BAMINis a majority GOB- owned institution,whose main activitiesinclude: (i) provision of long- term credit to small scale miners; (ii) purchase and resale of mining equipment,spare parts and materials; (iii) purchase of minerals from small mines and sale of marketable lots of minerals to internationaltraders; and (iv) limited technicalassistance to miners; and (v) approval of investment studies. BAMIN operateswith a staff of about 570 at headquartersin La Paz and six branch offices. BAMINhas been for many years the only source of term lending for small scale mines, although its main activity (in terms of financialand human resourcesallocation) is trading in minerals and supply of equipment. While BAMIN has not representeda drain on the Governmentbudget, its efficiencyis low and it requires improvementin various areas (e.g., systems, accounting,financial planning, credit management) to become an effectiveaining bank and mineral trader. BAMIN's balance sheet for 1987 shows total assets of US$62 million equivalent,of which US$16.3 million (26Z) constitutesits loan portfolio (includingdebts from sales of equipment),and the balance includesmineral inventories (US$13million), accounts receivablefor mineral sales (US$12.1mill 4on), equipment inventories (US$18.3million), and other fixed and current assets. BAMIN purchases concentratesfrom over 1,100 clients, but its credit operationsamount to only about US$2.5 million per year.
2.32 BAMIN suffered considerablyfrom the collapse of the tin prices in 1985 as well aa exchange rate distortionsin the precedingyears. The crisis caused a deteriorationin its portfolio and arrears increasedto 47Z by the end of 1987. After having been close to insolvency in 1987, BAMIN's financialsituation improvedconsiderably because the governmentassumed most of its debt in 1588. Reduction of arrears and non-performin,assets require further efforts,however, because BAMIN has not had its accounts properly audited since 1985 and has in store a considerablequantity of outdated equipment, its balance sheet is not reliable. Thereforeneither - 13 -
its total assets nor its current equity can be correctlydetermined before a complete evaluation of its equipment inventorieshas been carried out. Its present debt/equityratio is 0.3. On the basis of the unaudited accounts as part of recent economic reactivationmeasures, laid down in Decree No. 21660, the Governmentstipulated a substantialmodification of BAMIN's ownership and management through a 75Z representationof the private mining sector on its board and a gradual purchase of shares by the private sector to eventually reach the same percentage. Because of the private mining sector's lack of liquidity,the purchase of shares was to be financed through a tax credit on mining exports, introducedby the same decree. Because of severe Governmentbudget constraints,however, the tax credit was subsequentlyrevoked. A small amount of tax creditswere accumulatedprior to their elimination. This amount will be allocatedby the Government to the private sector as BAHIN shares,but will not present a majority of its capital. The majority representationon the board, however, will not be changed.
2.33 Bolivia'smacroeconomic instability as well as sectoral and institutionalproblems have inhibitedeffective financingof private mining investments. Credit for new investmentshas been limited by the inability of the banking system to fulfill its function in a highly inflationary environment,limited availabilityof long-termfunds, and high real interest rates of funds raised in the local markets. In addition, a major obstacle to mining financinghas been the inexperienceof the banking system with the sector and lack of appraisal capacity for lending to mining companies. Decapitalizationof mining enterprisesdue to high inflation, exchange rate distortions,low metal price and the effects of the tin market collapse,has increasedthe perceived risks of lending to the sector. High collateral requirements(about 1.5:1 by BAMINand 2-3sl by commercialbanks) have preventedfinancing of promising new investments. While some external credit lines have been available to the mining sector in recent years, their use by private mining companieshas been slow for the above reasons, and some of these lines expired before they were fully disbursed. Moreover, terms of external credit lines have often prevented urgently needed financing of free-standing working capital and procurement of inexpensive used equipment. Based on the surveys prepared among small and medium mines during project preparation,and mining projects submitted to BAMINand other banks, credit requirementsfor private Bolivian mines over the next three years have been estimatedto range between US$95 and US$120 million. Currently availablecredit supply amounts to about US$55 million, which results in uncoveredcredit needs of at least US$40-65 million for three years.
F. Sectoral Strategy
2.34 New Economic Policy. The Government,facing an economy that had almost reached a point of chaos, moved swiftly and decisively to implement a far reaching stabilizationprogram. This program, named the 'New Economic Policy", was announcedin August 1985. It containednot only macroeconomicstabilization measures, but also measures to liberalize trade, reform taxes, revamp administrativeprocedures and deregulateand partially privatize the public sector. It combined policy changes, such as freeingmost prices (includingthe exchange rate and interest rates), reducing the fiscal deficit and implementinga tight monetary policy. The - 14 -
'New Economic Policy'was supplementedby additionalmeasures, notably a comprehensivenew tax law, a freezing of employmentand wages in the public sector, eliminationof quantitativeimport controls and implementationof a 17Z uniform import tariff.
2.35 Because of the paramount importanceof mining for Bolivia's economy, this sector was given specific emphasis in economic stabilization and liberalization. The success of the Government'seconomic reactivation will depend to a large extent on the recovery of mining productionand exports. As part of its 'New Economic Policy" the Governmentadopted a mining sector strategywhich aims at a more efficientuse of Bolivia's natural resources. This would be achievea through a diminishedrole of the state, promotion of private investment .hroughthe creation of an enabling investmentenvironment, rehabilitation and estaolishmentof an efficient COMIBOL, strengtheningof the sector institutions,the formationof joint ventures between COMIBOL and private investors,and the establishmentof sector specific lines of credit for private and cooperativeminers.
2.36 Measures taken under the new economic strategy resulted in the abolishmentof mineral purchasingmonopolies of the National Smelting Company (ENAF), BAMIN, and COMIBOL, and the eliminationof most of the Fiscal Reserves (areas only availablefor explorationand mining by Governmentinstitutions and state companies). The Governmentthus opened up a vast potential for increasedmining developmentthrough private enterprise.
2.37 A major componentof the Government'snew mining policy is promotion of private sector activitiesand investment. This is to b'" achieved through revisions of the mining and investmentcodes and tax regulations which would make the business environmentmore conduciveto investment in mining. The legislative changes would introduce incentives to private investorsand would help create an investmentclimate comparable to other countries. The Governmenthas prepared final draft legislation which includesmodernization and simplificationof licensingprocedures, incentivesfor appropriateuse of explorationand mining permits in order to avoid blocking areas of high potential, lifting of remaining restrictions for exploration and mining in areas adjacent to COMIBOL propertiesand in border areas, reductionof royaltiesand introductionof profit based direct taxation and deductionof explorationcosts and joint- venture regulations. These legislativepackages are complete. The new mining code and taxationpolicy were presented to Congress. However, Congress did not act on it before the session closed prior to the forthcomingelections. At negotiations,the borrower agreed to take all appropriatemeasures to promote investmentactivities in its mining sector, includingtaking measures such as: simplificationof mining licensing procedures,improvement of cadastralservices, maintenance of a conducive frameworkfor joint venturing,and liberalizationof mineral exploration policies and regulations. Assuranceswere obtained that the borrower will resubmit to Congress the necessary draft legislation. The revised legislationwould complete the transformationof the general frameworkfor mining development. The new frameworkshould result in a substantial improvementof the business climate for mining and should present a strong basis for reactivationand strengtheningof private activitiesin the sector. - 15 -
2.38 Additionalmeasures to supportprivate sector initiativeswill consist of strengtheningthe basic Government institutionalservices, the effectivenessof which has declined over the last decade. These measures include restructuring,rationalization and strengtheningof the MMM so that it is in a better position to regulate,coordinate and orient mining activitiesin the country, thereby providingpromotional support. Restructuringof the operationalinstitutes and training of technical support staff is aimed at minimizing overlappingfunctions and providing better focussed support in the areas of generatinggeological and mineral data bases, consolidatingmining developmentfunctions (e.g.,mining and metallurgicalinvestigations) and providing specializedcontracting service to the industry. Moreover, cadastralfunctions for the precise recording of explorationand mining claims, now in a state of disorganization,will be modernized using state of the art technology. The strengtheningof all these Governmentsupport functions is essential in creating the required enabling environmentand providingan effective level of public services to attract private investment. It would also assure supervisionof the sector and collectionof the sector'spart in Government revenues.
2.39 A further element of reactivationof the private mining sector is the provision of financingto the local mining industry at more competitive conditionsthan in the past. The Government recently initiated a financial sector adjustmentprogram which is expected to generallyfacilitate and acceleratethe flow of capital into productive rctivitiesand thus enhance mining finance. In addition,because of the special features and risks of mining, the Governmentintends to strengthen the capabilityof the Central Bank and the banking system to evaluate and promote mining projects, and to restructure, modernize and partiallyprivatize the mining bank (Banco Minero - BAMIN), the specializedbut currentlyineffective institution for mining finance. Improved access to mining finance would complement the Government'sefforts to attract private investmentthrough inprovementof the investmentclimate.
2.40 Another importantelement of the Government'sstrategy is the rehabilitationand complete transformationof CONIBOL. The Government is firmly committedto this goal and has repeatedlyelaborated on it iu public. It is also laid down in detail in the Government's mining sector strategydocument discussedduring negotiationsand attached as Annex 2.6. The basic objectivesare an increase in efficiencyto levels comparable to the private sector, achievementof profitabilityand a reductionof the Government'sdirect participationin the sector through the transfer of non-operationalproperties and operatingcenters to the privat._sector through leasing, joint-ventureor managementcontracts. The Government's strategy calls for a complete overhaul of COMIBOL's operations,creation of a new corporate culture and value system which would permit independent and business oriented management.
2.41 The long-termstrategy for COMIBOL, as defined by the Government in its sector strategy (para. 2.40), calls for COMIBOL to develop from a state mining operationinto a primarily promotionalcompany. Under this strategy,COMIBOL would develop any new propertiesonly as a partner in joint-ventureswith private participationand under private management. COMIBOL would in the medium-termcontinue operatinga maximum of eight mines (para. 2.21). These have been determinedin COMIBOL'sbusiness plan - 16 -
(para. 3.17) as viable or potentiallyviable after additional studies and investments. Where justified by the results of the studies,potentially viable operationswill be rehabilitatedand returned to technical and financialviability. After their rehabilitation,these mines could then also be considered for joint-venturing,leasing or management contracts to reduce the Government'sdirect role in production. Six mines which are not currently operated but have not been closed or transferredto cooperatives yet, will be studied and, if viable. joint-ventured(paras. 2.21, 3.19) leased or otherwisemanaged.
G. Outlook for the Sector
2.42 The stagnationof production in the early 1980s, the inadequate explorationand developmentefforts since the early 1950s, and the limited resources invested,raise the questionwhether the Bolivian mining sector can continue to play a major role in the economy as it has in the past. On the demand side, prospectsare mixed. Followingthe minerals price boom of 1980/81 and the subsequentdecline, world mineral markets have been generallydepressed for most of the decade; however, there has been a strong recovery fnr base metals such as copper, lead and zinc in 1988/89--althoughtin prices have remained fairly sta:le. Hineral prices are not expected to increasemuch in real terms over the medium term. The international market for tin (which still accounts for more than 301 of Bolivia's mineral export and some 5? of world tin production)has been oversuppliedand is not expected to recover substantially. The supply prospectsare characterizedby a promisingbut insufficientlyexplored geologicalbase, good prospects for recoveringlower grade ores by modern. processes, and by a substantialgap between what now exists and what is needed in terms of supportinginvestment, institutions and policies. In sum, while there are indicationsof a large mineral resourcebase, the mining sector can at best expect modest recovery in the remainder of this decade and early 19909. Although short-termrecovery will come from tin, silver and zinc, major increasedearnings of the sector over the foreseeablefuture will be derived from increasedgold production,a sub- sector which has been largely overlookeduntil zecently. The potential is good for the discoveryof hard rock as well as derrital deposits and recent increasedinterest, includingnew mining operations,by the private sector is evident. The value of official gold productior.in 1988 was close to US$60 million, representinga major increase over the last two years (productionin 1986 US$7.2 million).
2.43 The extent of recoverywill depend also on the design and implementationof Governmentpolicies aimed at attractinghigh-risk private investment. A realisticexchange rate, low inflationand interest rates, adequate availabilityof foreign exchange to producersand modest rehabilitationinvestment, could partiallyoffset the decline in mineral production of the early 1980s in a relativelyshort period of time. Improvementof COMIBOL's operationswill be a complex task, requiring excellence in critical areas of management at both the headquartersand subsidiarylevel, continuousdialogue with the unions and a major training effort and change in staff motivation. An explicit,clear and consistent implementationof Government intentionsis an essentialprecondition for success. - 17 -
2.44 Geological data suggest that Bolivia has sufficientmineral resourcesto sustain i.,.the long run a higher output than is currently being achieved. To realize this potential,substantial investments will be needed in explorationand, subsequently,mine development. Sirce the general macroeconomicsituation will limit the availabilityof :!vernment investmentin coming )ears, efforts should be directed to mobilize private capital, both foreign and domestic,ro participatein the developmentof the sector. The resourcebase is consideredto be substantialand it is quite possible that mineral exports may approachUS$1.0 billion annually before the next century (Ministryof Mining and Metallurgy projections, December 1988, ref. Annex 2-7). Major alluvial gold reserve potential, particularlyin the north of the country, is awaiting evaluation,mega- project potential (silver-tin)exists at Cerro Rico de Potosi and the Bolivar zinc-silvermine, if financed and managed by the private sector, can be brought on stream within 3-4 years.
III. THE PROJECT
A. Role of IDA
3.01 IDA has given major support to the Government in the restructuring of the economy in recent years and has been actively involved in the r'ning sector of Bolivia since 1985 when the Government sought the Bank Group's assistanceto kee, the COMIBOL mines, which had badly deterioratedin operationuntil additionalfunding could be found or alternativesolutions achieved. Under the IDA financed First RehabilitationImport Credit (RIC I-Credit 1703-BO) an amount of US$12.4 million was made available for the procurementof urgently required spare parts, materials and equipment for COMIBOL. During the preparationof the RIC I-COMIBOLcomponent, the Goverument discussedwith IDA the possibilityof a COMIBOL rehabilitation project and requestedoutside assistance to prepare it. A Project PreparationFacility was approved in December 1985 to finance consultants for project preparation. Because of the necessity to assist COMIBOL directly in the conduct of its operationsand the consolidationand rehabilitationprocess, the PPF was complementedby a UNDP contributionand both were merged into a Bank-executedUNDP project which started in October, 1986. During the supervisionof this project various possibilitiesfor rehabilitationof the sector were discussedwith the Government and it was concludedthat a comprehensivesolution could be found only on the basis of a project which would address a broad range of sectoral constraints. During 1987, the Governmentthus asked IDA during 1987 to enlarge the scope of the project to include, in addition to COMIBOL, the Governmentmining sector institutionsas well as the private mining sector.
3.02 Since that time, IDA has worked closelywith the Governmentand COMIBOL to formulatea coherent mining sector strategy/policy. As the project scope expanded,IDA requestedassistance from bilateral donors (Sweden) for the preparationof the project and started discussionswith multilateraland bilateral sourcesto coordinatethe mobilizationof funds in addition to IDA financing.
3.03 In short, IDA supports and assists the Government in coordinating a complex and wide ranging series of inputs for the effective - 18 - implementationof the country'smining rehabilitationstrategy. Direct interventionby IDA in this critical sector will provide the impulse for cofinancersto participate. The proposed projectwill result in increased mine production and exports, an increase in private sector participation and stronger sectoral institutions.
B. Pro3ect Obiectives
3.04 The basic objectiveof the project is to assist the Government in the implementationof its m4.ningsector strategy,as outlined in the previous chapter. As part of its strategy for the mining sector, the Governmenthas initiateda US$151 million five year (1989-93)development program including (i) technicalassistance and training to improve the servicesof the Gcvernmentmining institutions,including the MM and its dependencies;(ii) establishinga line of credit for private mining investments;and (iii) rehabilitationefforts to increase COMIBOL's efficiency. The project would support selected technicalassistance and training componentsand high priority irvestmentscomprising about 852 of the five year program. It thereforecovers a wide range of actions designed to reactivateprivate mining, attract new investments,improve Government services to the sector, and rehabilitatethe state mining industry. Success is dependenton the creation of a conducivelegal and regulatoryframework. The project ultimatelyaims at making effecti'-euse of Bolivia's comparativeadvantages and restore the sector's vital role in the economy.
1. Promotionof Mining Investment
3.05 The project would aim at promotingprivate mining investment,both Bolivian and foreign. It would support the Government in the implementationand applicationof the new legal and regulatory framework. It would specificallybe oriented towards:
(i) strengtheningthe capacity of the MMM4to superviseand coordinate mining sector policy which includes determinationof priorities for mining sector institutions,interaction with external funding agencies and guidance and advice to interested investors;and
(ii) reinforcingthe cadastral service in order to effectivelyfulfill its function,and in particularto initiate the revised cadastre envisaged in the draft legislation.
3.06 The project would also aim at alleviatingfinancing constraints and thus increase funding availableto mining companies in Bolivia. The project would specifically:
(i) enhance the Central Bank's ability to promote mining credit within the banking system as part of the general strengtheningof its function as second fier for externally funded credit lines;
(ii) restructureand improve the operationsof BAMIN to make it a viablechannel of miningfinance; - 19 -
(iii) provide substantialflexibility in the use of credit funds through financingof locally purchasedand used equipment, as well as works, pre-investmentstudies and working capital; and
(iv) assist in the financialand technicalrestructuring of mining companies.
3.07 The project would also aim to support private mining investment through strengtheningcf the public mining institutions,which would improve the geologicaland technologicalknowledge and thus make mining projects less risky and more attractive. Specificallythe project would:
(i) reactivate the operationsof the geologicalservice and initiate or completehigh priority activities;and
(ii) reorient and streamlinethe mining/metallurgicalinstitute in order for it to render specializedsezvices and provide advice to the mining community.
2. Rehabilitationof COMIBOL
3.08 The project objectives for COMIBOL are oriented towards the developmentof a healthy core of efficientlyoperated mines through effective implementationof a rehabilitationprogram and the design and implementationof a joint-venturestrategy based on the evaluation and promotionof non-operatingholdings. The result at the end of the project implementationperiod should be a holding company managed in accordance with sound buptness practicesand guided by market forces.
3.09 Specificallythe project would aim at:
(i) defining the role and functionsof the corporate offices and equippingand staffing it adequatelyto fulfill its responsibilities,in particular in corporateplanning and coordination;
(Ii) improving in-mine exploration,reserve delineation,mine planning, mining methodology,and mineral beneficiationat the operating mines;
(iii) designing and imu ,mentingeffective systems of accounting, reporting,budgeting, financialplanning, and management information;
(iv) upgrading or introducingmethods of warehousing,purchasing and maintenance of equipment and materials;
(v) strengtheningof marketing capabilitiesincluding an evaluation of any concentratetransportation bottlenecks;
(vi) strengtheningof environmentaland industrialhealth and safety capabilitiesand standards; - 20 -
(vii) revision of wage and salary structure,introduction of adequate incentiveschemes, initiationof training programs; and
(viii) enhancing COMIBOL'srole as a joint-venturepartner through implementationof priority projects in exploration,research and studies.
C. Project DescriDtion
3.10 The project would financehigh priority investments,technical assistance,and training for the Governmentinstitutions, including MH0 and its dependencies,private mining companiesand COMIBOL. It would consist of three componentss (i) strengtheningof Governmentmining institutions, (ii) provision of financialand technicalassistance to private mines and to cooperatives,and (iii) rehabilitation,management strengtheningand training for COMIBOL as well as joint-venturepromotion.
1. InstitutionalStrengthening
3.11 This componentwould include essentialmeasures to improve management, financialand technical skills,and to implement restructuring programs in selected key areas. Importantprerequisites for success of this componentwould be appropriatestaffing and organization,and creation of a salarylincentivestructure to assure adequate remunerationand staff motivation. The principal cost elementswould include additional equipment needed for drilling and laboratories,vehicles, technical assistance, includingthe execution of specificcore projects, training materials, as well as treining courses and study trips. The specific institutional requirementswhich are summarizedbelow are based on an Institutional Master Plan completed in January 1989 (Annex 3-1), which was reviewed during appraisal and satisfactorilydefines the revised functionsof the Ministry and the mining sector institutions.
(i) The Ministry of Mining and Metallurgy (HMM) will be restructured in accordancewith a new proposed organizationscheme (Annex 3-2). Key areas of MM will be strengthenedunder technicalassistance provided through consultingassignments, training courses and study trips for key personnel.
(ii) GEOBOL will be maintained as a separate geological survey institutionunder a new organizationalstructure (Annex 3-3). A heavy emphasis will be placed on technicalassistance through the provision of both short- and long-termadvisory staff. Salary levels of core staff will be increasedthrough salary supplements paid for under a Government/co-financierarrangement for the duration of the project. Financingwill also be provided for specified infrastructuralinvestments and specific prior4.ty projects;
(iii) a new Mining DevelopmentInstitute, the Instituto de Desarrollo Minero (IDM),will be developedby Government under the auspices of the project to consolidatesupport for the extractive side of the industry. IDM will include a Center for Mining and MetallurgicalResearch (CIMM)which will also provide services to - 21 -
the mining community. IDM will provide technical support, contract services and training facilitiesto assist the mining industry. Similar to GEOBOL, technicalassistance will be provided through the provision of consultants,training and salary supplementsto key staff and financingof specific priority projects;
(iv) the TechnicalMine CadastralService (STCM) is a new institute to be created under the project. Financingwill be provided for new modern equipmentand tec-hnicalassistance for consultant support and training of key staff. Project preparationfor this sub- componentwas sponsoredby IDB which is currentlydefining its proposed financingcontribution;
(v) FONEM will be disbandedand assistance to the small scale private mining sector will be provided through IDM, BAMIN and commercial banks;
(vi) BAMIN will be restructuredto become more efficientand responsive to its new status as a mixed-capitalcompany. Technical assistanceand training courseswould be provided for BAMIN under the project.
A detailed descriptionand objectivesof the institutionalstrengthening program includingthe main elements for the consultantsterms of reference is presented in Annex 3-4. The interrelationshipof the new institutional structurewhich will be consolidatedunder this project, is shown in Annex 3-5. Assurances will be obtained during negotiationsthrough a dated covenant that Governmentwould by June 30, 1990 fully implement this new institutionalframework, as laid out in the InstitutionalMaster Plan and satisfactoryto IDA.
2. Financing of Private Mines and Cooperatives
3.12 Under this component of the project, funds would be provided to finance investments,working capital, exploration,and pre-investment studies and restructuringworkouts for the private mining industry. Focussing on the mining sectorwould contributeto institutional strengtheningof the private banking system in the area of mining credit appraisal and would facilitateaccess of small- and medium-scaleminers and cooperativesto such credit by introducingmore flexible funding procedures, includingfree-standing working capital and financing of used equipment (paras 2.33, 3.13 and 4.09). Since the medium-scalemining companieshave better access to credit and IPC is preparing specific assistance to some of them, the credit componentunder the proposed project would focus primarilyon support to small firms and cooperatives,while not excludingmedium-scale mining companies. Although the proposed project is oriented towards assistingthe mining sector, it is also expected to contributeto improvementof the financialsector in three ways: by reinforcingthe long-termcredit mechanism in the Central Bank, by strengtheningprivate banks' capabilitiesto handle long-termcredit to the mining sector, and by providing tecknicalassistance for a complete restructuringof BAMIN. - 22 -
3.13 In addition to regular subloans for investment (including associatedworking capital, exploration,and pre-investmentstudies) or free-standingworking capital financing, the credit componentwould also provide subloans to assist in the restructuringof those financially stressedmining companies,which cau demonstratetheir technical capabilitiesand potential for financialviability based on a sound restructuringof their operationsand of their short- and medium-term financial liabilities. A mining credit specialistwithin the DCD would administer the credit line and provide advice to participatingbanks on its use. For technicalassistance to participatingbanks and mining companies the DCD will hire specializedconsultants to be financed from the spread between IDA terms and the onlending rate to financial intermediaries. Financing of consultants,to assist in restructuringworkouts or to prepare investmentprojects, would be consideredeligible expenditurefor subloans to be financedby the IDA credit proceeds. On the basis of their past experience,some specializedbanks (e.g. BISA) are expected to play an active role in financing restructuringworkouts. The financialengineering capabilitiesof the Central Bank's DevelopmentCredit Department (DCD) and of participatingbanks would be strengthenedunder the proposed project.
3.14 An essential eligibilitycriterion for any firm to be financed under the restructuringworkouts would be to demonstrateits undisputed claim on its mineral deposits and ownershipof the fixed assets involved in its operations. Likewise,the firm would be required to demonstratethat, as a result of the proposedworkout, it would become financiallyviable, and that no further claims could be leveled against the firm with respect to its liabilitiesat the time of restructuring. The financialworkouts may require a change of the firm's ownershipin which case such a change would have to be completedbefore disbursementof the subloan although not necessarilybefore its appraisal. In order to facilitateparticipation by financialintermediaries and access to credit of small mines and cooperatives,it is intendedunder the project to establish at the Central Bank a Guarantee Fund using Government contributions,possible recovery resourcesfrom previous IDA credits and part of the spread that the Central Bank would receive from the operationof the proposed project. The Central Bank would prepare, by June 30, 1990, a detailed design of the Guarantee Fund and would review possibilitiesof its establishmentand fundingwith IDA. The main features,which such a Guaran:eeFund should include, have been discussedwith the Central Bank and are summarized in Annex 3-16.
3.15 Beneficiaries. The proposed project would provide credit for subprojects (in investmentsand working capital) to be implemer.tedby small and medium mining firms. Small mining enterprisesare defined in Bolivia as those private firms, or group of related firms, with less than US$100,000 equivalent in fixed assets (excludingmining rights or properties)before project financing. On the basis of available information,at the time of appraisal, it is expected that about 150 to 200 firms would qualify as small mining beneficiariesunder the proposed project. Medium-sizemining enterprisesunder the Bolivian legislationare those private firms with more than US$100,000 equivalent in fixed assets (excludingmining rights or properties)which are r3gistered in the Chamber of Medium Scale Mines. By mid-1988, 19 firms were consideredmedium-size mining enterprisesand would have been eligible under the proposed project. Three of the largestmedium miners were expected to obtain credits directly - 23 -
from IFC and BISA. Thus the number of potentialbeneficiaries is expected to be around 16. Cooperativeswould also be eligible if they operate as single debtors with crossed guaranteesthrough a participatingfinancial intermediary. Since there is little experience in financingof mining outside BAMIN, and the approach of this credit line is in some important aspects different from previous credit lines to the sector (particularly free-standingworking capital and used equipment),the componentwould be considereda pilot operation. In view of the pilot nature of the facility, and limited funding to establish the credit line, the volume of credit to be initially financedunder the projectwould be relativelysmall and lower than estimatedcredit demand (paras. 2.33, 3.39).
3.16 Limits and Terms. In order to avoid concentrationof project resources in a small number of firms the overall outstandingsubloans to any individual firm, or group of related firms, would not exceed US$200,000 equivalent,in the case of regular credits and US$500,000, in the case of restructuringcredits. The overall outstandingsubloans to any individual bank should not exceed US$2.5 million. A limit would also be established in relation to the existing equity and assets of the beneficiariesin such a way that their maximum acceptabledebt to-equityratio would not exceed 60:40, except for restructuringcases where the new credit can be appropriatelyjustified by a rigorous cash-flowanalysis and a detailed restructuringstrategy which would aim at reducing the company's debt/equityratio to 60:40. Overall financingof free-standingworking capital would not exceed an outstandingamount of US$160,000per sub- borrower and an aggregateof US$3.0 million. Maximum financing through credit, including IDA resourcesand banks' participationwith their own funds, would not exceed 901 of subprojectcosts and the maximum share of IDA financingwould be 80Z of the subproject. Appropriatematurities should be establishedfor each subloan on the basis of its own repayment capacity. However, such maturitieswould be limited to ten years, includingup to three years of grace, for fixed investmentsand associated permanentworking capital, and up to four years, includingup to one year of grace for free-standingworking capital. Restructuringcredits may benefit from the maximum establishedmaturities but subject to the agreementof the financialintermediary, as bearer of the risk, and to the proper justificationof such maturity.
3. COMIBOL
3.17 COMIBOL, on the basis of the objectivesformulated for the company, has prepared a five-yearbusiness plan. The plan, in addition to setting annual targets for production,capital expenditures,operating costs and manpower planning,covers the physical investmentneeds for COMIBOL's rehabilitation,training and technicalassistance requirements and a joint-ventureplan. The idea to prepare a five-yearbusiness plan was first discussedwith IDA in November 1987 and, after several revisions, was formally presented in May 1988 and revised further over the period July 1988-January1989. The physical part consists essentiallyof overdue investments,or replacementinvestments which would be part of a normal program to maintain production facilitiesin good operatingcondition. Technical assistanceis concentratedin areas of most urgent need such as management/technicalskills, mine planning,environmental protection, geology, informationsysters, and human resource planning which are also - 24 - the areas on which the training effort would be concentrated. The Plan also includespriority investmentsin explorationand studies in support of joint-ventureactivities with the private sector. The five-yearbusiness plan (includingthe 1989 annual capital and operating budget)was reviewed in detail by IDA and is consideredachievable and oriented towards COMIBOL's overall objectives.
3.18 The COMIBOL component of the proposed project will consist of the followingsubcomponents:
- rehabilitationsubcomponent - managementstrengthening and training subcomponent - joint-venturepromotion subcomponent
(a) RehabilitationSubcomponent
3.19 The rehabilitationsubcomponent would consist of a large number of small projects to maintain and improve the productive capacity of the existing score mines, (Huanuni,San Jose, San Vicente, Chorolque,Colquiri, Caracoles,Viloco and Unificada). The proposed actions are describedin Annex 3-6 and are summarizedbelow:
(i) the procurementand supply of operatingmaterials, consumablesand spare parts;
(ii) the procurementand installationof new equipment for the mines, concentratorsand workshops;
(iii) the executionof mine works to improve and reduce operating costs;
(iv) the executionof exploration/minedevelopment works;
(v) the executionof several technicalstudies including (a) a study to joint venture, or operate profitablyby other means such as leasing, six properties (Tatasi,Tasna, Chorolque,Animas Inocentes, Poopo and Santa Fe); (b) based on the results of explorationwork (to be carried out under item (iv) above), studies of the technical/financialfeasibility of five properties (San Jose, San Vicente, Unificada, Caracolesand Viloco); (c) a study of the expansion potentialof the San Jose mine; and (d) studies regardinghydropower supply (Colquiri),leaching tUnificada,Animas Inocentes),and on the use of tailings (Catavi).
3.20 COMIBOL's investmentprogram for the first year has been defined and consists principallyof urgently needed equipment,materials and mine works for the core mines as well as studies to define the potential of marginal mines. COMIBOL will present to IDA detailedwork programs for items (iii) and (iv) above for componentsto be financed by IDA for each of the individualmines and review them with IDA by September30, 1989 and implementthe programs as agreed upon. COMIBOL will also prepare detailed terms of referencefor the studies in item (v) above for review by IDA by September30, 1989, and undertake the studies using suitably qualified consultantsunder terms and conditionsacceptable to IDA. These studies - 25 - would be reviewedwith IDA by June 30, 1991 and C0I4IBOLwould then, promptly thereafter,carry out the recomendations of these studies.
3.21 In addition to the above activities,COMIBOL prepared, as an integral part of its five-yearplan, an action program for social services, health, safety and environmentalprotection, in order to improve living/workingconditions which have deterioratedduring the past years as a result of the crisis. The program calls for upgrading and improvementof houses, schools,medical units and recreationalfacilities. In the area of health and safety, COMIBOL had, prior to the reorganizationin 1986, a specializeddepartment respoasiblefor this area throughout the organization. This departmentestablished comprehensive operational and reportingprocedures for all COMIBOL operations includingsafety manuals, mine ventilation standards,personnel safety equipment requirements, explosives standardsand accident reportingprocedures. The 1986 reorganizationresulted in a reductionof central functions, transferring the responsibilityfor health and safety to the decentralizedcompanies.
3.22 Each of the new regional operatingcompanies maintains a health and safety engineer. These individualsare trying to maintain the standardsand procedurespreviously defined by the central departmentbut lack the resourcesto address the issues or undertakedetailed evaluations of systems. Statistics for 1987 indicate that safety standardsmay have already started to decline only a year after the abandonmentof the department. In order to alleviatethe situation,COMIBOL will submit to IDA by June 30, 1990 an action plan to achieve adherencewith the health and safety regulations. COHIBOLwill implementthis action plan and review it with IDA semi-annually. It is further envisaged that under a follow-up FY91 mining project an institutionwould be set up to advise the Government in the definitionof health and safety standardsin mining and implement them country-wide.
3.23 COMIBOLwill execute a staged environmentalprotection program as agreed with IDA with five major phases (Annex 3-7). Phase One involves establishingadequate mechanisms for monitoring progress at COMIBOL's operations. Phase Two involves identifyingand settingpriorities for correctiveaction based on the results of Phase One including appropriate regulatorymechanisms. Phase Three involves further definition and detailed design of the correctivemeasures. Phase Four is the implementationphase and Phase Five on-going performancemcnitoring. Presentationof a detailed environmentalprogram acceptable to IDA will be a conditionof credit effectiveness. During the project, COMIBOL would implementthis program and review its implementationwith IDA semi- annually. In addition GOB will prepare a national environmentalmining action plan acceptableto IDA. The submissionof this plan for review by IDA will be affected prior to June 30, 1991..
(b) Management Strengtheningand Training Subcomponent 3.24 In order that COMIBOL can meet its organizationaland rehabilitationobjectives, major changes are required in the manner in which the company manages its business. While many senior and middle managers have good technical skills, there is a general need to improve management skills at all levels in the organization. Traditionally, - 26 -
COFI80L has not undertaken formal management development and training activities. Managers have been developedon the job, depending on the capabilityand competenceof the supervisor (the same occurred for COMIBOL's workforce at large). If COMIBOL's management team is going to fulfill its mandate as the agent for organizationalchange, formal management developmentand train'tngwill be required,taking a pro-active approach in developing management resources.
3.25 COMIBOL's managementwill be strengthenedalong the lines summarizedbelow and describedmore fully in Annex 3-8. IDB has taken the lead In preparing the overall approach to management strengthening and is preparing assistance to finance the expatriate staff and the technical assistance noted below. First, about 17 experiencedpersonnel will be recruitedon fixed term contracts to fill a number of selected strategic positions in COMIBOL, while COMIBOL staff are selected/trainedto fill these positions. Second, technicalassistance will be provided to assist In certain key areas such as strategicplanning, human resources, marketing, industrialsafetyienvironmental protection and mine project evaluation. Third, COMIBOL will improvethe competitivenessof its compensationscheme in order to attract and keep competent,experienced senior managers. COMIBOL by June 30, 1990 will establish and, thereafter maintain, a compensationscheme for its middle and senior level managers acceptableto IDA and consistentwith the public sector compensation policies of GOB.
3.26 A fourth element of the management strengtheningactivity is training. The training programwould aim at upgrading and continuous)v iproving the skills of COMIBOL9spersonnel and would include the measures summarized below and outlined in Annex 3-9: (i)strengthening of COMIBOL'straining capability through the creation of a new training unit;
(ii) establishingnew training programs for managerial and supervisory personnel. A senior and middle management program model is attached as Annex 3-10 and the course outline in Annex 3-11; and
(iii) a technical skills and developmentprogram for the workforce is presently being prepared by consultants (Coopersand Lybrand) which mainly involves the preparationof manuals (for operations, electrical, mechanical,electronics skills etc.). An example of the manual format is attached as Annex 3-12 and of a typical training profile (Annex 3-13).
COMIBOL will submit its detailed training program for IDA's comments and review by Juw) 30, 1990 and implementsaid program thereafter.
(c) Joint Venture PromotionSubcomponent
3.27 This subcomponentof the project is a key element for the corporate strategy of COMIBOL. The promotion of joint ventures will focus on three catagoriesof mining properties: (i) partially operational COMIBOL propertieswhich are in the process of production reorientation from (old) tin mines to lead-zinc-silverproduction; (ii) non-operational - 27 - propertiesfor which technicalinformation indicates a production potential;and (iii)explorational holdings with littleor no recentwork. 3.28 Pre-projectpackaging of the firstjoint venture category is alreadyunderway by COHIBOL. Underthe projectthis work will be refined throughtechnical studies to be performedunder the rehabilitation subcomponentresulting in promotionaldocuments for thoseproperties (e.g., Tatasi,Animas Inocentes) considered to have jointventure potential. 3.29 The secondcategory of non-operationalproperties (e.g., Bonete, BuenaVista) will be subjectedto specificstudies under the project includinglimited testing and reconfirmationof known mineralizationas well as economicgeology assessment and interpretation.Study work, similar to the first category,will resultin promotlonalpackages to attract privateinvestment through divestment or jointventure. If promotionof promisingproperties of this categoryis successfuland a joint venture contractnegotiated, the proposedproject would financeup to 25 per cent of COMIBOL'sshare in the costsof follow-upexploration and prefeasibility studies,with the balancefinanced by the privatesector. 3.30 Approximately50 prospectiveexploration holdings have been selectedfor the thirdcategory. The projectwould financeadditional limitedevaluation work by specializedconsultants. It is expectedthat approximately10X of thesenon-operational prospects would meritmore detailedexploration and evaluation.Similar to the firsttwo categories of properties,promotional packages will be preparedfor the promising prospectsin an effortto attractprivate investment through joint venturing. The remainingproperties deemed to have limitedpotential will be subjectedto provisionsof the MiningLaw, particularlyas set out in TitlesV, VI and VII. 3.31 Jointventure contracting or leasingof all threecategories of propertieswill be activelypromoted under the projectthrough a special promotionalgroup which COMIBOLhas agreedto set up, by June 30, 1990, usingthe servicesof specializedtechnical, legal and financial consultantssatisfactory to IDA. In additionto preparationof industry- orientedpromotional documentation, the promotionalactivities will include the identificationof potentialinvestors and organizationof promotional meetingsin majormining and bankingcenters. Meetingswill also be held in Boliviato reviewand presentdetailed technical information and to give interestedinvestors the opportunityof on-sitevisits. 3.32 It is expectedthat upon completionof this subcomponentCOMIBOL's core mines"will be generatingsufficient cash flow to permitfinancing of follow-uppromotion and jointventure participation. D. ProiectImplementation Arrangements and Schedule 1. Prolect-coordination 3.33 Due to the largenumber of projectcomponents, the different sourcesof financeand technicalassistance, the projectwill require carefulcoordination and supervisionduring implementation. Project coordinationwill requirethe servicesof an overallproject co-ordinator, - 28 - an institutionalcomponent co-ordinator and a COMIBOL componentco- ordinator. Overall project coordinationwill be the responsibilityof the MMM wb4 ch will appoint the Project Coordinator. This Project Coordinator, locatedwithin the Undersecretariatof Administrationand Coordination, would monitor project implementationon a day-to-daybasis, keep the Ministry informed about major developments,and resolve issues and take appropriate initiativesas deemed necessary to ensure effectiveproject implementation. In particular,the Project Coordinatorwill be required to liaise with the various 4MM departments,other ministries, the Central Bank, COMIBOL, mining associations,and IDA. At present, the Project Coordinatorposition is being filled on an interim basis by the coordinator for project preparation. Assuranceswere given at negotiationsthat the position will continue to be filled until a permanent appointmentcan be made. The permanent appointmentof the Project Coordinator,acceptable to IDA, will be a condition of credit effectiveness.
3.34 Two project components--therehabilitation of COMIBOL and the strengtheningcf mining institutions--willrequire separate coordinators (para. 3.33). The coordinatorfor COMIBOLwill head a project coordination unit within the headquartersof the company. The coordinatorwill be responsiblefor ensuring the timely implementationof the various COMIBOL subcomponents,mine rehabilitation,consultancy and middle-levelmanagement inputs, training,ore reservedevelopment works and contracts,joint- venture promotionalactivities, personnel and environmentalmatters. Furthermore,the COMIBOL coordinationunit would coordinate all project procurementrequirements; liaison would be maintained with COMIBOL subsidiaries,the company'sprocurement agents and the overall Project Coordinatorin MMM.
3.35 The coordinatorof the institutionalcomponent (the MMM Sub- Project Coordinator)will be responsiblefor overseeingand coordinating the restructuringand strengtheningof the various institutions(MMM itself, GEOBOL, IDM, CIMM, and STCM). He would also supervisethe implementationof the various technicalassistance projects, consultancy inputs, training programs and relevant procurement. Furthermore,the institutionalcomponent coordinator would provide assistance to the MHK in coordinationand integrationof participatingbilateral and international co-financingagencies. Principal areas of liaisonwould be with such agencies, the Government'sprocurement agents and the overall Project Coordinator in the MMM. The appointmentof the two Project Coordinators for COMIBOL and the mining institutionswill be a conditionof disbursement for these two components.
2. Financing of PrivateMines
3.36 Second-TierMechanism - Central Bank. The main responsible organizationfor the credit componentwould be the DevelopmentCredit Department (DCD) in the Central Bank. The DCD, operatingas a second-tier developmentbank is alreadymanaging other IDA credits as well as several multilateraland bilateral loans. Under its current operationalprocedures DCD has establishedthat participatingbanks, as bearers of the risk, are fully responsiblefor subprojectappraisals and approvals. DCD does, however, a certain number of ex-post appraisalson a sample basis. The same system would be used under the proposed project. The first five - 29 - subloans would require DCD review, as well as IDA approval,prior to disbursements. Furthermore,subloans for restructuringprojects where the aggregate outstandingamount exceeds US$300,000would require prior approval by IDA. DCD review will be limited to the completenessof documentationand furnishingof comments, and would not imply approval or rejection of a credit application. In view of the nature and small maximum limits for subloans,banks would be required to analyze the repayment capacity of enterprisesrequiring subloans of less than US$100,000 equivalent. For loans over that amount and up to the limit of US$200,000 banks would be required to calculatefinancial rates of return of the subprojects. DCD would process credit applications,supervise implementationof the credit line and advise participatingbanks on its use (para. 3.13). DCD would, in particular,assist the participatingbanks in procuring the necessary assistanceto evaluate technical,financial, and managerial aspects of subprojects. While the line of credit would have its own guidelines and operatingregulations they would be designed to fit within the overall guidelinesof the DCr (para. 2.30). Draft guidelines and operating regulationshave been prepared by the Central Bank, have been reviewed by IDA and were discussedduring negotiations (Annex 3-17). The appointmentof a mining credit administratorand finalizationof the guidelinesand operating regulationsin accordancewith IDA's comments would be conditions of disbursementof this project component. No subloan approvalwill be made by BCB after June 30, 1994.
3.37 Financial Intermediaries. Not all commercialbanks are likely to have an active participationas first-tierlenders. While BISA and BAMIN are likely to channel a large part of the credit line because of their past experiencewith mining finance, some additionalbanks are expected to use the funds of the credit line. Eligibilityof commercial,as well as specializedbanks, would be determinedby the BCB and by the Superintendencyof Banks in accordancewith criteria applied by these institutions,and satisfactoryto IDA. In addition to the bank's creditworthiness,the eligibilitycriteria would include an assessmentof their long-termcredit appraisalcapabilities and of past experiencewith mining sector operations. Based upon existing information,at the time of appraisal of the proposed project, it is estimatedthat about 4 or 5 banks would be eligible to participate. In addition to commercialbanks, other financial intermediariesqualified as such and being in good standingwith the Superintendencyof Banks (e.g., financierasand FENACRE) may be eligible to participate. However, cooperativeswould not be eligible to participateas financial intermediariesalthough they may participateas credit beneficiaries,operating through other establishedfinancial intermediaries. As a condition for disbursementunder the credit component,BCB would present to IDA two or more participationagreements signed by participatingbanks.
3.38 BAMIN as Financial Intermediary. Due to its specializednature BAMIN is expected to play an importantrole as financialintermediary. However, due to its low efficiencyand unresolvedorganizational and legal situation (paras. 2.31-2.32),BAMIN's participationas a direct lender under the credit componentswould require, in addition to the other criteria applied to banks (para. 3.37), the initiationof its restructuring plan as follows: (i) a policy statementby BAMIN's board indicating the terminationof all its equipmenttrade; (ii) a detailed evaluationof - 30 -
BAMIN's total equipment inventoryand the unambigaousinitiation of the process of liquidationof such inventories;(iii) reassessmentof BAMIN's assets and determinationof the private sector's share of BAMIN's equity; (iv) completion of all necessary legal steps for the effectivenessof BAMIN's new statutes; (v) preparation.and initial implementationof a satisfactoryloan recoveryplan, includinga calendar of expected recoveriesand alternativesuggested actions, for BAMIN's largest 26 debtors; (vi) the establishmentof a basic management informationsystem (MIS) satisfactoryto IDA and a plan to complete such an MIS; and (vii) a calendar for executionof the program for technicalassistance as agreed during project preparation.3 Some of the above steps have been initiated during project preparation,and technicalassistance under the project will help complete the remainder. IDA would review BAMIN's fulfillmentof above requirementsand, if satisfactory,approve its eligibilityas a lending institutionunder the project. BAMIN is expected to take advantageof its past experience and play a particular role in providing the very small mines and cooperativeswith the necessary technicaland financial assistance to facilitatethe gradual entrance of the informal miners into the formal credit markets, specificallywhen the support of the proposed guarantee scheme become available (part-.3.14). Assuranceswill be obtained during negotiationsthat BCB will onlend funds to BAMIN only after it has demonstratedto IDA BAMIN's fulfillmentof the specific eligibility criteria above.
3.39 The Government,as the proposed borrower,would transfer to the Central Bank, under IDA terms, US$7.3 million equivalentof the credit component. According to existing laws and regulations (Decree21660), the Central Bank would relend those resourcesto the financialintermediaries in local currency but with a clause of adjustmentto the parity of the US dollar, at LIBOR + 12. Thus the Central bank would assume the exch=nge risk between the US dollar and the SDR but would retain the spread between IDA charges and its onlending rate, to cover administration,technical assistance costs and possibly funding of the GuaranteeFund (paras. 3.13-3.14). According to the same above-mentionedlaws, the financial intermediarieswould relend to final beneficiaries(also in local currency adjusted to the parity of the US dollar), at LIBOR + 6Z. Thus final beneficiaries,in this case small and medium miners, would bear the dollar exchange risk and pal substantiallypositive real interest rates. Although high, such rates are still lower than current commercial lending rates (about 202 p.a. in US dollar equivalent),and would contribute to ease the current financialshortage of small and medium firms. Onlending rates to final beneficiarieswould be subject to periodic reviewsbetween IDA and the Central Bank in order to avoid distortionsbut also to avoid unnecessarydelays in the comnitmentsunder the proposed credit.
3/ Detailed terms of referencefor this technical assistanceare included in a document prepared by a Bolivian consulting firm (CAEH) dated July 1988, on BAMIN's assistanceneeds, which is available in the project file. - 31 -
3. COMIBOL
3.40 The COMIBOL componentwill be implementedby various COMIBOL subsidiaries and departments. The overall responsibilitywould rest with COMIBOL's General Manager who would be assisted by a coordinator (par&. 3.34). Procurementwould be handled by a Government-appointedprocurement agen_y and monitored by the relevant procurementoffices of COMIBOL. The PersonnelDepartment of COMIBOL would be responsiblefor the training program. A training coordinator would be appointed to head the Training Planning and the Managerial Level Training Units. Organizational and managerial strengthening,which would rely heavily on technical assistance. would be overseen by a technical assistancecoordinator. The training and technicalassistance coordinators as well as the chief of the procurement division would report to COMIBOL'sproject coordinator,who in turn would report to COMIBOL'sGeneral Manager and liaise with the overall project coordinatorin MMM. An implementationschedule is given in Annex 3-14 and an organizationchart for project managementin Annex 3-15.
IV. PROJECT COST, FINANCINGPLAN, PROCUREMENTAND DISBURSEMENT
A. Project Cost
4.01 Project costs are summarizedin the table overleaf. The project comprisesabout 85S of a US$151 million five year (1989-93)investment program for the Mining Icstftutionsand COMIBOL plus estimatedcredit requirementsfor that period. A cost breakdown of the five year program is given in Annex 4-1. Detailed cost and sunmary tables for the program are attached as Annex 4-2. Project cost includingcontingencies is estimated at about US$126.8 million equivalent. Of this total, approximately541 is foreign exchange cost and 46Z local cost. About 772 of the funds will be used for rehabilitationof COMIBOL, 142 for institutionalstrengthening of Government services,and 92 for credit to private miners and cooperatives. Financing sources have been identifiedfor the balance of the five year program (about US$24 million) from bi-lateral sources. These are not sufficientlyadvanced to be included as firm financingunder the project. IDA will assist the Government in its efforts to finalize these additional financingpackages and IDA will also consider further support if required for the program. - 32 -
S _ ry of Pro ect Cost !/ cuss *1 moan)
S Sof Total Foreign Local Total Forelan Bsae Coat A. COMI3OL 1. Upgradingof Miningand PlantFacilitles Oruro 16.1 18.8 28.9 62 Quechisi 6.7 4.1 9.8 68 La Las 9.6 9.4 19.0 61 Potosi 4.9 8.8 8.7 67 CorporateOfftice and Service Facilities 2.8 1.6 4.4 64 Subtotal 88.1 82.7 70.8 54 60 2. TrainingProgram 1.8 0.8 2.1 8a 2 8. Organizationaland Managerial Strengthening 2.9 1.4 4.8 67 4 4. JointVenture Promotion 5.6 6.8 12.4 46 11
6. PPF Retinancing 1.0 - 1.0 - 1 Subtotal 49.4 41.2 90.6 64 77 B. InstitutionalStrengthening mmD 1.7 0.2 1.9 89 2 GEODOL 2.7 2.4 6.1 63 4 IDM 0.8 1.1 1.9 42 2 CadastralService 8.0 8.8 6.8 44 6 SAMN 0.4 0.1 0.6 80 0 PPF Retinancing 0.8 - 0.8 100 - Subtotal 8.9 7.6 16.6 64 14 C. Creditto PrivateMin and CooRerative 6.8 6.0 10.8 62 9 TotalProject Base Cost 63.6 58.8 117.4 64 100 PhysicalContingencies 8.2 2.7 6.9 64 6 PriceContingenciea 1.9 1. _ 8.6 64 a TotalProject Coat 68.7 68.1 126.8 64 108
TT IncruaWt mnastemstd USSlO million In dutiesand taxes. - 33 -
4.02 Expenses under the COMIBOL componentwould serve primarily for procurementof equipment, spare parts, materials,mine works, and for technical assistance. COMIBCL's cost estimateswere prepared in the second half of 1988 by COr4IBOLon the basis of previous procurementexperience and updated suppliers'quotations, and were adjusted to reflect price changes since then. Under the institutionalstrengthening component, expenses would be primarily for equipment,training, and special projects designed as packages, to be carried out by GEOBOL and by IDM with external assistance. For this component,cost estimateswere prepared in 1988 by the institutionsconcerned with the assistanceof consultants,based on recent procurementexperience and suppliers'quotations and updated to reflect prices at the time of this report. Under the credit component, various types of mine equipmentwould be financedas well as materials, spare parts, works, and ronsultantservices. The mining credit requirement estimateswere derived from projects which have already been prepared, and assessmentsof potential credit demand from small and medium mines and cooperatives.
4.03 The cost of consultantsfor project implementationhas been estimated, on the basis of a per-month rate of US$9,000,with the exception of long-termconsultants for COMIBOL'smiddle-level management whose costs were assumed to be in the range of US$4,000-6,000,depending on the position. Physical contingenciesof 102 have been added for equipment, spare parts, materials and mine works. No physical contingencieshave been assumed for technicalassistance, studies, special GEOBOL/IDMprojects and joint-venturepromotion. Price contingenciesare based on equal escalation rates for both foreign and lociA co'ts; it is assumed that the exchange rate of the Bolivian currencywill be adjusted to compensate for the differentialbetween local and internationalinflation. Price contingenciesare based on projected internationalinflation rates of 1.5Z p.a. for 1989, and 3.6? p.a. thereafter.
B. Financing Plan
4.04 A financingplan presented in the table overleaf has been drawn up as a result of discussionswith the Government,COMIBOL, cofinanciersand IDA. As Bolivia experiencessevere budgetary constraints,the proposed external financingwoild cover approximately60? of the project's total cost, equivalentto 100? of the foreign exchange costs and 142 of the local costs. The external financingincludes in addition to the proposed IDA credit of US$35 million, US$25 million identifiedparallel financingfrom BITS (Sweden)and the InteramericanDevelopment Bank for specificparts of the project. The Government'sfinancing contribution for the institutional strengtheningcomponent would mainly involve routine operating costs, while COMIBOL on the basis of its financialprojections would be in a position to meet its share of the project costs from its cash flow. - 34 -
FinancingPlan (US$ million)
Mining Credit to Insti- Mining PPF Re- COMIBOL tutions Companies Financing Total
Internal
COMIBOL 45.5 - - - 45.5 Government - 1.4 - - 1.4 Mining Companies - - 1.5 - 1.5 Banks - 1.5 - 1.5 Subtotal 45.5 1.4 3.0 - 49.9
External
IDA 22.7 3.7 7.3 1.3 35.0 Existing Financing Arrangement a/ 10.1 - - - 10.1 Cofinanciers 12.5 12.5 - - 25.0 Private Investors 6.8 - - - 6.8 Subtotal 52.1 16.2 7.3 1.3 76.9
Total 97.6 17.6 10.3 1.3 126.8 -- - - __ __ a/ Consists of IDA (RIC I and II - US$7.8 million) and KfW (US$2.3 million).
4.05 These funds will be sufficientto finance the proposed project, while it is envisagedthat the balance between the full cost of the five year program (US$151.2million) and the project cost (US$126.8million), will be made availablethrough other presently identifiedsources including additionalparallel financing. Available financinghas been allocatedto ensure completion of the priority parts of the institutionalprogram as first priority,while COMIBOL has prepared its investmentprogram in such a way that capital expenditurescan be made in a phased manner according to the available financing (from both internal cash generation and external sources). Effectivenessof the IDA credit would depend on effectivenessof the Swedish funding and assurancesfrom IDB that IDB intends to parallel finance part of the project.
4.06 The proposed IDA Credit of US$35.0 million equivalentwould be extended to the Governmentof Bolivia under standard terms. The Government would on-lend US$22.7 million to COMIBOL at LIBOR + 21 for 10 years with five years grace. US$5.1 million to finance studies and joint-venture promotionwould be passed on to COMIBOL at IDA terms since these activities would not be directly productive and would serve to help COMIBOL build up specializedskills and increase the knowledge of its mineral potential for improved decision making. US$3.7 million of the proposed credit would be made available through NMM to its dependenciesas grant for the institutionalstrengthening component. Grant terms appear appropriate - 35 - since these are service institutionswith praEticallyAo revenues,with the exception of BAMIN, for which grant terms are justified given the weak situationof the institution(paras. 2.31-2.32) and the limitation of funding to technical assistance. Assurancehas been obtained at negotiationsthat the Governmentwill make appropriatearrangements with each of the agencieswith implementationresponsibility, providing for project implementationand for transfer of appropriateresources. US$7.3 million would be on-lent to the Central Bank for credit to small and medium mines under terms and conditionsdetailed in para. 3.39. Conclusion of subsidiary loan agreementsbetween the Governmentand COMIBOL, and the Central Bank acceptableto IDA would be a conditionof credit effectiveness. A flowchartfor the funding of the differentproject activities is attached as Annex 4-3.
C. Procurement
4.07 COMIBOL and Mining Sector Institutions. Procurementof all IDA- financed items (equipment,materials, parts, and works) will follow IDA's procurementguidelines. Procurementof items financed by cofinancierswill follow the respectiveprocurement procedures of these institutions. Procurementof IDA-financeditems will generallybe done through InternationalCompetitive Bidding (ICB). However, specific equipment and srare parts amountingto about US$2.5 million, or about 7? of the proposed IDA Credit,will be procured through Limited InternationalBidding (LIB) from at least four suppliersfrom at least three different countries. This would apply to packages costing less than US$200,000 and to packages of equ'pment which can only be procured from a limited number of firms providing highly specializedservices or equipment. About US$0.7 million of computing and office equipment includingmaintenance/service of the same for the institutionswould be procured through local competitivebidding (LCB). In addition,approximately US$0.4 million will be used for direct purchase of proprietary equipment which would replace or add to proprietary equipment already operating in the mines and plants. Equipment items will be grouped into packages designed to achieve maximum efficiencyand cost effectiveness. All procurementfor COMIBOL and the mining sector institutionswill be handled by one of the procurementagencies hired by the Bolivian Government.
4.08 Contractingof technical assistance,consulting and training staff financed under the IDA Credit will follow IDA guidelinesfor use of consultants. These serviceswill includehiring of individualstaff for COMIBOL, using a spectalizedemployment agency, technicalassistance contracts and consultancyservices for both institutionaland COMIBOL strengthening,the executionof studies, and joint-venturepromotion. Contractingof training staff and organizationof personal training abroad and in Boliviawill be handled by the HMM (for the mining institutions)and will be implementedon the basis of annually updated training programs acceptable to IDA. MMM would submit draft annual training programs for the mining institutionsfor IDA's comments by November 30 of each project year starting November 30, 1989.
4.09 Mining Credit. Procurementof goods and services financed under the credit componentwould follow standard practices for Bank/IDA second tier type projects. The Central Bank/DCD and participatingfinancial - 36 - intermediarieswould be responsiblefor ensuring the competitivenessin price and quality, of items procured. Credit to mires and cooperatives would finance the approximateforeign exchange costs and local costs of imported and locally procured machinery and equipment,materials, civil works and services,as well as the costs for reconditionedor used equipment procured locally (for which the aggregateamount of IDA financing should not exceed US$2.0 million). The condition,value and useful life of this equipmentwill be certifiedby independentand qualified experts, satisfactoryto IDA to be selected from a roster maintained by the DCD. For goods and works (exceptfor packages under US$50,000),participating intermediarieswould require comparativeshopping, (i.e., at least three quotations). In cases where it may be impracticalto obtain three quotationsbecause of the limited size of the order, this requirementcould be waived if adequate justificationis provided. For packages below US$50,000, procurementwould be done followingestablished commercial practices, acceptableto IDA. Participatingintermediaries would satisfy themselves that procured items are su .ble for the respectivesubprojects, are reasonablypriced, and that the beneficiariesare purchasing from the most advantageoussource. Consulting services or technicalassistance for subprojectswill be contracted in accordancewith IDA guidelinesfor the use of consultants. All subprojectappraisals would include a discussion of procurementprocedures used, responses received,prices quoted and criteria for selectionof suppliers. It is not expected that any single contract would exceed US$300,000.
4.10 Contract Review. On the basis of the list of procurementpackages (Annex 4-3), IDA would do a prior review of bidding documents for equipment packages estimated to value more than US$300,000 or works contractsvalued at more than US$500,000 each (representingabout 80? of the equipmentand civil works categories). Packages valued below the above stated limits would be subject to post review by IDA. Procureomntarrangements are sulmarized in the followingtable: - 37 -
Procurement Arrangements a/ (US$ million)
Procurement Method Total Project Element ICB LID LCB Other Cost
Civil Works 17.4 - - 42.5 59.9 (14.8) (-) C-) I-) (14.8)
Equipment 6.3 2.9 - 26.7 35.9 (4.0) (2.5) (-) (1.3) (7.8)
Services - - - 14.5 14.5 C-) t-) (-) (2.3) (2.3)
Specific Projects - - - 6.2 6.2 (GEOBOL, IDM) (.) (-) (-) (1.5, (1.5)
Mining Credit - - 5.0 5.3 10.3 (-) (-) ~(2.0) (5.3) (7.3)
Total 23.7 2.9 5.0 05.2 126.8 (18.8) (2.5) (2.0) (10.4) V43.7) bl
al Figures in brackets indicate the amounts to be financed by the IDA Credit. bi Excludes refinancing of PPF (US$1.3 million).
D. Allocation and Disbursement of IDA Credit
4.11 The IDA Credit of US$35.0 million would finance goods and services in accordance with the allocation summarized in the table below:
Allocationof IDA Credit (USS mililon) Creditto Institutlonal Mining Unal- Dieburaseent Catesorles COMIBOL Strenothenlno Coan located Total X Porcentage 1. EquIpmnt, SpareParts 100I of foreigncost and Materials 6.6 1.2 - - 7.7 22 and 00Xof locelcost 2. Wtrks/Studi.s/ 100X of foreigncost JV Promotion 14.0 1.5 - - 16.5 44 and 903 of localcost 3. Technical Assistance/ 100X of foreigncost Traninng 1.0 1.1 - - 2.1 6 and 90X of localcost 4. Credit - - 7.8 - 7.8 21 7O3 of total cost
S. PPF 1.0 0.8 - - 1.8 4
6. UnaIlocated -- 1.1 1.1 8 Total 22.5 4.1 7.8 1.1 85.0 100 - 38 -
4.12 All expenditureswill be fully documentedexcept expendituresin respect of contracts,purchase orders, or training programs valued at less than US$200,000,as well as for expendituresunder the Credit Component which will be covered by Statementof Expenditures. Expenses for specific GEOBOL projects funded under the Credit would also be covered by Statement of Expenditure.
4.13 The disbursementschedule for the project (Annex 4-4) is based on estimates of order placements,payment schedules,and expected delivery times. It differs from the standard country and industry profiles as the project is a rehabilitationproject with limited constructionwork. The Credit is expected to be fully disbursedby December 1994.
V. FINANCIALANALYSIS OF COMIBOL
A. Financial Projections
5.01 Financial projectionsfor COMIBOIJhave been prepared in current US dollars covering the period of COMIBOL's five-yearplan. The projections are based upon the aggregationof cost and revenue forecastsprepared in constant 1989 US dollars by COMIBOL'sheadquarters and subsidiaries(La Paz, Quechisla,Oruro, and Potosi). COMIBOL's forecast was adjusted diuring the initial two years, 1989-90, ta allow for an increase in production toward full capacity utilizationin 1991. The projectionsin current US dollars assume that Bolivia's current exchange rate policy will continue and that exchange rate adjustmentswill reflect the differentialbetween internationaland domestic inflation. COMIBOL's financial forecast in constant US dollars was therefore inflatedwith the Bank's forecast of the ManufacturingUnit Value (MUV) Ind'x.
MUV Index Forecast,1990-93
1990 1991-93
MUV Index Change (Z p.a.) 1.5 3.6
5.02 COMIBOL's sales forecastsare based on its adjusted projectionsof tin, silver, lead and zinc production. Closing and joint venturing of mines during 1989/90will cause an initialdecline in the output of silver, lead and zinc, while tin productionis expected to increasemoderately during 1989/90. Metal sales proceeds are the result of projected productionand the Bank's latest commodityprice forecast.4 The general outlook for metals produced by COMIBOL is presented in Annex 5-1 and details of the metal price forecast used are given in Annex 5-2. The projectionsof operating costs of COMIBOL have been based upon the company's recent cost structureadjusted by the expected impact of the project.
5.03 The assumptionsfor the f-.nancialforecasts and detailed projectionsof the income and cash flow statementsfor COMIBOL and its subsidiariesare given in Annex 5-2. The financialprojections for COMIBOL
4/ Report 814/88 Price Prospects for Major Primary Commodities. - 39 - are presented below. Financialprojections were performed only for the income and cash flow statements. COMIBOL'sbalance sheets for the recent years, are unauditedand not considereda realisticbasis for estimating the value of COMIBOL's assets and liabilities. The lack of a projected balance sheet is a weakness in determiningCOMIBOL's future financial viability. However, since the Governmentabsorbed COMIBOL's total long- term debt in 1986, the debt-to-equityratio of the company is satisfactory and will remain satisfactorydurinp the project implementationperiod. Moreover, COMIBOL has started a program to determine realisticbook values of their equipment and materials inventoriesas a first step to a complete asset evaluation and full audit. COMIBOL has agreed to submit to IDA a full set of audited financial statementsfor 1987, 1988 and 1989 not later than Jur.330, 1990 and, thereafter,audited financialstatements not later than six months after the end of each fiscal year. The projected income statementsdemonstrate that COMIBOL'soperations during 1989-93 would be profitableexcept for 1989, when low capacity utilizationreduces sales revenues. With the exceptionof 1989, when the Government is committed to transfer to COMIBOL an amount of about US$9.0 million to cover expenditures for closed mines and other inoperativeplants, COMIBOL would be in a strong liquidityposition.
COMIBOL - Summary of FinancialProjections, 1989-93 (US$ million - current terms)
1989 1990 1991 1992 1993
Sales (gross revenues) Tin 43.9 60.7 66.8 73.2 77.2 Silver 25.7 26.6 20.0 21.1 21.9 Lead 1.3 1.1 0.6 0.6 0.6 Zinc 16.2 21.3 17.7 19.5 20.4
Total 87.2 109.8 105.1 114.4 120.1
Marketing Costs 27.2 37.1 32.3 35.0 36.1
Net Sales Revenues 60.0 72.7 72.8 79.4 84.0
OperatingCosts 60.1 57.8 49.5 51.3 51.9
OperatingIncome (0.1) 14.9 23.3 28.1 32.1 FinancialCharges 1.1 3.1 3.9 4.3 4.6 Royalties 2.7 3.6 3.6 4.0 4.2
Net Income A.R. (3.9) 8.3 15.7 19.9 23.4
Cash Flow Internal Cash Generation 3.7 19.1 27.2 32.3 36.6 Capital Expenditures 16.8 22.9 14.0 11.1 9.9
Ratios Operating Income/NetSales -02 20X 32Z 352 38Z Net Income A.R./Net Sales -7? 11? 22Z 252 282
Debt Service Coverage 0.6 4.0 5.5 5.3 6.0 - 40 -
5.04 COMIBOL is expected to be profitableduring the period 1990-93. Net income after royalty payments to the Governmentwould initialtybe negative at -US$3.9million in 1989 (-7Z of net sales revenues),but would rise rapidly thereafterto US$23.4 million (28Z of net sales revenues) during 1993, the last year of the rehabilitationperiod. Internal cash generationwould rise in line with the growth of net income from US$3.7 million in 1989 to US$36.6 million in 1993. The proposed project would cause the financialcharges to rise from US$1.1 million in 1989 to US$4.6 million in 1993. Since COMIBOL has a low long-termdebt burden, the increasingfinancial charges would not impair, to any major extent, COMIBOL'sprofitability. The debt service coverage ratio would be low in 1989 at 0.6 and would increase thereafterto 6.0 in 1993. These ratios are the result of a negligibleinitial debt burden and considerablecash generationduring the period of rehabilitation.
5.05 COMIBOL is expected to accummulateconsiderable amounts of cash during the rehabilitationperiod. At the end of 1993, COMIBOL's cash reserveswould be US$54.9 million. During 1989, however, COMIBOL will face a cash deficit of US$11.8 million. In 1989, COMIBOL faces exceptionally high expendituresfor maintenanceof inoperativemines and plants; continued severancepayments to displacedworkers; reduction of accounts payable (mainlyarrears of power and fuel bills); build-up of stocks of metal concentrateand low productionfrom some mines which are still in the start-upphase. The major outflov of cash in 1989, however, is planned for investmentsamounting to US$16.8 million. However, given CONIBOL's past implementationperformance, limited existing external financingavailable (US$10.1million from KfW and RIC I and II), and the initiationof disbursementsof funds from the proposed credit only during the second half of 1989, would reduce the investments,and therefore the projected cash deficit,would be smallerthan currentlyprojected. Furthermore,the Government,which has covered COMIBOL'scash deficits in recent years, is committed to provide a subsidy of US$9.0 million equivalent to COMIBOL which would cover the maintenancecosts of inoperativemines and plants as well as the costs of reducing the work force. During negotiations, agreementhas been reached that the Government provide the funding necessary to cover COMIBOL'scash deficit in 1989. Such deficit would probably be less than the currentlyallocated subsidy amount of US$9.0 million equivalent. The cash flow forecast indicates that COMIBOL's rehabilitationwould permit the initiationof dividend payments by 1991. Such paymentswould be in addition to royaltypayments which are in lieu of corporate tax payments and compensatethe Government for the value of the mineral extracted in COMIBOL'smines. Based on appropriatepolicies of capitalizationand liquidity reserves,the Government and COMIBOL will agree on a dividend and policy, satisfactoryto IDA, prior to December 31, 1990.
B. BreakevenAnalysis
5.06 The breakeven price (the price required for COMIBOL to cover its total production costs) has been calculated for tin which accounts for 50Z (1989) to 642 (1993) of COMIBOL'sgross revenues from metal sales. - 41 -
COMIBOL - BreakevenPrice for Tin, 1989-93 (US$Ilb.- current terms)
1989 1990 1991 1992 1993
BreakevenPrice 2.55 2.33 2.25 2.26 2.30 ProjectedPrice 3.65 4.20 4.42 4.65 4.90
The breakevenprices are consistentlybelow the projected price for tin, COMIBOL'smain product. In addition,COMIBOL receives an important, although declining share, of its sales from silver, lead and zinc production.
C. SensitivityAnalysis
5.07 COMIBOL'scash flow and profitabilityprojections during the 1989-93 period are sensitiveto alternativeassumptions with respect to capital costs, operatingcosts, production levels, and metal prices. The table below indicatesthat COMIBOL'sfinancial viability is not very sensitiveto variations in project costs. Profits and cash flow, however, are sensitiveto changes in operatingcosts, production and tin prices. COMIBOL has no influenceover the tin price, which generates 50Z-601 of its revenues. The analysis indicatesthat COMIBOL needa to maintain close control over its operatingcosts, as relatively small increaseswould result in sharp reductionsin profitabilityand cash flow. A major share oZ operating costs is labor and overhead. During negotiations.agreement has been reached that COMIBOLwill adhere to employment and wage policies which will be consistent with the company's financial viability and would not increase its total personnel to more than ten percent above the staffing level as it stood on December 31, 1988.
COMIBOL- Sensitivit Anallsi: of Cash Flow and Profitability w5; mi I I i on and Percent) Cash at 1989 1990 1091 1092 1i9 End 1998 BaseForecast Not Income a.R./hNt Sol" -71 11X 22S 256 28X - ChangeIn Cosh (11.8) 18.1 14.0 17.7 21.9 U4.9
CODItOl COS + loX NO Incoms.K./ot Sales -6X 16X 221 25X 28X - Change In Cash (12.9) 9.8 11.8 16.6 19.5 48.7
Ope:rtlna Cos # lOxt. Not Inhme *.R./fNttS le" -15X eX 1i1 19X 21X - Change In Cash (17.2) 0.8 6.2 11.6 16.8 24.1 Production Decline IL9:-lU: 90:-SX) Net Incom a.R./Net Sale -141 18X 22.10 28X 28X - Change In Cash (16.5) 9.2 18.2 16.7 20.5 44.0 Reductionof Tin Price (90-90: 7X-11X) Not Incom *.R./7 t Sales _-X 10X 151 18X 20X - Change In Cash (11.2) 7.1 7.2 9.6 12.8 26.0 - 42 -
D. FinancialRate of Return and SensitivityTests
5.08 The financial rate of return for the proposed project has been calculated on an incrementalbasis. It was assumed that the effects of the proposed project would be: (i) to prolong mine life by establishinga higher volume of proven reserves,and (ii, to permit operationsof the mines at their rated capacities beyond 1990 until the end of the prolonged mine life. Without the project, it was assumed that all operationsof COMIBOL would have to discontinueat the end of 1990. (Alternatively,the assumptionof scaled-downoperations after 1990, which would result in a zero net cash flow, would generate the same result as a discontinuationof operations). The rate of return calculationswere performed for each of the eight mines operated by COMIBOL (para. 2.20, 3.19), for the four subsidiaries(Oruro, La Paz, Quechisla and Potosi), and for the consolidatedoperations of COMIBOL. The incrementalcost and benefit streams and the results of the calculationsof the financial rates of return are in Annex 5-3.
5.09 The average rate of return for the project is high at 42.2Z, which is not atypical for a rehabilitationproject. The project adds needed working capital and replacementequipment to an already existing production capacity,which would however discontinueto functionwithout the project. All productionwhich occurs after implementationof major parts of the project in 1989-90 is attributedto the project, thus generating a high rate of return. A major factor determining the financial rate of return is the severance pay which would have to be paid to employees, if COMIBOL would discontinueoperation in 1990. In addition to the high social cost related to the displacementof a large number of workers, the termination of COMIBOL's operationswould involve financial expendituresror severance pay of about US$22.8 million. The financialrate of return varies widely among different subsidiariesand mines. The large mines which operate in the subsidiariesof Oruro and La Paz have high rates of return of over 502, while the smallermines in the subsidiariesof Quechislaand Potosi have generally low rates of return of around 52. The low rates of return have been made under assumptionsbased on the current low reserves and poor operatingmethods. For these mines, the project provides for studies in the first two years to determinepossibilities for extendingreserves and improvingoperations. Mines, for which this is the case, would then have higher rates of return,while investmentsin mines without possibilities for improvementwould not be carried out and arrangementswill be made to joint-venture,lease or discontinueany such unprofitableoperations in accordancewith its mandate (paras.3.19 - 3.20).
5.10 The financialrate of return for the project is sensitive to variations in metals prices, production costs, and investment costs.
SwitchingValues of Critical Variables
Variable SwitchingValue a/
Metals Prices -132 InvestmentCosts i882 OperatingCosts +292 a/ The percentage change that reduces the financial rate of return to 122. - 43 -
The rate of return is most sensitiveto variations in metals prices. A fall of 132 in the prices (gross sales revenues)below the levels projected would reduce the financial rate of return to 122. The rate of return is not very sensitiveto the cost of the project (investmentcost), but operating cost variationshave a relativelyhigh effect on the return. An increase of 291 over current projectionof operating costs would reduce the rate of return to 12X. COMIBOL has no influenceon metal prices, but its diversifiedproduct compositionreduces the downside risk of metal price changes. Another critical variable for the rate of return is production. A fall in production below currentlyprojected levels would have practicallythe same effect on the rate of return as a drop in metals prices, since COMIBOL'smarketing and operatingcosts would change only marginally. The sensitivitytests indicate that COMIBOL's financial viability does neither permit major reductions in the targettedproduction levels nor large increasesin operating costs.
E. FinancialCovenants
5.11 In order to ensure the necessary financingfor the Project and its completion in a sound manner, agreement has been reached on the following financial covenants:
(a) from the Government
(i) that it will ensure that COMIBOL and the institutions have access to sufficient funds, including foreign exchange to complete the Project;
(ii) that it will abide by the financialcovenants to ensure COMIBOL's viability and ability to implementthe Project.
(b) from COMIBOL
(i) that, by December 31 each year, for the next five years it will prepare and submit to IDA for its review a proposed annual operating and investmentbudget for the next year and submit approved budgets, as soon as possible thereafter, plus financial projections,including its foreign exchange and local currency requirementsand planned expenditureson an annual basis;
(ii) that, in any given year, it will not make capital investmentsin addition to the previously reviewed InvestmentProgram exceeding in aggregateUS$5 million without prior IDA's approval;
(iii) that it will maintain a current ratio of at least 1.2 to 1 from 1989 onwards; a ratio of uebt to equity of not more than 50:50, and a projected debt service coverage ratio of at least 1.3.
F. Auditing and ReportingRequirements
COMIBOLComponent
5.12 CONIBOL will submit annual financial statementsto IDA audited by independentauditors, within six months of the end of the accountingyear. - 44 -
COMIBOL is currentlynot audited by independentauditors, but has agreed that it will use the servicesof auditors acceptableto IDA. In addition, (i) COMIBOL will submit monthly progress reportswithin 30 days of the end of each month; (ii) COMIBOL will submit quarterlyprocurement reports within 45 days of the end of the quarter; and (iii) within six months after the closing date of the Project, COMIBOLwill prepare and furnish to IDA a completion report on the Project dealing with its implementation, and the costs and benefits derived and expected to be derived therefrom.
Institutionaland Credit Components
5.13 GEOBOL, IDM, STCM and BAMIN will submit their annual financial statements to IDA, audited by independentauditors. The Central Bank will also submit annually audited financial statementsfor its part of the project. Such audited reportswould be furnishedto IDA not later than six months after the end of each financialyear. Auditing would be done by indppendentauditing firms acceptable to IDA and would include an audit of the statementsof expenditure. Accounts for the project componentswould be kept and made availableby the MHM for inspectionby IDA at any time. In addition,the MHM will submit quarterlyrevorts on progress of the project (includingprocurement) within 45 days of the end of the quarter and finally the MHM would provide a project completion report not later than six months after the closing date of the Credit.
5.14 In addition, it has been agreed that IDA and the Governmentwill periodicallyreview the project implementationperformance. Such performancereviews would, among others, determine the banking institutions which would be eligible for participationin the Credit operated by the Central Bank aud review the progress made in privatizingand joint venturing of COMIBOL operations. Concurrentlywith the preparationof the annual budget, the MMKwould prepare a detailedwork program for the project for the followingyear, taking into account the likely budgetary allocation. The entities responsiblefor implementationof the components would prepare annual work programs,which the MMM would consolidatefor overall execution of the project. The consolidatedannual work programs would be submittedto IDA for approval by November 30 each year starting November 30, 1989. Startingnot later than January 31, 1990, COMIBOLwill review annually with IDA the status of the inoperativemines, the mines to be joint-venturedor leased as well as the unoperationalexploration concessionsand properties.
VI. ECONOMICANALYSIS
A. Economic Benefits of the project
6.01 The proposed project forms an importantcomponent of Bolivia's developmentprogram for the five-yearperiod 1989-93. A success of the proposed project would not only re-establishthe viability of the country's largest mining enterprise,but would have also major macroeconomiceffects. The mining sector provides employment to about 47,000 workers. COMIBOL has 7,000 employeeswho would not easily find alternativeemployment if the companywould discontinueoperations. The mining sector's ability to generate net foreign exchange earnings is an essential componentof Bolivia'seconomic program. Mining exports are expected to generate - 45 - approximatelyUS$1 billion in net foreign exchange earnings during 1989-93 (US$200million per year on average). COMIBOL'snet foreign exchange contributionwould be about US$250 million during this period. After several years of representinga burden to the Government'sbudget, a strengthenedmining sector would provide substantialamounts of tax/royalty and dividend payments to the Government. Tax/rsyaltypayments from mining may reach US$100 million for the 1989/93 period (includingUS$20 million from COMIBOL). In addition,COMIBOL would be able to pay dividends to the Governmentof up to US$50 million (US$10million per year on average) without impairingthe company'sfinancial viability.
6.02 The proposed project would have other importanteffects on Bolivia'seconomic performancewhich cannot be quantified. First, the successfulrehabilitation of Bolivia's largestmining enterprisewould provide an importantsignal, both in Bolivia and outside, that the economy is returningto normal levels of activity and growth. Thus, COMIBOL's successfulrehabilitation could contributeto increased levels of investment arl growth in other sectorsof Bolivia's economy. Second, the proposed project would support joint-venturing, leasing or other forms of profitable mining involving the private sector of mines which are now in the public sector. The successful execution of COMIBOL'sjoint venture programs would provide strong signals to domestic and foreign investors that the Government'spolicies of reducing public involvementin the productive sectors are pursued in an effectiveway. Again, confidence of domestic and foreign investorsin the Bolivian economy would be strengthenedand the environmentfor investmentand economic grSth would improve. Such signals of a private sector oriented developmentstrategy would be further strengthenedby the successful implementationof the project's institutionaland credit components. The technical and financial supportwhich would be provided by more effectivelyoperating mining sector and financialinstitutions is an essential componentof the Government's policy to attract foreign and domestic resourcesto a sector with a high developmentpotential. Finally, the agreements reachedwith COMIBOL on environmentalaspects of mining would contributeto improved living conditions in the mining areas.
B. Economic Rates of Return
6.03 Economic rates of return have been calculatedfor the COMIBOL componentof the project and its main subcomponents. The method applied in the calculationof the economic rates is the same as the one used for the cal:ulationof the financial rates which involvedbasically a comparisonof costs and revenues for the scenariowith the project and the scenario without the project. The incrementalfinancial cost and revenue streams were adjusted for the economic analysis by eliminatingtransfer payments (taxes and duties, and payments to displacedworkers). No other adjustmentsto the financialcosts and revenue streamswere necessary, since current economic policies in Boliviahave eliminatedmost distortions in wages and prices.
6.04 The economic rate of return of the COMIBOL project component is 34.32 which is less than the financialrate of return (42.22)but still attractive. The difference in thb two rates resultsmainly from the exclusion of the severancepayments to displacedworkers from the economic - 46 - analysis which tends to reduce the net benefits resulting from the project (i.e.. the costs that are avoidedby implementingthe project are reduced in the economic analysis). The economic rates of return for the different subsidiariesshow a similar structureas in the financialanalysis. The subsidiariesof Oruro and La Paz which have large mines show high returns of 46Z-48Z,while the economic rates of return in the subsidiarieswith small mines are marginal at between 52 and lOZ. These results again indicate the need to review the longer term viability of the Quechisla and Potosi groups at an early time during project implementation.
C. Risks
6.05 The technical risks of the proposed project result largely from the considerablenumber of development,exploration investment and training programs which have to be implementedat COMIBOL'sheadquarters and subsidiaries. A major part of these programs are scheduled for initiation at about the same time in late 1989 and early 1990. The simultaneous initiationand supervisionof a large number of programs may be difficult. On the other hand, major componentsof the rehabilitationprogram, in particular mine developmentand replacementof equipment,are straightforward in their implementation. They would largely be routine activities which form part of on-going operationsat the mines/facilities. Therefore, the developmentand replacementinvestment program should proceed largely as scheduled,while exploration,training and study programs face the risk of some initial delays.
6.06 Effective implementationof the overall project requ_res the realizationof an ambitiousprogram of institutionbuilding, both with respect to the support institutionsfor the sector and the financial institutionsproviding credit to tte privatemining enterprises. The mining sector support institutionshave been in a state of disarray in recent years. Their rehabilitationwill be difficult and time consuming, while the benefits reaped from the4r effective functioningwould only materializein the longer term. Close monitoringby IDA and the appointmentof experiencedconsultants who would assist in the implementation of this project component are importantto maintain the risks related to the rebuilding of mining institutions at acceptable levels. The credit component of the project faces also institutional risks. Commercialbanking in Bolivia is still in a recovery phase and cannot be expected to move aggressivelytoward h.gh risk lending to small and medium mining without strong incentives. BAMIN which was traditionally the main lending institutionfor small mining will undergo a thorough reorganization. The proposed projectwould provide assistance for the rehabilitationof BAMIN, but there is the risk that it may take more time and effort than currentlyenvisaged for BAMIN to resume effective lending on a larger scale to small mining enterprises. The proposed project attempts to reduce the risks related to the credit componentby (i) limiting the amount of the component to US$7 million; (ii) providing a reasonable spread to the first tier financialinstitutions; and (iii) providingbroad-based technical assistance to BAMIN which would improve the probabilityof timely rehabilitationof this institution.
6.07 Inspite of the strong financialperformance of COMIBOL which is projected for the program period 1989-93, COMIBOL could face serious - 47 - financialrisks. On the revenueside, the risksresult largely from COMIBOL'sambitious production program during the periodof rehabilitation. COMIBOL'soriginal assumptions were that,with the exceptionof the Colquirimine, all mineswould reachtheir ratedproduction capacity as early as 1989. Colquiriwould be at full productionin 1990. Given the fact that COMIBOLis stillin a recoveryand consolidationphase, these projectionswere consideredover optimisticand adjustmentswere made to stretchthe expectedproduction increases. The assumptionsused in the financialprojections are thereforeconsidered feasible and realistic. Anotherrisk may arise fromGovernment interference in COMIBOL'sactions to close inefficientmines and plants. Insistenceby the Governmentto maintainmines and plantsin operation,irrespective of theirviability, would impairthe overallprofitability of COMIBOLduring the program. In orderto mitigatethis risk, it has been agreedthat IDA will reviewwith the Governmenton an annualbasis the statusof inoperativemines, explorationproperties and jointventuring. Close supervisionand follow- up duringthe initialperiod of projectimplementation will help to minimizethe above risks. Particularattention would be paid to the performanceof the mines in the subsidiariesof Potosiand Quechisla,which are particularlysensitive to relativelysmall variations in cost and productionlevels. Finally,COMIBOL's operating estimates ma: prove unrealisticif laborproblems would recur. Renewedlabor problems could induceCOMIBOL to abandonits policyof reducingits workforceto levels neededfor effectiveoperation of the mines. Furthermore,the restraint imposedon increasesin wages and benefits,which is crucialfor the financialviability of COMIBOLduring the programperiod, might be relaxed if laborstrife would resume. This riskwould be mitigatedby a macroeconomicpolicy directed to reactivationand by the positiveinternal effectsof CONIBOL'srehabilitation.
VII. AGREEMENTSAND RECOMMENDATION A. Agreements 7.01 muringnegotiations the followingagreements were reached: (a) with the Government (i) The Governmentwill take all appropriatemeasures to promote investmentactivities in its miningsector, and will resubmitthe necessarydraft legislationto the New Congress(para. 2.37). (ii) The Governmentwill by June 30, 1990 fully implementthe institutionalframework for the miningsector institutions, as laid out in the InstitutionalMaster Plan (para.3.11). (iii) The Governmentwill preparea nationalenvironmental mining actionplan for reviewby IDA beforeJune 30, 1991. (iv) The Governmentwill make appropriatearrangements with each of the sectorinstitutions providing for projectimplementation and transferof appropriatefunds as grants(para. 4.06). - 48 -
(v) The Goverment will ensure that MMM submit draft annual training programs for IDA's comments by November 30 of each year starting November 30, 1989 (para. 4.08).
(vi) The Governmentwill provide the funding necessary to cover COMIBOL's expected cash deficit in 1989 ',ara. 5.05).
(vii) The Government and COMIBOL will reach agreement on dividend payment policy, satisfactoryto IDA, prior to December 31, 1990 (para. 5.05).
(viii) The Governmentwill ensure that COMIBOL have access to sufficient funds includingforeign exchange and ensure COMIBOL'sviability and ability to complete the project (para. 5.11(a)).
(ix) The Governmentwill submit to IDA annual audited financial statementsfor GEOBOL, IDM, STCM, and BAMIN and would submit to IA quarterly reports and a completion report (para. 5.13).
(x) The Govermentwill periodicallyreview with IDA project performanceand will ensure that M49 submit annual detailed work programs for the project by November 30 of each year starting November 30, 1989 for IDA's approval (para. 5.14).
(b) with Central Bank
(i) Central Bank will prepare, by June 30, 1989, a detailed design of the proposed guaranteefund (para. 3.14).
(ii) Central Bank will not approve any subloansafter June 30, 1994 (para. 3.36).
(iii) Central Bank will onlend funds to BAMIN after it has demonstrated to IDA BAMIN's fulfillmentof specific eligibilityrequirements as agreed upon with IDA; (para. 3.38), and
(iv) Central Bank will periodicallyreview with IDA onlendingrates to final beneficiarier(para. 3.39).
(v) Central Bank will submit annually audited financial statements for its part of the project (para. 5.13).
(c) with COMIBOL
(i) COMIBOL will submits
(a) detailedwork programs for its operatingmines for review by IDA by September30, 1989 (para. 3.20); and
(b) by September30, 1989 for IDA's review detailed terms of referencefor various technicalstudies, will undertake these studies and review their results with IDA by June 30, 1991 (para. 3.20), and promptly thereafter carry out work in accordancewith the recommendationsof these studies. -49 -
(ii) COMIBOL will submit by June 30, 1990 to IDA an action plan to achieve adherenceto the health and safety regulations(para. 3.22), implement it thereafterand review implementationwith IDA semi-annually.
(iii) COMIBOL will implementthe environmentalprogram as agreed upon with IDA and review its implementationwith IDA semi-annually (para. 3.23).
(iv) COMIBOL will, by June 30, 1990, establishand thereaftermaintain a compensationscheme for middle and senior level management as agreed upon with IDA and consistentwith the Government'spublic service compensationpolicy (para. 3.25).
(v) COMIBOLwill present a detailed workforce training program, including a schedule for establishing a training unit, not later than June 30, 1990 for IDA's comments and implement this program thereafter (para. 3.26).
(vi) COMIBOL will by June 30, 1990, set up a specialunit for joint- venture promotion (para. 3.31).
Cvii) COMIBOL will submit to IDA audited financialstatements for 1987, 1988 and 1989 by June 30, 1990 (para. 5.03).
(viii) COMIBOLwill adhere to employment and wage policies which will be consistentwith the company's financialviability and will not increase its total personnelbeyond an agreed level (para. 5.07).
(ix) COMIBOLwill follow prudent financial practices and maintain financial covenantsas described in para. 5.11(b).
(x) COMIBOLwill follow agreed upon auditing and reporting requirements(para. 5.12).
(xi) Starting in January 1990, COMIBOLwill review annuallywith IDA the status of the inoperativemines, mines to be joint-ventured or leased and unoperationalexploration properties (para. 5.14).
7.02 The followingare Conditionsfor Credit Effectiveness:
(i) COMIBOL will submit a detailed environmentalaction program acceptable to IDA (para. 3.23).
(ii) The appointmentof a permanentoverall Project Coordinator acceptable to IDA at the Ministry of Mining and Metallurgy (para. 3.33).
(iii) Effectivenessof bilatera1 cofinancingarrangements (para. 4.05).
(iv) Conclusion of subsidiary,loan agreements acceptableto IDA between the Government and COMIBOLand between the Goverment and the Central Bank (para. 4.06). - 50 -
7.03 The followingare Conditionsfor Credit Disbursement:
(i) For the CONIBOL and institutionalstrengthening components, the appointmentof the Project Coordinatorin COMIBOL and the 1MM Sub-ProjectCoordinator (para. 3.35).
(ii) For the Credit component,appointment of an administratorin the DevelopmentCredit Departmentof the Central Bank, finalization of guidelinesand operating regulationsas agreed with IDA, and presentationto IDA of at least two participatingagreements with participatingbanks, (paras.3.36, 3.37).
B. Recommendation
7.04 On the basis of the above actions and agreementsthe proposed Project would be suitable for an IDA Credit of SDR 26.5 million (US$35.0 million equivalent)on standard IDA terms. NMD SBnZ D8AS1^TAna Rgjr P ul " d 11-. 1978-87
CKMIL'S8 PNUOIITI Tin 90.601 19,818 20,272 20.540 28,251 21.448 19,010 18.62 20.628 18,479 16,090 18,005 10,060 4.249 884 Stlver 160 148 148 14" 164 177 1n 189 170 180 147 I11 75 41 40 Lead 14 068 12,00W 11,881 12576 14,984 12,7 9.826 10,158 9.897 7,22 7,489 8488 4,006 1.872 1.005 Cappor 8,845 82667 8,404 8.416 960 2.788 91.76 1,79 2.622 2,266 1."91 15B10 1.45 165 - DIP""th 661 59 591 Su 602 806 to 11 9 51 6 3 155 41 - W.fWolfram 1 999 - 777 - 1112 8 1216 .121 I ,006 989 1.840 1.60 -" 1,424 1 262 1,809 94 - 84- 77 Zinc 40,760 82,590 81,656 84,809 85.144 88,689 27.418 2e95,8 27,218 2.S725 22,065 15,298 18.677 4,01 2,900 GDid (hgm) 19 17 i8 11 16 14 2 - - - - - 6 1 - FROOJIO O "MR" SAE NODD Tin 7,000 6,989 6,899 5,575 6,83 6,62S 8,987 5,900 8.854 6,026 6.204 4,447 S,772 8,2e8 2,287 Si1v, - 2 a 12 17 28 20 24 24 28 17 28 as 78 Lead 899 26s as8 560 817 8,897 8,847 8,994 4,859 4,018 8,814 1,284 1,585 182 8.54 Copper 8,065 2,878 2,856 1,220 - 20 - 8iVAStih I - - 89 42 ------Antimony 9,122 8,80 9 407 10,488 9.987 9,481 10,498 11.800 12,154 10,181 7,808 6,9 5,665 7.190 6,627 Voifreg ~19,2081 200 1,O066 IN 1,82 164 1,76 1,519 160 1,765m 1,577 1,850 61.80 109 10 Zinc 10,414 11,796 12,56 11,769 24,488 20,975 1:,72 6 °16,7017 .7S1 19,068 20961 18,638 22,882 798,25 85,276 Gold (kg*) - - 88 488 824 801 278 - 0 152 12 10 184 296 488 PRDJCTIIONOF SMALL SCALE"D1 NDUMNAD OtHES Tin 8.582 8,896 4,781 8.100 8,656 2,818 2,812 2,800 2,687 2,086 38,04 2,458 2.826 2,947 S,507 S1Ilvor 12 10 11 12 5 I 6 10 10 16 17 is 10 19 27 L"d 9,781 7,106 5,788 6.064 4,166 1.995 2,899 8,078 2.79 1,189 1,068 782 6S6 1,067 1,804 cappr 1.972 1,481 468 488 291 100 91 8s 16 40 - - - 17 9 sismatl 28 27 81 1.7 7 2 - - 21 - -- 4 2 1 Antimany 6 ,60 6,112 6,66S 6,557 6,404 3.87" ,927 8,914 8,14 38.429 2,5888 2,482 2.2S2 8,088 8,708 Wolfram 400 880 i38 486 418 888 271 228 818 866 280 188 459 585 803 Zinc 2,209 8,048 4,885 8,785 8,881 n.m. 2,665 8,600 2 079 2,8 7 4,107 2 ,88 1,882 1,006 947 cold (kgm) - - 955 79 416 473 678 - 1,564 1,098 1,404 1,140 392 466 2,268 TOTALPRDIJCTD0m Tiln 81,108 80,180 181,898 50,318 85,740 80,881 27,759 27,271 29,829 24,341 28,306 19,911 18,188 10,479 8,12n SiIvor 171 185 150 189 le1 195 182 189 204 169 187 142 189 95 140 L"d 24 218 19 472 17 967 19 200 18,987 1s o09 1S895 17,228 18,785 12,482 11,888 7,449 6,242 3,121 9,048 Capper ~~8,0547,222 6,218 5,101 8,191 2,852 1,886 1,882 12,888 2,806 1,981 1,610 1,668 8838 9 Biemetlat591 622 622 612 681 807 10 11 30 a a 8 159 48 1 Antimony 1S 818 14,912 16,089 17,018 p6,341 18,835 14,420 18,500 6s,728 18,976 9,9s5 9,281 8e2 10,248 10,688 Wolframy 2,590 2,508 2,811 8,182 8068 8,078 8,180 428 8,504 8,195 08,09 2,887 2,072 1,380 604 Zinc *40591 49,486 4B,74 Ea,014 68,508 59,619 46,804 80,260 47 028 45,666 47,18 0 9877 28.1 84 3, Gold (has) 1,152 1,807 1,849 1,292 756 1,088 948 1,620 2,064 1,248 1,581 1,270 S62 768 2,7S5 TOTAL PRO0'USM -OE Tin 108.4 100.0 106.0 100.6 112.0 102.5 92.1 98.8 99. 60.7 83.9 66.0 88.5 84.8 27.0 SilIvor 110.4 100.0 108.2 109.0 116.7 12.7 117.8 12.9 181.6 109.0 12.8 91.6 182.8 81.3 90.8 Lead 124,4 100.0 92.8 98.6 97.2 92.8 79.0 88.5 66.0 65.8 60.8 88.5 82.1 16.0 48.4 copper 19.61 100.0 66.1 70.6 44.2 89.2 25.7 26.1 86.5 81.9 27.4 22.8 2a.1 4.7 0.1 BiematI 95.1 100.0 99.9 98.4 104.7 49.4 1.6 1.8 4.8 0.8 1.0 0.5 25.6 6.9 0.2 Antimn 106.0 100.0 107.9 114.1 109.6 09.4 98.7 106.9 112.1 98,7 66.7 82.2 89.9 68.7 71.8 Wolf 188.6 100.0 92.1 124.9 122.1 12 124.8 186.5 1.7 127.4 28.2 95.2 82.6 55.0 82.1 Zinc ___106.0 160.0 98.7 187.2 2128.8 120.6 94.7 101.7 95.1 92.4 95.8 78.4 77.1 67.7 79.1 aold Chum) 089.1 100.0 126.2 96.9 57.8 88.2 72.5 1283.9 157.9 95.5 117.1 97.2 45.0 86.4 210.6
SUmwee: linle. of Mining en Vtionl Statistical ettute. I/ Pelieinasi. - 52 - ANNEX 1-2 Page 1 of 3
BOLIVIA
MINING SECTOR REHABILITATIONPROJECT
EstimatedMineral Resourcerand Reserves
A. Tin ('000 tonnes of containedmetal)
Proven and Probable Possible
1. Reserves
COMIBOL 143.7 66.0 Medium Mines 190.0 230.0 Small Mines 60.0 100.0 393.7 396.0
Average Grade: 1.22
2. Resources
COMIBOL 26,390 Medium Mines 120 Small Mines 230 Precambrian 2,000
B. Tungsten (tonnes of containedW03)
1. Reserves
COMIBOL 10,500 6,000 Medium Mines 55,000 20,000 Small Mines 10,000 6,000 75,500 32,000
Average Gradet 0.85?
2. Resources (EasternCordillera)
150,000 tonnes - 53 - ANNEX 1-2 Page 2 of 3
C. Antimony (tonnesof containedmetal)
1. Reserves
Medium Mines 75,000 90,000 30,000 55,000 105,000 145,000
Average Grade: 2.9Z
2. Resources (EasternCordillera)
200,000 tonnes
Proven and Probable Possible
D. Zinc ('000 tonnes of containedmetal)
1. Reserves
COMIBOL 210 1,090 Medium Mines 167 606 Small Mines 178 404 555 2,100
Average Grade: 11.5Z Zn and 110 g/tonne Ag.
2. Resources (EasternCordillera)
10,000
E. Lead (tonnesof containedmetal)
1. Reserves
COMIBOL 72,000 85,000 Medium Mines 24,000 15,000 Small Mines 15,000 6,000 111,000 106,000
Average Grade: 3.92 Pb and 130 g/tonneAg
2. Resources (EasternCordillera)
350,000 tonnes 54 ANNEX 1-2 Page 3 of 3
F. Bismuth (tonnes of containedmetal)
1. Reserves
CONIBOL 4,500 5,500 Small Hines 300 100 4,800 5,600
2. Resources 10,000 tonnes
G. Gold (tonnesof containedmetal)
1. Resources
Western Region
Primary 18.3 Alluvial 140.0
Eastern Region 64.0 222.3
Proven and Probable Possible
H. Silver (tonnesof containedmetal)
1. Reserves
In zinc ores 530 In lead ores 360 In gold deposits 410 1,300
2. Resources 120,000
I. Sulphur (gross tonnes, Western Cordillera)
Resources 1,150,000 - 55 - ANNEX 2-1 Page 1 of 3
BOLIVIA
MINING SECTOR REHABILITATIONPROJECT
Mining Sector Institutions
1. The key institutionoverseeing the mining sector is the Ministry of Mining and Metallurgy (MMM). MMM's main functions are to (i) formulate and supervise implementationof the Government's mining policy, (ii) initiate, orient and evaluate developmentsin exploration,mining, concentrationand metallurgicalprocessing, and define and supervise policies of internal and externalmarketing of minerals, (iii) guide and promote the developmentof the mining and metallurgicalsector overall; (iv) define and present Bolivia'sposition in internationalmining-related institutionsor study groups, (v) develop and maintain a centralized mining/metallurgicalstatistical data base; (vi) supervisethe activities of the mining sector institutions,and (viii) formulateand process all mining related legislation. The Ministry is headed by the Minister, to ,whomreport two Subsecretaries. The Administrationand Coordination Subsecretarysupervises three directorates: mining (administrationand legal). The Planning and DevelopmentSubsecretary supervises a Plans and Projects Committee, a Planning Directorateand the documentation/database center. Apart from these areas, the Minister has several advisory boards, and the mining superintendencyreports directly to him. The Ministry is also the supervisingauthority for the state mining company, COMIBOL, the mining bank, BAMIN, the National ExplorationFund, FONEM, the geological service, GEOBOL, the Institutefor Mining and MetallurgicalResearch, lIMN to be renamed the CIMM under on-going restructuringand the new Technical Nine Cadastral Service (STCM)which is to be developedunder this project. The future of the promotionalunit for the Uyuni (lithium)salts project, CIRESU is under review.
2. The Geological Survey of Bolivia (GEOBOL)was created in 1965. Its basic functionsare country-widegeological investigationsincluding geologicalmapping, prospecting,exploration for metallic and nonmetallic minerals, remote sensing and hydrogeologicaland industrialmaterial investigations. IndirectlyGEOBOL performs a basic practical training function for geologicalgraduates. It has continued to perform a coordinatingrole for internationaland bilateral technical assistance projects that fall within its field of competence. In addition to the central office in la Paz, GEOBOL has regional offices in Cochabamba,Santa Cruz and Tarija. Presently there are 190 permanent employees. The organizationis elaboratewith too many chiefs at different levels and although it has a variety of equipmentat its disposal (mineral exploration and water drills, mining equipment,geophysical and geological equipment and support vehicles etc.) much is out of order because of poor maintenance and lack of spare parts. Building space can only be described as adequate but considerableimprovements are necessary for laboratoryhousing. Largely due to inadequatebudget support there has been a general decline of activitiesover the last few years, it no longer attracts bilateraland internationalsupport and has lost the prestige it once enjoyed. 56 ANNEX 2-12 Page 2 of 3
3. The Instituteof Mining and MetallurgicalInvestigations (IM) was created in 1965 as a counterpartinstitution for a UNDP-financed project. Based in Oruro, the center of a major mining district, the IIMM has been operating independentlyas a Government instituteunder the general guidance of the MMM. Its board, chaired by the Minister, has not met for several years. With a permanent staff of 82 employees (reducedby about 502 from the previous decade) it is still overstaffedin relation to its present level of activities. The five major departmentsare Administration,Mining, Mineral Concentration,Metallurgy and Services. Buildings are in a major state of disrepairbut the IIMM possesses a considerableamount of useful equipment;mining equipment,concentration plants and a concentrationlaboratory, pilot plants, ovens, chemical laboratoryetc. There is a varied degree of deteriorationand upgrading and replacementis required. The basic objectives of the organizationare to carry out research and to provide support services and assistance to the extractive side of the mining sector;mineral beneficiation,metallurgy, assaying and mining methodology. The present level of Government funding hardly permits any meaningful activity to be performed. As of 1973 a mining tax collected from the medium scale miners (12 of mineral sales) supportedabout 60X of IIMM's activitiesbut this shrunk during the 1980's mining crisis and was abolishedaltogether in 1986. In a similar situation to GEOBOL, the IIMM has found it more and more difficultto attract aid financingand also with decreasingcapability there has been a decreasing demand for services.
4. The National Mining ExplorationFund (FONEM)was created in 1977 as a dependencyof the MMM. Its objective is to promote the economic developmentof non-renewablemineral resourcesthrough financingof prospectingand explorationprograms. FONEM has the legal status of an autonomouspublic developmentcompany financed by the Government,through generated replenishmentincome as well as through additional fundingwhich it is able to acquire from other sources. Mines developed from successful prospects are required to pay an 82 gross production royalty until such time as loans have been repaid at a 102 p.a. interest, as well as a special bonus of 1.5 times the principal of the loan. This 'revolvingfund' has been supportedby the Government,the World Bank (Credit 940-BO) and German (FRG) bilateral assistanceand although it has accomplisheda considerable amount of useful work it has not lived up to expectations,has not produced projected revenues and shortcomingsin project selectionand executionare evident.
5. The main activities of the Mining Bank (BAMIN)include: (i) credit to small-scaleminers for investmentsand working capital; (ii) sale of mining equipment, spare parts, and materials; (iii) purchases of minerals from small mines and sale of marketable lots of these minerals to traders on internationalmarkets; and (iv) technicalassistance to miners both for operationsand for preparationof investment studies. BAMIN is a Government institutionemploying about 570 people in its La Paz main office and in six branch offices around the country. It purchases concentrates for about 1,100 clients and has in recent years extended mining credit ranging between US$1.9 and 3.7 million per year. Other public institutions of some importanceto the sector are the Planning and Finance Ministries. They decide on the investmentand operatingbudgets of the public entities _ 57 - ANNEX 2-1 Page 3 of 3
and handle their disbursement. The Central Bank is responsiblefor import licences and foreign exchange administrationand manages external credit lines.
6. The productivepart of the sector consists of COMIBOL (which includes the state-ownedsmelters), the medium and small mines, and cooperatives. COCIBOL (after a drastic staff restructuringand reduction process, Chapter II)operates ten mining centers, employs about 7,000 people and is also responsiblefor running the Vinto tin smelter and maintainingthe Karachipampalead/silver smelter, which has yet to function. The medium mining subsectorconsists of 19 mining companies dominated by three large, private groups,while there are several thousand small mines and cooperatives. Other institutionsof significancefor the sector are the IndustrialBank (BISA),which has financedmedium mines, private Bolivian and foreignmetal traders, and the Mine Workers' Union, which has played an importantrole in the past, particularlyin decisions relating to COMIBOL. "Ns w ^orin MINDISSECTOR BEHBZLITATIONPROJECT COMIDOL- HistoricalCost reakdown
1909 1960 1961 1962 1968 1984 1965 1986 1907 1986 usMg- x usMw- us.u usM 5 us,U I us.1--$ usobs us$ v u u r- s us$ r- g Labor 76.7 40 80.0 89 118.841 103.2 40 122.8 46 167.2 66 162.8 49 ) Materials 29.9 16 81.1 15 45.8 17 48.2 19 46.1 17 46.1 15 ".7 14 64.0 89 10.8 59 ) 24.1 74 Energy 6.9 J 7.2 4 14.6 5 18.4 5 18.3 7 15.5 5 20.90 ) ) ) MineralPurchase 84.0 18 86.1 17 42.6 16 86.9 16 42.2 16 A.6 12 34.6 10 ) ) ) Overhed 12.8 7 11.4 6 9.6 a 4.s 2 4.9 2 9.2 8 7.8 2 3.6 6 3.0 17 2.7 6 interest 10.1 8 19.0 9 27.4 10 a5.7 14 9.8 4 8.6 3 80.5 9 0.4 1 0.7 4 0.0 Depreciation 7.2 4 7.9 4 10.0 4 12.4 4 14.0 5 14.8 5 18.6 4 1.8 8 1.9 11 4.8 16 Others 7.2 4 11.6 6 9.9 4 2.7 6.75 a 6.90 16.8 6 0.9 1 1.6 9 _ - Total 190.t 100 208.2 100 278.2 100 259.0 100 264.4 100 808.8 100 880.$ 100 61.5 100 17.4 100 82.4 100
U' - 59 -
ANNEX2-8
SIOUVIA MININGSECTOR REAILITATION PROJECT COMIBOL- Summaryof HiltoricalInco.. sttemntu (US4millon)
Income Statm ien1980 L 1982 1088 1984 1063 198 1087 1988 Ses 352.8 378.1 278.0 280.8 224.0 185.1 50.7 17.9 42.0 of whichtin 239.9 258.8 198.7 188.8 168.7 n.a. 20.1 6.0 16.1 other metal. 112.9 119.8 96.1 92.0 60.9 n.s. 24.6 11.9 20.9 Markeaing Cost. 88.1 102.0 81.1 76.5 06.9 52.8 10.1 5.2 14.6 ProductionCostu 20B.8 278.2 259.0 264.4 803.8 880.8 01.5 17.4 82.4 Participation. 16.0 4.2 0.8 ------OperationalResult. 60.8 5.8 (61.?) (60.6) (14,.5)(248.0) (20.9) (4.7) (4.9) Other Coet./(Rwoenu.s) / 8.2 8.8 (48.7) (46.2) (99.7) n.a. 10.7 1.8 1.2 Incom before Taxem 42.6 2.0 (18.0) (16.4) (44.8) n.s. (10.2) (8.0) (8.7) Royalties 72.5 47.6 88.9 86.2 28.6 n.e. 0.2 0.1 2.2 Net Incme (30.0) (46.6) (51.9) (61.6) (68.4) n.a. (10.4) (8.5) (6.9) Operational Result/Sales (X3) 14 1 (22) (22) (64) n.a. (41) (28) (12) Net Ineose/Saloo (5) (9) (12) (19) (18) (80) n.e. (21) (20) (14)
*MWorker c' n r t.cipetlon. Most ly rahngtet r-lnted. - 60 -
ANNEX 2-4
BOLIVIA
MINING SECTOR REWABILITATION PROJECT
COMIBOL - Summary of Historical Cash Flows (US$ million)
1980 1981 1982 1983 1984
Cash Revenues 387.8 289.6 213.9 218.3 173.8 of which Sales 346.5 258.7 186.9 197.4 156.1
Cash Operating Expenditures 422.0 347.7 223.1 273.4 256.8 of which Personnel Expenses 96.8 80.8 55.7 69.8 85.3 Consumables 96.8 102.8 61.3 109.5 97.3 Mineral Purchases 45.8 37.6 22.3 23.2 24.4 Services 36.9 38.7 23.3 31.8 25.2 Taxes and Royalties 127.2 58.4 55.3 32.9 21.4 Interest 18.3 29.5 5.2 1.2 3.3
Capital Expenditures 44.5 56.0 10.0 9.3 6.3
Loan Repayments 2.1 1.2 0.3 0.7 0.7
Cash Surplus/(Deficit) (80.8) (115.4) (19.5) (65.1) (90.0)
Financing Cash on Hand and in Bank Accounts 12.8 9.6 14.1 10.3 30.8 Disbursements 77.7 113.9 29.3 60.5 97.6
Total Surplus 9.6 8.1 23.8 5.7 38.3
Payments Due at End of Year 82.4 119.1 113.1 91.1 47.8 BOLIVIA MININGSECTOR REHABILITATION PROJECT COMIBOL- Summaryof HistoricalBalance Sheets tUS million)
1986 198 1988 1980 1981 1982 1988 1984 '386 / Assets 258.2 294.6 194.4 186.2 168.9 CurrentAssets 225.0 260.8 212.8 218.4 103.4 164.9 168.2 189.1 268.7 162.1 146.6 of whichstocks 152.6 182.7 249.2 240.4 281.9 220.4 280.5 237.4 284.7 286.4 286.8 FixedAsse's 41.8 42.8 88.9 92.7 82.9 OtherAsset. 80.4 87.4 89.8 48.7 529.6 673.5 680.6 519.8 628.7 TotalAsset 475.7 628.2 490.4 600.0 Liabilitiesand Equity 886.6 428.6 78.6 45.2 92.0 CurrentLiabilities 202.2 204.6 196.7 270.0 of whichCurrent Portion - - 61.7 50.4 118.4 170.2 269.2 268.9 - of Long-TermDebt 173.7 119.4 116.3 11.0 18.9 11.6 Debtand Provisions 165.9 251.1 192.1 485.1 68.8 28.9 84.7 441.0 460.2 Equity 117.6 72.7 101.6
TotalLiabilities 659.9 573.6 630.5 619.3 528.7 and Equity 476.7 628.2 490.4 500.0 Indicators 81.9 (51.8) (138.4) (128.9) 115.9 141.0 1. Working Capital 22.7 66.8 16.1 2. Ratios 4.1 2.0 1.1 0.8 0.7 0.7 2.6 Current 1.1 1.3 0.6 0.9 0.7 0.4 0.4 0.8 0.2 0.2 0.1 Quick 76:24 83:17 77:23 2:98 3:97 3:97 Long-TormDebt/Equity 67:48 77:23 86:36
Long-TormDebt / Indicatorswith CurrentPortion of Lona-TermDebt Accountedfor as 186.8 186.0 1. WorkingCapital 64.4 106.2 182.5 118.8 2. Ratios 2.2 2.2 1.9 Current 1.6 1.7 2.7 0.6 0.6 0.7 0.6 0.6 0.8 Quick 86:14 94:8 92:8 Long-Term Debt/Equity 865:36 81:19 76:26
a/ As of June 80, 1986. therefore do not changeany longer absorbed all of COMIBOL'slong-term debt. The financial indicators In 1986 the Government for. depending on how the current portion of long-term debt Isaccounted ANX2-6
ESTRATEGIA PARA EL
SECTOR MINERO - 62 - ANNEX2-6 Page lof 29
CAPITULO VT
ESTRATEGIA PARA EL SECTOR MINERO
V.1 EL SECTOR MINERO Y METALURGICO EN LA ECONOMIA NACIONAL
1.1 El Desafio
Reactivar la min2ria tradicional y crear una nueva mineria que sea competitiva internacionalmente, c'onsolidar y fortalecer ia capacidad empresaria.l del Estadto en la miner'a nacional, y gene- rar un gran flujo de inversiories privadas hacia ese sector: estos so5n los mAs grandes desafic que confrontarA la politica minero- metalcirgica en los doce anio¢Ie la Estrategia. En terminos cuan- titativos, para aprovechar ol potencial mineral6gico del pais a un nivel compatible con los requerimientos de un crecimiento eco- nomico nacional del 4.9% anual. serA necesario invertir en el sector una suma cercana a 1os US$ 13003 millones. Si se toma on cuenta tanto las restricciones fiscales como los requerimientos en inversiones pCblicas de otros sectores eton6micos, rApidamente se podrA constatar que esta suma es muy superior a la capacidad de inversi6n del Estado. La omprosa estatal, COMIBOL, podrA con- tar con financiamientos para realizar inversiones cercanas a los US$ 150 millones. Es .docir, la mayor parte de las inversiones reque-ridas para hacer nuevamente de 8olivia un pais minero corM- petitivo, deberA ser de car.Sctr. privado.
Si la minerC) bdliv-iana vuelve a tornarse atractiva a la inver- si4n privada, el.. sector podria generar grandes recursos. Las proyecciones de la Estratwgia de Desarrollo muestran un potencial de exportaci6n superior a los US$ 770 millones anualas, pudiendo, bajo condiciones favorables de precios, superarp en el aRo 2000 *las US$ 1,100 millones anuales. Esto se traduciraa *n. vat'rios miles de empleos adicionales, en un sustancial aporte del sector a 'os ingresos fiscales, y en una gran contribuai6n al aumento 'dJel nivel de ingresos de la poblaci6n boliviana. Analizaremos m6s adelante los detalles de este desaf o y estas proyecciones.
1.2 Bolivia: Pa;s de Grandes Recursas Mineral6gicos
Bolivia cuenta con importantes recurcor mineral6gicos. En el sec- tor occidental del territorio boliviano convergen varias de las provincias metalogendticajn mAs importantes de lo Andes Ce*tra- les. Existen yacitnientos vetifor- :es d? estanFo, zinc, ploma-plata, estano-tungsteno, bismuto, plomo--zinc, oro, antimonio-oro y azu- fre. Los Yacimientos vetiformen de estaRo y plata son mundial- mente fafrozos, siondo el mi5s iniportante el Cerro Rico de Potosi. Estudios recientes domuestran quc- vl Cerro RFico de Potosi cons- tituye uno de los mAs atracti>ros prr,scoctos de baj.a ley para ex- - 63- Page2ANNEX 2-6 of 29
_plotaci6n masiva de plata, Tstafio y otr-os yacimientos auriferos epitermales on el Altiplano. f'diicionalmonte, las dos cordilleras ofrecen ex:pectables oportunidin.dl.. El Salar do Uyuni, el mAs grande del mundo. y otros salares do los Andes Centralesq con- tienen concentraciones importantes do ;:alos de litio, potasio, boro, magnesia y otros element6s evacoi-iticcs. En la Cardillera Occidental so ha detecLado mAs dc qU pros-pecbos de azufre. En el sector oriental del ter-ritorio boliviano atfloran rocas del Escudo Precambrico Brasilero. con prospecton *similares a los yacimientos en actual explotaci6n en el Eiramil, CanindA y SudAfrica, de pine- rales de fosfatom, tierras raras y toy-ia asociada§ a compYe.og alcalinos; niquel y plEtino, unidas a rocas ultrabAsicas; estano y oro aluvial; piedras preciosas y semipreciosas; y yacimientos de plomo. plata y zinc. Los sistemas fluviales que drenan la Cor- dillera de 5lsAndes contienen importantes yacimientos aluviales de oro y esta-o.
1.3 Proyecciones de Producci6n
Una adecuada politica minera puede tener resultados muy satisfac- torios, quizAs incluso, sorprendentes para quien haya dado casi par terminado el ciclo hist6rico de la mineria boliviana. Para formular la Estrategia, se hi:o una estimaci6n del potencial co- r:er i.aI-- -condmico de los minerales en Bolivia, establecidndose una reserva base nacional dc minerales en funci6n de la infor- maci6n .existente. Esta rpo-erva ba u: aglutina s6lo la informaci6n de las reservas positiv&z y probables de.minerales existentes en mina. En cuanto a las reservas auriferas7' para lai cuales no existe una evaluaci6n y cuantificaci6n .a'sta;'5e ha considerado lns recursos estimados an vol6menes de material sedimentario con contenidds prtmedio de cre. Trmbij.n ._se ha hecho una estimaci6n de l.as.reservas positivas y 'probables de plata y de los recursus existen.tes en minerales dv plata, cn antiquos y nuevos yacimien- toe argentiferos. Los resultados se presentan en el luadro V.1., que muestra -a precios de webroro tic 1998- un valor bruto total do la reserva base de minurFtle= de Polivia do US$ 7.1 mil millo- .nes, a los que habria quo agregar los rccursos en plata, estima- dos en mAs de US$ 38 mil millones.
Explotar estas rocursos naturales en forma bene+iciosa para el pais, supone srealizar U. grz.n 0- fUerzo. tanto por parte de la CMIBtOL como par la emprecsa privada. Crear el marco adecuado para que este esfuerzo pueda materiali-:rso. es el objetivo de las e iniai z'tivias srct;- ri5r 1 F F7-teia.
V.2 PROBLEMAS PRINCIPALES DEL SECTOR
2.1 Dimensi6n Cuantitativa de la Criisis de los Anos Ochenta
I . . -64- ANNEX2-6 Page 3 of 29
Desde comienzos de la pres,nt.e ta-*~cztda, ol sector minero-metalur- cico se encuentra en unat prof nd-a cr-ist. qute sei observa a traves de las siguientos cifrao . La contribuait5n del sector al PIB cay6, entre IiO0J y 1997, de 1U..5 % z 4.tJ 7%. Li valor bruto de la pro- ducci6n cay6 de US$ 75i6 iiillones en 14?BU a US$.1.39 millones en 1986, cor: una leve recuperaci6n en lt97 (ver Cuadro V.2).. Con la sola excepci6n del orc. la proditcci6n de los principales minera- les se redujs considerablemente (ier Cuadros V.3 y V.4; y GrAfica V.1). Espocialmnonte drAstica fue la caida de la producci6n en el sector estatal (vvr Cuadro V.X). Las e::portaciones descendieron de US$ 641 millones ean 1990 a US$ 207 millones on 1987 (ver Cuadros V.6 al V.9% y GrA.Fico V.2). La contribuci6n del sector. a los ingresos fiscales pr-tcticamente cay6 a cero (Cuadro-V.10). El empleo sectorial tambi6n se redujo, de 86.000 a 47.000 personas (Cuadros V.11 y V.12).
2.2 Factores de la Crisis Estructural
La enumeraci6n anterior de los datos estadisticos mAs reveladores de la crisis, muestra que en el pasado. pese a la riqueza minera- lgica boliviana, una serie de factores negativos no s6lo difi- cultaron, sino bloquearcn el desarrollo del sector. No todo fue responsabilidad de la mala politica seguida en el pa;s. Una fuer- te influencia tuvieron tambian 15s factores fuera del alcance del, gobierno. Analizaremos brevemente los factores end6qenos y ex6ge- nos quo participaron en este hocho.
Entre los factores endogenos debe contarse:
- La inestabilidad politica, que impidib la creaci6n de con- diciones adecuadas para la inversi6n. Mientras en los paLses vecinos las g-andes empresas re4li_aban cuantiosas invor- siones5 que permitian conquistarL una importante participa- ci6n en el mercado mundial de determinados minerales, Boli- via se convirti6 en un "freezer" de la inversidn privada, quedando marginado, incluso..d.i aqltel.los, emrcados - en'los quo su part.icipaei6n era signiiticativa.
- El contexto macroecon6mico desfavorable, expresi6n de un ex- cesivo intervencionismo estatal., se manifesto, entre otras razones, por la obligatoriodad deoentregas de minerales a las fundiciones ostatales an condiciones desventajosas para los productores; por el mantenimiento de extensas Areas en reservas fiscales, vedadas a lla actividad minera; por la vigencia de un sintema tributario basado en regalias, que so tomaba en cuenta las reales utilidades o pdrdidas en las operaci.ones mineras; per un-a politica cambiaria discriminia- toria del' sector; v pcr las condicioner financieras y credi- ticias inadecuadas pD.ra La actividad minsera. - 65 - ANNEX2-6 Page 4 of 29
El ranri eo ineficiertLe de 1 a§ empresas minero-metalcirgiras ostatsales se e:presa cr: la carcricia do, objetivos einpresa- riales racionales-, la ingurcnrcia dc-o intereses politicos co- y untLtrales en eI ma:.eOo d e 1:c tmpr-esas, la formaci6n de un estamnento bu-ocrAti:o incficiento. la contratacion excesiva de empleados alej:dos: de la producci6tn. la realizaci6n de inversiones no rentrtble_ y _abredifriensionadas. Asi, per tz - jemplo, las o6rdidas acum,uladas entre 1961 y 1985 en la CO- MiIEoL sLuperaron los US$ 700 n:il lones. La deuda externa act.- mnulxada por estai eiapres-.x a=zendi6 a USs 400 mil lones, sin incluir la deuda flotanLe do US$ 40f mil'lones, y el almacc- hamier7to de repuLostos por mt-s do US$ 100 millones. Las fun- diciones estatales. por su parte, acutmularon durante este periodo una deuda e,: terna de rrAs de US$ 400 millones y una ptrdida de alrededor de LUS$ 180 millones.
Entre los factores ex6qEonos destacan los cambios tecnol6gicos en los paises inrdustrializado-- qcuo 'indujeron un mayor ahorro de las materias primas y un reciclaje m&s intensivo de las ya utili- zadas, y la recesi6n ocon&n-cat mundlal de los anos ochenta, qtie determinaron la caida de la drnmanda y de los precios. A ello se sum6 el colapso del mercado irnternacional del estano a fines do 1985.
2.3 Respuestas a la Crisis
En respuesta a la situaci6n descrita3 junto a las medidas de ca- rActer coyuntural destinadas a atenuar el costo social de la cri- sis, el Gcbierno adopt6, desde 1986, una politica minero-meta- l:rgica de largo alcance, con profundos efectas de ajuste estruc- tural. Esta politica, que se onmarc6 en la Nueva Politica Eron6- mica (NPE), est-uvo diseFada de manera que pudiera generar un pro- ceso de oe:pansi6n y fortalecimiento del sector, bbjo condiciones de rentabilidcad y competitividad de .las operaciones mineras. Los primeros frutos de esta politica se manifestaron en la leve recu- peraci6n del ano 1987,!- quo fue seguida par un crecimiento mAs pronunciado en 1988. Las medidas mAs destacadas. tomadas en el -marco de esta politica, fueron las siguient.-
- Decreto Supremo 2106G, quo permitib el establecimiiento de un tipo de cambio real, tnico y fle::ible; la eliminaci6n del % monopolio de las fundiciones y su reemplazo por- la libre co- mercializaci6n y exportL.ci6n de minerales; y la liberaliza- ci6n de precios y de contrataci6n de mano de obra. Este De- creto creb condicione5 fav.orables para el desarrollo del sector.
RF:servas Fi;calas. t!odiar-trcel Dc-reto Gt.ipremo 21298 se le- vantaron lais zonaLs de rcsor.ra f i.:cal que cubrian mAs del 00% de las zanas minoralizada!z del pais. abri6ndolas Al libre desarrallo de la actividad niinera. - 66- AZNX 2-6 Page 5 of 29
- oa¢l :incenticcin itr-afra. Li. Loaiorria e5t.tbloci6una politic:a auri+era de f 4.cil aplicaciCn. oriantada fundamentalmente a la generaciOn de divisas, a la absorci6n de mano de obra y al aprovechamiunto racional de los recursos auriferos del torritorio. Esta politica se basa fundamontalmente en la libortad do comer-cializzici6n del oro y en-el pago de una regalia u nica del 1.5 % sobre..al valor bruto del aro explo- tado.
Rzhabilitaci6n de la Corcorac36n Ilinera de Efoli%oia. El Go- bierno procodi6 a una profunda reestructuraci6n de la COMI- VOL, con ei objeto dC adacL'arla a las nuevas condiciones ecor6mic.s, tanto internas como externas; e.liminando sus cLuantioso§ deficits y buscando establecer empresas eficien- tes y rentables. La nueva estructura de la COMIBOL descen- traliza sLts operacianes con una administraci6n de tipo "hol- dlin". Las minas sin posibilidades de rentabilidad fueron .erradas. Utras minas han sido arrendadas a sociedades cooperativas integradas, preferentomente, por ex-trabajado- res. La fuerza laboral de la COIMIOL y de las fundiciones estatales, se redujo de aproximadamente 30.000 a 7.000 tra- baj adores.
El Estado comenz6 a invertir importantes recursos para la rehabilitaci6n de todos aquellos centros mineros cuyo poten- cial mineral6gico permita la e:plotazi6n racional y rentable de sus recursos. La expansi6n futura de la COMIEOL estA concebida sobre la base de la captaci6n de invorsiones pri- vadas a trav6s de "Joint ventures". para desarrollar lois numerosos yacimientas quo osta cmpresa posee.
Politica de _undiciones.' La politica del Gobierno elimin6 el intervencionismo y monopolic estatal sobre las fundicio- nes. La Estrategia contempla la.liberalizaci6n en el esta- blecimiento de fundiciones privadas. y el libre juego de mercado dentro del cual debon competir las 4undiciones del Estado. La fundici6n estatal -. de A'into fue redimensionada y rehabilitada en condiciones do libre competitividad, habidn- dose logrado durante el ago 1988 rovertir su situaci6n defi- citaria cr6nica.
- Forta leciminto institucional. Con el apoyo t6cnico y finan- ciero de fL'ontes bilaterales y multilateralos, se comenz6 a aplicar un prcgraz. de fortalecimien-to institucional del sector tninero-metalCirgico. diriqido a reordenar y fortalecer las instituciones del s ectot-. Este programa estA concebido para ser ejecutado durantc el cuatr-ieitio 1989-1992.
V.3 POLITICAS PARA EL SECTOR - 67 - ANEX 2-6 Page 6 of 29 3.1 Lineamientos Estrat6gicos de la Politica Minero-Metal(irgica
Las niedideis tomadas, ci re-,puett.t.a la crisis, tienen una orien- taci6n a largo plazo. us5 lineamientos bAsicos, que describen la concepci6n estrat6gica propuesta en el presente documento, son los siguientes: a) eliminaci6fna del intvrvancicnismo.estatal y disminuci6n del rol del Estado como administrador directo de operaciunoes mineras y metalWroicas; b) creaci6n de condiciones atractivas para las inversiones pri- vadas en el sector; c) reestructuraci6n, redimensionamientq y rehabilitaci6n de la industria minero-metal6rgica estatal! con decisiones orien- tadas al desarrollo de empresas estatales eficientes y ren- tables; d) fortalecimiento de las instituciones del sector minero, ade- cuando sus funciones a la nueva polUtica del sector; e) atracci6n de capitales de riesgo, tecnolog;as y capacidad empresarial al sector, mediante la formaci6n de asociaciones empresariales mixtas, entre capitales privados y las empre- seas minero-metalUrgicas estatales; f) diversificacion de la produccibn minera; g) establecimiento de l{neas de financiamiento para capital de trabajo y proyectos de invorsi6n. en condiciones adecuadas 2. las caracteristicas -de la actividad minera; h) mejoramiento de la infraestruciura y rebaja deolos costos de los servicios; i) promoci6n intensiva de las actividades de prospeccimn y ex ploraci6n.
3.2 Proposiciones.Estratqgicas Adicionales
Para garantizar un adecuado desarrollo del sector metalargico sora necesario tomar medidas de carActer legislativo, que crVpn un marco juridico estable par-a la actividad minero-metaldrgica. Este marco debera reflejarso en la modernizacjin del C6digo de Mineria y en una nueva legislaci6n tributaria para- el sector mi- n.ero.Al respecto, la Estrategia propone: a) Modernizaci6n del Cbdigo de Mineria -68 - ANNEX2-6 Pa_ge 7 of 29
El C6digo de liineria vigeLtc-. rofleja la tradici6n minera del pais y puede Ler considorado. Lin t6rminos genereles, como un cuerpo lenal apr-opiado para el desenvolvimiento mi- nero. Sin ombargo, la EsLraLegia cintempla la introducci6n de algunas modificufiaonc* dc-stinadas .a hacer mAs atractivas y Agiles las invvrsior,s en il .ector. Estas modificaciones son bAsicamente la s siguientes:
i) introduccion dr un sistema moderno y eficiente de peti- ci6n y registro de La propiedad minera;
ii) apertura a la inversi6n privada extranjera en operacio- nes de "joint venture" de las Areas, hasta ahora res- ttringidas, dentro de ls0 50 K(m de las. fronteras inter- nacionafes oen las quo se encuentran muchos de los prospectos mAs atractivcs del pais;
iii) estableciiniento .de un marco juridico apropiado- paraIal conformaci6n de operaciones rnii.tas("joint ventures") entre emnpresas mincerc-metalCtrgicas estatales y priva- das, nacionales y o:tranjcras, para un desarrollo ra- cional de los recursos mineral6gicos del pals. b) Sistema Tributario Minero
Un nuevo sistema, elaborado en base a una comparaci6n de loz sistemas impositivos de los paises minercs mAs exitosos po- dr4a presentar una alternativa al sistema de regalias en ac- tual.vigencia. Este "sistema impositivo opcional" tiene las siguientes caracteristicas:
- manteniendo el sistema de regalias. se ofrece la alter- nativa de acog,erse al sistema de tributaci6n sobre r-e- sultados (o ganancias) notas a quienes realicen nuevas inversiones en el sector;
- las tasas de contribttci6n son bajas durante el periodo de recuperaci6n del capital ihvertido en proyectos mi- neros. Estas tasas bajas se mantienen si el operador minera decide reinvertir las ganancias en su propio o en otrcs proyectos mineros durante el periodo.en-que, con sus ganancias, recuperf la& (nversicnCo reinver- si6n) ejecutada. En caso contr-aria, la tasa se tripli- ca.
La tributaci6n de este sictzma :pcional es neutra en t&r- *minos de la asignaci6n do recursos minercs, sLuperando el siste.i.iade r-jalias!, quo al nravar la producci6n estimula la esplotaciern irracional y solcfLiva de las Areas. mejor mine- ralizadas en las reservas o:;istentes. Esta alternativa es- - 69 - ANNEX 2-6 Page 8 of 29
timLularla la invorsi6n. cvit.ii~do La deprcda3ci6n de los re- curcos mineral6gicos del pa 4s.
3.3 Los Esfuerzos de Producci6n e Inversi6n
Ya *e ha inr:ncionado 12 r1c;abi itaci ! l,a LO(11EOL conno uno de lou oeje cuntra!oc de ia politica iminoro-luetalCtrgicallevada a cabo pzr el Gobierno a partir de fines do 1965. Sin embargo, aun consider-AndQ la1-.r ;e's de esta politica, los planes d- inversi6n de la COMIDCLL _;61o lograr,.n la integraci6n. en el ciclo do produccion rcntable.. de. aquellas operaciones que presen- tan su+icientes reservi.a winer4 aldicas, infraestructura operativa adecuada y un plan de operaciuries eficiente. A corto plazo, esta limitaci6n no permitir6 una expansi6n productiva significativa. A mediano plazo, la producci6n se verA incrementada con el ingreso de nuevas unidades productivas do los subsectores estatal y pri- vado. Hasta finales do siclo, la producci6n se incrementarA sus- tancialmente con nuevas y significativas inversiones privadas, y con el ingres5 de operaciones mi::tas ("joint ventures") en yaci- amientcs masivos de baja ley de plata y oro.
Las proyecciones de prodLcci6n do la Estrategia se reflejan en el Cuadro V.13. Se observarA. que duranto los doce anos, el valor bruto podria alcanzar entre US$ 7,300 y US$ 9,900 millones, des- tacAndose la plata, el oro v el estano como los minerales.de ma- yor valor de producci6n.
El Cuadro V.14 muestra la proyecci6n de'produccThn par'subsec- tores de la_mineria. De 61 se des_pronde claramente que la COMI4OL seguira teniendo 6ira-gran iinportancia en la produccion de estano, zinc, cadmio'y tam'biben.d plata (en "joint venture" con capitales privados). La mineria mediana., junto con. la mineria chica y las cooperativas, tendrAn ena importancia relativamente mayor.a la de la COMIBOL en casi todos los mineralos.
Sin embargo todo dependerA de que en Bulivia, realmente se lo- --,grara generar un flujo de inversiones hacia el sector minero tan 'grande como para permitir la utilizaci6n de los recursos en los * voltirenes mencionados. Las proyecciones de las posibles inver- siones en el sector se detallan Lri ttl. Cuadrcz V.15 al V.17, Ol *acuardo a tres difererites "escenarrios". Estos cuadros se distin- guen, fundamentalmente. por el montc: de capital privado inrverti.io en las diferentes regianeP del Pais. Comparando estos cuadros con laz proyeccionesi de ;rOu.LciOn e-egOnel subsector de la miner;a (Cuadro V.14), s-e const:ata fAcilrtienteque no podria existir una adecuada explotaci6n de los recursas do plata y de las reservas de oro, azufre, etc., si no SC n.oviliza una gran cantidad de ca- pital privado hacia la produc:ci6n do estos minerales. La misma comparaci6n de cuadros permitt eLtifvtarlas graves consecuencias derivadas de la. incapaciiad del tsutc:iJro de? fortalecer. de tal ma- nera a la COMII?.L COi!O para haterla Lina emipresa atractiva para la formaci6n de "icint vwntur2s'l con c:pitales privados. -70- AN EX2-6 Psge 9 of 29
Volviendo. por Ciltimo, n 1xAn proyoccionos del balance de la ro- serva-base y I1 mxplotaci6n en V--perrlodo 1989-2000, las cifras respectivas so detallan en el Cuadro V.18. La explotaci6n de los mninerales estano, wolfr.m, cro y bismuto no acabarA su reserva base calculada. En cambio para joder arribar al final del perio- do de la Estrateqia con las proyocciones de prodUcci6n de los minerales antimonia. zinc, plqmo, plata y azufre, dotalladas an-, teriormente, se ve la necesidad de desarrollar nuevas reservas de estos minerales.
3.4 La Creacion de "Joint Ventures"
El Estado Poliviano pro-mocionarA y alentarA, en' el futuro, la creaci6n de empresas de sociedad mixta, en base a contratos de operaci6n, entre las entidades estatales productivas.y las empre- sas privadas nacionales a e::tranjeras. Para ello, la COMIBOL ya ha identificado dentro de suts concesiones variot prospectos de oro, plata y estano de baja ley y gran tonelaje, susceptibles de explotaci6n masiva. Estos prospectos serArn objeto de exploraci6n y evaluaci6n oara establecer la magnitud y calidad de sus reser- vas mineotalgicasv la viabilidad de su extracci6n rentable, su posibilildad de concentracion y beneficio con sistemas metalar- gicos de lixiviaci6n.
3.5 La Exportaci6n y el Desaflo a Crear Adecuados Instrumentos de Comercializaci6n
Tanto la producci6.. de concentrados de minerales provenientes de las empresa mineras, como la de los metales y aleacjones-* de or'-' gen en las fundiciones. se destirarSn casi en su totalidad, a la exportaci6np ya que el consumo interno de ostos productos as muy limitado o casi inexistente, con ex:cepci6n de algunos usos indus- triales en peltre y soldaduras. Los vol:menes y' valores proyec- tados de las exportaciones estAn conteridos en el Cuadro V.19. (Las diferencias de valores entre el cuadro V.19 y I1I.2 se ex- plican por uso de definiciones diferentes_. Las primeras eutAn dadas en valores CIF; las Oltimas en valores FOB).
Lograr estos vol:menes de exportacion no depende s6lo de la pro- ducci6n, sino tambi6n de l comercializaci6n adecuada. La poll- tica implicita'en la concepcl6f de la Estrategia de Desarrollo se orienta, por lo tanto. a crear un marco para que la venta de los productos inineral6gicos bolivianos en los mercados internaciona- los se realice en condiciones ventajosas y beneficiosas para el pals. De alli que la politica deberA contemplar:
- la libre, amplia e irrestricta comerciali:aci6n de metales y minerales, condicionando las mismas al fiel cumplimiento de las leyes tributarias en vigen'.:ia; - *71 ANhE 2-6 -1Page 10 of 29
- la prornoci6n de laI.ncmarciali:aci6n de productos que conten- qan el mayor valor agrcgado y que hayan sido sometidas al mejor control de calidad posible, bajo un r6gimen de mercalto libre;
- la promoci6n y el fortalecimiento coordinado de las unidades de comercializaci6n interna y externa de las empresas esta- tales, para lograr un Agil y din&mico servicio en suS opera- ciones con una mayor rentabilidad y, fundamentalmente, capa- citar, mediante planes do,entronamiento especifico, al per- sonal boliviano de alto nivel encargado de las empresas es- ctata13s;
- la creaci6n de una fuerte capacidad tdcnica de negociaci6n del Estado con las emprosas privadas,interesadas en las'for- macion de "joint ventures" con la COMIPOL.
3.6 Instrumentos Adicionales de Pol.tica Minero-Metaliirgica
Debe quedar clara, que los instrumentos'de intervenci6n directa del Estado en el desarrollo rninero-metaltirgico del paA5s, nece- sariamente, van a ir perdiendo peso relativo,-en la medida en quo el volumen de la inversion privada vaya superando ampliamente la inversion pwXblica. Si esto fen6meno se produce, de acuerdo a las proyecciones de la Estrategia', serb labor fundamental del Estado mantener y perfeccionar el marco -c.lobal dentro del cual se desen- vuelvan los diferentes subsectsreps ineros, mAs que la de reali- zar programas especificos de produccibn, y fomento. La orientari6n bAsica de esta politica se halla brevemente descrita en el pA- rrafo 3.1.
Ello no quiere decir, que el Estado pueda o deba renunciar a la utilizacidn de recursos financieros y crediticios para fortalecczr y apoyar la capacidad de modernizaci6n y expansi6n del sector privado de la mineria. Es necesario reali:ar un programa de pros- pecci6n y exploraci6n minera, quo tenga altp prioridad en la biis- queda y ubicaci6n de nuevos yacimientos, y que permita elaborar *una Carta Geaol6gica Nacional. Esta Carta deberA ir acompaRada por un banco de datos geol6gicos y geoecon6micos de las zonas mapea- das, para que el sector productiva pueda hacer la interpretaci6n geol6gica del comportamiento de la mineralizaci6n, de la de'lim4- ta~ci6n de yacimientos y de La evaluaci6n de reservas, favorecien- do,, aWs su posterior racional explotaci6n. IguaTmente, el Esta- do?. deberA tomar iniciativas tendientes a apoyar la integraci6n de la exp-lotacidn com la concentracion y beneficia de minerales, a impulsar la'investigaci6n bAsica y aplicada de todas las t6cni- cas de concentraci6n de minerales, etc. AdemAs. el sector de la pequena mineria y de las cooperativas deberA contar con un acceso directo a la asistencia tdcnica y crediticia del Estado,. para-lo cual los instrumentos e:tistentes doberAn ser perfecorioados. Por dltimop es urgente realizar un programa estatal des,tinado a mejo-
. - 72 - ANEX 2-6 - ~~~~~Page11 of 29 rar la seguridad y la in+raewatructura s3ocial y las posibilidades de.ccapacitacibn da todas las personas, hombres y mujores, de to- das las edades, cuyo ingreso y bienevstar social dependa de la mineria.
V.4 PROGRAM( DE INVERSIONES PUBLICAS PARA EL SECTOR
La inversi6n pablica proybctada para el sector, durante los doce anos de la Estrategia de Desarrllo, asciende a aproximadamente US$ 158 millones.
En un parrafo anterior se ha hecho menci6n a la inversi6n reali- zada por la COMIBOL, quo permitirA.a esta emprosasenfrentAr ios proyectos de rehabilitaci6n y redimensionamiento - de nievas ope- raciones, muchas de Ollas en asociaciones contractuales mixtas.
El Cuadro V.20 muestraaeI ndtmero de yacimientos, tanto primarios, como secundarios y masivos, que se protende encontrar con los trabajos de prospecci6n y exploraci6n quo se deberlan ejecutar durante los doce afos contemplados en la Estrategia. Se-calcula que este programa demandarA -una suma aproximada de-USS 48.4 mi- Ilones que serA invertida tanto por el sector ptblico como por cl privado.
El total de la inversi6n pitblica y los gastos de operaci6n en los pr6ximas doce anos, puede ser resumida de acuerdo a la actividad a realizarse en:
a) Prospecci6n y E::ploraci6n US$ 16.10 millones b) Explotaci6n US$ 67.10 millones c) Concentraci6n US$ 63.50 millonoes d) Fundiciones US$ 46.00 millones e) otros. US$ 4'.40 millones
T U T A L US$ 197.10 milloones
De esta sum& total, US$ 39.4 millones son para "apital de opera- *clones.
I, -73- ANNEX 2-6 Page 12 of 29
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VALORDE LOS HINERALES INSITU nczan:zuuuu-aunuua::usa:ua2:-a:sauu:u::::::u s:;u:B:~2:uu:32Sa :: U:UUS::::: U: 233:S UUU:S-3UUS8DI S MINERAL RESERVA I PRECIO VALORIN SITU I BASE(ThF) US,(1) I (enUSS) I ESTA'0: 394,000.0 3.10ILb 2,692.7millones I WOLFRAH 75,500.0 44.00/UIF 331.1sillones I iANTInNIO 1 105,000.01 19.50lULF 201.5eillones :ZINC 555,000.0 0.35/Lb 428.1sillones ,PLONO Ill,OO.Ol 0.22/L.b S3.9eillones !ORDIRecurso) 222.31 450.00/onza troy! 3,126.0eillones 'PLATA 1,300.0I 6.10/onta trori 247.9sillones I IPLATA(Recurso) (1) 200,000.01 6.10Ionza troyS 38,125.0millones (111 9BISIUJO ' 4,800.0 3.20/Lb I 33.8millones I AIUFRE : 100,000.0 88.00 /TNB 9.9 oillones I -3_-:-:t5:SS:SS::::::===::3::X:t.3-;==: gS::::XS:gSS::::u:S:2 :z::2==2tu:3*glnu I t TOt L 7,123.6silones I 3281 22:3:88s=:8882s=8 2-=2ss3:8332:sz:2:::32:32222u328823333883382*2333253355L3U83382 NOTA:(1) 39,125.0 nillones noestan incluldos enel total. 124,000TKF del Cerro Rico de Potosi : (US) 23,63? illneus). (1)Precios a febrero, 1983. FUENTE:ESTRATE61A DEDESARROLLO ECONONICO Y SOCIAL, 19R9-2000.
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VALORDRUTD DE-LA PRODICCION 1980 - 1987 (Ensillones deUS$)
i 132:S::-:s=:: V::::t::%SSg--SSSggAS5 I VALORDE LA t VARIACIONPORCEH- VARIACIONV PORCEN- I AODS I PRODUCCIONH TUAL RESPECTO ALt TUALRESPECTO AL 1 (ENUS$) I ANOANTERIOR I AggBASE (1980) 1
11990 : 756 50.1: .. --- t 1981 : 660t -12.7: -12.7 t 1 1982 1 5001-24.1 2 -33.9 1 1 1983.1 496: -0.7 -34.2 S : 1994 1 .374 ' -24.6 -50.5 i I195Is 2901 -22.6 *-1.6 2 1996 1 139: -52.2: -91.6:1 t 1987(p)l 196I 33.9 1 -75.4 1 NOTAi(p) Datos prelisinares. fUENTE:SOLETIN ESTADISTICO HIhiERO-IETALUR61CO, - NINISTERIDENINERIA V NETALORQIA ASOCIACIONNAC!O!IAL DENINEROS nEDIANOS. - - 74 ANNEX2-6 Page 13 of 29
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PRODUCCIE1DELOS PRINCIFALES IIttERALES ENBOLIVIA (En toneladaseAtricas finas)
A,.DSo ESTAROI WOLFRAM 1 ANTIMONHI: FL(O 1 ZItIC: PLATA COEREI DISIWTOD AlUFRE 1 OR0 * a ,~~wu,,,m3 i 11TK9) 1t(,F) t)1 191' t 29,9971 1,3151 18,776 22.173: 43.e8i 151t 8,523 I 615 9I -13t- 062-: :liiS 31.898 : 2,3191 16,98 1 17,9671 49,774 1: 169 S 6.218 I 621 21,929 : ,649: 19a9 1 27,2711 3,359 1 15,4651 17,225 1 58.261: 189 1,84t 1i . 11 11244 1,6291 : 1981 : 27,621 3,4491 15,296: 16,756 : 47;828 218: 2,6361 10 1 192921 1,564S : 1982 : 26,689 3.171 ; 14,061t 11.943 : 45.6671 1701 2,269 1 4 5,914 1 1,0961 1983 : 25,279 1 3,987: 9,443 : 12,9921 46,919 I 192I 1,991I 6: 391111 1,531 1 1 1984 1 19.9191 2,571: 7,ES4 : 7.325 1 37,8S 1 144' 1,2511 3 1 1l978I 1t278: 1 19951 16,136: 2,128 : 8,419 : 6,297: 36.591 : 197 1,665r 159 : 2,7411 561 1 : 1986 : 1s,4791 1,390 t 19,243: 3.121 :33,472 : 96 : 337 43: 4,739I 7631 : 1987 1 8,129 9904 19,635:9,943 1 39,1221 149 7: - 1,7461-2,759 : NOTAs(1) Registro oficial de producci6i.Se estioa cue la produccitnreal essayor. FKUNTE:ANUARIG ESTADISTICO flINERO, 1979. HISISTEFaODEtIINERIA Y tETALUS8Al BOLETINESESTADISTICOS ANUALES. MINISTERIG DE4I1NERIA Y METALURSIA.
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IhDICEBE QUANIUH (Base:aRa 1988 z 198)
: lliNERAL 1 19E8 1 19al 1 1982 1 198.3 1 1994 t 1985 . 1 19.6 s9I NI22:3:iS::2s==::::2222:2=2:82 ::= z:s:::2:::::::::N:2::zz::::=: :5:a:,uz::u ::ssuhaaj ,ut2, 1 iESTA.O : 18O 19: 1Q51 98: 79 I 6t 4U1 289 !VOLFRAt : l19I I95: 951 931 771 691 49 :. 221 1ANTItON1I lOO:t 1961 981 66' 55: 591 711 .I 78 I IPLONO : 1OO9 . 971 _.6 791 43: 341 191 is3 tiZNC I 10 1 94 t Sl 1. 94:1 74 1 14 1 -674 - 791 ICOIRE 1 1e3: 1461 1261 11:1 7t1 931 9 1 1 1 IPLATA .109 I t111 9s-:1 82 761t 57 1 501 n7 IDISnUTO... 1 - I9 -. 961 771 92: 711 63 201 9 I !AZUFRE :. 198-: 1461 821 131 1941 371 59 1651 IOTROS I laI 1099 99* 97 771 611 441 4 1 FUENTEtUSTITUTO NACIONAL BEESTADISTICA. -75 ANNEX2-6 Page 14 of 29
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INDICEDE QUANTUN POR SUBSECTOR
(Base:ago 1980 210) f5-S~~~ ~~~ :=:::::8:zt:S::a:zs:::tX2aaas2s3u2:2gm,Ju83"33a2S33mS22:t::22f=222:::7:::: r SUBSECTOR 1980 : 1981 1982 1903 : 1984 1 1985 1 19t6 1 I kCONIBOL : 100: 108 981 92: 661 15S 221 9 I :NINERIANEOIANA 10000 111 -. too 941 751 74I1 931 i:i,nERIACHICA : 100 107: 102: 111: 99 631 921 1591 IOTROSEIPORTADORES 100: 109: .99 7 1 771 11 44 1 4&1 FUENTE:INSTITTO NACIONAL BEESTADISt1CA.
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PARTICIPACIONDELSECTOR DENINERIA V NETALUR6IA ENEL TOTAL DE LAS ElPORTACIONES (ValorCIF - enuillones deUS).
* : AOS : EXPORTACIONESi TOtAL BE I PARTICIPAC10|t :: MOS : gNEkAsEEPORTCIONES I PORCENTUlL I
1 1970 : - 204.71 229.61 89.5 1 : -1975 1 304.51 521.41 58.4 1 1990 : 641.11 1,035.91 61.91 1 1981 1 556.01 995.31 55.9 1 -. 1 19B2 1 419.41 89B.21 46.71 - - 1 1993 1 3473 1 917.5t 42.5 1 1 1984 1 364.01 792.11 44.5 t | .19B5 t 263.81 672.51 39.21 196.8 649.7 I 1a6 (P)l:1 : 1 30.31 1 1997(p) 207.21 561.51 36.9 t NOTAtIp) Datos prelieinares. FUENTEsBOLETINES ESTADISTICOS ANUALES, IINISTERIO D- -NINERIAY NETALUR61A. 0OLETINES,BANCO CENTRAL DEBOLIVIA. -76- -76- ~~~AMNE2-6 Page 15 of 29 CUABROV.7 EIPORTACIONPORItIkERL V NETAL DE BOLIVIA (ValorCIF en millones deUSS voiueen en milesde toneladas mttricas y preciosunitarios-en US,por libra, o indicado)
:uuuu:a*t:uz3u:z;z:33uS:s8s:sn3z::z:ss:at:z ::U::=S:1:::s2:ZZ:ZS:Z::: Z::g::SU3SZ U8UJat .:uuausa-stauu NINERALES 1 1993 1984 1 1905 1 1986 1987 3a::::zs:2S2 :::::z:s:::z:::s:::a3g:8:2:g:2.:3s::5ssl-3ssgga:s32::38u :322:::z:3-z3 lguuu.a I8 saM"Wl ESTMO(concentradol I: valor 32.40 56.90 52.90 49.901 56.20t volunen 2.50 4.701 4.40 8.60:9 820 1 preciounitario i 5.e2: 5.54: 5.39 2.57 3.00 1ESTA9Olaettlico) I : 1 valor I 175.50 190.70I 133.90 55.30: 12.60: volunen 1 13.50 15.60 11.70 B.20I 1.80I I preciounit-j ! 5.98 5.54! 5.19! 3.05s 3.10: I'OLFRAN(1O31 j IS valor 1 20.001 18.90: 10.301 6.60 -5.9" volumens 2.60: 2.501t 1.601 -1.50 1.201 s S ~~~~~preciounitario 3.51i 3.471, 2.84 -2.00 1 1.9n.s 1ANtinHloR . I: - : : t1 I valor 1 16.301 22.601 15.901 14.501 22.701 : volunen , . .12.90 10.901 7.701 9.60: 12.50t preciaunitario 0.57! 0.951 0.93t 0.771 0.82t IPLONO i t . . I valor : 4.001 1.001 0.501 5.001 - 4.201 nvolumen 1 9.30 2.401 1.401 12901 -7.40*1 t pruciounitario 1 0.191 - 0.201 0.17 1 . 0181 0.231 :IINC I 1t t1 I valor - : 33.40 37.30: 29.501 28.0.1 32.80I .I volumen 1 41.301 36.90i 33.901 35.601 39.601 1 preciounitaraj 0.371 0.461 0.391 0.361 0.31,1 IPLATA 5 3 t I 1 valor 1 9.301 21.401 10.?01 27.301 33.301 t volusen(TNF? 1 157.901 80.001 51.601 157.20 151.901 I preciounitaruio : 11.41 81.16 : 6.121 5.44 6.531 1 IUS$por onzatroy) I i 1 t I ICOIRE I : 1 t S I valor 1 3.00 1 1.80 t 1.70 1 0.80 I 0.01 I t voluen I 1.90: 1.30 1 1.201 . 0.60 0.011 I precio unitario 1 0.70 ' 0.62 1 0.63 1 0.61 1 0.63 I - ~ t1St t i tt 1 il I I valor I 0.00 1 0.00 I 0.00 0.20 1 0.00I I volumen I 0.00 I 0.00 I 0.00 1 0.04 0.0 I I preclo unitaris 1 1.57 1 3.57 1 4.94 1 2.70 t 2.39 1 ItRO I I i 1 I valor I 0.50 9.791 5.401 7.201 37.501 I volusen(KF) 1 44.101 -910.00 1 533.901 609.g01 2,596.201 1 reciaunitario I 6.51 478 1 tlU5Spor nonzatroy) I 1 1| 5 ! 1 IAlUFRE I I t I valor 1 0.201 0.20:1 0.301 0.50;1 0.90I volumenITMB) 3.0011.90 1 2.701 4.701 ..8JO.701 precio unitariao(tnf I 54.001 9200+ _ 97001t 101.00I 90.101 1OTROSNINERALES t t t t valor 1 3.70 1 3.30 i 3.20 1 1.60 1 1.19 1
TOTALYALOR 1 3;4.30 . 63.99' 263.901 195.90t 207.201 FUEIITEcFi.lSTERIO DE nINERIA VETAdLUAGIA.Y - 77- .NM Al.-6 Page I6 of 29
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- EXPORTACIOIESHINERAS POR SU9SEC7ORES (YaloresCIF en sillones de US$)
I SUISECTOR1 1982 : 1983 1984 1 1985 1 119B ' 197 1
ICOHIDOL : 93.6 99.5 75.2 24.7 1 26.3 1 12.6 . - IHINERIANEDIANA 1 51.5 1 42.9 1 50.61 61.31 * 63.31 95.2 1 ININERIACHICA 1 19.41 19.2 I 34.0 1 34.9-1 35.11 12.6 t IOTROSElPORTADORESI 7.11 10.61 8.8I 3.9 1 12.2 1 49.11 1FUNDICIONES 1 247.51 195.11 195.31 139.61 59.9 1 .17.7
I t OT A L 1 419.11 347.21 363.91 ,263.6? 196.81 207.21 FUENTEtIIIIISTERIO DEIINERIA Y METALUR61A.
CUADROV.9
EXPORTACIONESI VENTAS BE IIINERALESPORSUBSECTOR A LASFUNDICIONES NACIONALES (1) (Emaillones de.USS) mu8auaSglUUaUauauagauuaucuuauaasususa: uFllll-lllllll*lguagaJusau-asu uaau|taaauu.uUUaaaUsu I SUBSECTOR 1 1982. 1 1983 1 1994 1 1995 1 1996 1 1987 1 1 1 : 1F t I -t (i)' I Jmltsssssauuuuuuuuuuusuuauuunajltslatlsauua*88asaeauuanadas.gaauauuaugasuama # *guuau# lSllo"r I Exportacion 1 93.6 1 89.5 1 75.2 1 24.7t 26.3i 12.61 IC01ni1L Vents 1 182.8 1 172.21 123.31 50.4 1 28.91 8.5 I I I------.t..... I Total : 1 276.41 261.71 198.51 83.12 .551 .- 21.
I EEpartac1Hn1 51.5 1 42.8 1 50.6 t 61.3 1 63.31 95.21 ININERIANEDIANA Venta I 65.6 1 44.9 1 29.6 1 9.9 1 21.9 1 0.5 I I I---z------*1--*.------It I Totel I 117.11 87.7 1 80.2 1 71.1 1 95.2 1 95.71 I _..0.ee...... It Exportacln 1 19.41 19.2 1 34.0.1 34.91 35.11 32.6 1 §INIIIERIA CHICA Vent& 1 1S.8 1 20.2 1 15.9 t 13.01 29.9 1 0.5 I l ...... |.. I------I...... _ I Total 1 35.2 I 39.4 1 49.91 47.9 I 65.0 1 33.1 I ExportaclHn1 7.1 1 10.61 8.8 1 3.9 1 12.2 1 49.1 1 IOTROSEIPORTADORES Vent I - 1.81 1.7 1 0.8 1 0.8 1 22.8 1 6.5 I I I...... _ _ Total I 8.9-1 *12.3 1 9.11 4.7 1 35.0 1 55.6 1 NOTA(l) Incluyeventas de concentradosdi *stanoy deantimanlo. 1IDato nstiuadas. FUENTE:ESTRATEBIABEDESARROLLO ECCNON1CO Y SOCIAL, 1989 - 2000. -78- ANNEX2-6 Page 17 of 29
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PARTICIPACIONDELOS INGRESOS FIS8ALES POR EL SECTOR DE tINERIAV NETiLURtIA
(En sillones de UMt a:ag8::SzzSS:::::3:St:g55s:zn:s::s::SSS::=:82e.taz::::23asaus8:zu5::uszs::nst3zSt3m * a : 2IPORCENTAJE I ARO : SECTOR: SECTOR I TOTALDEL (TOTALINGRESS DE* . : ESTATALI PRIVADO 1 SECTOR T.B.N. 1 CONTRIBUCIONI uns g3afuuaSauu3s:u23auu3taza38zau:S5:u3:ug.3l2u3gs3uw.suu3lau3a8tuszu,8 t ts
1 199 S .59.781 29.95 1 e9.55: 589.671 15.0I
11991i1) : 26.58' 17.94 44.44 : 59.119I 7.61
,1992(1) 15.99: 1.7012): 26.591 289.16: 9.2S
11993 : 4.18: 2.3512): 66.45: 15?.59 4.1S
11984 1 5.28: 3.D5 (2)t 9.25 1 62.21: 13.3 :
11995 : 2.881 0.59l2i '2.99: 114.91 2.5S
11996 : 9.98 8.74 (2U 1.64: 461.90: 9.4
11997Ip) 1 9.9D2 2.47 12): 2.47 479.821 O.5I
NOlA:(1) lncluyen regallas devengadis. 12)Incluyen regallis auriferas. Ip) Datosprelisinares.
FUEtITE:TESORO SENERAL BELA NACION, 1929.
. -79 ANNEX 2-6 Page 18 of 29
MEUA~~V.11
PARTICIPACIONDELSECTOR BEIIINER8A Y HETALURSIA ENEL E8IPLEO TOTAL (En2iles de cersonas)
: AROS : EOPLEOTOTAL : OTROS t SECTORItNERhO- PARTICIPACION : ENBOLIVIA : SECTORESt ETALURGICOt PORCENTUAL t ======:===z-======--=z::==x:z:=:=:s 1980 : 1,719.6: ,633.6 96.9 - 5.9: 1981 : 1,694.5: 1,692.8 82.5 4.9: 1 982 1,799.9: 1,623.4 a4.6 4.9: : 1993 : 1,678.6: 1,571.3 97.3 .5.2:1 : 1984 ' 1,795.5: 1,619.6: 95.9: 5.91 : 1985 : 1,695.9: 1,695.2 89.6 I 4.91 1 1996 1 1,6SI.3: 1,627.2: 52.1: 3.11 : 19871e)l 1,999.9: 1,933.e9 47.9 I 2.4 1 NOTA:(e) Datosestisados. FUENTE:NINISTERI DE TRABAJO YOESARROLLO LADORAL.
CUADROY.12.
.~~~~~~~~~~. . PARTlCIPACIONOELOS SUB-SECTORES ENEL EIfLEG GENERAD P0OR EL SECTOR SE NINERIA V NETALURGIA (Entiles de personas)
g:=SSuat:5zg:z-:z:::sn===:st-:z:su:==:=gs=:gz::::t::unuuz gug Su:aau::=t:usg:.a:maag,,sg:asusa:* I AOS I TOTAL : CONIBOL MINERIAI NINERIA ItOPERAtIYAS : ENAF I .1 NEDIANAI CHICA I NINERAS I I SS5355S:SS:-:--:---S2:S::SSSzS:SSSCS::S:a:staS=:===:SSS:S3Ss::S:S:5S3::tgSS:SSugSS.S3SuUNI885*UaS 1 1981 96.918 26.5: .7.6: 292.0 22.81. 2.1 S I 19911 82.5: 25.7 : 7.5 26.2.S 21.9 1 2.1 1 1 1992: 84.61 26.11 7.11 24.0 *24.71 2.1 t I 1983: 97.31 27.9: 7.51 23.5 1 26.2 I 2.2 1 1 19941 95.9 1 27.9 : 6.2 1 22.9 1 271.:1 1.9I 1 1995 : 98.6 1 25.9 t 5.7 19.4 1 28.9 1 1.6I 1 1996 1 52.1t 7.5: * 4. 1 11.81 28.7 111) 1.1I 1 1997.1 47.8. 7 I - 4.5: 19.91 25.5l(1 1.31 ua:Sszua::uussu::::=s:::::n::::::z:::.g:suz:u::::Sz::sssa:::a:g:;s.:z.st:g a::msa5S# I 8ShZ3UUS2I I NOTA:(1) La Eopresa National deFundiciones (ENAF), i partir de enero de 1996, pasoa formarparte de CONIBOL. FUENTES:CONIDOL. ASOCIACIONDENINEROS NEDIANCS. CANARANACMONAL DENINERIA. FESERACIONNACIONAL DECOOPERATIVAS MINERAS.
I s~~~~~~~ - 80- A1NN 2-6 Page 19 of 29
CUADROV.13
PROVECCIONDEFRODUCCION HiN(ERA: 1969 - 2000 (Volusenin toneladas altricas finas I valoresen aillones de US$1
' IIIHEE '. 1988 I 1989 - 1992 2 1993 - 1996 1997- 20001 TOAL I (ANUAL) (AKUAL) -1 !"AL) I I VOLWIEN(1) 1 10,650.00 14,600.00 15,900.00I 17,000.00 20,000.001 20,000.001 215,000.00lI)S 2ESTAaO VALOR12) 1 72.761 99.75 a 108.642 116.15 a 136.65: 13.651 1,41.91 211 :______VALOR13) 72.762 112.62 140.17 : 164.86 200.56: 207.16 1 2,0S.06 13)1 _-______-___.______--- _ -______------VOLUlEN(1)1 1,500.001 2,000.00 3,200.00: 3,300.00 4,500.00 4,500.001 44,000.011)1 2VOLFRA(1103) VALOR(2) 1 6.48 9.64a 13.82: 14.26 a 19.441 19.44 190.0912)1 : VALOR(3) 1 6.48 I 9.83 18.90: 24.36 36.55I 39.97S 38.76101 1 VOLUIEN(1) -*9,500.00 1 11,500.00 12,500.002--43,OO.00 16,000.001 16,000.001IN,OO.OO fll)S1 IANTINONI VALOR(2) 1 15.241 22.08 a 24.002 24.96 a 30.721 30.721 326.0 12)1 VALOR13) 1 18.24: 23.23 25.251 28.08 34.561 34.561 36.4 4311 :------* ------VOLUIIEN(1) 152,220.00: 62,490.00 95,040.00I 95,500.00 100,000.001 100,000.00:1,106,060.00 111- hIINC. VALOR(2) 1 40.28 71.35 a 73.31 73.67 a 77.141 77.141 999.50121 : VALOR(3) 1 40.281 52.33 83.791 98.40 95.971 99.181 1,037.5013)1 : ~~~~~~~~~~~------.-.- VOLUJEN(1) 214,000.001 14,130.00 16,700.00: 17,000.00 24,500.001 24,500.001 242,60.00M111 tPUU10 VALOR(2) 1 7.10: 7.25 a 8.47 2 8.62 a 12.421 12.:421 123.2012)1 :______VALOR (3) 1 7.10 9.105 10.31 I 10.49 15.661 16.20 1 153.9213)1 I ------~ ~~------VOLUIIEN11) 1 260.001 270.00-- 359.00: 500.00 2,000.00S 2,000.001 14,258.00(I)t IPLATA VALOR(2) 1 51: 53.00 a 70.40: 99.01 392.221 392.22 1 2,796.141211 S VALOR(3) 1 51.001 58.16 60.79: 120.56 546.55S 610.86I 4,055.56(3)1 ,.,~~~~~~~~~~~~~ - - -_ - - _- _-- -, -...... - -T------: VOLWIENl1) 3.70 4.20 5.50 7.50 10.401 10.401 96.60fi)1 IDRO VALOR(2) 1 53.531 60.76a 79.572. 108.51a 150.461 150.461 1,400.4412)1 S VALOR(3) : 53.53: 63.46 69.41 2 127.80 198.91I 200.621 1,739.441311 I VOLUIIEN1) : 1 30.00 100.00i 200.00 300.001 300.001 2,460.00(I)I IBISIWTO VALOR(2) 1 -- 0.21 a 0.71: 1.41 a 2.121 2.121 17.38 211 VALOR(3) : --- 1 0.21 0.69 2.12 3.311 3.44 26.80 3)S 1* :VOLUEN 1)I118,000.00 I 60,000.00 70,000.00 90,000.00 100,000.001 100,000.0011,02u000.00 fll) IAZFRE VALOR(2) 1 1.598: 5.28 a 6.16: 7.04 a 0.80 I 6.80 1 89.76(21) S VALOR(3) 1 1.581 6.00 7.70 12.00 16.00I 17.001 151.4013)1 S ------_ _ _ _ _ ._ _ _ ...... _ _ _ IVALOR3RUTO (2) 1 250.971 326.32 a 385.08: 452.63a 929.97I 929.971 7,311.981 | t_.___I ------.------S IVALORBRUTO (31 I 250.97: 333.94 a 456.20: 578.67 a 1,137.971 1,229.891 9,929.12 1 NOTA:1 VoluaenTotal produCido enlos doCe *AOS 11989-2000). 121Valor Bruto de Produccifn a precios deftebrro 19E8. en sillones deUt. (3)Valor Bruto de produccien a precios proyectados, insillones deUSS. |FUEIE:ESTRATE6IA DEDESoRROLLO ECOMORICO Y SOCIAL, 1989 - 2000. - AN$NEX2-6 -81 - Page 20 of 29
CUAfROV.14
PRODUCCIOIIDENINERALES, PROVECCION PORSUBSECTORES (E4toneladas *etricas finas)
.IINERAL SUBSECTOR 1988 1598- 1992 1993- 1996 1997- 2000 1
==:==:::::::: :=====:=::5: =:::aS::=:===S::::S::S=::S::S::: :Z: :::::::5S:SSS:: I5tS 'CONIDOL 3,840 6,700a 7,000 9,000a 10,000 10,000I :ESTARD BIUN. NEODIAlA : 2,500 2,800a 3.000 3,900a 4,900900 00 1 'lNl.CHICA V COOPERATIVAS 1 4,310 5,lOOa 5,900 5,100a 5,100 5,100i
I : : b10,65014.600 d 15,900 17,000a 20,000 20,0000 ------__- ___--_, …- Is : 0 0aCDNIBOL0 a100a 0 700 700: :NOLFRA 1 NIN.PEDIANA . 1,200 1,500a 2,500 2,50a 2,000 2,900 :KIN.CHICA Y COOPERATIVAS: 300 500a 700. 700a 1,000 1,000I i ii1,500 2.000a 3,200 3,300a 4,500 4,500I ------… ------:CONIOOL I 0 Oa 0 Oa 0 0O !ANTInONIO:BIN. nEDIANA 1 6,000 5,900a 6,300 6,700a 9,200 9,200S :MNI. CHICAV COOPERATIVAS : 3,500 5,600a 6,200 6,300a 6,800 b,B00I I * … … …- ~~~~~~~~~~~~~~~~------| I - : 9,500. 11,500a 12,5001 13,000i 16,000 16,000I : : I :ICORIBOL . 1 15,170 . 23,590a 54,540 55,000a 57,000 57,000I 1ZIlIC g NIH.NEDIANA . - 1 36,200 38,000a 39,000 39,000a 40,000 40,000; :DN.: CHICAY COOPERATIVAS -: 950 900a 1,500 1,500a 3,000 3,000I : :_--______-______1 -__ I: : 52,220 62,490a 95,040 95,500a 100,000 100,000t I COIIDOL I 3,400 2,930a 4,000 4,000a 9,000Q 9,000I IPLOIIO MIlN.NEDIANA : 9,000 9,500a 10,500 10,500a *11,500l . 1,-500L I HIlN.CHICA Y COOPERATIVAS: 1,600 - 1,700a 2,200 2,500 a 4j000 4,000I |~~ : ------__ S : . :1 14,000 14,130a 16,700 17,000a 24,500 24,500 1 .
1 :~ ICONImUL 11) 1 130 127a 1 e 250 a 1,600 1,600 1 'PLATA ItIN.tEDlANA : 95 103a 120 130 a 250 2501 : S1IIN.CHICA V COOPERATIVAS 1 35 40a 55 70a 150 1501 - a I ------*------. --- I1 : I 260 270a 369 . 450a 2,000 2,000 1 ------i CORIBOL 0.0 0.2a 0.5 0.5 a 0.7. 0.71 :ORD(gr.f.): MIN. nEDIANA I 1.7 2.0a 2.5 3.2 a 4.6 4.6t I NIN.CHICA Y COOPERATIVAS 1 2.0 2.3 a 2.5 3.9 a 5.1 5.1 1 , . I |___ .- :. -^-----...... -.--______----- 1 3.7 4.5 a 5.5 7.5a 10.4 10.4 1 I |ICO:I11OL: I 0 25a 90 180a 260 2601 IPISHUTOIMIN. NEDIANA O Oa 0 Oa 0 01 t::IN. CHICAY COOPERATIVAS I 0 5a 10 20a 40 401 1 - 1------____.__1___ I*I I 0 30 a 100 200a 300 3001 …_------___ - __. - | _-______ICONISOL :0 0a 0 0a 0 01 SlAUFRE I BIN.IEDIANA I 0 0 a 0 0 a 0 0 1 I I nIN.CHICA Y COOPERAI1VASI 19,000 60,000a 70,000 90,000a 100,000 100,0001 |~~ . 1… ------_ -I...... *_____._____.... I:I : 19,000 '60,000a 70,000 90,000a 100000 100,000I I COWIBOL 1 41 60a 80 90a 100 100 :CADMIO 1 HI. IEDIANtA I 5 a 10 10a 20 201 I MInl. CHICAY COOPERATIVAS:1 0 0a 0 0a 0 0 : 1 ------______-.---- ______,,_l .-.-. .1 1:1 41 . $5a.- 909 . 90 a- 120 10 NOTAS11) Protducion de Joint-Venturesa partir te 19'2.
-1 *-- TV *r-,A I . -mna -arrI n v qf-?'i ^A -82- ANII X2-6 ag-e21 of 29
CUAL.FOV.15
INVERSIONES1¶G9 - 20O00 ESCENARIOI (Ensilfonet de USSI
1 C A P I AL DE I N V E RS I O N ES CAPI1ALOE OPERACIONES 1OlALES PORrtt1AJE1 a a~~~~i------1------a RE P OS I C Io0 t1 N E V A S ESYATAL PRIVADO I E5TATALI PRIVADOi ESTATAL1 PRIVADD S la) PROSPECCION: I 1 23.71 9.221 RE610 OCCIDENTAL I-- . a-- 6.71 10.0 I 16.7I REGIONORIENTALI --- 1a--- - 0.5 6.51 7.0 1 I - --- _ -. ------…------I Is Ib)EIPLORACION: I 21.7I 6.421 I REGIONOCCIDENTALI 1.0I 1.5 - 4.5 I 6.0I 13.0 I I RE61ONORIENTAL : - I ... I 0.2 3 I 3.7I SALARES --- a ------5.0: 5.0I a ._ - -…---_--_ --- -: …--…-…-: tc) ESPLOtACIONt i a 106 .5a REGIONOCCIDENtAL: 30.0 25.0 25.0 - 7.5 1 16.01 103.51 I I RE610NORIENTAL I ------3.01 3.0S I SALARES I ------I --- L -- _
Id)CONCENTRACION :I aa 1 78.5 1 30.62 I~~~~~ I I 1~~i I I REGIONOCCIDENTAL' 40.51 15.0 I 23.0 I I -- 1 1 78.5 1 1 S REGIONORIENtAL - --I ------II I I S
ale) FUUDICIONESs: a , 1 22.07:1 8.62Sa I VINTO S 2.0 1 -- - -: 10.0t --- -' 12.0I I I KARCIPAAA - I 10.0 -- I 10.0 II I PRIVADAS -- I--- __ I I I I- ---- If)OlROS: I 4.5 1.82S I VARIDS 1 3.0 1 1.51- --- S ------i 4.5 1 I I tO T A L E S 1 76.5 43.0 43.0 -- 39.4I 50.0 I 256.91 100.02 MORCENTAJE 29.1 16.72: 18.71 I-1 15.321 19.521 100.021 FUENTE:ESTRAIEGIA DEDESAPROLLO ECONOIICO Y SOCIAL, 18? - 2000. - 83 - 83 PageA~~~~MI 222-6 of 29
iINVERSI'E.E13IM - ;') s EStENARIM11 (Ensilines de USI)
C A P I t A L DE I N V E RS I OHES WCAPITALDEOPERACIONES I ------~------I--1TOtIES PORCENTAEI I a:REPOSICIOH E p a N?IUEVAS I ESTATAL PRIVAOOI I t I S ----______~~~~~~~~------I~- ~--r--- -___t-SS- I I: ESIATALIPRIVADO ESTATAL P I - I I IRIYAOO : : - .~~1-- . . : t) PROSPECCION: 23.71 .4.01, I REGIONOCCMIDNLA ------I--- 6.7 I 10.0 S 16.1.71 I REGIGOORIENTAL --- 1 --- , I 0.51 1.51 7.01 : lb)EXPLORACIO: : : :1 24.1 4.2Z: S ~ ~~~~~: : :S ~~ ~~ ~~ ~~~~~~~~~~~~~ I RE6IONOCCIDENTAL: 1.01 1.5 --- 3.01 4.5 1.0S 11.0 I i RE611NORIENTAL I -- 1 ------.0.21. 3.I 3.7 S I S SAIMES ------1 ---_ - - -1 5.01 5.0I I a ~~~~~~~~------; - I !I) EIPLOTACIONs I:I 1a I 1 1 223.51 37.92 I I Is :I sz I REGIGNOCCIDENTAL5 30.0 250 25.0 102.0I.5 U.0 S 205.51 S I REUIONORIENTAL : -- I ------15.0 -- 1 3.0 1 16.0 I I I SNARES I -:to . S Id)CGlClUCION: I I S 217.51 4S.lJt I I a aIta1I- I REGIONOCCIDEHTALI 40.5 I 15.0 1 23.0 J177.01 1 -- I 25. 1 I RE610WORIENTAL I ------12.0: I -1 12.0 I I I.* :------:el. FWUDICIGIESs a1 41.01 7.tU1O Is : : - : : I-s I VIltO 1 2.01 ------:I 10.01 -1 1 2.01 t I KARACHIPAPA ----I :l --- 1I 10.0 -1 34.0 1 1 I P-I-VADS _ - --- : ------If) AtROS t ' VARIGS I 1-: . S |~ ~ ~~~30:1: : :- 0.: *-: 1 1 a aI ' t.0t I Baa:sgunaugzuaas Bsauzll:uzaC2 l33:Ssu-:zzuu:s*::::*::::uzzzsS::2383_::833288:u rnuzaau,uu,uai:sJ" a IT Ot A L S 7J^.5:1 43.0 72A 309.5I 39.41 50.02 590.41 100.0: i3uzszs:s8::u2mss sss2zs8=3::m::sz::s::::z:ss:.~ :::zs-* - S::::~~:uazuuuguuzagzaasassass-glaua....a UUUSUU-UU3EWUJu Is IPORCENTAJE l3.01S1 7.31; 1.:":"2.411 6.721 6.511100.0:1 I szznzz :az:zzzzz2:z:zasaastzs::z5s:z s:z.::.:.:....:::: : ..... J FUENTE:ESTRATESIA GEtESARROLLO ECONONICO I S5CIA1, 19s - :Ot5.
p -84- AM 2-6 Page 23 of 29
CUADROV.17
INJVSlIOKES1989 - 2000: ESCEENARIIII (Enmillones de USI)
C A P I t A L DE I N V E R S IO N E S CAPL OEOPERACIUES' TOIALESIPORWIJAJE: .______--- _------:- -: R E P O S I C IO N : N U E V A S : ESIATAL1 FRIVADOI I : 1 : : ESTATAL: PRIVADO: ESTATAL: PRIVADO . t I ) PROSPECCIONsE : : : : : 1 23.71 1.72 I RESINOCCIDENTAL: : --- : -.: 7 10.0 1 : 1*.7 a RE6BIONORIENTAL : - I - : 0.5: 6.51 7.0 I lb)EIPLORACION: : : I 1 27.91 2.01: I REIONOCCIDENALI 1.01 1.51 3.2I 3.01 4.51 6.01 19.2 1 1 RE6I1ORIENTAL 1 - Is : I --- -: 0.21 3.51 3.71 1 1 SLARES : : l Is --- Is - 5.0 I 5.0 I I 1 S-*------** ------.-- *------1 S WIcEIPLOTACION: S i i629.11 45. I RE1GNOCCIDENTALO 30.0 1 25.0 29.5 1 306.0 1 7.5 1 16.0 1 414.0 1 : I 61ONORIENTAL 1 -- I - e.0 - t- 3.0:; 45.0 1 : I SNARES I Is- 0.11 170.01 -- I -1 170.11 I Sd)CLOfiENRCION: I I 6657.5 1 47.115 S RE6IlOCCIDENTAL 40.51 15.0S 23.0 1 531.0 I -S1 6S09.51 1 I RE61iORIENTAL I -: - - 4.0 -S 48.01
I) FIUDICIOES: I : . : . 1 I1 52.0S1 3.71 I I S a . . . I~~I i. YVIITO 1 2.0 i 1 -- I0 -1 12.01 1 S ARIIPANPA I -: ---. S 24.0 1 -- 10.0 -1 34.01 1 I PRIVADAS 1I ------1 6.0 - -- S -1 6.0 S..- I I :. II--- I0) TROS: I I : -: - I 6.4 1 0.52 I I I I 1 -1l I I VARIOS : 3.01 1.51 1.41 0.51 - I --I 6.41 1 1 1 : : : I S. 1 S :. IT Ot A L ES i 76.51 43.0 U1.2 1,106.5 1 9.4 1 50.0: 1,396.6 100.0l: IORCEIITAJE 1 5.521 3.11: 5.92: 79.2u1 2.IU 3.U1 100.021 I fUENTE:ESTRATEGIA DEDESARROLLO ECUNONICO VSOCIAL, 19" - 2000. ANNEX2-6 Page 24 of 29
CUADROV.18
BALANCERESERVASIEIPLOTACION: 199 - 2000 (Entoneladas uitricas finas)
NIIIEAL : RESERVAI PORCENTAJE: EEREMVAPRODUCCION I DlIFUMCIA I 1 BASE I RECUPERACIONA: VIMCDE LE I PROYECTADAI I * a aa a a IESTAR S 94,000a 50.002S 197,0001 244,150.001 l(4T,150I WOLFiRAM 5?,500 70.01: 52,85S 49,400.00 3$4501 IANTIKOVIO I 105,000I 80.001j 84,000a 194,000.001 (110,000)1 -lIINC 555,000 80.001X-- 4440 1 1,256,030.001 1812,0s0)1 *PLON0 : 111,000S 80.00X. 88,8001 243,410.001 (154,61011 10R0(Recurso) : 222.3. 60.002N, 133.41 15,780.001 (15,655)1 IPLATA 1 1,300 70.0021 n910 i.45 I 801 t . ; t I |It 1BISNJTO : 4,600 1 70.0021 3,360 1 2,710.00i 6501 a *~~laII 4 a a AZUFRE I 100,0001 85.0021 85,000 1 1,128,000.001 (1,043,00011
SENYE: ES= _ATE23IA:: :BE: ::8Et:LO:Et:N:C_SCIAL,_89 - 2000 FUENtE:ESTRATEBIA OEDESARROLLO ECUONI"CO Y SOCIAL, 1989 - 2000.
-~ I ~ ~ ~ ~ ~ _ - 86 - ANNEX 2-6 Page 25 of 29
CUADROV.19
PROYECCIONDEVALORES CIFDE EIPORTACIOII HINERA: 1968 - 2000 tVolu.enon tonsladisa*tricas lins y vlaoresen sillones do US$1
NINERAL : 1968 1 1989 - 1992 1993 - 1996 119 - 2000:I TOT.
VOLUHEN 10,330.00: 14,010.00 15,260.00 16,320.00 19,200.00t 19,200.00 216,710.00I :ESTAA0 VALOR11) 70.60: 96.30 a 104.302 111.50a 131.201 131.201 1,412.002 VALOR(21: 70.60 105.80 134.50 Is 15.30 -.192.0 1 M.901 2,031.20 1 1 - - _ - - ______- ______-____-_____- -____ I I VOLUNEN: 1,425.00 1,900.00 3t04O.004- 3,135.004,275.00 1 4,275.00 1 43225.002 OLFRM(11031 VALOR(1) 6.20 9.20 a 13.10 13.50 a 18.50 16.501 186.80: I VALOR(21: 6.20 9.30 18.00 2 23.10 37.90 t 37.90 334.401 : S Is------…-----.------I VOLUIENI 9,025.00 : 10,925.00 11,970.002 12,350.00 15,040.00 1 15,040.00 I 169,555.00 2 SARTIIIONIO VALOR(1) 17.30 : 21.00 a 22.80q 23.70 a 2.90: 28.90: 325.70 1 : VALOR(2) 17.30 : 22.10 24.00 2 24.70 32.50 S 32.50 : 357.90 VOLUWENI 49,610.00: 59,360.00 90,280.00 : 90,720.00 95,0 0.00 9!000.00 11t100,330.002 IZIUC VALORt1) 2 36.30 : 45.80 a . 69.60 : 70.00 a 73.30 t 73.30 1 849.902 I VALOR(2) 2 36.30 _ 49.70 79.60 2 94.00 94.20 1 94.20 1 1,030.10 2 :~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ :2 VOLUNEN2 13,300.002 13,420.00 15,860.00 : 16,150.00 23,300.00: 23,300.00 t 243*960.00: ,IPLOQN VALORI1) : 6.70 : 6.90a 6.00 : 8.20a 11.80 11.601 123.50: VALOR(2) : 6.70 7.70 .9.600 10.00 15.40: 15.40 S 154.10 : VOLUNEN: 247.00 --256.00 350.00: 475.00 1,700.00: 1,700.00: 12,609.00: IPLATA VALOR(1) : 48.40 50.20a 60.60: 93.10a 333.40: 333.40I 2,472.60: I VALOR12) t 48.40 55.10 78.80 114.50 519.20 519.20: 3,640.401 VOLUIIEN2 3.70 4.20 5.502 7.50 10.40: 10.401 100.50 : 'ORO VALOR(1 : 53.50: 60.80 a 79.60 2 108.50 a 150.50 : 150.50 1 1,454.30 : VALOR12) 2 53.50: 63.50 98.402 127.80 200.60: 200.601 1,816.502 I VOLUJEN: 0.00: 27.00 90.00: 190.00 270.00: 270.001 2,214.002 t815tlUTO VALOR(1) I 0.00 0.10a 0.30: 0.70a 1.10 1.10 98.80 : I VALOR12) 2 0.002 0.10 0.40: 1.10 1.70: 1.701 13.40 2 VOLUENI 18,000.002 -40,000.00 70,000.00 : 80,000.00 100,000.00 2 100,000.0 2 1,038,000.00 t IAZUFRE VALOR(1) 2 1.302 1.80 a 4.40 : 5.30 a 7.00 7.00 1 4.30 1 I:- VALORI2) : 1.302 2.00 5.50: 9.00 13.402 13.601 115.901 IVALORCIF TOTAL 11) : 242.30: 291.00a 370.702 434.50a 755.70 2 755.701 6,946.90: I -.-.---- …---.------...... …… ...----.-.-..-...... _--_.. IVALORCIF TOTAL (2) 1 242.301 318.30a 439.00 2 554.50 a 1,108.002 1,108.00S 9,513.90 2 NOTAs(1) Valor CIF con precios de febrerode 1985; (2)Valor CIF con precios proyectados. FUENTE:ESTRATE6IA DE DESARROLLOECOIlGNICO Y SOCIAL, Ii - 2000. - 87 - ANNEX2-6 Page 26 of 29
PKOVECCIONDE POIJCCIUN NlldA 1MS3-ZUS 135U 30 mCIOSMA ,E O 1988 * ?ECIOS FnRoM Sl
88
I . -. -. - /
ea
1!18 1n85 1598 1991 1992 1993. 1594 1395 l9S Ild? 15S8 1952. 0OS1'5 -88- Am 2-6 Pagi 27 of 29
zSxo CIacEsNir I PORSUBSeCos
25 ACONIhOL (3NIH.NUIB 2a23 * MHIN.NIlCAI OTROs U?. * UNDICIUhEU
154
Il
Be
82 li153 1584 18 A OH . - 89 - ANN1X2-6 Page 28 of 29
PAITICIP?AIOHDISECIOR BiELT IOAL DOROACIO- DfORINACIIESRios m TOTALDiDlilCIoS
N
1~~A~~~~A ~ 188 188 188 138 188 198?- .," i __ m R I
R m m m ,~~~~~~~~~~~~~~~~~~~~~~~'14.
Z I,
o m.i 90° AN= 2-6 Page 29 of 29
CUAPROV.20
RESULTADOSESPERADOS 1989-'000
!YACIRIENTOSPRIARIOS S
ESTARO 3 YACIIIENtOS 200IND IOWLFRAN 1-2YACInIENtOS 100-5001ND IANTIMONWI 2 YACINIENTOS 200IND ZINC 3-4YACINIENTOS 500-1,000IND 1 1PLOIO 3 YACIRIENTOS 300-500IND S : : PLATA(Disesinado) 3 YACIR'ENTOS 6,000-30,000IND1 ORO(Disesinado) 8 YACINIENTOS 1,000-6,000t1D1 'RO (Yetiforee) 4 YACIHIENTOS 20-20011D1
. : YACINIENTOSSECUNDARIOS : : : ORO(Regi6n Occidental) 1IRASA 300,000a3/Ies 15VASHING PLANTS 40,000W3/3es |RO (Regi6nOriental) 2 DRAGAS 300,000a3/ses S 12VASHING PLANTS 40,00003/mes I |ESTARO(RegibnC;cidental) 4 VASHIYGPLINIS 4fOOOS/i-- S iESTAnO(Regi6n Oriental) 1 DRAGA 300000 *31es S 10WASHINS PLANTS 40,000W3/oes 30 DDHDAS-DRAOAS !YACI1iENTOSNASIVOS I j ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~S iIWUEL- CO0ALTO 1 YACINIENTO i IAZUFh,E 3 YACINIENTOS 5,000-10,000TDlS IYACINIENTOSEVAPORITICOS ISALARES S S---- : 11PLANTA PARA LA PRODUCCION DE: ! LITI 4,000- 6,000tn LiCO3 I POTASID 500,000- 600,0040 IN KCI POTASIO 150,000TN K2So4 EORO 20,000- 40,000TN HH303 NAGNESIO 600,000TN ("9g FUENTE:ESTRATEEIA DEDESAPROLLO ECUNONICO Y SOCIAL, 1989 - 2000. BOLIVIA
MINING SECTORREHABILITATION PROJECT
Mining Export Prolections
1350 * 1300 , A PRECIOSFEBEO 1988 0 PRECOSPRDYECTAD00
100 .
900 .
700 Soo . 800 3w~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 6001 aw~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~-
ar
2100 I I I I I*II 19. IS18 1989 1990 19911 192 1 1 1995 199 1997 0 ~~ ~ ~ ~ ~ ~ ~~~A0 AFgOS Source: Bolivia Ministry of Mtulza anad Metallurgy. BOILI'T- MINING SECTORREHABILITATION PROJECT
Institutional Master Plan ORGANIGRAMAGENERAL Y FUNCIONESDEL SECTORMINERO ESTATAL
CABIZA KUL ICTOR t g 1te11111OCIlEt V MtT CURCIA mm IL ,.' 1. htiet p .o 2._.uiae&a tm Iet a emb a"e_ _ S. ftewiWe ti vwo I OrlABoida? uugmuuldsidesonhA
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_~~~~- ______BOLIVIA MINIG SECTORREIABILITATION PROJECT
GEOBOL-Organiaational Structure
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Fig. 5- 0r"*gosgrma Pro,wsto PGre @1 SftvI*f0 Ge01lOgIc.d 90iisOlI (GEODOL). -95 - ANNEX 3-4 Page . of 15
BOLIVIA
MINING SECTOR REHABILITATIONPROJECT
InstitutionalStrengthening Program
(i) The Ministry of Mining and Metallurgy (MMK) will be restructured in the overall context of an umbrella institutionalmaster plan (Annex 3-1). A project coordinationunit to oversee and coordinateproject executionwill be establishedwithin an Undersecretariatof Plenning and Developmentwithin the Directorateof Planning. The principal functionsof the Planning and DevelopmentUndersecretariat will be to further the design of mineral policy, the promotionand coordinationof mining development,the developmentof plans and projects, the compilationof mine statistics,the management of a centralized documentationand informationcenter and the coordinationof foreign investmentand technicalassistance programmes. An Undersecretariatof Administrationwill administer defined mining policy and provide a coordin-tingfunction for mining activities of both the private and public sector. Legal and general administrativefunctions will be concentratedin this AdministrativeUndersecretariat. The organic structure of MMK is attached as Annex 3-2. Cadastral functions for the recording of explorationand mining claims will be divested from Ministerial functionsand will be handled by a new TechnicalCadastral Service. These key areas of MMM responsibilitywill be strengthenedunder technical assistanceprovided through consultancyassignments, training courses and study trips for key ministry personnel. The institutionalstrengthening component will be coordinatedfrom within the MMM by a longer term consultant. Equipment requirementswill be largely limited to computer hardware and software as well as office and reproduction equipment. Priority areas for improvementwill be associatedwith the developmentof the statisticaland informationdata bases, the developmentof joint venture strategy,project analysis and promotion,planning, 'ieneralmanagement and coordination. !(ii,Under the new Institutiona.1Master Plan GEOBOLwill be maintained as a separate geolcgicalsurvey institutewith four principal departments;Regional Geology, Economic Geology, Hydrogeologyand a Service Department. Core staff will be reduced from the present level and contract staff will be hired for specific projects as they are developed and financed from a variety of sources, including the present project. The new organic structureof GEOBOL is attached as Annex 3-3. The principal functions of GEOBOL will be acquisitionand distributionof geologicaldata, the explorationfor mineralizedareas using modern conceptswith the aim of promoting discoveriesfor private investment and the - 96 - ANNEX 3-4 Page 2 of 15
obtention and evaluationof relevant geological (including hydrogeological,geothermal etc.) data through a data base system. Every effort must be made to develop consultingactivities with the goal being that this type of work, outside the essential core activities of geologicalmapping and mineral exploration,will account for a substantialpart of the work load hence generating income and easing the burden of Treasury financing. A key to successwill be staff salary levels so that good professionals will be attractedback to work on stimulatingand challenging activities. Project financingtakes this into account through salary suipplementsto senior core staff and through the project contractingprocess. Infrastructuralinvestments under the project will cover building rehabilitationand laboratory construction,laboratory installations, equipment and stock. Geophysical,workshop, map preparation,instrumentatiorn including computerhardware/software equipment as well as support transport. A heavy emphasiswill be placed on technicalassistance tk;rough the provision of both short- and long-termadvisory staff in the field of regional geology, economic geology, laboratoryassaying and geophysics. Specificpriority projects have been identified for financing. These include the revision and publicationof geologicalmaps, mineral inventorywork with the resulting production of thematicmaps. The results of this work will guide the directionof mineral explorationactivities and the developmentof a mineral resource data-bank. In addition to on the job training, specializedtraining courses will also be provided through overseas diplomawork and attendance at key internationalseminars.
(iii) In accordancewith the Master Plan, a new institutewill be developedto consolidatesupport for the extractive side of the industry. The core of this new Mining DevelopmentInstitute (IDM - Institutode DersarolloMinero) will be the present IIMM (to be known under the new structureas the CIMM - Centro de Investig&cionesMinero Metalurgicas). The principal functionsof CIMM will be the investigationof mining methods suitable for the specificmining environmentof Bolivia, the development, refinementand research into prioritymetallurgical processes for the extractionconcentration and refining of ore minerals and the offering of competitivecontracting and assistance services to the industry. These serviceswill includethe design of both mines and concentrationplants with flow sheets, chemical and mineralogicalassaying work, method_ for improvingconcentration, optimizationof equipment requirementsand technical assistance orientated toward the small-scalemining and cooperativesub- sectors. A second branch of the new IDM is a Mining Cooperation Group (GCM - Grupo de CooperacionMinera) where expertise in actual mine evaluationand reserve developmentwork will be concentrated. This strictlyoperational arm of IDM will probably be formed from core operationalstaff of the present FONEK who are presently finalizinga German bilAteral assistance small mine developmentprogram. The future role of GCM will be predominantly in the contract services area. Apart from general assistance in the structuringof the new IDM the projectwill not address GCM - 97 - ANNEX 3-4 Page 3 of 15
activitieseither through technicalassistance or investment. The third arm of IDM will be the developmentof a technical training center to service the requirementsof both the public and private mining sector. This technicaltraining school will both upgrade present mine staff and prepare new techniciansin the fields of mining geology, laboratorytechniques, mineral beneficiationand metallurgy,drilling, blasting, surveying,workshop methodology as well as small business management. It will have full access to CIMM laboratoriesand testing facilitiesand some of CIMH staff will be used in course preparationand supervision. One goal of this training center will be the developmentof a training mine so that there is a direct linkage to on-site practical instruction. Discussionsare presentlyunderway with the Japanese Government for the financingof this new technical training center.
(iv) As far as the new IDM is concernedthe project will largely address the requirementsof the CIMH. Infrastructural requirer'entswill call for the constructionand rehabilitationof buildings, repairs of serviceableequipment and the provision of new equipmentfor the laboratories,beneficiation laboratories, pilot plants and to beef up mine equipment stocks. New support vehicles are required as well as office equipment (including computer hardware/software)to support the technicalprogrammes and overallmanagement needs. Technicalassistance will be provided through the provision of short- and long-term consultants in the fields of mining methodology,metallurgy, mineral beneficiation(concentration) and laboratoryassaying. Apart from on the job training,study courses, attendance at seminars and symposia and literaturewill be provided under the project. Similar to GEOBOL, core staff will be retained but most operative work will be carried out through specific projects. Supplemental salarieswill be provided to key core staff. Those projects to be financed under the context of this pro!ect includework on tne recovery of tin and precious metals from tailings and low grade deposits,the recovery of silver from complex ores the recovery of gold from old tailings and alluvial deposits and improved recovery of tungsten. Technicalassistance that will be provided through consultantswill be particularlyrequired at the departmental management levels for leadership,on-the-job-training and the developmentof a dynamicworking organization.
(v) An importantnew departmentwhich will be created through the project under the Master Plan will be the TechnicalMine Cadastral Service (STCM - Servicio Tecnico de Catastro Minero). Previously this work has been inappropriatelyhandled by the HMM itself. Substantialmodifications to the mining code over the last 60 years includingthe manner in which concessionsand titles have been awarded and registeredhas led to a chaotic situationwhereby there are no clear definitionsbetween properties,accidental and deliberate overlaps as well as the improper awards of titles. A modern system of claim recordingwill be affected using satellite positioningtechnology. Initiallythe confusionwill be rectified by transfer of old claims to the new system and new titles will be awarded under the new system once it is in place. The principal - 98 - ANNEX 3-4 Page 4 of 15
functionsof this new STCK will be the developmentof a mining cadastre for the entire country, the verificationof measurements, positioningand boundariesof concessionsbased on an unquestionableUTH system,advising the Mining Superintendencyon claim statutes from the legal point of view, be responsiblefor the compilationand computer-basedstorage of technical plans and reports, the maintenanceof Government'sconcession registry and the applicationof the requirementsof the new mining legislation. The project will provide new modern equipment includingelectronic and geodetic recording/receivinginstrumentation, topographic and measuring instrumentation,a computer center includingplotters and digitizers for map production as well as general management and service equipmentand vehicles. Technical assistancewill be provided through specializedconsultancies particularly for the setting up and management of the new systems. Training will be provided at specializednational and overseas institutionsfor key staff. Project preparationwork for this componentwas recently completedwith IDB financing.
(vi) FONEM, the special revolvingmining explorationfund, will be disbandedonce its present work program has been completed. As mentioned under Para. (iii) above, the present GCH arm of FONEM will probably form a unit of the new IDM. Assistance to the small scale private mining sector will now be provided more conventionallythrough IDM, BAMIN and commercialbanks.
(vii) BAMIN would be restructuredto become more efficient and to respond more effectivelyto its new status as mixed-capital company. The principalareas of improvementwould be management informationsystems, budgeting, financialplanning, accounting, portfoliomanagement, portfolio analysis,warehouse and inventory management,project evaluationand supervision,and mineral marketing. Technical assistanceand training courses would be provided un'4er the project to assist BAMIN in this restructuring effort. - 99 - ANNEX 3-4 Page S of 15
BOLIVIA
MINING SECTORREUABILITATION PROJECT
Institutional Strengthening ComPonent
A. Summary of Sub-Components with Line-Item Base Costs and Financial Source
Sub-Component mount Source $000.
1. Investment
1.1 Ministry of Mining and Metallurgy Linked PC System plus software, etc. 200 IDA 11 Office, reproduction, telephone, telefax-, etc. 50 IDA 1/
1.2 GROL3L Construction of laboratory, installations, instruments and chemical stocks,etc. 400 BITS 21 Geophyticalworkshop and equipment. 50 BITS ManagementPC system,cartographic equipmentand supplies. 50 IDA 1t New Vehicles (8) plus spares. 200 IDA 1/
1.3 Mine CadastralService (SToI) Geodesicand topographicequipment. 1,240 IDB 21 New vehicles (18). 520 IDB 21 Office equip. base maps etc. 60 IDB 21 Upgradingcomputing system, digitizer. plotter,programs etc. 100 IDB 21
1.4 CIMi Repair of buildingsand labs. A0 BITS 21 Upgrading(equipt.spares) Pranckeita pilot pl.'t. 130 BITS 2/ Equipment,instruments and suppliesfor laboratoriesand installation. 245 BITS 21 Equipmentand spares for concentration. 450 BITS 21 Mining equipt. suppliesetc. 20 C$DA Office and computerequip. 20 CIDA New Vehicles (5), spares and repairs. 125 CIDA
1.5 Mining DevelopmentInstitute (UDK) Computerhardwarelsoftware for MIS 25 IDA 1/ Office equipments telephones,copiers, telefax,typewriters etc. 75 IDA 1/
InvestmentTOTALt 4,000
1/ Denotescomponent financed under this project. 2/ Denotescross-effective parallel financing. - 100 - ANNEX 3-4 Page 6 of 15
TechnicalAssistance Proiects
2.1 GEOBOL Revision/publicationof geological maps. a)Vehicles(2),fieldequipment,supplies. 250 b)Operationaland support costs. 650 c)Project staff salaries (contract). 650 d)Ktscellaneouslcontingencies. 100 Total Proiect # 1. 1,650 IDA 11
Compilation/productionof mineral resource maps. a)Vehicles(2),fieldequipment,supplies. 50 USAID b)Operationaland support costs. 225 USAID r)Project staff salaries (contract). 185 IDA d)Miscellaneous/contingencies. 40 USAID Total Project t 2. 500
Investigationof epithermalprecious metal deposits. a)Vehicles(2),fieldequipment,supplies. 90 USAID b)Operationaland support costs. 200 USAID c)Project staff salariee (contract). 165 IDA d)Miscellaneous/contingencies. 45 USAID Total Project # 3. 500
Resource evaluationof other precious metal deposits. a)Vehicles(2),fieldequipment,supplies. 80 USAID b)Operationaland support costs. 300 USAID c)Project staff salaries (contract). 300 IDA d)Miscellaneouslcontingencies. 70 USAID Total Project # 4. 750
Resource evaluationof placer gold deposits. a)Vehicles(2),fieldequipment,supplies. 60 USAID b)Operationaland support costs. 350 USAID c)Project staff salaries (contract). 300 IDA d)Miscellaneous/contingencies. 40 USAID Total Proiect # 5. 750
Resource and geological/geophysical evaluationof the PrecambrianShield. a)Vehicles(2),helicoptersupport contract,fieldequipment, supplies. 250 b)Operationaland support costs. 200 c)Project staff salaries (contract). 250 d)Miscellaneous/contingencies. 50 Total Proiect # 6. 750 CIDA
1/ Denotes core project (see p. 5 of this Annex). - 101 - ANZX 3-4 Page 7 of 15
Resource evaluationof lead (zinc- silver) deposits. a)Vehicles(3),fieldequipment,supplies. 80 b)Operationaland support costs. 400 c)Project staff salaries (contract). 350 d)Miscellaneous/contingencies. 70 Total Prolect t 7. 900 KfW 31
Formation of mineral resource data bank (compilation,review and interpretation of mineral resource data). a)Equipmentincluding computer hardware and software, supplies. SO USA ) b)Project staff salaries. 135 Govt. c)Hiscellaneous/contingencies. 15 USAID Total Proiect t 8. 200
2.2 Technical Mine Cadastral Service (STCW)
Costs to support 3-phase project; fuels, maintenance,per diemst a) Stage I (5-years). 980 b) Stage II (5-years). 1,445 c) Stage III (5-years). 75 d) Contract to support above (IGM). 500 Total Proiect. 3.000 IDB 21
2.3 Center for Mining and Metallurgical Investigations (CI)l Recovery of cassiteritefrom old tailings and flotationtesting. a)Project staff salaries (contract). 425 b)Miscellaneouslcontingencies. 25 Total Project t 1. 450 BITS 21
Recovery of tin and silver from polymetallicores. a)Project staff salaries (contract). 260 b)Miscellaneous/contingencies. 2 Total Proiect1_2. 28) ClDA
Recovery of gold from old tailings. a)Project staff salaries (contract). 625 b)Miscellaneouslcontingencies. 35 Total Project1 3. 660 CIDA
2/ Denotes cross-effectiveparallel financing (see p. 5 of this Annex). 31 Financed by FRG technicalassistance. - 102 - ANNEX3-4 Page 8 of 15
Recovery of flinegold from alluvlals. a)Projectstaff salaries (contract). 420 b)Miscellaneous/contingencies. 30 Total Prolect # 4. 450 CIDA
Improved recoverylgradeof tungsten (wolfram)concentrates. a)Project staff salaries (contract). 55 b)Miscellaneous/contingencies. 5 Total Proiect # 5. 60 BITS
Alloy research investigations(bronze, pewter.gold,:inc,silver,antimonyetc.). a)Literature,market. feasibility investigations. 20 b)Follow-upresearch. 80 Total Proiect # 6. 100 BITS
3. Expert TechnicalAssistance and In-serviceTraining.
3.1 Ministry of MinLingand Metallurgy (NM1). Economic Geologist: Planning Undersecretariat (3.6 manlyrs). 400 BITS 21 Mining Economist: Planning and Coordination Undersecretariat. (2.7 manlyrs). 300 BITS 2/ Systems Analyst: Planning Undersecretariat (2.7 manlyrs). 300 BITS 21 Data Treatment Expert: Planning Undersecretariat (1.8manlyrs.). 200 BILAT Mining Engineers Coordination Undersecretariat(1.8 manlyrs.) 200 BnLAT Coordinator;Institutional Component (5.0 manlyrs.). 550 IA 11 Total MM0 Component. 1,950
I1 See p. 5 of this Annex. 21 See p. 5 of this Annex. - 103 - ANNEX 3-4 Page 9 of 15
3.2 GROBOL. Co-Manager,Regional Geology Dept. (4.0 man/Yro.). 440 BITS 21 Co-Manager,Economic Geology Dept. (4.0 maulyrsd.. 440 BITS 2/ Co-Manager,Laboratory (ServicesDept.) (4.0 man/yrs.). 440 BITS 2/ Co-Manager (Chief),Geophysics Division (4.0 man/yr..). 440 BITS 2/ Co-Leader,Project J 7 (4.0 man/yrs.) 440 BITS
Program Coordinator (USAID)for Project #'s 1;2;3;4;5 and 8 (5.0 manlyrs.). 55C USA-, Economic Geologist (5.0 man/yrs.). 550 USATD Geochemist (5.0 man/yrs.). 550 USAID Geophysicist(5.0 man/yrs.). 550 USAID Cartographer(5.0 manlyrs.). 550 USAID PublicationExpert (5.0 manlyrs.). 550 USAID Short-termExperts to support Project l's 1;2;3;4;5and 8 (e.g. epithermal gold, placer gold, mineral economist, mineral resource experts. (7.0 man/yrs.). 770 USAID Total GEOBOL Component. 6.270
3.3 TechnicalMine Cadastral Service (STCM) Mining Cadastre Expert (Project Coordinator)(4.0 man/yrs.). 440 IDB 2/ CadastralCoordinator (4.0 man/yr..). 440 IDB 1/ GPS Expert/Instructor(1.8 man/yrs.). 200 TDB 2/ Data TreatmentExpert (2.9 man/yrs.). 320 IDB 2/ National Consultants (5.0 man/yrs.). 100 TDB 2/ Total STCM Component. 1.500 IDB 2/
3.4 Mlning DevelopmentInstitute (ID) Systems Analyst (approx.4.0m/mnths.). N/A BITS Data TreatmentExpert (approx.4.0 mjmnths.). N/A BIT-' Mining Economist/Engineer(approx. 6.0 m/mnths.). N/A BITS Above services to be supplied from experts to NMM under 3.1 above. N/A BITS Total IDM Component. N/A BITS
21 See p. 5 of this Annex. - 104 - ANNEX 3-4 Page 10 of 15
3.5 Center for MLning and NMtallurgical InvestigatLons (CB"H Chief Adviser, MJ.neral Processing Eng. (4.0 manlyrs.). 440 CIDA Co-Manager, Dept. of Mining (3.0 manlyrs.). 330 CIDA Co-Manager, Depts. of Concentration and Metallurgy (2.0 man/yrs.). 220 CIDA Senior Advisor and Co-Manager (Analytical Chemist), Laboratory (4.0 manlyrs.). 440 BITS 2/ Total CIMM Component. 1.430
4. Formal Technical Training.
4.1 ILustry of MinLng and Metallurgy (301) Overseas (diploma) training in Mining Code Administration, attendance at seminars. 120 IDA 11
4.2 GEOBOL Seminar Attendance (2 staff per yr. over 5-years e $4,500 per trip). 45 IDA 1/ Diploma Courses (3 staff for 1-yr. duration specialized courses e $35,000 all-in costs per course). 105 CIDA
4.3 TecbnLcal Mine Cadastral Service (STOC) Training of Topographers at IGM La Paz. 200 IDB 2/ Scholarships at SME. 50 IDB 21 Training in use of GP3. 25 IDB 2/ Postgrad (M.Sc) courses (2 staff for 2- yr. duration courses e $25,000 all-in costs per year). 100 IDB 2/
4.4 Center for Mining and Metallurgical Investigations (CnII) Seminar Attendance (2 staff per yr. over 5-years 6 $4,500 per trip). 45 IDA 1/ Diploma Courses (2 staff for 1-yr. duration specialized courses Q $35,000 all-in costs per course). 70 CIDA
5. Supplemental Salaries.
5.1 MinLstry of Mlning and Metallurgy EMSOIDA------Program------
_/ See p. 5 of this Annex. 2/ See p. 5 of thiLc Annex. - 105 - ANNEX 3-4 Page 11 of 15
5.2 GEOBOL Govt./ Director. (5 manlyrs I $12,000/yr.). 60 BILAT. DepartmentChiefs. (25 manlyrs * Govt./ S9,600/yr.). 240 BILAT. Project Managers. (40 manlyrs 0 Govt./ $6,000/yr.). 240 BILAT.
5.3 TecbnicalMine Cadastral Service(STCK) Govt.! Director. (5 manlyrs I $12,0001yr.). 60 BILAT. DepartmentChiefs. (10 manlyrs I Govt.! $$9,600/yr.). 96 BILAT. Managers.Computing,Surveying,Cadantral. Govt./ (25 manlyrs. 0 $6,000/yr.). 150 BILAT.
5.4 Center for Mining and Metallurgical Investigations (CINO) Govt./ Director. (5 man/yrs I $12,000/yr.). 60 BILAT. DepartmentChiefs. (25 manlyrs 0 Govt./ $9,600/yr.). 240 BILAT. Project Managers. (25 man/yrs 0 Govt./ $6,000/yr.). 150 BILAT.
TOTAL; InstitutionalComponent 28,206
6.0 Total by Institution. MM0 s 2,320 GEOBOLt 13.660 STCM s 7,101 CIMK s 5,025 IDM s 100
28,206
7.0 Total by Sub-ComDonent. Investment (equipment). 4,910 TechnicalAssistance Projects s 10,090 TechnicalAssistance (in-service training)Experts. 11,150 Formal Training. 760 Salary Supplements 1,296
28,206 - 106 - ANNEX 3-4 Page 12 of 15
8.0 Total by Fundiza Source. IDA 4,120 USAID 5,685 BITS 4,965 IDB 6,795 CIDA 3,470 BILATIGOVT.s 1,831 KfW s 1,340 28,206
It should be noted that USAID/USGS are presenting a possible country-widemineral resource inventoryprogram which would in effect replace TechnicalAssistance Projects 2;3;4;5 and 8, and include the Expert componentas given above under 3.2 at a total estimatedcost of US$12.8 million. This is still under discussion.
B. Objectives of SpecificInstitutional Projects and Outline of Consultancyand Advisory Staff Terms of Reference
1. Introduction
Infrastructuralstrengthening will be concentratedin GEOBOL, the new STCM and CIMM (principalsubsidiary operating organ of the new IDM). The constructionof new laboratories,workshops, upgrading of installations and the provision of new equipment and suppliss for both GEOBOL and CIM will permit these institutesto effectivelysupport their operationalwork load and hence provide meaningful services to the mining sector in accordancewith their mandates.
All advisors and consultantsto be provided for support of institutionalinfrastructural development and projectwork will in the course of their assignmentsprovide in-servicetraining and transfer of technologyfunctions to Bolivian staff of the respective institutionsand departmentsin which they will be working. 2. 1.MM
Scope of Work. Within the MM, the Economic Geologist,Mining Economist and Mining Engineer will support and advise on the work of the Planning and CoordinationUndersecretariats in policy formulationfor the overallmining sector, the developmentof strategiesfor the successful implementationof Governmentpolicy particularlywith respect to the new mining legislation,and the coordination,planning and orientationof work of the various institutionaldependencies, including COMIBOL. They will also provide assistanceto the promotion of new mining ventures and in particular advise on joint-venturingnegotiations. The Systems Analyst will be responsiblefor establishingcomputer,based management, planning, personnelmanagement, account and, in particular,information systems within the 0M0 documentationcenter. This team of advisory staff within the NMM will also provide direct assistance in the establishmentand organizationof the new IDM (ref. para. A, 3.4). - 107 - ANNEX 3-4 Page 13 of 15
3. GEOBOL
Objectives. With respect to specific GEOBOL projects (A, 2.1 of this Annex), Project #1 will revise, compile and update approximately100 geologicalmap sheets which have been prepared in draft over the last 25 years but which have never been issued. This "hidden,information will thus be made availableto the public and other concernedGovernment institutionsand will be particularlyimportant to provide an available geological data base to the minerals industry. The order in which maps will be revised and printed will be in accordancewith market demands. Projects #2 through 7 will have -.he overall objectiveof developinga systematizedmineral inventoryof priority mineralizedbelts. These projects are specificallydesigned to the needs of the mining industry. Information,using new concepts and ideas with respect to the nature and occurrenceof precious metal deposits,placer gold (includingfossil glacially-derivedplacers), chrome-platinum ultra-basic associations of the Precambrianshield area and lead-zinc-silverdeposits will be researchedin the field, evaluated through the laboratoriesand services to be provided under the infrastructuralstrengthening component and combined with the geologicalwork to be developedthrough Project #1 to provide valuable informationto the mining industryon prospectivezones for the discovery of new economic mineral deposits. The combined information obtained from Projects t1 through 7 will be used in the developmentof a computerized mineral/geologicalresource data bank through Project #8 which will also assemble all data presentlyon record. This will provide industrywith immediateand systematicaccess to informationfor use in orientationof exploration work.
Scope of Work. As far as GEOBOL is concerned four Co-Managers will be provided for the three most important departments, Regional Geology, Economic Geology and Services (ref. Annex 3-3). These consultants will assist in the reorganizationof these departments,be responsiblefor the planning of their department'swork programme (allocationof personnel, equipment and required operationalfunding etc.) and coordinatework between the respectivedepartments to which they are assigned. The Regional Geology Co-Managerwill have speclfic responsibilityfor organizingthe execution,interpretation and compilationof all geological mapping activities. The Economic Geology Co-Managerwill have specific responsibilityfor all mineral inventoryand explorationactivities, the evaluationand disseminationof results and will set prioritieswith respect to work required from the Services Department. The Co-Manager of the laboratoryin the ServicesDepartment will advise on the construction and refurbishingof the laboratoryfacilities, institute working procedures required to serviceand supportGEOBOL field programmes (largely exploration)and general public demands for custom work, advise on and introducemodern analyticaltechniques as required and generallyprovide quality control for the department. The Co-Manager of the geophysics division of the Services Departmentwill advise and assist in setting up the geophysicalworkshop and will be responsiblefor planning and supervisinggeophysical surveys required to support, largely exploration activitiesand thematic requirementsof the m'neral inventorywork (Project #2). In addition to the departmentand division co-managersa mineral inventoryprogram coordinator,project co-leadersand specialisttechnical consultants (economicgeologist, geochemist and short-termconsultants) - 108 - ANNEX 3-4 Page 14 of 15 will provide GEOBOL with the expertise required to successfullymanage, execute and interpretthe results of Projects #2 through 7. They will each introducemodern mineral assessmenttechniques, theories and mineralization models into the work programme and manage and participatedirectly in fieldwork. Essentiallythey will provide the inputs required for the production of mineral inventoryand thematicmaps as well as for the developmentof the resource data bank (Project18).
4. STCM
Objectives. The STCM project (para.A, 2.2 of this Annex) is of vital importance to the country. This project will be implementedin three separatebut inter-dependentphases and will permit the developmentof a new cadastre and a computer based cadastral information system. This project will thus allow the precise location and registrationof all explorationand mining claims,will allow the enforcementof the new mining explorationand mining claims, will allow the enforcementof the new mining legislationwith respect to revenue collectionand property protection and provide support to the legal authoritiesof the country (e.g. mining court, notary etc.). Existing mining claims (mining registry) which are subject to an old and chaotic systemwill be built into the new system over the duration of the project. The resurveyingof all existing claims will th.us be an essentialproject component and will preciselyclarify land ownership.
Scope of Work. For the STCM (ref. para. A, 3.3 of this Annex), a Mining Cadastre Expert will be provided and will be the project coordinator for the establishmentof this new and vitally importantinstitutional service. He will assist in the overall design and planning of this office, staffing and budgetary requirements. Under his leadershipa cadastral coordinator,a GFS equipmentexpert (globalpositioning system), a data treatment expert and surveyingand field inspectorsand consultantswill develop a new cadastral index map based on UTM coverage,will resurvey existing concessionsand land positions on the basis of the new cadastre and provide the data for the developmentof a new cadastralregister. The new cadastral register to be set up by the data treatmentexpert will record abstractsof title, mortgages, loans, servitudes,changes of ownerships etc. The project coordinator,cadastral coordinator and data expert will also assist in the settingup of registersat the Notary in each designated region of the country.
5. CIM
Objectives. The IDM (CIMM) projects (para.A, 2.3 of this Annex) will provide support to and developmethodology for use by the private mining sector,particularly small-scale and cooperativemining that do not have their own equipment, technologyand expertiseto improve their mining and mineral beneficiationmethodology. Projects (#'s 1 through 6) have been selected on the basis of country priorities;to generate economic rates of return on the processingof old discardedmine weste (tailings), to effect better separationof metallic componentsof complex ores, to reduce smelter and processing costs and to produce marketable products and to allow the recovery of gold (throughleaching and other processes) from - 109 - ANNEX3-4 Page 15 of 15 both alluvial and tailing depositswhich has not been possible to date because of outdated processes and previous economic conditions.
Scope of Work. Four advisers and consultantswill be provided to the CIMK division of the IDM. The Chief Adviser in mineral processing,the principal function of CDMM, will assist in the restructuringof the division, the planning and management of the division and the repair and upgrading of all facilitiesincluding the laboratoriesand pilot mineral concentratingplants. le will introducenew laboratorytechniques suitable to support requirementsof the Bolivian mining industry. Co-Managersof the departmentaof mining and concentration/metallurgywill assist in the strengtheningof these departmentsand will lead specificprojects aimed at developingand refiningmining, metallurgicaland concentrationtechniques includingthe executionof the specific investigationprojects to be executed under the segis of this Mining Sector RehabilitationProject (ref. para. A, 2.3 of this Annex). The senior adviser (AnalyticalChemist) will supervise the rehabilitation of the chemical laboratory, design and implement a work programme to effectively support the work requirements of the IDM as well as custom contract work and will liaise closely with mineral processing and metallurgicaldepartments to provide them with the required assay services to test flow-sheet design etc. He/she will introduce adequate modern analytical and assay techniques and lead teams in the actual mineral analytical day to day laboratory workloads. BOLIVIA MINING SECTOR REHABILITATION PROJECT
New Institutional Relationships
ASISTENCIA FINANCIERA AS_EC T_NC
SECTORMINERO SECTORMINERO PRI ADO'* POLITICA - CORDINACION - CONTROL |ESTATAL
MINEROSCHOSO|SAM |SCA G. D. M. M ISN|O.c IYERAS JOINT VENTURES" GEOBOL I I I S.T.C.MI
ASISTENCIA TECNICA PRESTACION DE SERVICIOS SE_,YIC_TE_NI_ o EXTENIONISMOMINERO AY DE CrASTRO FINANC MIENTO DE PROYECTOS I PARA SOLCITU- DES DECONCE- ASISTENCIA TECNICA RELACIONADA CON FINANCIAMIENTO SIONESMINERAS COMERCIALIZACION DE MINERALES- VENTA INSUMOS
Fig. 3 ROL DE LAS ENTIDADESESTATALES Y PRIVADASEN EL SECTORMINERO EN SU CONJUNTO
i~~~~~~~______- 111 - ANNEX 3-6 Page 1 of 2
BOLIVIA
MINING SECTOR REHABILITATIONPROJECT
COMIBOL - RehabilitationSub-component
The procurementand supply of operatingmaterials, consumables and sptre-parts. A detailed breakdownof the requirementsfor the individual facilities (mines,concentrators, shops) has been prepared by COMIBOL and been presented to IDA, with the exceptionof the spare-partsrequirements.
The procurementand installationof equipment to replaceworn, obsolete and less efficient equipmentin the mines, the concentratorsand the shops. This would include lobc-motives, loaders, drills, concentratortables, flotationcells, pumps, electric motors and laboratory equipment,etc. Equipment lists by mine/facilityhave been prepared by COMIBOL and presented to IDA. Packagingof the equipment requirements will depend on the outcome of the co-financingefforts.
The executionof mine-works to improve and reduce the operatingcosts of the vertical and horizontal transportation of ore and waste and to improve the dewatering/pumpingend ventilation systems in the mines. Mine by mine programs have been prepared. This work will be executed on the basis of outside contracts. Detailed scope of work and draft contracts have to be prepared by COMIBOL for presentationto IDA.
The executionof exploration/minedevelopment works. As stated before COMIBOL has been hampered by a lack of proven ore-reservesin its mines. This programwill address the reserve issue. General scope of work, expressed in number of meters of drilling and developmentwork has been agreed between COMIBOL and IDA on a mine by mine basis. Detailed work-programswill be reviewed by IDA and subsequentwork will be executed by outside contractors. As for the mine-works, detailed scope of work and draft-contractshave to be prepared by COMIBOL.
The execution of technical studies. These studies in contrast with the work to be undertaken under the joint-venture promotion sub-component, deal with the existing operating propertieswith the objective improvingprofitability. COMIBOL will execute three sets of studies. The first group will assist COMIBOL to joint-ventureor lease propertiesto outside private investors. The followingproperties comprise this first group.
o Tatasi, Tasna, Chorolque,Animas-Innocentes o Poopo, Santa Fe - 112 - ANNEX 3-6 Page 2 of 2
In order to assist COMIBOL in its joint-ventureefforts, a promotionalprospectus/package will be prepared with the assistanceof outside consultants. The second group of studies deals with the 18 months assessment of the explorationldevelopmentwork to be undertaken. An expert- opinion will be required to assess the justificationto continue furtherexploration/development work at the San Vicente, Unificada,Caracoles and Viloco mines. This group of studieswill assess the technical/financialfeasibility of these mines foi the next five years in order to assist COMIBOL in its decision-making. The third major study to be undertaken is to assess the expansion-potentialat the San Jose mine. This study would first focus on the technical feasibilityand if warranted the economic and financial justificationand the optimal timing of the expansion. In addition to the above studies, several individualst4dies will be undertaken in the areas of hydro-power supply (Colquiri) adaptabilityof leaching (Unificada,Animas Innocentes)and utilizationof tin-tailings(Catavi).
Implementationof a social plan. COMIBOL, as is usual for mining in reamoteareas, provides housing, medical attention, schoolingand recreationalfacilities to its employees and their families. In order to improvethe living conditions, which deterioratedduring the past years as a result of the crisis, COMIBOL has designed a social plan as part of the rehabilitation-program.The plan calls for upgrading and improvementsof the facilities,houses, schools,medical units and the procurementof furnitureand equipment. - 113 - ANNEX 3-7 Page 1 of 2
BOLIVIA
MINING SECTORREHABILITATION PROJECT
COMIBOL - Environmental Program
COMIBOL will execute a staged environmentalprotection program as outlined below. A detailed program, includingthe organizationalstructure will be presented to IDA for its review and approval. A phased approach as presented in the attached Fig. 1 - COMIBOL Proposed EnvironmentalProgram - will be the basis for the detailed program. The program consist of the following Phases:
Phase I
Establishment of monitoring programt to determine the characteristicsof aqueous and solid wastes associatedwith mining operationsas well as the upstream and downstreamquality of the receivingsystems. This will provide the basic data required to define appropriatecorrective programs. At the present time, no such data exists. This phsse might have an initial duration of 12 months and will start shortly after effectiveness. It will require the availabilityof an environmentalanal7tical laboratory as well as personnel trained in analytical and sampling techniques. The provision/financingof both the laboratoryand the technical assistanceto train the personnel form part of the proposed project.
Phase II
Preparationof a conciae environmentaloverview report for each operation in which the impacts identified in the Phase I monitoring program would be prioritized and corrective programs defiued at a conceptual level for review with regulatory personnel. The regulatory mechanisms would be in place prior to the completWn of this phase so that the reports can address the guidelines and codes of practice pertinent to the industry. The timing for this ;hase would probably be spread over a period of at least 24 months wfth reports for the larger active mines being prepared within the first year and others following on an assigned priority basis.
Phase III
Definition and agreement of environmentalmeasures to be implementedfor each property (on a prioritizedbasis) and design of correspondingenvironmental systems.
Phase IV
Implementationof programs defined in Phase III.
Phase V
On-going performancemonitoring.
A national environmentalmining plan will be prepared for review by IDA before June 30, 1991. BOLIVIA
MINING SECTORREHABILITATION PROJECT COMIBOL- Proposed Environmental Program
YEAR I Y, AR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7
STATEMENT OF INTENT
P fSENTATIONOf DETAILEDP OGRAM
ORGANIZATIONAL STRUCTURE mm GUIDELINESa REGUATIONS
PHASEII PHASE ONGOINGPERFORMANCE MONITORI G MONITORING . J .~ ~ _.____~ ~~ ______PHASE31 OVERVIEWREPORTS _i DEFINE8 DESIGNENVIRONMENTAL MEASURES
PHASEM | IMPLEMENTATIONI
0' I r. - 115 - ANNEX 3-8
BOLIVIA
MINING SECTOR REHABILITATIONPROJECT
COMIBOL - Management StrengtheningSub-component
1. The first element is the recruitmentof a number of experienced proiessionalsto fill a number of limited strategicpositions in COMIBOL while COMIBOL staff are selected/trainedfor these positions. These expertswill be hired on fixed-termcontracts not exceeding two years. As soon as the Boliviansare trained they would be phased into these positions and the contract professionalsphased out, with an appropriatetransfer of responsibilities.Approximatel7 17 managers/specialistswould be hired in the followingfields, mine-management (4), finance/administration(4), metallurgylmineralbeneficiation (3), electrolmechanicaiengineering (3), and geology (3). These managers/specialistswill occupy line-functions within COMIBOL's overall organizationalstructure. Expert-profiles,job- descriptionsand conditionsof employmentfor the positionswill be prepared by COMIBOL. The second element in the management strengthsniing area is technical assistance. This activity builds upon and is a follow-up to the TA-work provided by Coopers and Lybraad under the PPF. The project calls for 18 man-months (mm) of TA distributedas follows; strategic planning (3 mm), human resources (3 mm), marketing (3 mm), industrial safety/environmentalprotection (6 mm) and mine project evaluation t3 mm). The management strengtheningsub-component will be parallel financed by IDB.
2. In addition to the above elements,which deal with the management- strengtheningissue via the injectionof outside expertise, it will be necessary to strengthenthe company from within. It is in this area that the issues of compensation-competitivenessand training are addressed. A survey conductedcomparing COMIBOL's compensation arrangements with those of private mining companies in Bolivia, concluded that COMIBOL's salary levels are, on average, not competitivewith the externalmarket, particularlyat the senior management levels in the organization. The salary variance fluctuatedfrom a differenceof 372 for a mechanical superintendentto 96Z for the general manager'sposition. It is obvious that with such a variance COMIBOL can not attract and retain the competent staff required. Under the project it is, therefore,proposed to establish a scheme to enable COMIBOL to pay adequate salaries to middle and senior level managers. PresentlyCOMIBOL with the assistance of Coopers and Lybrand is formulatinga revised job-classificaticnand compensationpolicy system to rationalizethe existing structure. - 116 - ANNEX 3-9 Page 1 of 2
BOLIVIA
MINING SECTORREHABILITATION PROJECT
COMIBOL- Training Sub-component
1. A comprehensive training program would aim at upgrading and continuouslyimproving the general skills level of COMIBOL'spersonnel. The program would include:
(i) Strengtheningof the company's training capabilityat the head office through the creation of a new unit, the Training Planning Unit within the mandate of the Human Resources Department. This unit would be responsiblefor collectingand processingof data on training needs (both for managerial and general skills levels) and for the coordinationand executionof all training activities. Two competentexperienced training professionalswill be required, initiallyon a contract basis while internal skills are developed.
(ii) Training for Managerialand SupervisoryPersonnel. For senior and middle level managers (approximately90) an initial pilot project would train approximately12 selected staff who would then serve as a steeringcommittee to review the trainingmaterials. The remainingmanagers (75-80)would be trained in three courses (each course with a group of 25-30). Each course would extend over an 8-monthperiod, one week every two months. For the forseeable future it is recommendedthat the course trainer should be a recognizedorganizational and management expert external to COMIBOL. Because of management turnover and the requirementfor review courses, this management trainingwould become a permanent activity. The senior and middle management program model is attached as Annex 3-9 and the course outline (theory)as Annex 3-10. Apprnximately 180 staff will require and be eligible for supervisorytraining and a training group will consist of approximately25 persons. This program will consist of 6 seminars per year with each seminarhaving a duration of one week. Seminar contentwill be as follows:
- Productionplanning and scheduling - Production control - Leadership - Financialmanagement - Safety administration - Industrialrelations - Human relations - Performancemanagement - Time management - Training - Social issues - Projectmanagement - 117 - ANNEX 3-9 Page 2 of 2
All of the foregoingwill be framed within COHIBOL's revised expectationsof management and supervisorsin a decentralized environment. The priority for supervisorytraining is clearly in produ:tion areas, in which the greatest number of workers are employed (e.g., mines, concentrators,maintenance, etc.).
In addition to the in-house training seminars, a limited number of outside courses abroad, in specializedareas will be atcended by COMIBOL staff. The total time allocated for this part of the program is equivalent to 150 staffweeks over the 5 year period.
(iii) The technical skills and developmentprogram aimed largely at the work force is presentlyunder preparationby Coopers and Lybrand as part of its consultancyservices contractwith COMIBOL financed under the PPP. The program calls for a modular systems training approach based on the fact that the work-activitylprocessand its associated equipmentdetermine the training that needs to be done.
This will be a manual based system, and to satisfy CONIBOL's immediateneeds some 213 manuals require preparationas follows:
- Operations 76 - Electricalgeneral skills 19 - Mechanical general skills 41 - Basic industrialelectronics 16 - Operations/electricalequipment maintenance 53 - Shops - general shafts 8 213
It is estimated that some 36 weeks will be required to prepare the initial 12 priority manuals once program coordinatorshave trained supervisorshow to coach, conduct a trainingneeds assessment,set up qualificationprocedures and standardsand maintain training and qualification records. A typical manual format is presented in Annex 3-11.
During the training sessions the traineeswill alternatebetween the manual and the field equipmentto meet each objective. On successfulcompletion of the manual training, the trainee progresses to whands-on' training, where within a specified time period, he gains a degree of proficiency. The measurement being "can he do the job?"
Each training session (held at the appropriatemine, mill or subsidiaryheadquarters site) will be made up of minimum of 4 and a maximum of 8 participants. The length of the training time to qualify each participantwill be dependent on the 'training profileo developed for each job category. Attached as Annex 3-13 is an example of a typical training profile already developed for the San Jose mine and mill but which would be appropriatefor most of the other COMIBOL operations. - 118 - ANX31 BOLIVIA 3-10 MINING SECTOR REIABILITATION PROJECT COMIBOL- SENIOR AND MIDDLE MANAGEMENT DEVELOPmENT (SMD) PROGRAm MOODL
STAGESUD I OUTPUT
DOCUMENTMANAGEMENT 0 A SET OF MANAGEMENTSTATEMENTS PHILOSOPHY WHICH DEFINE THE ORGANIZATION'S AND STRATEGIES MANAGEMENTAPPROACH.
STAGESMD 2
DESIGN O DRAFT TRAININGMANUAL(S). TRAINING MATERIALS
STAGESWD 3
PILOT TEST O COURSE MATERIALSAPPROVED BY COURSE THE STEERINGCOMMITTEE. MATERIALS
STAGE SMD 4
IMPLEMENT 0 MANAGERSWHO HAVE KNOWLEDGEOF TRAINING APPROPRIATEMANAGEMENT PRACTICES, PROGRAM WHICH SUPPORTCOMIBOL'S MANAGEMENT PHILOSOPHY,VALUES AND STRATEGIES.
STAGESW) 5
EVALUATION O ESTIMATEDIMPACT OF TRAINING PROGRAMAND IMPROVED/REVISED MODULES. - 119 - ANNEX 3-11 Page 1 of 3
BOLIVIA
MINING SECTOR REHABILITATIONPROJECT
COMIBOL - Senior and Middle ManagementCourse Outline
mmK ONE
Day One: An Introduction to Management
The management model to be used at Comibol and therefore this course will be introduced. Participantswill engage in simulationsand role playing exercises to initially explore the key concepts.
Days Two & Threes Planning
The planning model to be used by Comibol will be reviewed. Different planning approaches will be considered. The differencesbetween strategicand operational planning will be explored. Members will participate in a planning simulation and begin work on a major organizational case study.
Days Four & Fives Organizing
The course will review the organizationaldesign concepts including classical and human relations theories. Case studies will be used with crntinuing work on the major organizational case.
Mm TWO
Day Ones Review
Through discussion,role playing and case studies the material presented in Week One will be reviewed and the participants will have the opportunity to discuss how they have implementedthese concepts and what issues they encountered. - 120 - ANNEX 3-11 Page 2 of 3
Days Two & Three: Directing
The three primary directingfunctions of anlayzing, defining and delegating the work will be explored. The role of motivation, reward systems, authority, responsibility and accountability will be discussed.
Case studies, simulations and/or role playing will be used to assit the participantsin exploring and understandingthe directing function.
Days Four& Fives Leadership
The manager's role as leader will be thoroughly reviewed. The developmentof leadershiptheory and the leadersneed to develop both his/her directive and supportivebehaviours will be explored. Self study of the individual's leadership style will be encouraged. Case studies and role playing will be used to reinforcethe learing. Continuedwork will occur on the major organizationalcase.
Day Ones Review
Through discussion,role playing and case studies we will briefly review the planning and organizationalareas but primary emphasis will be given to the directingand leadership functions.
Days Wo & Three: Coumunication
The manager as an effective communicatorand an active listener will be thoroughly explored. Participantswill identify strengths and weaknesses in their communication styles, idenify ways to improve communicationsand actively work on their personal communicationissues during this part of the course.
Days Four & Fives Problem Solving
A problem solving model will be introducedwith material and discussion on finding creative solutions. Role playing will be used to explore the concepts and then members will be asked to - 121 - ANNEX 3-11 Page 3 of 3
identify real issues facing the organizationand to work on finding appropriate solutions. Action plans on different solutions will be developedand presented to the appropriateComibol executive(s).
WE FOUR
Day One: Controlling
A key principle in this section is the idea that one can only control work, not people. Planning controls such as scheduling,budgeting and policies and organizing controls such as structure, definition and delegation will be explored. Case studieswill be used to illustratethese concepts.
Day Two: Performnnce Management
In this section we will idenitfy how a manager applies good management principles in face-to-face situationswith their own people to achieve high performance. We will integrate the directing and supportingconcepts from the leadershipreview with task analysis to estabish specific individual objectives.
Day Threes Team Building and Meeting Management
Understanding group dynamics is an important component in developinga high performanceteam. A review of group development theory will be presented and integratedwith concepts on improving team morale, communicationand productivitY.
The second half of the day will look at the chairman's role in managing meetings and will assist the individual to develop specific skills such as agenda setting and summarizing. Role playing will be an important part of this component.
Days Four & Five$ Integration
In the last two days of the course we will knot together all of the materials presented. We will use simulationsand role playing to review and use all of the management techniquesdeveloped during the course. The major case study developedduring the course will be completed at this time. Participantswill be encouraged to discuss their implementationof the materials and to identify areas of concern. - 122 - ANNEX 3-12 Page 1 of 2
BOLIVIA
MINING SECTORREHABILITATION PROJECT
COMIBOL- Tmaical Training Manual Format
Each Systems Training Manual follows basically the same format with variationsbeing incorporatedwhen needed. The following outlines the typical areas of coverage that can be expected.
SECTION1
- Prologue - Performance Objectives - Safety - Introduction - Equipment Description - Equipment Summary - EquipmentOperation - Feedback
SUCTION 2
- Introduction - Controls - Control Summary - Feedback
SECTION 3
- Pre-StartChecks - Start-Up - Planned Shut-Down - Emergency Shut-Down - Feedback
SECTION 4
- Normal Operating Mode - Off-NormalAdjustments - Operating Problems - Feedback - 123 - AMNEX3-12 Page 2 of 2
SECTION 5
- Operator Maintenace - General Maintenance - Feedback
SECTION 6
- Summary - Qualifications
SECTION 7
- Special Procedures
*NOTE - For Equipment Maintenance Manuals, latter sections are replaced with: - Test - Troubleshoot - Repair
- While following the same training methodologies of the other TrainingManuals, the Genera. Skills Manuals differ slightly in their approach, and are theory and task oriented. - 124 - ANNEX 3-13 Page 1 of 5
BOLIVIA
MINING SECTOR REHABILITATIONPROJECT
COMIBOL - Typical Training Profile San Jose Mill Ogerations
Tralalag Time PEED PREPARATIONOPERATOR
PStI's
- Overview 1 - Feed Preparation System 3
PENI's
- Belt Conveyors 2 - Belt Feeders 2 - Jaw Crushers / 2 - Cone Crushers 2 - Tramp Iron Magnets 2 - Vibrating Screens 2 - Ball Mills 2 - Rake Classifiers 2 - Automatic Samplers 2 - Horizontal Centrifugal Pumps 2 - Cyclones* 1
Total 25 Days * Positive Future Installation
Ag/Pb EXTRACTIONSYSTEM OPERATOR
PStl'8
- Overview 1 - Ag/Pb Extraction System 3
PE1's
- Agitated Tanks I - Automatic Samplers 2 - FloatationCells 2 - HorizontalCentrifugal Pumps 2 - Clarkson Metering Feeders 1
Total 12 Days - 125 - ANNEX 3-13 Page 2 of 5
CONCENTRATE RANDMING SYSTED
- Overview 1 - Concentrate Handling System 3
PEK's
- Thickeners 2 - Dorr-Oliver Diaphragm Pumps 2 - Disc Filters 2 - Horizontal Centrifugal Pumps 2
Total 12 Days
LDMXSTONE PREPARATION SYSTEM
PSW's
- Overview 1 - LimestonePreparation System 2
- Belt Conveyors 2 - Ball Mills 2 - Rake Classifiers 2 - Agitated Tanks 1 - Clarkson Metering Feeders 1
Total 11 Days
REAGNTS PREPARATION SYSTEMS
PSN1's
- Overview 1 - Reagents Preparation Systems 4 P31's
- Agitated Tanks 1 - Clarkson Metering Feeder 1 - Horizontal Centrifugal Pumps 2
Total 9 Days - 126 - ANNEX 3-13 Page 3 of 5
PLANT UTILITY SYSTEMS
PSHIs
- Overview 1 - Plant Utility Systems 3
PE1's
- Agitated Tanks 1 - Horizontal Centrifugal Pumps 2 - Mine Air Compressors 2
Total 9 Days - 127 - ANNEX 3-13 Page 4 of 5
COMIBOL - Typical Training Profile San Jose Niee Operations
TraininR Time
MINING SEQUENCE
MS4 s
- Overview 1 - Mining Sequece 3 - Ventilation System 2
NEKI's
- Jackleg and Stoper Drills 2 - Horizontal Centrifugal Pumps 2 - Air Operated Submersible Pumps 1 - Mucking Machines 2 - Mine Air Compressors 2 - Battery Locomotives 2 - Trolley Locomotives 2
MM'S
- Blasting Procedures 2 - Scaling 1 - Rockbolting and Screening 1 - Timbering 1
Total 24 Days
LOADING AND HA&LAGE SYSTEM
NS514's
- Overview 1 - Loading and Haulage System 3 - Ventilation System 2
- Mucking Machines 2 - Battery Locomotives 2 - Trolley Locomotives 2 - Air Operated Tugger Winches 2 - Horizontal Centrifugal Pumps 2 - Jackleg and SToper Drills 2 - 128 - ANNEX3-13 Page 5 of 5 mii's
- Scaling 1 - Rockbolting and Screening 1 - Timbering 1 - Laying Tracks and Switches 1
Total 22 Days
SKIPPING AND HOISTING SYSTDI
MSm's
- Overview 1 - Skipping and Hoisting System 3 - VentilationSystem 2
MI'8
- Mine Hoists 2 - Allis Chalmers 2 - Wolman Morgan 2 - Krupp 2 - Mine Air Compressors 2 - HorizontalCentrifugal Pumps 2 - Air Operated SubmersiblePumps 1
Total 17 Days BOLIVIA
MINING SECTOR REHABILITATIONPROJECT INSTIlSTIONALSTRENOTHENING COMPONENT:Impl _mntaeton Schedule.
1989 1wo i0 19S2 iwsa 1994
HireProj. Coordinator xxx ProcureEquip e t xxxxxxxxxxxxxxxxxxxx xxx xxx RepeirBulIdnge/lIab xxxxxxxx SiletExperte.Inwentory xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Ministry Export. xxxxxxxxxxxxxxxxxxx xxx xxx GEOSOLExpert. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx STCM Experts.Log Toro xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxXX5xx STCWExperts.Short Term xxxxxxxxx xxx xxx xx IOMExpert Assletenc. xxxx CI Exporte.Le T'rm xxxxxxxxxxxxxxxxxx xxx xx xxx CIWSExpert.Short Tot xxxxxxxx xxx xxx WOEUNITA Project. xxxxrxsxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx ClUE TA Projoct. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx STCMProject.Phs r xIxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Ph... II xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Pha.e III xxxxx tt Traintng xxx xxx xxx xxx xxx Coordintn on/Supervislon xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Io - 130 -
ANNM 3-14 Page 2 of 2
IIXIVIA MININS SECTORREHABILITATIDN PROJECT
COMIBOL and BAMIN ImDlementationSchedule
1989. 1990 1991 1992 1993 COMIBOL
1. Operatino Cyinters
Major EquipmentProcure ment ------Mine Works ------
GeologicalPackages ------…------…------Studies ------
E. Joint Venture Promotion
3eneralEvaluation A ------General Evalua'lonB ------SpecificEvaluations StudLes ------Exploration
3. Trainina ------…------
4. Technical Assistance ------…
5. SuDDlements ------
BNI Fullfillmentof Conditions X TechnicalAssistance - 131 - ANNEX3-15
liiii
' ~~a1t ANNEX 3-16 - 132- Page i of 5
BOLIVIA MININGSECTOR REHABILITATION PROJECT Guidelinesfor the Establishmentof a GuaranteeFund
1. aan.kgr.gwn&.Mission interviewswith small and medium entrepreneurs.with bankers, with Governmentauthorities and with bilateral donors have revealed that the lack of appropriateguarantees constitutes a major problem in channeling oredit for small mining and small industrial enterprises.The problem is more acute among the small miners because the commercial banks have little, if any, oxperience in dealing with the legal and economic procedures related to the valuation and mortgaging of mining properties.Because the Bank has been working, almost in parallel, in the preparationof two IDA Credits, one for small miners and one for small industries,it was in a good position to respond to a Government request for assistancein setting-upa Guarantee Fund to covrerseveral productivesectors. The first action of the Bank mission was to review some other local or bilateral initiativesunderway (e.g., FUNDES,swisscontact,
-USAID, FONEM, etc.), as well as the past experiencegained by the Central Bank with its own guarantee fund (Programade Garantia de Creditos Productivos -PGCP), which operated in Bolivia, between 1977 and 1984, with assistanoefrom USAID. 2. Upon review of such initiativesand experiences,and following discussionswith BCB and commercialbanks, and subject to a more detailed study to be financed under the TA oomponent of the proposed project, the mission recommended, in principle, the establishmentof a second-tierguarantee fund (Fondo de Retrogarantia),which would reinst're guaranteedportfolio from different kinds of first-tier guarantee funds. Such a scheme would enable the creation and operation of several competing private and public funds, rpecializedby sector or region, would provide for the necessary economies of scale required to operate a self- financed guarantee/insurancebusiness. and would establish a multiplying mechanism through which first-tierfunds would be able to increase their coverage manyfold (say from 3:1 to 10:10 without incurring unacceptablerisks. 3. PEat ExoeUience_The already mentionedPGCP, which operated until 1984, was establishedin 1977, in BCB, with a contingent fund from USAID for US$ 2.5 million, and a contributionfrom BCB for US$ 1.25 million. It was a rather successfulexperience assistingnearly 3,000 small entrepreneurs(mostly farmers) in its nearly seven years of - 133 - ANNEX 3-16 Page 2 of 5
operations. However, it never developed into a large program and it oeased to operate in 1984, after USAID stopped its support. BCB claims that the Program was a financial success, that arrears did not exceed 1Z, and that, as a result, the contingent resources contributed by USAID were never used. Nevertheless, PGCP did not generate enough resources to continue operations and, when BCB tried to continue the program with a PGCP II, in 1985, using a BCB's contingenv contribution, the success could not be repeated. The main reason given for the failure of PGCP II is that the capital of the fund was not adjusted by inflation and consequently, in the hyperinflotionary crisis of 1985-86, it could not cover the clai&..by financial intermediaries. The program lost its credibility and was finally discoqtinued in 1986. While a new fund is expected to benefit from the experiences of the past it would, initially, face an uphill task to regain credibility vis-a-vis the financial intermediaries. 4. The Proposed Scheme. The details of the new mechanism would only be spelled out as a result of a specific study to be financed under the TA component of the proposed project. The expected timing of that study calls for a final draft in or about September 1989 and for the implementation of the Fund by the end of 1989. In deciding the detailed procedures, BCB and the consultants are no only expected to draw upon the past experienoe of PGCP, in Bolivia, but also upon practical experience in other countries and, in particular, upon that of the European mutual guarantee organizations and cooperatives and their sohemes of risk sharing with the provincial and state governments. On the basis of that and other foreign experiences 1, some of the characteristics of the Fund can be expected to look as follows: (a)Risk sharing. Evidence collected from most developed countries--and also to some extent from developed countries-- (see Levitsky and Prasad, op. cit.), indicates that banks are never very enthusiastio about guarantee sohemes and that it is necessary to encourage them to participate by reducing the share of risk. There are some indications that where the risk of the lending institution is 30X or more the institutions are less willing to participate. Consequently, it has been suggested that the risk for the banks should around 20 to 30X, leaving 70-80X to be covered by the Fund. (b) Guarantee Fees. Most guarantee systems require the payment of a fee, or premium, for the guarantee. Such fee
1 See IBRD, Technical paper ft 58, J. Levitsky and R. Prasad: "Credit Guarantee Schemes for Small and Medium Enterprises",1987. - 134 - ANNEX3-16 Page 3 of 5
might take various different forms, including one-time payments when the loan is arranged, service payments for the investigation of the loan by tthe Fund, and/or annual premiums either for the guaranteed portion or for the total loan. Considering the high cost of money itnBolivia and, in particular, the alternative cost of funds, in informal markets, for those entrepreneurs with lack of adequate guarantees, as well as the rather high operational costs of the first-tier funds (which would include TA services), it has been suggested that the first-tier funds oould oharge a premium of about 3% p.a., on the total amount of each loan. The reinsurance premium could, in turn, be around 1% p.a. on the reinsured portfolio. (c) Claims. Because guarantee schemes build up their credibility principally by how claims are handled, the proposed scheme would have to establish very expedite procedures to respond to, and for the paying of, claims. However, while payments to financial intermediaries should be almost automatic, the regulationi shouild also clearly establish those specific steps that the lending institution would be required to take in order, to satisfy the guarantee organization in that every effort has been made to obtain repayment, and to facilitate further recovery actions on behalf of the Fund. Recovery procedures would have to be pursued with due diligence by the financial intermediary, and the amounts recovered, and the losses incurred, should be divided between the lending and guarantee institutions in proportion to their agreed sharing of risk. (d) Beneficiaries. While BCB would like to extend coverage, from the beginning, to all productive sectors; prudent management of scarce financial and human resourees may suggest a more limited initial coverage. The mission suggested that since the Bank/IDA has been preparing two similar projects, for small enterprises in the mining and industrial se¢tors, a pilot guarantee fund could start activities covering initially only those two sectors. In addition, and to avoid concentration of resources in few and relatively larger enterprises, it has been suggested to adopt a ceiling on the size of enterprises eligible for the Fund. Such ceiling could be similar to the maximum size of accepted enterprises under the credit components of the proposed IDA credits (i.e., below US$100,000 in fixed assets, excluding mining properties, in the case of mining, and excluding land and buildings, in the case of SSIs). It could also be lower than those limits assuming that only part of the universe of potential clients would require assistance from the guarantee fund. (e) Technical Support. Past experience in Bolivia, as - 135 - ANMEX 3-16 Page 4 of 5
well as in other countries, suggests that several private and public guarantee schemes can trace their success to the provision of adequate technical/managerial assistance which helps their clients in confronting growth problems and critical junctures. Under the proposed scheme it has been suggested to use some of the existing private institutes to ensure a sound technical supervision of the loans covered by the guarantee Fund. Furthermore, some of the first-tier funds, now under preparation (e.g. FUNDES) have included TA as an essential part of their operational procedures. (f) Resources. Initially the Guarantee Fund is expected to require about US$ 2.0 million, which can be contributed to the Fund "pari-passu" with its commitments of coverage. In principle, those funds are not necessarily required in cash since the fund way operate on the basis of contingent contributions. However, and in view of the credibility problems related to PGCP II (para 3), it has been suggested that the Fund should have its own separate assets and that at least its initial contributions should be in cash. Possible souroes for such contributions, which havo alroady boon oxploiod, inoludot direct contributians by the BCB from its own resources, contributions by BCB from IDA Credit recoveries (i.e., RIC I), contributions from the new proposed credit for the mining and industrial sectors. After implementation it is also expected that some bilateral contributAons could be forthcoming. With the initial US$2.0 million the Guarantee Fund would be in a position to cover a portfolio of about US$10.0 million. 5. ProDosed Institutional Structure. The Guarantee Fund is expeoted to operate under the aegis of the BCB, but as a separate institution with independent resouroes, assets and personnel. Its second-tier nature should allow a very lean structure, with a very reduced team of specialized and competent operators. 6. First-tier Minina Guarantee Fund. The existence of a Second-Tier Fund should stimulate the emergence of first-tier funds, but these are not expected to appear spontaneously. In the particular case of mining, the ministry of Mining has requested IDA for assistance in the creation of such a fund, and that assistance has been considered in the TA component under the proposed IDA Credit. While most of the work to be undertaken as preparation for the second-tier fund would be essential for the preparation of the first-tier mining fund, the later would require rev'ew of procedures which are specific to the sector. FONEM (Fondo taoional de Exploracion Minera), which is currently being restructured, is expected 136 - ANNEX 3-16 Page 5 of 5
to play arI important role as Pruvidar ur TA rur Llie small miners and mining cooperatives. One of the possible sources of funds f r mining fund could be the Emergency Fund (Pondo Social de Emergencia) which has received resouroes from local and foreign donors to assist in the creation of new jobs for mining workers displaoed from COHIBOL. The timing for the preparation of the mining fund has been set forth in order to coincide with the second-tier fund. ANNEX3-17 - 137 - Page l of 8
BOLIVIA
MINING SECTORREHABILITATION PROJECT Guidelines and OperatingRegulations of CreditLine
Artioulo 1. La Republica de Bolivia y la Asooitaion Internacional de oamento(All) del Banco Mundial, en fecha .... de . de 19... sl2scribieron el Convenio de Credito IDA. por un aonto de us ...... de los cualos $Us...... seran destinados para ouorir las necesidades de capital do Lr=bulju y oapital de inversion para reactivar el sector de la mineria mediana, pequena y cooperativas del sector privado.
Artioulo 2. El objetivo basioc del Programa es el de incrementar y divermifioar la produooion del sector minero a traves del finanoiamiento de proyeatoo destinadom a ls oreaoion, ampliaoion I/o modernizaoion de empresas mineras perteneoientes aI sector de la mineria medians pequena yVo ocoperativas. RRCURSOB nRL Mflt-RAMA Artioulo 3. Los reourso. del programs estaran constituidospor el aports del oredito AIP y por e1 sports local, constituidopor las oontribuoionesdo lou bonefioiario.do los subprestamos. MRNRPCIARIO& DEL PROGRAM4A Artioulo 4. Se oonsideraranelegibles, oomo sujetos de redlitos bajo eute programs, aquellas personas naturals o juridicas quo eJersan una aotividad miner. y quo, a juicio de lam ICIS: a) se *nouentron legalmento constituidas con adecuada capacidad administrativa,teonioa y financier& pars ojeoutar y operar e1 subproyeoto a ejeoutarse; b) quo havan presentado un estudio de faotibilidad toonica, economics y financiesa de au proyecto, quo domuestre ls adeouada rentabilidad del mismo. Pars efctoo del Program&, ae oonmideraran pequenas empresas mineras aquellas quo Longan aotivos fijos, exoluyendo el valor de las propiedades minera,, hasta por el equivalents de US$ 100.000. Be considersran emproeus de mineria mediana aquellas empremas qua sesn del seator privado y ouyo valor do log aotivos exoeda el indioado anteriornLente.
C_IlERTUA O PRO2RAM Artioulo 5. Los reoursos del oredito AID ostaran destinados al ftnanoiamiento de: a) aotivo. fiJos y capital de trabajo asociado a osao aotivos; b) ospital de trabajo incresental a libre, deutinado a aumento de producoion do inAstalaciones .xistentes; o) prograias de reostructuraoion tecnica y financiers an eapresoa ANNEX3-17 -138- Page 2 of 8
existentes. Los rubros a financiar bajo oada categoria seran las siguientes: u) luu luvwCuluuw wit Lv:liv6x fij.59 eiih-rimvi hinvinn do oapital importados o nacionales, nuevos y usados, asi cooo lao aquipoo, inotai3gtQnqag obras eiviles, Rrvinins d1fa ingenieria y mon4ajw du '1^ uzluaus, I&xatwLtaw&&L a V & -;. hPrrRmiAntAP; invnrsinone an laboros .nqrp pgra el deoutrrullu y pruyiLuulua do lan y?&iUiStR"5l infraestructura e instalaoiones de apoyo, tales como eaminos de anORAn, instalaoiones oleotricas. etc.; y el capital de trabajo permanents, de hasta un 30X del costo total dol subrroveeto, asocirin A In Awplnt.nflinn de los activos flioe menrionadom mas arriba. b) nl capital de trabaJo libre o inoremental inoluira ls insumos y materlas primas de origen importado o local, neosearios para incrementar la produccion do una ampresa existente. a) Ian creditos de reutt!uoturaoion, teonioa y finanoiera, astaran destinados a oubrir tanto la rstinanoiaoion de pasivos oomo la adquisicion de activos fijos v do oapital de trabajo, inoluido. en un Plawnde restruoturacion teonica y eoonomica de una empresa ouye viabilidad de largo plazo debera ser plenamente juutifi*,ada. Awtloulo d. En todo. ls ounase de importacion, los biOnes debeoan provenir de paises slegibles, de oonformidad con Ion oonzrazom de pruuwLmu dw l AIP, y no fLuwswu.l.&;. ls 6h la base de su valor CII. In el easo de lam equipos comprados localmente, oaten se finQnoiawvn oubvo la baee do au valor oxeluyendn impuestoui.d,ocompraventa a transacoion.. Rn el oaso de equipOs UmUsm,.. A ,# ; J.L.1 _ ... 6L&Ll&&i*&19 IANRpSDiORK I ontidad adena al oomprador y al vendedor, y ouys oaouihdd tsonioa sea aceptable para e1 BCB. CARAL.TEACITnnR RT.SRCtLRS%s ArtioUao 7. Los reoursos so canalisarana Ivawu wLLulu,; i L.-iI Ai law Ims6f6idi o.ns de r'adddtn Tntnumnrlnuismi(TrT9l niis hayan soao oalfoaosae y designadas oomo eseliblvu vur e1 BCB. Para e1 efoeto, el BCB sumoribira oon Ian ICIS elogibles, un oontrato do partiuipacion del oual east reglamento forma parto integral. CBTTTRRO DR LELGIBILTnADDE LAS 1=I Artioulo 8. Loa oriterios financierom y administrativom de elegibilided de las ICIS estan basados en las disposicones legales en aotual vigenoia, siendo lo minimos loe siguientes: a) Acreditar una relaoion pasivo/patrimonio, un indioe de oartera on mora, y unas provisione. y reservas para oubrtr ANNMX3-17 -139- Page 3 of 8
pouibles perdidas por prestamoo dudosos, que no exoedan los oriterios estableoido. entro el BCB y AIP. b) Law inversione. en aotivos fijoo. on ningun osso podran exoeder del valor del patrimonio neto. c) Las ICIS deberan tonor una organizacion adecuada de au Vnidad de Desarrollo, la oual dispondra del personal teonico neoemario para ouaplir racional y ofiioenteoment Ian tsreas de procesamiento. evaluacion, supervioion y seguimiento do proyeotow baJo este Progxama. d) Las ICIS deberan toner, ademas, sistemas de administracion de credito y contabilidad teonicamente adcuadoe, y una auditoria externa que sea aoeptable pars el BCB. a) Certifioacion de gus la Saposintondencia do Banoos y el BCE, han habilitado como ICT al Banco solicitante, oonforms a la Ley de Banoom. El BCB revimara periodioaments la evoluolon de Ian ICIS, de acuerdo a loa oriterina de slegibilidad antes aenoionadou y a los informem periodioos de la Superintendenois de Bancos. Cualquier modifiosoion posterior e. estas normas, sera inoorporada al presonto ReglJsuento y oomunioada a lao IrCa maedants ciroalares, CRITERI 9 DR 9RLRCCIONDR 9UfPROXICTQR Artioulo 9. Para recibir un subprestamo oon reoursos del Programa, log subproyeotoa deberan demostrar mu viabilidad toonioa y eoonomica modiante un estudlo do faotibilidadquo inoluya, a la mencs: una desoripoion detallada del subproveoto (yaoixientom, motodou de oxplotacion, posibilidadeu do aeroado, oapaoidad toonica do el a lo emprosarios, eto), y un aonJunto de proyoeoiones finanoerao (fluJo do fondos, balances, y estadom do perdida. y gananoias) quo demuestren una rontabilidad positiva del proycoto. Artioulo 10. Adioionalmento ae debera inoluir un analisis de los siguientos aBpeotom eapeoif los: a) quo los proyeotou correspondan, a la aetividades definidas en las secoionem 2.03 y 2.04 do oato Reglamento: b) quo la utiliaoion de la teonologia sea adeouada pars uns explotacion racionai o incromentar la reouperaoion y optialo. el posible aproveohamiento de lou minerales ooitenidoa en lam relaves y desmiontes; c) quo exiatan saguridades acerca do la sufioaenoia do la reservas del mineral; ANNEX 3-17 - 140 - Page 4 of 8
d) qua la WnXormaoionsobre .1 yacimiento y sobre la teonologia de explotaoion, permitan juzgar los posibles efootos, go'logicos y ambientales, derivados de su operaoion;
f) quo lee instalaoiones y operaoiones de la empresa den adeouada atencion a la salud y seguridad de lo trabajadores.
Artioulo 11. En el osso de subproyeotos qua requieran reocursoo del programa para una re.structuraoion finanoiera, 1 estudio de faotibilidad debera demostrar olaramente la viabilidad teenics y financiera de largo plazo de la empreea a ser restruoturada. Dioch ostudio, ouyo costo podra inoluirse entre loa rubro8 a finanoiar por el programa, debera inoluir, ademas de los datom requeridos par& los subproyootos mencionados en lo0 artioulos prsecdenteo, a lo meno. lo siguientoo antsoodent*s: a) un plan de produocion basado en la restruoturacion toonioa de la emprema; b) un plan de ventas quo denueetre un incremento en Ion resultado. finanoiero. do la empress; o) un plan finanoiero quo inoluya todas las medidam de restruoturacion a tomar (p.ej. venta de activos ±nneoesarios, nuevos aportes de capital, restruotursoion administrativa, etc), en orden a haoer viable la *mrosa. Las evaluaoiones db tales subproyeotoa deberan inoluir el oaloulo de tasao de retorno financieram MTP) y economicsa (TRE), oalouladan usando preoios de frontera y preoai real de Ion reourSon.
T!EEMT?nIOIV ONDICIONIRS DR LOR UnRUD'RRTAWAg Attioulo 12. Los prestamos conoedido. a traves del Programa, soran otorgado. y pagadero. on monsda nacional oon clausulade gantonizionto do valor, al- tipo de oambia oficial del dolar do 10 REUU de Amerioa. Art*ulao 13. Los montom de los subprestamos no podran oxoder Ion siguientos lunites:
a) E1 monto maximo del oredito total, inoluyendo el monto del subpreatsmo, do una 1CI a un solo subprestaterio a grupo de empresas relaoionada., no podra exoeder del 2ox del patrimonic noto do la ICI (Artioulo 81 y 82 del DS. 21860). b) La deuda total del prostatarlo. inoluyendo el monto del subprestamo, no podra excoeder.do1.5 vaces au patrimonio muditado. a) Ningun subprestmao financiara mas del BOX del oosto total del proyeoto. d) 21 monto maxima do l10 oreditoasen pequena minoria, no podra exoeder de US$ 100,000 por empress a grupo de emprosas relaoionadas entre si. - 141 - ANNE 3-17 Paige 5 of 8
a) En el caso de subprostamos de reconversion a mediana aineria, loa monton maximos no podran exceder los US$ 500.000, y lo1 subprestamos deberan contar con la aprobaoion previa de ATP (Banco Mundial) antes del desembolso del BCB a la ICI. Artioulo 14. La tasa de interes anual efeotiva para las ICIS sera igual a la tasa quo periodioamente establezoa el BCB y que an la actualidad as LIBOR + 1. la quo se mantendra durante e1 periodo do amortizacion del subprestamo. E1 BCB hara conocer a las ICIS v estas a los subprsstatarios, las tasas LIBOR correspond iontes. La tama ofeotiva para el subprestatario seva Is oobrada pot el BCB, ass un maximao de oinoo puntos poroentuales por ano. El monto quo exceda a la LIBOR sesra libremento negooiado y pactado entre las ICIS y loa subprestatarios,con la unios restriocionde quo sea inferior a winco puntos poroentualesanuales. La tasa de interes anual etfotiva al subprestatario,inoluira todor low cobros, rocargos, oomisionesy avales por cualquier oonoepto o oualquier otra aoolon quo resultare en bensfioiode la ICI. Para todo refinanciamientocon reoursos del Programa, lam ICIS indloaran explioitamente,en 10 dooumentos de prestamo con lo subprostatArio,,1 tasa fefotivade interes anual. Artioulo 15. 31 plaza de loa subprestaao.estara do acuerdo a lo requerimiontos de oada subproyeoto. Para los subprestamou destinadom a activos fijos, el plaza maxiao sera do 10 anos, quo podran incluir un plazo do gracid de hasta 3 anos. Paras lo subpi'utsaas do oapital de trabajo. .1 p1820 maxiMo sera de auatro anos, inoluyendo hasta I ano de gracis. SERVICIO fliLAS QEIIDAB .Artioulo 18. Las amortisaoiones y .l pago do interomes se efootuaran on poriodos someotralso o anuales, dr scuordo a lo quo oonvonfgan lam ICIS oon loa subprestatarios y quo eats detallado en el dcoumento "Reconooimiento do Douda y Promoma de Pago". (Apendioe 2 del Contrato do Participaoion). Los reoursom otorgadoo a las ICIS para lo subprestatarios, soran do ouenta y riesgo exclusivede las ICIS y, on las foohas de venoimiento do los plazow, el BCB dobitara el imports oorrospondiente an la cuenta oorriSenteo enoajo legal do las ICIS. El BCS no reprograma.r ostas operaCiones por ningun motivo. Aitioulo 17. Los subprestatariow podran ofeotuar pagom antioipadou, parciales y/o totailess sin ponalidad o roaargo alguno. Los pagos antioipados efootuados, deberan ser - 142 - ANNEX3-17 Page 6 of 8
notificados al BCB, por las ICIS, en un plazo maximo de 48 horas do haborse ofeotuado el mismo. Los pagos antioipado. parciales so8 splioables a las ultimas ouotas.
Aitioulo 18. E1 BCB desembolsara los fondos del Programa a lan ICIS, uns vez qua estas hayan aprobado el oredito y remitida toda la dooumentaoion requerida, para que los fondo., a mu vex, sean trzaupaados a ls subprostatarios finales an un plazo no mayor a 2 dias habiles. TRamTTACTIG1BE LO% stJBpRISr'AHo Artioulo 19. Para la tramitacion de los subprestamos ae aplioara el siguiente procedimiento: a) Una vez quo la ICI aprusbe el subprestamo, en l10 diferentes niveles e instanciae quo establezoan sue reglamentos do credito, solicitaran a la Gerencia de Domarrollo del BC8 sodisnte oarta. oon las firmas autorizadas respeotivas,el desembolsode lo0 recursos del Progranm adjuntando: 1) Formulario de solicitudal BCB; 2) Documento de Reconocimientode Deuda y promosa de pago; 3) Eetudic de factibilidadq4n incluva un flujo de fondom proyeoatado,por .l periodo del oredito, sin inoluir e incluyondo lo reoursom del subrrestamo. b) Dentro do' termino do treinta (30) dias oalendarioa partir del do8ambolso, las ICIS doberan enviar a la Gerencia de Dosarrollo del BCS, loo siguiontesdocumento. relaoionadoual subprostatarioy al subproetamo,bajo riesgo de reversionen camo de incumplimiento: 1) Copia do dooumentoprobatarlo do traspaso do la recurmas al subprestatario; 2) Detalle do gastos y sum oarreopondientesfaoturas oon RUC do todam las compras de capital do trabajo y de inversion quo se realizaton con el oredito, oorrespondiente&I tieapo tranuourridadeeds el momento del demssbolso hasta la fooha. 3) Formulario estadistioo del BCBs el cual se adjunta al presents reglamento. a) Una vez concluidoel plan do inversiones,pero en todo caso on un plazo no superior a 180 dias despuos del desembol.o, so enviara al BCB oapia de la documentaoiondo desoargo de loa fondos provistos par el prograna. ORIAGIngRSY HRRSTICCTONKSPARA LOS ICT. X LnOS UBPRSSTATARIOR Artioulo 20. En aplioacion al artioulo t.48de la Ley General de Banoos del 11 do Julio de 1928, las ICIo estan prohibida.de otorgar creditoa oon reoursos del PROGRAMA, a sue proplos funcionariosa empleadom,dirootores o asse.res. - 143 - ANNEX 3-17 Page7 of 8
Artioulo 21. En todom lou contrato.de prestamos quo otorgue la ICI oon cargo al Programa,deberan incluirso,por lo menos, las sigipienteooondiciones: a) El oompro§isadel bensfioiariodo quo ls bienes y servioios qua ae finanoiencon el oredito se utilizaran oxolusivamente en la eJeouioon del respeotivoproyeVto. b) El dereoho del Gobierno de la Republica de Bolivia, a del BCB o la ICI, en mu oamo, y de la AIP, a examinar los bienes, loa lugareo, las trabajom y las oonstruooionesdel rospeotivo proyeoto; o) La obligociondo proporcionartodas las informacionesque la ICI o el BCB solioiten al bonsfioiario con respecto al proymeto y a mu situaciori financiera; d) E1 dersoho do la IC! o el BCB a aumpender loa desembolsoo del oredito 9i el benofioiario no oumple con muS obligaciones. e) 21 oomprominodel beneficisriade quo tomara todas lag medides quo mean neoesariampara quo tods la compra de bienes para el proyeato, se haga a un costo razonableque sera goneralmente e1 prooio mas bsj- del moroado, tomando en cuenta factores de calidad, eficienoiay otros quo sean del oame. rars compras quo exoeden de US$ 25.000 el subprestatariotendria que preomentarovidenoias de quo has rocibido a lo mono. tres (8) ofertas de preoio de vario5 muministradores. f) La oonutituoionpor parte del bonefioiariade garantiam opeciftoeas sutaicentesen favor de la ICI. g) B1 aompromimodel boneficiariode asegurar v mantener el meguro do loe biones qua garantieon el oredito oontra loo zioagos y on low valorem quo as aooutumbran en el Seotor, dentro de las posibilidados quo existen en sl pais. RKGis'rRV CONTROL Attioula 22. El programa sera registrado contablemento por el BCa an ouentss moparadas pars oada ICI partioipante. A eate ofeoto lam ICIS deberan: a) Proporoionar monsualmento al BCB, hasta el dia S de cada &e., un ostado colocaciones y recuperaciones del programas. b) Efootuar oonoilisoiones mensualso de saldos oon el ECS. Artioulo 23. Las ICle deberan prosentar a la Gerencia de Desarrollo del BCB, memestralmente, el flujo de fondom efootivo del semestre anterior aoumulado haita l fcohs de prosontacion. 144 ~~~~~AN=KJ3-17 - 144 - Page 8of 8
Artioulo 24. l BCEBse reserve el desoho d: supervi8ar on la ftoha y forma qu osttime convenisnto, la oorroota apllcion de los reoursou de oonfornidad a lo dispuesto an el presents Reglamento y el Artioulo 89 del D.S. 21880. evR =lB U rEnNn Artioulo 25. 91 BCB realizara la reversion de un oredito otorgado oan reouruos del PROGRAMA, cuando se verifiquo oualquiera do lam miguientos infraoolones: a) Cuando las inmtituoiones orediticias intersediarias hubiesen Iasignado reouroos a seotores *empro8as y/o propositos distlntom al obJeto del programs. b) Cuando Ice subprsutatario.no hubiesen oumplido oon todo lo establecido en el presents Reglatsento, o hubiesen deeviado fondos para otros propositoo distinto. a la satipulado an el Contrato de Participaclon y en sate Reglamento. Las reversiones de los sontos mal utiliaados seran efeotuadas una vez quo el BCE hubisre detectado aualquiera de Ian anteriores infraooiones, y devengaran la tass comerolal aotiva de interes de Is ICI infraotora, a la tama oomercial active promedio del mistema finanoero, meleooionando de entre setas la mas slovads vigents al momenta del cobra, aplioada al manto mal utllizado deude, el momento dol desembolso. Si la infraoclon tuere do la ICd, la tsas activa quo se Is oobre, no debera ner tramfetrids al subprestatario. - 145 - ANNEX4-1
BO0LIVIA MININGSECTOR REHABILITATION PMJECT Sumary of Flve Year Prosram (USI million)
X S of Total ForelTn Local Total Forelso Base Cost A. COMIBOL 1. Upgradingof Miningand Plant Facilities Oruro 16.1 18.6 26.9 62 21 Quechine 6.7 4.1 9.6 58 7 La Paz 9.6 9.4 19.0 51 14 Potosl 4.9 8.88 .7 57 6 Corporate Officeand Service Facilities 2.8 1.6 4.4 64 8 Subtotal B8.1 82.7 70.6 64 51 2. Training Program 1.t 0.5 2.1 e8 2 8. Organizational and Managerial Strengthening 2.9 1.4 4.8 67 8 4. Joint Venture Promotion .68 7.2 12.6 44 9 Subtotal 48.4 41.6 90.0 54 e6 B. Institutional Strengthening MUm 2.1 0.8 2.4 so 2 GEOBOL 7.8 6.4 18.7 68 10 1DM 1.6 8.4 6.2 85 4 CadastralService 8.4 4.8 7.7 44 6 BAMIN 0.4 0.1 0.5 70 0 Subtotal 15.0 14.6 29.6 50 21 C. Creditto Private Mins andCooperativee '4.0 6.0 20.0 70 14 Total Project Base Cost 77.4 62.8 189.6 66 100 PhysicalContingencies 4.0 8.4 7.4 54 6 PriceContingencies 2.8 2.0 4.8 54 8 Total Project Cost 68.7 67.6 161.2 65 108 - - m N-,~ ~~ ~ ~ ~ ~ ~ ~ ~~~gako f oa$It.tn mm~~~~~~~~~~~~~~los'o
is" 111113Total190 1991 19112Is" 19 1"I m IM Ttal Fr.Exahd o Totals [md loW INESTPENIcosis~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~lsi00
A. wimmi~~~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~~~~- a.0us E"IPENI 2~~1982.890 19916 19920 6199Tot33 99 3190 19921 13992 1993 Toa For. Ea33chTazei . faes Sot "Ms m~~~~~.5::s:: IOss:: :5:::s9: :25: 2:s:: :5::::5:: ::5 5 2.5535 GM:35::5:.:1 219::: 25:.19
GEOLOGY 2.103 2,156 2.102 2,2919 2.299 10.959 2.313 2.369 2.389 2.107 2,899 12.803 .1.041 6. 02 I. 2* 12.303 So-fatoal NuI8hII 3.4V7.105 3,284 3.479 2.913 20. 193 3.771 7,871 3.110 4.09? 3.653 23.009 12.06 17.618 3.32? 23.009 B, SuNJOSE (OUIPIIENI 220 174A 239 50S 152 1,690 242 636 272 191 W8S 1.930 1.49 - 431 1.920 101S 705 616 136 144 - 1.641 7M 727 151 170 1.827 548 1.096s 183 1.821 NA11L*15L 94.,218 - 371 102 308 - 410 311 - 91 410 STUDIES .4 200 - - - 200 - 202 -202 iII s0 WI2 6(01007 661 616 S80 185 609 3.051 727 683 619 689 743 3.101 1,400 1.710 350 3.50 Ssh-lotel SANJOSE 1,679 2.323 95S 1.234 761 6.913 1.84? 2.151 1.086 1.453 928 7.869 3.913 2.897 1.019 7.86e C. P0090
EOUIPUENI 18 7 . . 115 .63 63 - . - 127 97 - 29 127Cy NATERIALS 20 61 - elS 22 68 so8 69 - 21 a GEOLOGY 341 2015 - 546 375 227 - 602 241 301 so 602 STUDIES - so - 5so so5 so 38 13 so5
Sub-TotaP00P0 418 373 - - 791 460 409 . 6 444 314 too 88 D. SANIAFE
EtUIPIIENT 174 31 209 192 39 -230 176 54 230 NUsS a 8a Is 9 9 - . - Is S 2 la 11TERMS1 lie - Ila-1 130 130 I39 130 GEOLOGY 394 - - - 394 433 .-- - 433 173 21? 43 433
Soft-TotalSuva 11 694 43 - - 13 763 48 all-81 414 227 130 sit E. 011199NETAL. PLANT
NAfTIBALs 19 s8 117 -234 59 19 121 - 239 164 94 239I 5thi-total0O1URO RETAIL. PLANT 59 58 II? - 234 S9 59 121 - 239 184 54 239I" loW* INVESININICOStS L.281 9.903 4.33? 4.714 3.673 28.9091 6.904 10.944 4.917 5,110 4.481 32.7?97 17.061 11. 055 4,680 32.7?97 total 6.281 9.903 4.337 4.714 3. 673 28.909 6.904 10.11444.911 1.510 4.481 32.797 17.061 11,055 4,680 32. 97 zzzz=at; -52 55555? nz:5" 5fl-22 =55:32 *53fl. fl5.2 =5*5fl 232fls :32555t Z.:5?35::: 555:55: s::::::: :235:: frtse-y 10. 1989 18:S7 tosedem.of Ttatls loimo. Cons 0155 I 00 We.1 Is- ctIiAdifagCoanto mumiss ...... sall Cots. in $ (us$ loom1 to"aI ...... * ...... (Ec ld. uso 8 *09 *9 9* I*9OM*9 1990981111989 199 1o totalOm1s l "99 T l Fo. (scSi. Taws) loans total
I. liUWSIUUT8951
igmimust 1.038 701 920 77 14% 2.682 1.142 778 9.064b 90 177 3.234 2.491 738 3.234 UTEEIALS 164 469 613 l*0 S42 - 72 f51 - IS 722 619006? *20 9*4 1.0On 1.066 t. 012 4.147 143 1.0*3 1.161. 5,211 235 4.8*1 1.924 2,405 481 4.8*1 1198115 so - So So * - SO 38 13 so SoMVICENIE *382 2. 106 1.941 I. 43 I. II? 7.132 I.SIS 2.333 2,211 I. 345 1.412 G.6*7 56.013 2.418 1.388 6.6*7 s.M1.h-ola tkvasi AT 664 189199011 603 -' 603 164 - 6 Sol 6E9066? U8 *4% *93 S3 *65 2*3 Is *07 21 213 .... - -9 1198115 . 10~~...... 9... 9...... SM-Ioal1*1 *19S 70* 141 846 678 169 "92 630 fie III 927 C.CMoaoqu
E9819663 31 31 39 . - 39 so 9 39 66*119161 2% I? l0t 27 6% 112 8 28 9*2 619066 136 *35 272 ISO *1* - 00 *20 ISO 30 300 1168*15 too *0 lot - o*0 76 21 got0 a Ssbilltal cIlStOS *96i 313 - 10 216 336 - 12 3*1 fig 85 152 0. MIN"6 619006 423 - 423 465 461 IN0 233 47 461 . 5190115 IGO I6O *6* 161 III 40 let Stol-Total MIMS6 123 *60 13% 461 161 - .2707 273 47 621
STUDIES *21 121 926 . 26 04 31 126 Sioll-otol Mull 121 In*% 12 6 12 3 I9 - 28 total 1198516601COSTS 2.702 2.848 1.941 1.143 1.151 9.796 2.It' ,3.116 2.211 1.341 1.412 *1.049 E.311 3.0*7 96.676 *1.049 I5.&-: 222..5 :. 22-'. --.. II v... .f... .. 25.51 . . .58 fl .... 88 t ...882228588 .88288 58822S... 8588"2 2.8481 1.945 1.143 1. IS? 9.796 2.983 3.118 2.2*1 1.341 1.412 11.049 6,316 3.0*7 1.616 *5.049 total 2.702 885.88 582225 128285Ss82l -l.,2 281 --..5:. . ;:...A1:718 2582*388 28-2528- 2888585252-22
I 1eiryI.*989 isS1
2'.~~~~~~~~~~~~~~~~~~
.22~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~t Table S. LA Mt1II ASU?MV ntal led C a Table
0r.aI of total Inel. Cont tt# '.oo lotals Including Contngnl" -- . .-..... 1USs 0001 tocal ease Costs in S Dutios ...... ----- .... -.--.-- ..... lEscl. A teomTotal 1989 1990 1991 IM 1993 lotal 1989 1990 1291 tW2 13 Total for. Ec lenm
1. INUSI;E4T cosis ...... A. COtlUIRI 2.572 - *78 3.350 1.2M9 1.743 - 3.033 1.418 1,932 3.350 EOUlPEU4T 2.353 1.313 540 2.353 - 2. 124 2.124 2.353 MIE RIALS 2,991 3.739 748 7,478 1 043 1.3e2 1.377 1. 349 1.349 6. 00 1. 147 1.532 1. 565 1,588 . 64b 1.478 610106 20 7 - 27 27 * - 27 27 27 STUDIES 2.449 734 1.48 245 2.446 "MS 2. 132 91 2.223 2.349 l0t 1,955 1.,88 1.546 15.655 8.130 5.213 2,311 15,655 SAr-lol.l CO011191 4.464 9.36? 1.371 1.349 1.349 13.906 4.911t ,945 8. C*RA1OlS Sll 393 * s11Sll EfoulpEwI * 461 . 461 91 262 202 * 60 252 MIERuItS - 236 - - - 236 262 714 741 722 3,410 1.364 1.709 341 3,410 M(0t= 459 659 628 62m 592 2.965 503 730 - S0 38 13 - SO SlUDitS - 50 - - - 50 - SO * 92 IU? - 209 63 125 21 209 47 142 - - - 189 ...... 110RIS ...... I...... 714 741 722 4.442 2.0t 9 1,843 S39 4.442 S%6-lotal C61COtES 504 1.548 628 629 s92 3.901 994 1.711 C. 91t9c0 SS 239 * 215 - - 215 239 * - 239 184 Itl£RatS MII 1.113 197 131 131 980 339 238 224 194 160 1.113 445 956 601015T 308 213 ...... 629 996 166 1.302 a 308 428 197 131 131 1, 19 339 475 724 PA 160 1.392 Sib-total 931080 ...... , ...... ~~~~~~~~~~~~~~~~~~~~~~~~. 10.819 7.6l; 3.016 21.448 5,276 7.343 2.202 2.109 2,072 19.003 5.804 0.130 2.503 2.483 2.528 21.448 totol IUVSIHEII COSIS :: .:SSfl ttn:: n:::n:S:: *::z:: 822:2::: tS:S::; :::$ :5:: :::: :::::: 5:::n :: ::::: K::.:: S:5:5:: 5:::; . . 8.130 2,503 2.483 2.528 21.448 10,819 7.613 3.016 21.446 5.276 7.343 2.202 2.19 2.072 19,003 9.804 .. |.X... total . ,...... ; .... 2 :,aS...... a2:: ,,ls* cas.,. .. ,,5, , , ,s:: , 2..:: 5:8t:: K,, , a:.: ...... :: : fdfrwary to. 19891118 s7
0I1
4P- MatM
ctol led
Eroamloomof lotal$ lol. Cant USI 0001 lots Is Inc luding echo ISf m ...... Usia Cost In S bUSs c000ol Locl ...... -. -* ...... - -It . . . - - . . l Duties a 1989 19 1991 1992 1993 tool 1989 1990 1991 1992 1993 Total for. Lxch ltagga tarn Total ,aG::. a::.. Ia. ::, ,, 51:: CS2 . :, 8,:: .. . ' ., :..: :,,t .: !::: t,:a:a&g: ;tfl-*Bt:sz- *-s8 :.:..:S 58* Sllt:
1. ImusImt costs ......
EIU9lNIPI 314 1.042 72 609 49% 2.592 412 I. ISS 82 71t 603 2.969 2,307 - 662 2.960 NAtIRISIS 84 650 416 . 1,152 92 721 475 1.288 .99S 293 1,288 EOllGT 1.055 938 1.045 975 651 4.664 1, Ibl 1,040 1.18 1.148 794 5.330 2.132 2,66b 533 5.330 StIIDIIS lo1 25 135 110 25 13% 101 34 - 135 "Ms 32 91 123 3% lot 136 41 82 14 135 Sati-lotal tIJFIIC* 1.655 2. 747 1. 35 1. SU 1, 146 S. b6 1.610 3. 041 1. 74b 1. 56 1,398 9. 858 5.576 2.760 1,502 9.868 total IUMS1NUIf coIsS 1.666 2.74n 1.;36 1.584 1. 146 8 666 1.810 3.041 1.74T 1.65 1,398 9.856 . 576 2.78e0 1.62 9.8i8 ,:: . ;:- --. L.. ; -- ...... : :-.- -:- -.... I.-I:: .. :.:. :.. .:.:.:::...... : .:::% totatl 1.565 2. 147 1,535 1.584 1.146 8.665 1.810 3.041 1,745 1.866 1.398 9.8568 5.56 2,780 1.602 9.858 -S:::: ::.::S a-:.a :2:: - :: :::a -:-:: I :::. : .:- .. .. ::. Z.-:: s:::.: :-:. 2:::-a ::::.- a.::::;t: ::
...... ~~~~...... lruat' t10. 198Y 18 b7
%01 Table S. ~U W0
Breakdown of total mnel. Cant muS 0031 108,Including Conti: is ...... tocal Bass Costs lot $ is. 10001 lot.t For'. litch. tazelttes lse Total 1969 1990 1291 1992 1993 fatal 19M 1990 1991 1992 1993
I. IUiSIEUI Eosis A. w1OQuMflfl 393 393 303 90 393 - 394 M9 14 99 I1801N1 93 14 49 so9 45 miTtuiAts 13 40 104 4912 406 14 437 - 492 348 Sub-total lt188qmiUs 13 39 S. 00161640 669 531 194 66n 9 330 12479S66 603 10 369 140 69 80 IWIpUSU so Go 92 is so 49 . fiat It 19100 milikiAts ~~Is 190- 190 76 99 i 113 113 143 24 239 010t03 213 S log6126 - 239 72 VM9S 9 9711 M 212 I. 162 1.051 223 923 267 69 60 I. 162 131 232 Se-total PUIACMO 203 472 239 79 66 C. BIG Vonl - 219 941 471 470 - - 941 722 426 424 - 62 90 699 EOOiUUiU 613 22 M7 699 210 940 NMS 20 610 940 309 1.641 .66S 694 1.145 - -1.641 092 Seji-lotel RIO TIM 631 1.03 - 0. or=1 IND. PLUl . 231 Its 92 231 2? 64494 206 30 94 107 46 EWIlpnhU 12 39 46 35 - I WAtERItAS 10 31 .42 277 214 63 277 - 24? 42 126 107 Sub-tatal 03111 119. 91891 36 1 6 94 E. 6699669 30 23 6 30 - 30 30 5199)15 s0 30 30 0- 30 23 6a Sub-TotalOCONOO - 30 - F. 697*11 - 249 63 S"33 - 330 tOO 232 332 SIUoU.1 100 230 - 3 330 tOO 232 332 249 63 Skib-fot.t 1*1691 100 230 - 49 49 49 45 34 11 StUlIES 49 it - 49 49 45 - - 934 Smb-tot.0l 3*EUOSE - 49 I"6 699 967 321 332 - - 699 910 £OuipoEIF 20 29 149 699 67 321 332 699 910 t91l989. PROTECTION 29 29 Sib-Total 860 637 4.6SIT 66 4.363 1.073 2.6SU 109 so s 4,6$1? 3.099 Total IUVISIfEUI COSTS 695 2.616 621 1S n60 631 4.611 66 4.363 1.013 2.6619 705' 62 60 4.61? 3.099 total 989 2.616 621 I9
lbtv'10. 198 la: 9? MI= 0111111mmmain.ITAT in.mr inlede. wmb met
(usll IOm lotels lnc*iuIm'tg Conitifgoacles ...... I...... btes Costs in S fuss$ '00* tote I Ha8 19g9 1901 *992 *993 loWa 1989 199 199*1 1992 1993 total for. lack~ temeI Tu.s 1.ot ....338 .lns8..s. S.,S. 81. . . 8.. 81181888S. 888.8&88 .1888 ...... 83888
PMaS A1 410 -00 104- - w10so0b 20 300 10 Pon 56 .n 1.0 000 200ON 1000 *.000 2.000 60 *.000 200 L.000 lab-total 98919*1 1181t11011 M 1.4W *.000 2'" s0o1 I 410 I. 000 2,100 *.000 1.200 200 2. S" S. SKCuIICEVtiwawrOuS
STUDIES 10 10*01 s0 10s1 21 *00 8XPtO*IOU - BONO3,200 4.000 a"0 3,200 4.000 1.G" 2.000 400 4.0001 Sti-Total PUL*CA19 so 690 J.200 4.100 so 010 3.900 4.100 1.6GIs 2.021 400 4.100 2. 11 ASIENTO STUDIES 29 2I to1 A1 29 t0 38 13 10 £391091IS No0 so0 000 00 s 00 - 1.000P 400 10 100 1.000 kb-oglt 5191 29 12 N00 1.01o A9 129 %00 1.09 438 si too 1.010 S. C169 RICO 90*95*
STUlIES 10 o1 *00 10 10 too is 21 . 00 EZdtOMIIU - 1.o .0003 4.000 * 000 39000 4,000 1.000 2.00 400 4.000 Sib-lolal 19M RICO9Pot0si SO 1.0no 3.000 4.*00 s0 *.090 3.000 4*100 1. 671 2.021 400 4,100 4. SO tOUiO011 1*0
kb6-Total SPICIFIC &W*tuhi*AIS *29 2.10 0.G,700 9.329 *29 2.10 1,tb700 9 329 3.844 4.518 900 9.321 C. PM$* la00 400 400 .000 200 400 400 1.000 I'1o 210 *000 foist IUVESIEUI 10S11 371 4.310 G.10too*2. 82 371 4.31M .100 12.021 S $9.4 L6.12I 1.100 12,6821 88.8...... w .. 64-ce..8 5 .f'la8 -. 8S8L I.t.t31 .1 8.100 *2.67% 371 4."110 . *00 *2.62S",1 14 6.131 1.100 *2.62n
... 8.81.*~~~~~ .. ~~ 88...... ~~~......
10.~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~0
r4 0.6611.4~ ~ ~ ~ ~ba Tbl~~~~11 tir t lotelt lfel. o 6ioahltn ef IrcleOm Ca-- foist Including e...... ees...... --
...... Out Total ,:, ...... s:...... ,:...... 19910 19911 199 1993 total Toe. SudIl 14480 Tave 1989 1290 1991 199121993 total 198 . . a..: 5sss sasS.: t.S...:...... :...... n .5.. *5x.
a. Sugsaur costs
...... 248 2%7? 133 7SS 7 No w 120 240 240 120 720 121 IUAlIUI 290 446 343 311 1.494 . I.10 33 1.-4 lmisiwlt Is O0m1,1 104 288 432 120 280 1.424 104 411 694 899 444 2.252 1.879 373 2.22 Sub'talal 1881316 lOt 408 672 560 400 2.144 104 SIKUSIUZUSG a. Us1zi1tt...... ,,_... . 1. IWtUiCl ISSISIICI ...... 274 * 2.737 * 1.141 1.341 2.62 - 1. 351 1 38 2.?37 2.483 1l01-lSI6 USO15stNil 110 4 St - 1S0 - 2M0 210 s00 292 275 ...... SU0-lt9I WcSSItiImiS ...... 2.922 321 * 3.24? - 1.191 1. 9t 3,182 1.603 1.644 3.24? -Total t ICNIU tI 8SSISIU 442 1.067 - 1.081 - S.al 426 428 1.010 214 431 ...... 2. S8991(UliS 214 ...... 2.066 * 4.334 2.22 1.412 4.334 214 2.019 2.019 4.257 214 2,034 ...... Si-iotal 11*I0I*It SinSWWlUlIN ..... fl .. *t ...... 5...... 8...... u SSSCfl .assIS .85. .. 55 .8 ... l . .
400 6.396 318 2441 2.4t 1 19S 444 6187 4.601 1.186 - 6.8 318 2.427 2.691 560 55..... total INKStNial COSIS . 2s52t -t1B etas .$s&$S .ltStsS8 .t5:f -seSft. fitS :25*5. f*S:* :stsx.. :. ... l- : 558 85 :::
_...... Sasury IS. 19689 18.I?
IoIemt TleS. NDIDQ SEO iNomabeNor,
9i.rakdoauiof total, ltmcl Can~t (US$I0001 lotalsIncluding Conti ugu ous ------Ross Costsin I IUs$ '@00) Coco, 195'i 1990 1991 1992 1993 lbtd l1489 1990 1091 IM9 199 lotal lot,.Itch lose,) loses latal
I. lUVlStEINI costs A. 11115519of MININGAND0 NlTt*t&RGT 1. LOWtPNIICI
COMPUTERS 236 6 6 6 6 26) 259 7 I a a 2819 221 68 826 Of111: (ouIpNiMI 65 . . . 72 . 2 93 I? 72 Siwb-lots)IQUIPIIII 301 6 1 6 6 327 jil I 7 a a 361 216 68 181 2.lBPAIUING 28 28 28 281 20 :20 28 28 26 27 22 128 100 28 128 J. IPtRIlS 110 360 360 280 240 1.98 710?I 363 37? 300 266 2.011 1,610 20) 2.011 SubIbttalNIINISIR? Of NIulIrGASO NttAIUsRGn 1.036 39) 391 III 268 2.397 lOb6 395 408 334 296 2.496 2.155 228 88 2.495 o. 1:80*511*1SIBvicIs I. IOUIPIENI SURVIVING fOlIfl'WI 'IIt? 462 71 it 28 1.1,14 1.0ONO 446 as8 90 93 1.796 1.381 616 I1.796 711111:118 628 128 2b ?b 2% b17 4641 1104 29 30 3)1 7% 876 fib IS2 011)11 208 206 230 230 Ml - 83 230
Sib-totalIQjIpIICN1 1.407 768 103 10? 101 2.499 1.MO8670 III 120 123 2.779 2,136 - 643 2,779I- 2. hRINIING 43
TRAINING*8UO* - 90 88 - 78 93 91 164 164 1543 FRA11MIGIN SOLIVIA 40 40 40 40 40 200 40 60 41 43 44 209 . 209 209 Sib totalTRAINING 40 40 130 128 40 378 40 40 134 134 44 303 894 209 393 3 &RP?RIS FM IGN EXPEIRS 440 300 300 Igo Igo 1.400 440 302 310 193 20 1.449 1. "a 144 1.448 LOc*CAIp&Rls 20 20 20 20 20 199 20 20 21 21 22 104 - 04 104 Sib-total EXPERIS 460 320 320 200 200 1.800 460 322 331 2)4 22 1.840 1. 300 249 1.849 4 PSGS*NSCOSTS 7S0 780 8,00 SOO 800 3.000 780 786 sit 838 888 3,112 -2.601 311 3.112 8 SUPPIINIlIs 82 b2 82 82 1111 l08 4? 6 64 SI) 64 3)9 its 319 Sibpftal. C*0*Sl60 81171C1S 2.719 I, 987 I. ll " ay"98 11 . (Ono 2.8so 2.08) I. 163 1.070 I. 008 LISP8 3.520 3.586 984 S. II2
~~:::::...... 2~~~~ . 332 . 33=~. lR ...... : .n:.. 3 S 33 fatal 3.M8 2.349 1.8508 1.300 5.166 10.075 3. 925 2. 446 1.568 1,404 1.304 10.648 8 808 3,804 I. 039 10.548 tebrnery 10. 1969 18:SIP?
h-a ~~~~~m- wm ~ ~~~~~~a"dm fltasIesCn
6111 0010D
ease cosls VN~S fuss5 l0c0) ocaI 1989 6990 99 199I 2 193 T01*1 1989 1990 1991 199 1993 total for. Emich.haloe Im late, lo. lint Cs - ...... ; .fs t: tS8StS *1;::p .3*.z...... a:, t I. IWVES?N8Ul6951$ *. INUISISUCIIIM
I. coIEIc*1 1*80981911 200 200 400 220 222 442 309 07 75 442 2 OEOPIIISICAIUIIISHP %(l %o 00 fit 46 9 5 3. OJFIlCA OINS191 LOUIPI6(1 so 00 00 - 0 46 9 Ss 4. VIIEiciZs no SPIRES 209 63 13 13 13 261 230 14 Is Is is 290 222 - ? 29 sul-lotolI lURf&SIRICIURt bOO 213 13 13 13 101 560 236 lb is IS 842 623 01 161 6. SPICIFICPIOJEICS 842
0691066CMk011P SNIEEIS 380 255 255 200 ?25 1.400 380 207 263 213 283 1.456 116 1.340 1.455 VIE6I1L&S.PAP StEIEP89OJECI 325 - 320 360 - - 360 2fl 83 390 061**1 am0s 30 30 30 30 200 80 30 31 32 33 201 62 145 20? INEUIIAICNAPS 200 is is 16 70 000 700 16 7? s0 83 Si? 12 PKCIO01S 444 so? 8(1*65. LPIINI8NI OEP0SJIS laOso so go 0s 60 000 a@0 SI 83 86 89 St8 114 004 S18 01961 P86(1011alai1 OlPOSlis 2)4 634 134 114 134 7%10 764 635 638 143 649 180 III 683 180o P116116060o otpaslis 190 140 640 140 140 no0 190 141 640 608 605 318 88 690 ?18I MPIECJIAU $111110 t90 140 140 140 140 no0 190 146 145 ISO M5 78) 28 492 ?181 S51618l(icD/l1IC 244 164 16* 164 664 900 244 660 169 116 182 936 122 8)4 936 M-tIotal SKICIFIC PlOJECIS 1. 618 6.343 6,018 6.066 6.068 6.075 618TI 1.385 6.052 1.090 1.129 6.334 1,250 4.M9 63 6.334 C. floHIulAi ISSISFIAC( 1. 620 $.620 6. 4)0 60 8 )0 6,10 6.2 620G 1.632 1. 40 86? 89 6.414 0.82? 84?1 0. 1*60116G 6.414 50 00 t0 - 60 - s0 52 54 - 15 124 36 E. SIIPIENINIS10 106 U' 110 I 110 6)0 620 060 lie III 114 it8 133 M85 M8 u80 P- total INVES18EN1CBSI 3. 91? 3. 335 2. 601 2. 001 1.966 13.615 3.988 3.415 2.689 2.143 2.116 14.291 7.829 6.311 244 14.391 loW, 3.91? 3.33 2.606 2. 00 6,9561 13.81Bi .C968 3.415 2.689 2.643 2. 115 14.391 7.829 6.36? 244 164.91
Fana.ry 60, 1969 IS 0?T
'ato 4
wlc~~~~~~~~~~~lsge** I"le It* t MIce ttl It 010-6 OOC't OKOCalo0001> 0eo** ooo1 ooo11 oowloNS a22 :V-98*w .Sl" 9t= usts l,Rs: for.tS. ;.2:gs ::::Tt ::'S2: STV-- S:3-22 ::::tfX -w:20 :Trsxa .1:W:= CS.. t .so ... lBK'49 - 1tip 11911 l,I-lC 9to'# C9C'4 cc$ t MIO' oec- oococ'QC 0 ' oeo-0 "O 0ooo I ooc It sism INTAISIN leot ...... -...... In'*& - scl &994 199oc gto,I agt S£t[l O001 O-* lip00-toeo-oc ooo10 o - e o-*o t oe It llo111111=11 l oec - O t OCt eoc * ooc ooc -IRN *ao "S s e I3 i m 'ev
AUM'01OWNDW elqqL ~ ~ ~ 8 0SISW3 661.0IIIIIISIDI AIuqb 'I
:5u5:s .:es,crsut: eg.. lh ,s ,n. s::, 2s4:tt,t 52?? .- ?i ftE ,.atis,*32 " f" l x I...... :.... t -:..se. ,:...... :- .... ::s - ,...... e:g:::...... awe
"lm 4000. $Sol S s *814*0 061 ...... seizvolliw Ouspnl3ul slotel leo. ISM :03aul 010o0 e0 _OO"OJ
40u ;l I; TableU.mm m.3. am maiin me
Sraakdi, of Totals lmel. tnt (us$ I ooi totals tnr Iudtag conlt46 ls ...... Base Costs in S loss l o0w0 to I - ...... - Esitel.* - -- Olwtie A I989 191 199t 1ts2m 993 total 1989 199 1991 1992 1913 total f6o. E(xie lamns tns lotoa ann:aa at...St.. c;; ;St. ::5:S::: .. S:S:.. X.:: SCS :;:$ :::: :t:::S ::: sU;tSS Sc.. tu#S.. SU..d.
1. I985s101 COSTS
...... l15tl6 EVI. lost - EoU ...... i"ePVA I lOS 26 131 11b 79 144 1O 34 144 ......
Sub-lotal 1til010tKV. INST.- IIi lOS 25 131 its 29 144 ItO 34 I" a MINING msasu nmiite - cim ...... 1. 643ItilltS UUG8IUG 435 430 - 86 479 477 955 let 5t3 to# 6 2. tlUIsasISOffICE too. 20 10 10 - 40 22 11 I - 44 I1 9 S 44 . ISUICIES so SP3hES 117 b 6 6 6 163 t5t I 7 S a 16t 1S - 42 181 4. finaRS 430 300 300 2 0 20 1.430 430 302 310 214 222 1.48 1.30 148 - 1.418 S ltUSiOUG 9 9 44 44 9 toS 9 9 45 47 tO 121 S9 24 - o2f & sUPissis 9 e0 90900o90 40 9 911 93 98o 470 - 470 - 410 1. SPttltit 9GRuf ...... CASSIEOXIE( lEl tte so 90 90 se0 450 90 91 93 96 600 470 - 470 470 IIUSIIW SIENKemal 70o 10 to- T128 to To721i 288 280 2U i0l0 mcmOWe-ISUlOS 2 132 13 2 132In 132 60 132 133 13b 141 146 -89 689 - due9 0e161-ilwiaL 90 so 90 90 450 90 99 396 loe0 410 - 4 - 470 IuItSJCEII U soe - - 6 -0 - - - 60 - 60 - o OttOUSEUICN 20 2020 20 20 too 20 2 1 21 22 1t4 104 104 ...... _...... S-lots# SfCIJIC P0ROWL" 452 402 402 402 332 2.000 462 405 415 420 38 2 D8l 2.086 - 2.01et
Si-letel Slsit INS"A=U CErtE1 - CIO .5 6.247 C52 742 637 .06 1.t643 1.302 02 9 701 5.330 1.788 3.i01 246 S.330 ...... _...... leatl IUISlEUi COSTS 1. 8 1.273 82 142 637 s 1.94 1.158 1.331 882 7 707 L.414 6.8 3.306 215 5.414 .Sc;3; .5:;; 585;a. . -:; Z.-sA ; .. .S .. ... 4z- S.-. .S:3 St;aetna *SS 46 84 S S.S Iotal .888 6.273 1652 142 53 b. 194 1.78 t 331 882 RS 707 5.474 1.891s Sol 275 S.414
. . c:. :5.: ;;.; a...... S **.4: .... l S ...... t...... t...... lebrusav 60. '9989 8 .57 t°L! a CCMMerlot
* bIk 4104 001 7.0 1 1.0* 10s*l lnr.e*g tota0l 1*t ore0lgn jo.la I lchWp Costs
1. ISVs[imlU COStS
a. tf0P6ltl 14.938 45.161 6,.s 224 1 a6l, 29.040 1S IS t.ITERIAIS MJ SIDA PARIS 3.614 I2. 30 15.919 1.b31 S. 17 6965 77 s C. 0iUs 9.446 0.ON2 In. 28 33.1020?20.S6 53. 90 39 39 e. coOSmSOLUis 4.016 31.9I 297.0? 1.613 13. 1S9 14.832 69 it I s5le01s 0.006 .010 4.029 409 1.96 10.6?? S I I. tCII0 14.400 33.640 48.00 t.e00 14.000 20.000 70 04 6. SftCO IC POGSS 24.092 2.308 26.400 0.039 962 I,t000 9 6 * CASIs. siniIa #ASSIID II Ion 2.119 71.20 0.370 663 3.020 3,904 7? I 1. SItU? SuPiPUilS S .?6 * .2A 2.38b6 * 2.366 2 lots) USEllff COSIS 149.416 M69.306 134.123 62.291 17.211 039.408 ss 000 htysmoI Conisnpmees 6.0137 9.607 17.144 3.390 4.003 7.39* 54 s Prie- C ichsee . 4.74 59.606 00.390 1,977 2.136 4.313 S4 1 botal uooCICoDSS 162.799 200.909s307.66 67.62795 .%49 ISI. 014 ss Ito
~~~~~~~~~~~~...... : ...... *.bruarp6. O96 20:24
It 0 - 158 - ANNEX4-2 Page 13 of 14
6otIVIA 8INING SECTORREHaBILIAIAION PROJECt PROJECTCOSI SUNNARY
IIOLIVIANO '0001 (USS '000I s total ...... -. ------...... I Foreign Base tocal foreign total tocal foreign lotal Exchange Costs A C£081B01
I ORURO NiUANUNI 23,033 25.431 48.463 9.597 10.596 20. 193 52 14 SAlUJOSt 8.383 8.303 16.687 3,493 3.460 6.953 so 5 POOPO 925 974 1.899 385 406 79t St I SA1A FE 779 990 1.769 325 412 737 56 I 0RUR0 NElALt.PLANT1 128 434 563 53 l8e 234 77 0 Sub-lotal OJRO 33.248 36. 132 69. 380 13.853 *s. 055 28. 909 52 21 2 QUE1CISt1. SAINVICENTl 7.944 10.614 18.588 3.310 4.422 7.732 57 6 lATasI 650 1. 382.. 2.031 271 576 846 68 1 CHOROLQUE 528 693 1.221 220 289 509 57 0 aNI8AS 7os 694 1. 399 294 289 583 so 0 I ASA 75 225 300 31 94 125 r 0 I ~~~~~~~~~~~~~~~~~~~~~...... ------Sub-lotal QUECNJSLA 9.902 13.607 23,510 4.126 5.670 9.796 . 58 7 3. LA PAZ CoGUWIeI 15.972 17.403 33.375 6.655 7.251 13.906 52 10 CARACOLES 5.001 4.36t 9.362 2.084 1.811 3.901 4? 3 ItOCO 1.530 1.339 2.869 637 558 1.195 47 5tb-lotal LA PAZ 22.503 23. 103 45.606 9,376 9.626 19.003 51 14 4. PIIOSI
UNIFICAOA 9.023 11.776 20.799 3.760 4.907 8.666 5? 6
Sth-lotal POTOSI 9.023 11.776 20.799 3.1760 4.90? 8.666 57 6 s. COIPORATEOfFICE NEAOouARTERS 225 154 978 94 314 408 77 0 RIO TURA 1.842 2. 55 3.997 768 898 1.665 54 1 PULACAYO 966 1.555 2.521 403 648 1.051 62 1 OR0UROINO PLANT 135 458 594 56 191 247 77 0 C0I0CORO 18 54 72 8 23 30 75 0 CATAVI 198 594 792 .- 83 248 330 75 0 O1RUROWAREHOUSE 27 8l 108 II 34 45 75 0 ENVIRONNtEUTALcONTROL 319 1.090 1.408 133 454 587 77 0 Sth-lotal CORPORATEOFFICE 3.730 6.741 10.471 1.554 2.809 4.363 64 3 6. JOINT VEN1UREPRO1T110N 17.355 13.425 30.780 7.231 5.594 12.825 44 9 7. cONISOLTRAINING 854 4.291 5.146 356 1.1788 2.144 83 2 8. COIIIBOLORGANIZATIONAL STREUGTHENING 3.332 6.873 10.2Q5 l.388 2.664 4.252 67 3 ------...... -- - - Sub-Total COMISOL 99.948 115.949 215.897 41.645 48.312 89.957 54 65 S. INStIlUTIOIIS
t. KIlISTRI 710 5.042 5.752 296 2. 101 2,397 U8 2 2. GEOBO0 STRUCTURAIINPROVENENT 3.395 15.182 18.578 1.415 6.326 7.741 82 a SPECIFICPROGUIUS 12.092 2.308 14.400 5.039 962 6.000 16 4 ------S'ub-Total GEOD3t 15.488 17.490 32.916 6.453 7.288 13.741 53 to 3. ION ANDCIlI ION 74 240 314 31 100 131 77? ChUM- STRUCT.IIIPROVEENTI 3.259 4.092 7.351 1.358 1.705 3.063 56 2 CINN - SPECIFIC PROGRAMS 4,800 - 4.800 2.000 - 2.000 - 1 Sub-total ION ANDCelm 6.133 4.332 12.465 3.389 1.805 5.194 35 4 4. IMININ 360 840 1.200 150 350 soo 70 a s. CA4I0TRAtSERVICE 10.379 8.0o2 t &431 4.325 3.355 7.680 44 6 ------..------.-- - .------. . .
Sah-lotal INSTITUTIONS M5.070 35.756 70.828 14.612 14.89" 29.511 so 21 C. IIIIII CR7OI tillE 14.400 33.600 48.000 6.000 14.000 20.000 1o 14 total BASEtINECOSTS 149.418 185,306 334.723 62.257 77.211 139.468 55 100 PhysicalCant ingences 8. '37 9.607 ?.744 3.390 4.003 7.393 54 , 5 Price Contamngencts 4.745 5.606 10.350 1.97n 2.336 4.313 54 3
total PROJECtCOSTS 162.29s 200.519 362.818 67.625 83.549 151.174 55 108 Febru ary.9..z t6.Xta.s .. . s1a98921:2412 txt
February 6. 1989 21: 24 - 159 - ANNME4-2 Page 14 of 14
BOLIVIA INIIGSECTOR IEHA6Iall iIUo PRJeCt Project ComonentIsby falls
toasIncl uding Cnfitpm ss flaotl In~cluin,g Cafit1l96flc 04 1811v1810 -000l WS$I 0001
1282 1990 1991 1992 1993 total 1989 1990 1991 1992 1993 total s.s.. I.I ... . .Ita,I -I. at::I . .$.SSns.2.t .tt:.:I ...... sSt.s.
IIUANUNI ~~~~~~~~~~9.069 18.899 8.904 9.833 8. 2? 5S. 922 3. 77 7.8Th 3. 710 4.097 3. S63 23.009 SANJOSE 4.432 6.132 2.809 3.488 2,22? IL8*8 1. 84? 2.6S6 1.086 1.463 928 7*89 PUP 1. 104 1180, - 2.084 460 408 - 8 hhulaof 1.832 114 - - - 1.946 783 48 all 091100161*11 PLANt 141 141 290 - 613 69 69 121 - 239 Sull.1.s 009t0 16.559 26.267 11.801 13.321 10.766 18.712 6.9204 10.944 4.91? S.660 4.481 32.1"I 2. OIIEOISLA SANVICENII 3.536 S. 600 6.306 3.229 3.389 21. 160 1.5 IS 2.333 2.211 1.346 1.412 8.81?I tAtASI 1.840 386 - - 2.22S 18? 161 - 02? CIIIIoLuE 618 807 . - 1.339 218 338 - 66S" AIIII8A 1. it? 38? 1.504 466 161 6 1 TAM1* 302 - * 128 126 Imb-total OUEOIIS1A 7.110 7.482 5.306 3.229 3.389 26.616 2.963 3. fig 2.211 1.34S 1.412 11.049 3. IA PAZ cotouIlRI 1.1.88 14.268 3.156 3.812 3.9O0 37.572 4.911 5.945 1.SO 1.US 1.645 IL .ISS CACOMLES 1.331 4.106S 1. 113 1.778 1.733 10.660 664 1.711 714 741 722 4.442 1131060 813 1.140 63? 370 384 3.244 339 476S 224 164 160 1.362 S1b-ltotl LAPAZ 13.930 12.S13 8.00? 6.960 6.015 51.476 6.804 A. 130 2.503 2.483 2.528 21.448 4. POTOSI *IFlCAOA 4.343 7.299 4.1IN 4. 41S 3.354 23.660 1.8610 3.041 1.946 1.886 1.398 9,1868 S5*-Ttatl POTOSI 4.343 7.299 4. IU 4.476 3.354 23.680 1.810 3.041 1.745 1.8966 1.396 9.8S8 S. CORPORATEOFFICE
NIEAOUAIRtERS 36 1.060 - 1.084 14 43? - -w RIO TURA* 1.6366 2.761 - 4.41? 694 1. 146 - - 1.841 PULA861A 63 1.266 840 213 193 2.836 223 623 267 89 80 1.182 ORURO0IND. PLAN? 100 307 256 - . 66 42 128 t0? - - 277 £0906030 73 . - 73 - 30 - - s3 CAIAVI 240 666 . 96 t00 232 - 332 ORURtOMAROUSE too0 log0 4S 4- EUVIIOIINEIAL£011301 ? 84 797 1.set 327 33? S"66 Sub-Total CORPORATEOFFICE 2.576 6.866 1.693 213 193 11.5600 1.093 2.862 706, 89 80 4.817 6 JOIST VENTUREP9010110 900 10.440 19.440 - - s0. 788 371 4.360, 8.100 - - 12.896 7. £011601IIaiMIUG 390 987 1.566 1.439 1.06M 6.405 104 411 694 S99 444 2.262 8. £01901 ORGANIZATIONALtSTIEKGTHEUI9* S14 4.88 6.007 - - 10.402 214 2.034 2.088 . 4.334 1*d-Total £0O1801 48.191 83.158 SS. 100 28.631 24.821 238.S12 19.246 34.898 22.982 11.232 10.342 99.380 8.INSTITUTIONIS I. pNISSTS? 2.669 946 912 802 Ill 6.992 1. 068 39 406 334 2M 2.495 2. 61080 1SIITRUCMLINPIOVNENT S. 497 4. B1t 3.928 2,6281 2.612 19.338 2. 290 2.029 1,83? 1.063 2.041 8. 06? SPECIFICP90O981 4. 196 2.570 2.836 2.131 2.82 14.962 1.148 1.021 I. 098 I. 138 1.119 6.224 S9*-Tota 060801 9.892 1.441 6.666 6.269 5.342 34.298 4.038 3.100 2.136 2. 191 2.226 14.291 S. IN MD16101
Ion 276 69 - 346 I16 29 - 144 elm1 - 5199£?. INPIVEIIEI 2.834 2.16S2 1.121 878 814 7.198 1.181 89? 461 36 339 t 2424 elm1 - SPECIFIC090O9*1 1.100 992 097 1.033 11814 1.994 462 406 416 430 368 2.081 S1b-Total 10810 £1C01 4.219 3.193 2.118 1.909 1.6SU 13. 131 1.168 1.331 882 19 70? S.414 4. WINI 1.200 - - - . 1.200 600 - o L. 648*118* SERIVICE 8.884 4.923 2.190 2.667 2.420 19.S684 2.880R 2.061 1.183 1.010 1.008 9.26*
Sub-Total INSTITUTI01S 24.534 IL SOS 12.44S 10.63? 10.170 14.191 10.222 6.877 S. 186 4.390 4. 23 3 0.013 C. MININGCREDIt LIVE 9.600 9. 672 9.919 10.276 20.846 60.114 4.000 4.030 4.123 4,282 4.436 20.881 Total PROJCTCOSTS 80. 329 199.932 17. 473 49. 450 46.638 382.816 33. 469 45. 806 32.280 20. 604 19.016 151. 174 fabruary 6. I98 21:24 - 160 -
ANNEX 4-3
BOLIVIA
HINING SECTOR REHABILITATION PROJECT
Flow Chart of Project Funding
i ~COFINANCIERS|
SLA GOB MM TA INV TR INST. STRENGTHENING
COMIBOL C L l l ~~~~~~~CRSLA TA
TA INV CENTRAL BANK TR . TA
GEOBOL | IDM4 BAMIN|TA ! I _ I I ~~~~~FINANCIAL iINTERMEDI,ARIES BAMIN
MEDIUM/SHALL HINES COOPERATIVES
TA - Technical Assistance INV - Investment TR - Training CR - Credit SLA - Subsidiary Loan Agreement - 161 -
Plebureemet Procurembnt Items Est Gi atte ProcuremnrI Ecul.mmnt ult A LID sourSouc en r A. CfMflJ 1. E-uinnt1.-airys tor a inh1a.Li.akI.WiD*raiin tin ntre
Packsme
1 Locomotives 706 706 - - 706 - - - 2. Dril l-s 1S6 1 - - 5I6 - - - . Pu 479 473 - - 479 4. Grners 408 4011 408 S. Cyclon u s80 u1 - - 188 - - - 6. winchec 866 860 - - 6do 7. Filters and Separators 273 7 - - 27 S. Flotation Celle 146 146 - - 148 - _ 9. Compreors W1 Sol - - d61 - - - 10. Jigs 140 140 - - - 140 - - 11. Shovels 476 476 - - - 476 - - 12. Tables 0D0 60 - - - 080 13. Trucks ------14. Spero Paer 847 847 - - - - 347 15. Various Smaller Packages 170 170 - - - 170 - - 18. Electr7:al Motors and a84 854 - - - 864 ElectricalEquipmnt 17. Equipmnt for Pulacayo 218 218 - - 219 - o1. Equip t for Oruro 149 149 - - 149 19. Equipnet for Rio Yura 612 612 - - 612 20 . Environ Ia Prote cton Equipnt 251-0- Subtutal 6.I6 6.860 - - 4,001 2.220 847 2. Works and Studles 21 Iuanuni 21 Mine Works 1.73S - 1,738 - 1 789 21b. Resrv-i Development 4.778 - 4,M - 4778 22 Poog 22* Reserv Development 22(b) Studies ------23 San Vicente 2(a). Rerve Development 1,208 - 1.208 - 1,208 23(b). Studiec -_ _ - 24. Tatasi 24a) * Resrve Developent 24 b) Studi- t * ______25. Chorolque Studies ------I 26. Animas Studies * ------27. Tenu Studie ------28. Colquiri 28.1 Rerve Developmnt 687 6978 697 28) .Min- Works 122 - 1 - 12 - - -2 2d c) Studies _ _ 29. Caracolr 29(v) Rerve Develoment O98 - 9Ws - 9f 29 (b )line Worvks0v 2029 - 209 29(c). Studies ------30. VilIoco Resrvec Development 278 - 278 270 81. Service Facilties Works 6S0 - 60Sao - 32. Closd mine Studies 299 - - 299 - - - 29 3e. JointVenture PromOtion 84. Exploration Works 98,10 - 8.610 - 810 - - S8t Techntcal Aei staence 14CO - L.o _ - _ La Subtotal 16.111 - 14.812 1,299 14.612 - - 12"9 . InatituttonalStrinathitnin L ~~~~1.Efimf 6. Vehicle 27 277 - - - S7. Computer, Office. Field ___= __ _* - - _ - [ ~ ~ ~~~~1,188 ~~,10- - - 27 - 908 2. Workj. TechnicalAssice and Training 80. Si). 8 ax3.Specific Project. 1.450 _1,48 - 1.456 Ob. Trasining 47 _ - 47 _ _ _ 47 89 Ministryvof Mining - - _ 89() Technical 6 wmitne56-6 40. WMN fCD14) Training 47 - -47 -- 47 41. bAIIN TechnicalAssistnce and Training _ - Subtotal 2,888 - 1,450 10.2 - - - 2,8 06A1NTOTAL 26,400 7,751 16.268 2,831 18.818 2,497 847 4,745 I~~~~~~~~ _ - - _ - - t - 162 -
ANMn 4-5 Page 1 of 1
BOLIVVIA
MINING SECTORREMABILITATION PROJECT
Projected DisbursementSchedule for IDA Credit
Semester of Projected Cumulative Cumulative IDA FY Disbursement Disbursement 2 by Semester bl Semester -- (US$ million)------
FY 90
I 2.0 2.0 6 II 4.0 6.0 17
PT 91
I 4.0 10.0 29 II 4.0 14.0 40
F. 92
I 5.0 19.0 54 II 4.0 23.0 66
FY 93
I 3.0 26.0 74 II 2.0 28.0 80
FY 94
I 3.0 31.0 89 II 2.0 33.0 94
FY 95
I 2.0 35.0 100 - 163 - ANNEX5-1 Page 1 of 8
BOLIVIA
MINING SECTOR REHABILITATIONPROJECT
Metal Markets
1. The relative importanceof differentmetals for Bolivia's export revenues has changed substantiallyover the last few years. The most importanttrends have been the continuationof the secular decline of tin and the rapid rise of gold exports, as well as the resurgenceof silver as a major export revenue earner. The principal reasons for this adjustment process were analyzed in detail in Chapter I and can be summarized as the shrinking of COMIBOLto a small number of core mines, and the rapid reaction of both medium and small mines, as well as cooperatives,to the 1985 crash of the tin market, the stabilization of the Bolivian economy, and the recovery of base metal markets. Nevertheless,on the basis of recent developmentsand projected trends, it can be safely assumed that for the next few years the principalmetal exports of Bolivia will consist of tin, zinc, silver and gold. The outlook for these commoditieshas been reviewed in a recent Bank reportl the results of which are summarized in the followingparagraphs.
Tin
2. World tin consumptiondeclined by an average of nearly 12 p.a. from 1970 through the mid 1980s, its level decreasing from about 220,000 in 1970 tpy to 201,000 tpy in 1985. As a result of production quota under the international tin agreement and a buffer stock system tin prices were kept artificially high in real terms during this period and reached a peak of more than US$16/kg (in 1985 terms) in 1979. This led to the introduction of new technology and due to less intensive use of tin--a trend illustrated in the use of thinner tin coatings for tinplate. The substitutionof aluminum cans for steel (tinplate cans) in the beverage sector also contributed to the decline in tin consumption. Additional pressure on demand resulted from the introduction of new packaging systems which have eroded the traditional market for steel cans in the food processing industry.
3. The collapse of the InternationalTin Council (ITC) in October 1985 was marked by a precipitousprice decline and, after decades of managed markets and buffer stock activities,a general concern that the emerging comyetitive environment would result in highly volatile markets. After the initial price decline, there was increased uncertaintyregarding future price trends. Some analysis expected continued declines through 1986 while other observersanticipated generally constant prices for several years. In assessing short-termprospects, a major concern involved the length of time required to eliminatethe inventorysurplus (about one year's consumption)which had emergedwhen ITC buffer stock operations ceased. In addition, the existence of pre-collapsesubsidies, royalties,
1/ Price Prospects for Major Primary Commodities;Report No. 614/88 of November, 1988. - 164 - ANNEX 5-1 Page 2 of 8 and export controls distortedoperating costs and raised questions concerning the extent of likely cost reductionsand their impact on long- term equilibriumprices.
4. Experience over the recent past indicatesthat the more dire predictionsof late-1985and early-1986were exaggerated. Tin prices have increasedmodestly since early 1986, but prices have not been volatile- -particularlywhen compared to the experienceof other major metals such as aluminum, copper, lead, zinc, and nickel. Surplus stocks still remain, but the large inventoryoverhang at the end of 1985 has been substantially reduced. Estimated stocks of tin metal amounted to about 37,000 tonnes at the end of 1988, about 12,000 tonnes above normal commercial levels. The much lower prices have led to reduced tin production and, at least temporarily,appear to have reversed the dramatic decline in tin consumption. Finally, adjusted productionquotas, as agreed by the Associationof Tin ProducingCountries, (ATPC),appear to have supported and stabilizedprices.
5. World output of tin-in-concentrateshas declinedmarkedly since 1985. The terminationof the ITC's program and lower prices have led to the cessationof smugglingwhich was a major source of tin during the early and mid-1980s. Tin output also has been constrainedby the precipitous decline of the Bolivian industry and only modest recent increasesof Brazilianproduction after several years of rapid expansion. Tin mine production,which reached a low point of 179,000 tonnes in 1987, has increased since then and is expected to reach about 193,000 tonnes by 1989 as stocks are reduced to aormal commercial levels. The reductionin tin productionand the increase in consumptionexperienced during the past several years should eliminatethe current tin surplus by 1990. Consequently,prices are expected to increase to USC925/kg in 1990 (USC610/kgin 1985 constant dollars) and to reach USC1,700/kgin 2000 (USc750/kgin 1985 constant dollars). Tin prices in real terms through the 1990s will remain far below levels typical during the pre-ITC collapse period, largely due to cost containmentand ample supplies. In the longer term, material substitutionin major markets such as tinplate and sclder is expected to continue as real tin prices, gradually incritasethrough the mid-1990s. Consequently,world tin consumptionis expected to decrease 0.92 p.a. during the 1987-2000period from about 208,000 tpy to 185,000 tpy. During the 1990s therefore,production should graduallydecline, paralleling trends in consumption. Only Brazil is expected to increase output during that period and by the year 2000 should account for approximately 25Z of world production.
6. Following the price collapse in late 1985, world tin production declined and has averaged approximately180,000 tonnes during the 1986-87 period. However, marked differencesexist in the pattern of individual producer responses. The three large, traditionalproducers of Southeast Asia--Thailand,Malaysia, and Indonesia--togetheraccounted for 76,000 tonnes in 1985 and 71,000 tonnes in 1987. This rather small decease reflects the fact that only Malaysian output contracted significantlywhile Indonesianproduction increased. In contrast,high-cost Bolivian production declined from 27,000 tonnes in 1980 to only 8,000 tonnes in 1987 (from about 121 to 42 of world production. Tin smugglingessentially ceased with the eliminationof export controls and the price decline of - 165 - ANNEX 5-1 Page 3 of 8 late 1985. The rapid expansionof Brazilianproduction also slowed, thus minimizing the impact of marginal cutbacks in other countriesiregions.
7. The gradual increase in world productionthrough 1990 will result from output expansion in several countries. Indonesianoutput should increase as relativelylow-cost offshore dredging is emphasized. Chinese production also will increase to satisfy expandingdomestic consumption. Bolivian mine output is expected to increasemodestly in the short-run, reflectingthe gains attainedwith the restructuringof COMIBOL. Brazil remaius a key factor in world supply. The continuedexploitation of low- cost deposits in Amazonas State, the expected increase of world tin prices, recent announcementsof additionaltin reserves,and the resurgence of small-scaletin operations,all indicate that Prazilian output should expand to 39,000 tonnes in 1990 and 48,000 tonnes in 2000--at that time Brazil is expected to account for slightly over one-fourth of world mine production.
8. In contrast to the situation in Brazil, over the long-term in most other countries/regionsoutput is expected to decline. Industrial country output should be 10,000 tonnes in 2000--a decline of 3.11 p.a. for the 1987-2000period. Similarly,Bolivia and the traditionalproducers of SoutheastAsia are likely to exhibit declines in both volume and market share thrcagh the 19909 as ore grades and reserves decline. For Bolivia, these developmentsimply that up to the mid-1990s, the markets for the productionof COMIBOL'score mines, as well as the remainingprivate sector tin mines remain assured. In the second half of the 19909 it is likely that further cuts in private sector tin capacity will be needed, and that the higher-costtin centers among COMIBOL'score mines will need to be closed. It is for this reason that despite an expected short-termrecovery of the tin market, its unfavorablelong-term prospects would suggest for Bolivia, and for COHIBOL, in particular,the active continuationof a diversificationaway from tin.
2. Zinc
9. World tin consumptionduring the 1961-86 period increased2.6Z p.a., but demand slowed markedly in the 19709 due to lower economic growth and material substitution. The recessionof 1981-82 exacerbatedthe decline. However, zinc demand has increased steadily since 1983.
10. The performanceof the world zinc industry during the mid- and late-1980s--bymost measures--hasbeen reasonablygood. As has been the case with other metals such as aluminum and copper, demand has been buoyant. World consumptionin 1986 (6.68 million tonnes) surpassedthe previous high attained in 1973. Prices soared to US$922/tonnesin 1984 while the ensuing downward price correction in 1985 to US$783Itonneswas relativelymoderate. Prices remained in the US$730-830/tonnesrange through 1987. However, the market became increasinglytight during the letter part of 1987. Zinc prices have risen dramaticallyduring 1988, averagingUS$1,058/tonnes for the first half of the year.
11. Recently the market has been typified by declining inventories which are now at histort.callylow levels. The tight supply situation is the result of several factors. The generallypoor markets and excess - 166 - ANNEX 5-1 Page 4 of 8. capacitywhich typifiedmuch of the late 1970s and early 1980s curtailed Investment spending;world smelting capacity stagnatedduring the 19809, and utilization rates increased. In addition, demand has been unexpectedly strong, particularlyin some developingcountries. A third factor- -unanticipatedsupply disruptions--hasalso contributed. Although strikes and technicaldifficulties have occurredwith considerablefrequency in the zinc industry,the magnitude of the supply disruptionsduring the past several years has been particularlylarge.
12. After stagnatingthrough most of the 1980s, expanded to approximately6.8 million tonnes in 1987, an increase of 750,000 tonnes over the estimated1985 capacity. The increase reflected improvedmarket conditions and the subsequentreopening of a major mine as well as the start-up of severalnew units. Although a number of new mines are expected to open over the next several years total capacity is expected to be largely unchanged in 1990. Among those mines closed by mid-1988 or scheduledshortly for shutdown are Pine Point (Canada)and several European mines. Capacity expected on-streamby 1990 will be concentratedin Canada (WinstonLake, Mines Selbaie, and Caribou),the United States (Greens Creek, Ward) and in Australia (Cadjebut,Lady Loretta).
13. The major uses of zinc will remain galvanizing,diecasts and alloys (brass). The prospects for the galvanizingand diecast markets are determinedboth by decreasedtin intensityand by the introductionof additional applications,while the alloys market is generally expected to lose ground because of substitutionwith other materials (aluminum, plastics). The general outlook for zinc consumptionthrough 2000 is thus mixed. Total consumptionis expected to increase from its 6.8 mtpy level in 1987 by 1.52 p.a. during the 1987-2000period, which contrasts positively to the 0.9? p.a. rate exhibitedduring the 1970-86 period. Industrialcountry consumptionis expected to increase modestly. Although expanding galvanizingmarkets and renewed competitivenessof diecasts should arrest the declines experiencedpreviously--lZ p.a. durinb the 1970 -86 period--severaltrends should restrict industrialcountry consumptiongrowth to 0.6Z p.a. through 2000. Continuedkeen competition should lead to further reductionsin zinc coating thicknessand lighter diecastings. Moreover, a major end use market for zinc--construction--is expected to expand at only 0.5Z p.a. in the industrialeconomies through 2000. In contrast,consumption in the developingcountries is forecast to increase by 3.2? p.a. during the 1987-2000period.
14. During the 1987-2000period, zinc mine capacity is expected to expand by approximately900,000 tonnes from 6.8 to 7.7 mtpy (about 1? p.a.). Industrialcountries will continue to account for the majority of capacity,but their proportion should decline slightly from 60? in 1987 to 56? in 2000. The continued expansionin industrialcountries during the 1990s is dominatedby the anticipatedopening of Alaska's Red Dog mine in 1991 (314,000tpy of zinc). The Red Dog deposit (17.1? zinc, 5? lead, and 2.6 oz. silver/ton)also documentsa recent trend toward high zinc content and precious metal by-products.
15. Vhile a large proportion of the additions to capacity during the early and mid-1980s consistedof mine expansions,greenfield projects will be the preferredtype of investmentthrough the 19909. The new lead-zinc - 167 - ANNEX 5-1 Page 5 of 8 mines planned for the next several years also are predominantlyzinc. Recent exploration and development activity has emphasized zinc (and by- products such as silver) with minimal consideration to lead content. These two trends reflect the more sanguine outlook for zinc vis-a-vis lead and are illustratedparticularly by investmentactivity in Australia and Canada.
16. World mine productionis expected to increase 1.42 p.a. during the 1987-2000period. Regional productionshould parallel capacity trends. Output expansionswill be concentratedin those countries/regionswith relativelylow costs and substantialby-product credits. Japanese and European output should decline during the period. The North American increase is due to expected productionfrom the Red Dog mine in Alaska. Australianmine output will also rise. In the developingcountries, the relativelyhigh silver values in both Peru and Mexico should encourage expanded output. In general, industrialand developingcountry output should increase 0.6? and 2.52 p.a., respectively,during the 1987-2000 period.
17. World zinc smelter capacitywas 6.5 million tonnes In 1987--an increase of only 150,000 tonnes since 1985. Expansions were limited to developingcountries. High costs (particularlyenergy and labor) have resulted in decliningcapacity in Japan and Europe. This trend in the industrial countries is expected to continue and may accelerate if recently announced mergers prompt additional rationalization. Consequently, the 730,000 tonnes increase expected in zinc smelter capacity during the 1987-2000period (about 0.8? p.a.) will be the result of expansions in developing countries which will then account for 40? of smelter capacity in the year 2000 compared to only 31? in 1987.
18. Zinc metal production is projected to increase 1.4? p.a. during the forecast period, in line with consumption, and with zinr mine production. Developing country output should increase 3.1? p.a. while industrial country production is expected to expand a modest 0.6? p.a. and is expected to be constrained by the contraction of smelting capacity in Europe and Japan. The more robust 3.1? p.a. expansion of developing country output reflects increasing zinc consumption and the desire of many developing countries to increase the value-added of mining by expanding smelting activities.
19. Exports of zinc ores/concentrates should increase 2.3? p.a. during the 1987-2000 period--somewhat faster than production. Decreasing mine output in Japan and Europe and the rise in metal production in developing countries with limited mine output should account for the moderate rise in exports. Zinc metal exports through 2000 are expected to increase at the same rate as output--l.4S p.a. Several contrasting trends are apparent. The main reasons, however, for modest growth, are that higher smelter capacity in Asia will reduce metal import requirements, and stagnant demand in North America and Asia is expected to minimize import requirements in these regions.
20. Zinc prices are expected to average US$1,100/tonnes in 1988, up from US$799/tonnes in 1987. The rapid price increase reflects declining stocks and tight market conditions brought on by strong demand and supply - 168 - ANNEX 5-1 Page 6 of 8 disruptions. It is estimatedthat production losses at zinc smelters amounted to a combined total of over 270,000 tonnes in 1986187. Prices are expected to moderate over the short term as demand slows and increasing output permits stocks to rise. By 1990, zinc prices are expected to average US$S895/tonnes.Prices are projected to average US$1,140 and US$1,799/tonnesin 1995 and 2000, respectively,and should mirror underlying cost changes. Prices in real (constant1985 dollars) terms will increase from US$590/tonnesin 1990 to US$794/tonnesin 2000.
21. Bolivia has in the past been a producer of negligible importance at the internationallevel. Its share in world production is only about 0.52 and even doubling its productionwould not make any difference in internationalmarkets. Given the reasonablyfavorable prospects fo- zinc, this appears a prime metal for diversificationof Bolivian mining. However, because of the generallyhigh cost of Andean mining, the viability of new deposits and expansionswill depend not only on their tin grades (which have to be relatively high) but also on their by-products,mostly leadjsilver and some gold.
3. Silver
22. Silver is a by-product or coproduct of other metals. Some two- thirds of silver reserves are contained in lead, zinc, and copper sulfides, while zAlyabout 252 originatesfrom pure silver mines. Mine production is the largest source of supply. It has accounted for nearly 70X of total supply over the past few years. Other sources of supply ares secondary recovery,coin melt, South Asian disboarding,and sales from Government stocks. Since 1976 world mine productionhas increasedat an average annual growth rate of 2.91. World mine productionpeaked in 1984, declined slightly in 1985 and 1986, but recoveredin 1987 when the silver price recovered. The major producingcountries are Mexico (17.22),Peru (14.3Z), Canada (9.11),United States (7.91),Australia (7.52),and the USSR (11.91). Smaller producersare Chile, Japan, Spain, and South Africa. Bolivia's share in world silver production is about 1.32.
23. Though the USSR is one of the major silver producers, the USSR and other CPEs have been either almost nonactive in world trade or net importersin the 1980s. In previous periods they had been net exporters. Judging from the incompletedata available it seems that their consumption has grown while their productionhas remained static. However, as oil prices were much higher prior to 1986, they may not have needed to produce silver for foreign exchange purposes. Moreover, it is unclear to what extent they built up stocks during this period.
24. The compositionof world silver consumptionis as follows: photography (452), currentlythe dominant user of silve::;electronics, about 172; jewelry and silverware,142. World concumptionof silver has increasedmodestly since 1983, though the level of consumptionis significantlysmaller than it was ten years ago. Reduced jewelry demand and more efficientuse of silver in photegr.p4hyafter the 1979-80 high- price period appear to be the main reasons for the reduction in consumption since 1977. The major users of silver aridthe United States, the major countriesin Europe (France,the Federal Repdiblicof Germany, the United Kingdom, and Italy), and Japan. The major EEC countries as a group have - 169 - ANNEX 5-1 Page 7 of 8 experiencedmodest growth rates over the past five years, and their level of consumptionis still much lower than it was ten years ago; 5o, too, is the consumptionof the United States. Japan's consumptionhas maintained its general upward trend and its consumptionlevel in the mid-1980s was higher than ever.
25. The intensityof use of silver in industrywill be subject to continuing technologicalinnovation. In the industrialcountries there will continue to be a trend towards replacingelectromechanical switching systems in telephoneexchanges with electronic devices,more widespread use of miniaturization,new manufacturingprocesses, and improved contact lifetime. All these improvementsin efficiencywill have a negative impact on silver consumption. The jewelry and silverware industryhas suffered a general decline in its consumptionlevel as comoared to the level experiencedten years ago. The demand for costume jewelry, which is a cheap substitutefor silver jewelry, has increased (stainlesssteel, brass, and wood). Silver is at a disadvantagesince it has an image of being cheap relative to other preciousmetals such as gold and platinum and it tarnisheson exposure,but it is still considerablymore expensive than substitutes. However, the current lower sil-er prices might encourage consumers'interest in silver as jewelry.
26. Silver prices averagedUS$6.60lounce in the first half of 1988. Sstrong economic trends generated substantialactivity in silver, leading to a better performancethan gold over the summer months. The silver price is expected to average US$6.65louncein 1988. In 1989 the price of silver sheald move up with relativelyhealthy demand and sustainedinflationary concerns. By 1990 the fundamentalspoint to downwardspressure on the price; industrialdemand is expected to be weak and mining output is expected to increase. Inflationshould be moderating,and the gold price should be weakening. Therefore,prices are projected to decline in 1990 and 1991 but begin to move upward again in 1992. Since the long-term silver price cycles are similar to those for gold the rate of change aor silver prices for the period 1992-2000is assumed to resemble that for gold. The silver price is expected to increase in current terms from US$6.6/troyounce in 1988 to US$9.70Itr^_younce in 2000 correspondingto a decrease of about 8t in real terms.
4. Gold
27. Gold productionhas been expanding rapidly in recent years, largely in response to the shift in relative metals prices in favor of gold.2 Expansion and explorationactivities continue, in particular in North America and Australia. South African production declined in 1987 due to a combinationof lower grades and the failure of the industry to increase the volume of ores mined. The South African decline was more than offset by other major producers, in particular in the United States, Canada, Australia, and Brazil. Other smaller,but still important, producers are the Philippines,Paoua New Guinea, Colombia, Chile, and Venezuela. Bolivia'sproduction, although growing fast, is negligible in
2/ The index of the ratio of gold prices to the average of the prices of nonferrous base metals increasedfrom around 100 in the 1981-84 period to 112 in 1986 and 117 in 1987. - 170 - ANNEX5-1 Page 8 of 8 the world context, amountingto only 0.2Z of western world total yearly output. The USSR and China are major producers of gold, though their supplies fluctuateconsiderably. Other sources of gold supplies are secondary supply and official transactions. Secondary supply from recyclinghas increasedsince 1981 as it is price sensitive. It is also governed by a combination of changing economic circumstances which at times can lead to distress selling. In the past few years supplies from this source have been governed mostly by profit taking as prices have risen.
28. Demand for gold is made up of fabricateddemand (jewelry, electronics,dentistry, and othsr industrialuses) and investmentdemand (officiallyissued coins, bullion, and medallions). Fabricateddemand has increasedin this decade, though it has declined in the past two years. Jewelry accounts for nearly 822 of total fabricatedgold. Since the drop in jewelry consumptionin 1979-80,when gold prices rose dramatically, jewelry demand has risen by 4.72 p.a. Jewelry sales are a function of net disposable income. Even though a slower industrialgrowth rate is expected in the short term, the demand for jewelry should increase--inparticular in light of lower gold prices in most of the currencies other than the US dollar.
29. The prospects for gold have been assessed on the basis of cycles Jnherent in the historicalprice series, the relationshipbetween inflation rate and exchange rate movements and gold and silver prices, and expected changes in the supply and demand for the metals. The decline in gold prices in 1988 interrupt 1 an upward tend experiencedsince February 1985. Slower industrial growth in the industrialcountries and increased explorationand production activity as a result of the higher relative prices for gold will have a dampeningeffect in 1989, which should become more dominant in 1990. With the dollar expected to appreciate in the early 19909, price increases in the United States are expected to be relatively low in the early 19909. The combinationof these factors point to a lower gold price in 1990 and 1991 and a slow rebound in 1992. For the longer term, gold prices should advance slowly from 1992 to 1995 with inflation continuingat a moderate pace. In the 1995-2000period, with the value of the US dollar decliningand the US inflationrate at a higher level, we should see gold prices increasingat a faster pace. In real terms this would mean a 202 decrease between 1989 and 2000.
30. Bolivia's geology points to a substantialgold potentialwhich has remained largely under-exploited because of lack of exploration. Improved recovery of gold as by-product can help make polymetallic deposits, which increased explorationis likely to prove numerous gold prospects in the future. Although Bolivia is not expected to play a role in the gold market it clearly has the potential to increase its market share through developmentof small- and medium-scalecompetitive gold mines. - 171 - ANNEX 5-2 Page 1 of 5
BOLIVIA
MINING SECTORREHABILITATION PROJECT
COMIBOL- Assums.ionsfor Financial Proiectionsand ProJectedFinancial Statements
A. Revenues
1. The following sales volumes of tin, silver, lead and ziuc are projecteds
COMIBOL - Metal Sales, 1989-93 (tonnes)
1989 1990 1991 1992 1993
Tin 5,491 6,559 6,855 7,145 7,145 Silver 111 120 89 91 91 Lead 2,221 2,053 1,008 1,058 1,058 zinc 16,731 23,585 18,676 19,644 19,644
Projectionsof metal sales during 1989 and 1990 take into account the affect of the rehabilitationeffort resultingin additionalmine closures and thus reduction in output of silver, lead and zinc. The sales projectionsfor 1991-93 are based upon full production of the remaining eiy,Atmines. A full account of the outlook for tin, silver, lead and zinc is given in the World Bank Report 814/88 Price Prospectsfor Major Primary Commodities, November 1988. The main feature of the metals market outlook is a steady strengthening of the tin market as surplus inventoriesare reduced and a supply/demandbalance is reestablished- followingthe 1985 tin market crash. Sales revenues are the result of the projected sales volumes and the metal price forecast describedbelow and taken from Report 814/88. The metal prices used for the financialforecast are as follows:
Metal Price Forecast,1989-93
Constant 1989-Terms 1989 1990 1991 1992 1993
Tin (US$/lb.) 3.63 4.14 4.20 4.27 4.34 Silver (US$h:.) 7.2 6.8 6.7 6.6 6.6 Lead (US$/lb.) 0.27 0.24 0.24 0.24 0.24 Zinc (US$/lb.) 0.44 0.40 0.41 0.41 0.42
Current Terms
Tin (US$/lb.) 3.63 4.20 4.42 4.65 4.90 Silver (US$/oz.) 7.2 6.9 7.0 7.2 7.5 Lead (US$/lb.) 0.27 0.24 0.25 0.26 0.27 Zinc (USS/lb.) 0.44 0.41 0.43 0.45 0.47 - 172 - ANNEX 5-2 Page 2 of 5
B. operating Costs
2. Operating cost projectionsare based on COMIBOL's cost structure prevailing during the early 1980s and take into account he following specific assumptions: (i) COMIBOL'sheadquarters staff Vill be reduced from currently 1,160 to about 560 by 1991; (ii) wages and salaries, includinghealth and educationbenefits, will remain unchanged in real terms during 1989-93; (iii) materials, electricityand fuel costs are also unchanged in real terms; (iv) materials costs for mine development,vwhich are partly financed by the proposed project, are included in the operating costs; and (v) labor costs during 1989 and 1,- include dislocationcosts for the workers employed in mines to be closed or to be put up for joint venture. The estimateddislocation payment is US$4,000 per worker. Toe operating costs of mines, concentratorsand metallurgicalplants which will remain with COMIBOL are not expected to experienceoperating cost reductionsdue to furtherproductivity improvements. Substantial productivity gains were achieved during the recovery period of 1987-88. An important objective of the proposed project is to secure these recent productivity improvements. - 173 _ ANNEX 5-2 Page 3 of 5
BOLIVIA
MINING SECTORREHABILITATION PROJECT
COMIBOL- FinancialPro ections for Subsidiaries
1. Important financialindicators for COMIBOL'sfour subsid.aries, Oruro, La Paz, Quechislaand Potosi, are presented in the table below. The large subsidiaries,Oruro and La Paz, which account for over 70S of COMIBOL's net sales revenues,are expected to have strong profit and cash flow performance. They account for 93Z of COMIBOL'snet income and 86S of internal cash generation. The small subsidiaries,Quechisla and Potosi, would be in a much weaker financialposition. In particular,the Quechisla subsidiarywould face a period of low profitabilityand tight liquidity during 1989 and 1990.
0,e'aIBOLSubsidiaries - Summary FinancialProiections, 1989-93 (US$ million - current terms)
1989 1990 1991 1992 1993
Oruro Net Sales Pevenues 33.4 37.0 34.3 35.9 37.7 Net Income after Royalty 8.3 10.4 11.6 12.1 13.0 Int. Cash Generation 9.8 12.2 13.2 13.8 14.8 Capital Expenditures 6.0 9.3 5.3 5.2 4.4 Net Income after Royalty/NetSales 252 282 34Z 34Z 35Z
La Paz Net Sales Revenues 15.4 22.6 23.8 25.0 26.4 Net Income after Royalty 2.5 5.8 6.8 7.5 8.4 Int. Cash Generation 3.5 7.1 8.1 8.9 9.8 Capital Expenditures 5.5 5.4 3.3 2.5 2.6 Net Income after Royalty/NetSales 162 262 28Z 302 321
Quechisla Net Sales Revanues 11.7 9.7 7.4 7.5 7.8 Net Income after Royalty 0.6 (-0.3) 1.2 1.1 1.2 Int. Cash Generation 1.2 0.3 1.7 1.7 1.8 Capital Expenditures 2.5 2.5 2.3 1.4 1.4 Net Income after Royalty/NetSales 5 (-32) 162 152 162
Potosi Not Sales Revenues 3.9 4.9 5.7 6.3 6.5 Net Income after Royalty 0.2 1.1 1.8 2.2 2.4 Int. Cash Generation 0.4 1.3 2.0 2.4 2.5 Capital Expenditures 1.6 2.4 1.6 1.7 1.3 Net Income after Royalty/NetSales 62 222 322 362 372 - 174 - ANNEX 5-2 Page 4 of 5
BOLIVIA MININGSECTOR REHABILITATION PROJECT
COUIBOL- ProjoctedInco. Statement (UWIOGO
1. Production 1989 1990 1991 1992 109 Tonnesof tin 6,491 8,659 6,566 7,146 7,145 Tonnasof silver 111 120 89 91 01 Tonns of load 2,221 2,058 1,008 1,050 1,0Sa Tonnesof zinc 16,781 28,585 18,676 19,644 19,644 2. Net SolosRevenues 60,019 72,681 72,779 79,393 08,981 B. OperatingCoat Labor 16,643 16,908 14,465 16,041 16,661 materials 18,789 14,407 18,492 14,041 14,629 Electricity 5,289 6,388 5,020 5,207 5,406 Fuel 1,688 1,576 1,545 1,602 1,658 Overhed 8,864 8,720 5,589 5,605 4,691 Otber coats 10,771 9,616 5,547 5,72t 6,220 Depreciation 8,762 4,208 3,908 4,146 4,876 TotalOperating Costs 60,106 67,808 49,618 61,261,647 4. OporntlnsInco (87)14,678 23,269 28,128 82,184 Minus: FinancialChares 1,122 3,047 8,908 4,289 4,687 S. Nt IncomeBeore Taxes (1,208) 11,981 19,860 28,840 27,640 Minus: Royalties 2,721 8,668 8,688 8,974 4,180 6. Net IncomeAfter Taxes (8,929) 8,278 16,728 19,865 28,87 7. Profitability OperatingIncomeo Net Sales ox 20X 82X 85X 8an Net Income b.T.: Net Sales -7S its 22X 26X 28% - 175 - ANNEX 5-2 Page 5 of 5
BOLIVIA MININGSECTOR REHABILITATION PROJECT COMIBOL- ProJected Funds Flow Statement QW11'000)
1. Sources Internal Sources 1989 1990 1991 1992 1998 Net Incoa after taxes (8,929) 6,278 16,728 19,665 28,867 Add: Financial charg 1,122 8,047 8,903 4,289 4,587 Depreciation 8,762 4,208 8,906 4,146 4,876 Other non-cash Ites 7,166 S,445 8,764 8,675 8,005 Total Internal Sources 9,120 20,969 27,292 81,975 85,884 ExternalSources
Long-TermDebt RIC I IDA Credit KfW 12,592 22,970 6,819 8,774 2,568 IDB OtherCot inancing
TotalLong-Term Debt 12,692 22,970 6,819 8,774 2,656 Short-Term Debt Increase In Accounts Payable 0 0 0 0 0 Other short-term debt 0 0 0 0 0 TotalShort-Term Debt 0 0 0 0 0 Other Sources 0 0 0 0 0 Tubal Sources of Funds 20,712 48,989 84,111 86,760 87,990 2. Applicationsof Funds Capital Expenditure 16,800 22,698 18,08M 11,071 9,867 Increas In Inventories 6,481 1,200 689 807 116 Accounts Payable (Customs,Sales Tax) 6,691 2,817 1,819 1,222 687 De"b Service
Repaymentof Lon-Tern Debt IDA1 KfW IDB 1,782 8,911 4,816 5,414 5,867 Others FinancialCharge
Total Debt Service 1,782 ,911 4,815 5,414 6,867 TotalApplIcation of Funds 82,654 80,026 20,164 16,014 15,976 8. Increase(Decrxse In Cash (11,842) 18,114 18,967 17,788 21,914 4. Cashat Beainningof Year 0 (11,842) 1,272 15,220 82,964 S. Cash at End of Year (11,842) 1,272 15,228 82,964 54,878 - 176 - aNN of5-
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94 q SoLril meifme SICTORREU4BILITATlN PROJECT Oruro Subsidiary COMIEOL- Financall Rate of Return CaIculetiors (UWOUO)
iwo 1090 1001 1092 jM 1994 10n5 166 1997 1008
Inrme_ntal Rovewe: Nat Incmeo 0 0 18,922 14,827 14,964 15,412 15,660 2,418 2,140 0 In"VSteMt Costs: In,Sstmmt 6,015 10,889 5,066 4,7M6 8,64 0 0 0 0 0 Taxes: IVA n Retise S 077 W5e m 486 0 0 0 0 0 S,sramc Pay 0 0 8,964 0 0 0 0 -4,64 -8,910 0 Resdual Value: Stocks 0 0 0 0 0 0 0 1,789 1,64 0 Residual Volvo: Flzid Asaset 0 0 0 C 0 0 0 8,26 1,85 0 Not Cashrio.m Eaosemla -4,615 -10,8V b,U4 9,542 11,100 16,412 15,660 7,494 5,U8 F1nancll -4,50 -11,838 17,99 8,6164 10,664 1,412 1,9860 2,510 1,858 Intrnal Rat of Reurn Calculation EsnsI c 4.2861 FinancIal 55.6811
0Ira 1 N|w UB mIm SECTORRUABIUTATION PROJECT La Paz Sub.idinry COIIBO. - FinancialRate t Reurn Calculation (UWOOO) 1e" 106 109t 109t 3 100 )99 ION 192 X C 191
6,624 9,22S 9,070 9,089 9,341 9,948 1o,s73 11,217 11,217 1,199 RIben_ 0 0 2,820 2,265 mv.t.sst 5,504 7,582 8,00 65 30 19 Taxe 415 15'M 5,450 -3 -4,606 So" 16O 1,n7 Stocks Fixed Assets 11.Cook Flow 11,21711,217 2,911 -5,604 -7,682 6,784 6,905 7,265 9,089 9,841 9,948 10,576 Ecnmic (1-2.54) 6,885 6,809 9,089 9,041 9,094 10,57611,21? 11,217 -1,086 Finsnelnl (1-2-8+4.5.6) -C,919 -9,120 11,119 Intrnal Rato of Rturn Calculation Econceic (1-2.64) 46.21X Financial IRR of (1-2-5.4+5*5) 48.661
wOR o l U'L vINm SECTORRAHDLITATION POJECT bachlele Subsldlary COMI3L - Fiuaclial Rs St Ratur Calculationl
1089 lmo0 1 102 1664 199C
1. Ron.oacv 0 0 1,669 1,752 1,366 1,070 1,4C0 1,9 a6 2. Intw 2.681 2,908 2,202 1,289 1,289 0 S. Tena 170 560 0 4. S vrarae 2,060 -534 -1,666 S. Stocks S. FlIXdA.aS 62 70a NobtCash Flows Economle(1-2.+5) -2,09 -2,908 -313 515 627 1,679 1,513 1,559 1,010 FIlannlal (1-2-8.4.640) -2,006 -8.458 1,717 513 827 1,879 1,134 1,859 10 Interl Rto of Return Calculatlon Economlc(1-2.50) 4.705 Fisancll (1-2-8.4.5) 3.70X
n DOLIVIA MD=~SECTOR REtSIATATKOM PROJECT Poteel Subldlanr C0MI3OL- Flsae)aI at. ofRtnculculations
1906 10 a 1982 1998 4 1906M I 1W7 -9 2000_
1. Rev....0 0 2,044 2,852 2,428 2,486 2. I.wet nt 1,712 2,930 1,907 1,597 1,146 $. Taxe 150 468 1Us 187 a8 4. Seeamne 2,270 -2,270 S. stocksX41 6. Fixed Assets 1,487 Net Co"h Flo Economic (1-2.5.6) -1,7n2 -2,980 187 76 1,277 2,486 2,278 0 0 0 0 0 Financial (1-2-384+.5.) -1,362 -8,a80 2,294 618 1,214 2,486 S 0 0 0 0 0 Co Internal Rat of Retur Colculatlo. Econmic (1-2.*5) 9.851 Financial (1-2-8.4.56+) 8.038
'I
{0I U' - 181 -
BOLIVIA
MINING SECTOR REHABILITATION PROJECT
Documents in Project File
1. GENERAL
Draft Report on an Environmental Overview of the Mining Sector in Bolivia Project No. H88095E, Nolan, Davis & Associates (N.S.) Limited, Halifax, Nova Scotia, Canada, July 1988
Codigo de Mineria, Libro Primero, Titulo I, Del Dominio de las Substancias Minerales, Capitulo I, Del Dominio
Department of Technical Cooperation for Development, Mineral Investment Policies in Bolivia, Mission Report, November 1988, Thomas Walde
Ministerio de Mineria y Metalurgia, Modelo Impositivo Opcional Para El Sector Minero (Primer Borrador)
Ministerio de Industria Comercio y Turinmo, Ministerio de Planificacion y Coordinacion, Ley de Inversiones, Bolivia
A Programme Designed to Assist the Government of Bolivia in the Revitalization of the Bolivian Mining Industry, United States Geological Survey, November 1988
A Review of the Mineral Sector of Bolivia, CIDA (Canada), by C. Delbridge, November 1988
Analisis de la Situacion Juridica, Tecnica y Financiera de los Proyectos del Fondo Nacional de Exploracion Minera (PONEM), by San Martin, Terrazas and Ruiz, becember 1988
2. COMIBOL
Plan Quinquenal 1988-1992 - Volumen I - Volumen II - Anexo, Programa de Exploracion, Etapas "A, Fichas Tecnicas
Ajustes al Plan Quinquenal 1988-1992
Plan Quinquenal 1989-1993 - Tomo I - Tomo II
Plan Quinquenal 1988-1992, Anexo, Programa de Exploracion Etapas Al Fichas Tecnicas - 182 -
Plan Quinquenal 1988-1992,Prospectos Preseleccionados, Informacion Tecnica Basica
COMIBOL, Perfiles de Proyectos,Plan Social, November 1988
COMIBOL, Subgerenciade Empresas Mineras Subsidiarias,Plan Quinquenal1989-1993, Tomo 2, Paquetes de InversionSujetos A Financiamiento,November 1988. (A. Estudies,Implementaciones). (B. Activos Fijos, ReposicionEquipe y Maquinaria)
COMIBOL, Subgerenciade Empresas Mineras Subsidiarias,Plan Quinquenal1989-1993, Tomo 3, Paquetes de Inversion Sujetos A Financiamiento,November 1988. (MaterialesEsenciales, Materiales Uso Corriente,Repuestos)
COMIBOL, Estados FinancierosConsolidados, Al 31 de Diciembrede 1987
COMIBOL, Estados FinancierosConsolidados, Al 31 de Diciembre de 1986
COMIBOL, Estados FinancierosGestion 1988
UnauditedBalance Sheets and Income Statements1986, 1987, 1988
Reorganizationand Rehabilitationof COMIBOL, Phase I, by Coopers and Lybrand, December 1987
Reorganizationand Rehabilitationof COMIBOL, Phase II, by Coopers and Lybrand, 1989 (underpreparation)
Project ManagementAssistance, Colquiri Mine and Mill Rehabilitation Project (COMIBOL),Bolivia, Final Report, February 1989, Minproc Engineers Inc.
Modelos Conceptualesy Evaluaciondel PotencialMineral de los Yacimientosde Pulacayo,Region de Ubina o El Asiento, Potosi Bolivia, UNDP Project BOL/871012, by J. Pinto and E. Arteaga, March 1988 Preussag Ag Metall Mine Consulting,Preliminary Proposal for the COMIBOL Bolivar Mine Development
Preussag Ag Metall Mine ConsultingFeasibility Study for the Centro Minero Bolivar, July 1988
- Part I, Geology and Reserves
- Part I, Geology and Reserves,Exhibit R4, PomabambaChannel Samples and Assays, Includes Table on Wallrock (DilutionRock), Mineralizationat Pomambamba - 183 -
Part I, Geology and Reserves,Exhibit RS, Pomabambaand Nane Ore Reserves,Including FormulasUsed for Proven Reserve Calculation Formula Used for Inverse Distance Square Method Diagram Specific Gravity Versus CombinedMetal Contents
Part II, Development and Mining
Part III, Metallurgy- Processing J
Part IV, Metallurgy- Plant (Design/Operation)
Part IV, Metallurgy - Plant (Design/Operation) Evaluation of Maltide Mi.e Equipment and Buildings
Part IV, Metallurgy - Plant (Design/Operation) Capital Expenditurewith Equipment SpecificationsFirst Part of Estimate, Summaries,Estimate with Specificationsto Fine Ore Storage Inclusive
Part IV, Metallurgy - Plant (Design/Operation) Capital Expenditurewith Equipment SpecificationsSecond Part of Estimate for Primary Grinding Section
Part V, Administration and Services, Including Emso Oruro and COMIBOLLa Paz Overheads, Vehicles, Environmental Considerations,Mine-Poopo Road ConcentrateTransport. Part VI, Infrastructure
Part VII, Economic Evaluation,Inclusive Marketing
3. INSTITUTIONS
'Plan Maestro",Ministerio de Mineria y Metalurgia,January 1989
Future GEOBOL and IIMM, by Swedish Geological International,June 1988
Strengtheningof the Ministry of Mining and Metallurgy,Swedish GeologicalInternational, June 1988
Report on the Bolivian Mining Cadastrewith Proposals for the J Implementationof a Modern Cadastral System, Inter-American DevelopmentBank, Project ATN/SF-2948,by j.G. Price, June 1988
Restructuraciondel FONEM, by R. Mignon (BRGM),August 1988 - 184 -
4. BAMIN and Credit
BAMIN, unaudited financial statements1983, 1984, 1985, 1986, 1987, and July 1987
BAMIN, audited financialstatements 1985
BAMIN, organizationalmanual, 1986
Auditoria Externa del Banco Minero de Bolivia al 31107187
BAMIN, draft statutes
BAMIN, Board resolutions54188 and 55/88, and documentsNo. P-646/88,P-652,Pu653, P-654188,regarding policies of sales of equipment, sales of minerals, revaluationof assets, and debt recovery
Estudio Asistencia Tecnica al Banco Minero de Bolivia, CAEM, July 1988
ReestructuracionFinanciera y Financiaminetode Inversiones, AsociacionNacional de Mineros Medianos,David Ancieta Barron, July 1988
Proyectot Rehabilitaciony Fomento de la Mineria Chica Marginal, J. Guillermo Cortez A., 1988 IBRD21474
B R A B O LI V I A Rb AI MINING SECTORREHABILITATION PROJECT
(/_ MAJOR COMIROL MINES,
I QUECHISlA GROUP (TIN, BISMUTH. SILVER) @1 MAJOR PRIVATE MIES,
2 CATAdI (TIN) 7 ESTALSA SA. (TIN, DREDGEI
3 HUANUNI (TIN) 8 EMUSA (ANTIMONY) \COBIJA < b / 4 COLQUIRI (TIN) 9 INTERNATIONALMINING CO. (TUNGSTEN, 11N)
-S UNIRCADA (TN) 10 SOUTH AMERICAN PLACERS (OOLn)
6 SAN JOSE (TIN) II COMPASIIA MINERA DEL SUR SA. (TIN) _a2. R \, />\ , hL ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~12-- ALTIPLANO
[ ZONE OF VALLEYS 66 SE~~~~~~~~~~~~~~~~~~~~LECTEMAIN RIOACDS SELETE'D: SECONDARY ROADIS ~~~~~~~~ -~~~~~~~~~~~~~~I--ISAILROA-S - - DEPARTMENT ROUNDARIES - -,, INTERNATIONAL BOUNDARIES
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6.6' A N~~TIN
APRIL 19A9