The Mineral Industry of Bolivia in 2008
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2008 Minerals Yearbook BOLIVIA U.S. Department of the Interior August 2010 U.S. Geological Survey THE MINERAL INDUS T RY OF BOLIVIA By Steven T. Anderson In 2008, Bolivia produced about 5% of the world’s total mine this same timeframe (Instituto Nacional de Estadística, Bolivia, output of tin and silver; 3%, of zinc; 2%, of antimony, bismuth, 2009a; 2009b, p. 448-450; International Monetary Fund, 2009; lead, and tungsten; and approximately 1%, of boron. Bolivia’s López and Ferrufino, 2009, p. 9-10, 28-30; Ministerio de proven reserves of natural gas (about 711 billion cubic meters) Minería y Metalurgia, Bolivia, undated a, p. 6). were second only to those of Venezuela among South American In 2007 (the latest year for which data were available), the countries. Tin, some antimony, and small amounts of some total labor force employed in mining was about 57,400 workers. other mined minerals were refined or further processed into mill Of these workers, an estimated 46,700 small-scale, cooperative, products in the country but most were exported in crude form and artisanal (SMACA) miners were officially registered by rail to ports on the coasts of Argentina, Brazil, Chile, and (or) with a cooperative through the Government and at least 2,450 Peru and then shipped further on to processing facilities located SMACA miners were not. In 2006 and 2007, about 3,350 people in Asia, Europe, and North America. On average, 31 million were employed by medium-scale mining operations that used cubic meters per day of Bolivia’s production of natural gas modern mining methods. The remainder were employed by the was exported to Brazil during 2008 compared with about state-owned mining company Corporación Minera de Bolivia 27 million cubic meters per day during 2007; 2.3 million cubic (COMIBOL), which restarted active mining operations in 2006 meters per day, on average, of Bolivia’s natural gas production for the first time since at least 2000 (when the company’s last was exported to Argentina compared with about 4.6 million active mining operations were either privatized or closed). cubic meters per day during 2007. The supply contract with COMIBOL employed about 4,900 miners in 2007, and most Argentina had a clause that promised deliveries of natural of these Government employees were transferred from private gas up to about 7.7 million cubic meters per day (equal to the mining cooperatives that had been working the Huanuni tin listed capacity of the Yabog natural gas pipeline from Bolivia mine before the mine’s renationalization during the final quarter to Argentina), subject to availability of natural gas for export of 2006. According to the Instituto Nacional de Estadística after first fulfilling Bolivia’s domestic demand requirements (INE), Bolivia, the total number of employees in the mineral and allocating necessary volumes for export to Brazil (table 1; industry was about 72,400 in 2007 (Instituto Nacional de Cauclanis, 2008b; BP p.l.c., 2009, p. 22; Brooks, 2009; Carlin, Estadística, Bolivia, 2009b, p. 294; Ministerio de Minería y 2009a-c; Guberman, 2009; López and Ferrufino, 2009, p. 34-39, Metalurgia, Bolivia, undated b). 63-71; Polyak, 2009; Shedd, 2009; Tolcin, 2009). Preliminary estimates indicated that foreign direct investment (FDI) in Bolivia’s oil and gas sector was about $380 million Minerals in the National Economy in 2008 compared with about $131 million in 2007. The 2007 level of FDI in the sector represented an increase of about 126% In 2008, the value of output of the mineral industry of compared with that of 2006 ($58 million). The 2006 level of Bolivia accounted for about 14.2% ($2,360 million1) of the FDI was the lowest since 1996 (when the production of natural country’s gross domestic product (GDP) compared with about gas in the country was still in a nascent stage), and corresponded 12.3% ($1,630 million) in 2007. The mining sector accounted with the Government’s measures to nationalize the sector. In for about 8.55% ($1,420 million) of the GDP and the mineral 2008, FDI in the mining sector was estimated to be at its highest fuels sector accounted for about 5.7% ($940 million) in 2008 level ($478 million) since at least 1996 (about $20 million), and compared with 5.8% ($770 million) and 6.5% ($860 million), had increased substantially even compared with that of 2007 respectively, in 2007. In 2008, most of the value of mineral fuel ($308 million). In early 2007 and somewhat into 2008, there output was accounted for by the production of natural gas. Zinc appeared to be some Government announcements in favor of the led all the nonfuel minerals in Bolivia in terms of both the value nationalization of the mining sector. Government investment in and the volume of production. The value of mined zinc totaled the oil and gas sector increased to about $51.3 million in 2008 about $710 million followed by that of silver ($520 million), compared with $7.6 million in 2007; public investment realized tin ($315 million), and gold ($230 million). In 1990 prices, the in the mining sector was $34 million in 2008 compared with real GDP of Bolivia increased by about 6.1% in 2008 compared about $11 million in 2007 (Ecclestone, 2008; Orvana Minerals with that of 2007, which was the greatest annual increase in a Corp., 2008, p. 22-23; Instituto Nacional de Estadística, Bolivia, decade. In 2008, an increase of about 56% in the real value of 2009b, p. 630, 686; undated a, b; Mapstone and Schipani, 2009). production by the mining sector compared with that of 2007 led In 2008, the mineral trade balance (not including some trade all sectors of the Bolivian economy in terms of its contribution in chemical substances and products that may have been mineral to the growth in the real GDP of the country. The real value of based) was about $4.4 billion. The value of trade in minerals production of mineral fuels also increased by about 2% during may include the value of some transportation and (or) pipeline services. Natural gas was Bolivia’s leading export (reportedly 1Where necessary, nominal values have been converted from Bolivian valued at about $3.16 billion), and zinc in concentrates was bolivianos (Bs) to U.S. dollars (US$) at an annual average exchange rate of the leading nonfuel mineral export (about $740 million). Bs7.75=US$1.00 for 2007 and Bs7.27=US$1.00 for 2008. All values are nominal, at current prices, unless otherwise stated. Production of silver was growing in economic importance, and Bolivia—2008 3.1 the value of the country’s exports of silver (mostly contained in about $95 million compared with $70 million in 2007. During concentrates) was reported to be about $500 million compared 2008, the President of Bolivia was able to schedule a public with $225 million in 2007. The leading mineral import category referendum on a proposed new constitution for January 2009. consisted of manufactured mineral fuels and related materials Approval of the new constitution could lead to the Government (about $545 million), which included petroleum refinery further revising both the mining code and the hydrocarbons products, and the second ranked mineral import category law (Ministerio de Minería y Metalurgia, Bolivia, 2007; Coeur was common manufactured (refined) metals ($480 million) d’Alene Mines Corp., 2009, p. 22; López and Ferrufino, 2009, (López and Ferrufino, 2009, p. 28-30, 70; Instituto Nacional de p. 2, 7-9, 73, 80-87; Romero, 2009). Estadística, Bolivia, 2010a, b). Production Government Policies and Programs Data on mineral production are in table 1. In decreasing On May 2, 2007, operations contracts came into effect for value of production in 2008, the leading nonfuel mineral private oil and gas companies in accordance with the terms commodities in Bolivia were zinc, silver, tin, gold, and lead. of the Government’s program to nationalize the sector, and it In terms of tonnage, production of lead, silver, and zinc all appeared as if no further major changes to the Hydrocarbons increased substantially compared with levels of mine production Law were made during 2008. These operations contracts in 2007 mostly owing to a full year of production at the San were approved as part of the Hydrocarbons Law of 2005 (law Cristobal Mine. The startup of production at the San Bartolome No. 3058 of May 17, 2005), which also allowed for two other Mine in June 2008 also had a significantly positive effect on new types of contracts between private companies and the the country’s production of silver in concentrates during the state—production-sharing contracts and association contracts. year. Production of tin contained in concentrates increased Under all three types of contracts, oil and gas reserves and significantly in the country, mostly owing to an increase in any production belongs to the state and the contractor (private production to about 6,700 metric tons (t) of tin compared company) must deliver the full amount of production to the with about 5,400 t in 2007 by SMACA mining operations and state-owned oil and gas company, Yacimientos Petrolíferos partly owing to a slight increase to 7,875 t of tin compared Fiscales Bolivianos (YPFB). These contracts were designed to with about 7,670 t in 2007 at the state-owned Huanuni Mine. replace risk-sharing contracts, which existed under the previous Owing to a substantial increase in the annual average price Hydrocarbons Law of 1996 (law No. 2689 of April 30, 1996). of gold in 2008 compared with that of 2007, the value of In effect, the contractors bore all of the risks and costs for mine production of gold in Bolivia increased, although the the exploration and production of hydrocarbons under the volume of production decreased mostly owing to a decrease risk-sharing contracts but were allowed to claim ownership in production of gold at the Don Mario Mine.