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Viewing cable 06LAPAZ2976, GOB POSTPONES MINING PLAN UNTIL 2007

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Reference ID Created Released Classification Origin
06LAPAZ2976 2006-11-01 17:34 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy La Paz
VZCZCXYZ0000
RR RUEHWEB

DE RUEHLP #2976 3051734
ZNR UUUUU ZZH
R 011734Z NOV 06
FM AMEMBASSY LA PAZ
TO RUEHC/SECSTATE WASHDC 1174
INFO RUEHAC/AMEMBASSY ASUNCION 6243
RUEHBO/AMEMBASSY BOGOTA 3563
RUEHBR/AMEMBASSY BRASILIA 7425
RUEHBU/AMEMBASSY BUENOS AIRES 4686
RUEHCV/AMEMBASSY CARACAS 1936
RUEHPE/AMEMBASSY LIMA 1988
RUEHMD/AMEMBASSY MADRID 3171
RUEHME/AMEMBASSY MEXICO 1861
RUEHMN/AMEMBASSY MONTEVIDEO 4137
RUEHNE/AMEMBASSY NEW DELHI 0066
RUEHQT/AMEMBASSY QUITO 4575
RUEHSG/AMEMBASSY SANTIAGO 9149
RUEHKO/AMEMBASSY TOKYO 0260
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHC/DEPT OF INTERIOR WASHINGTON DC
RUEHC/DEPT OF LABOR WASHINGTON DC
RHEHNSC/NSC WASHINGTON DC
UNCLAS LA PAZ 002976 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR WHA/AND LPETRONI 
COMMERCE FOR JANGLIN 
TREASURY FOR SGOOCH 
 
E.O. 12958: N/A 
TAGS: EMIN EINV ECON PREL PGOV BL
SUBJECT: GOB POSTPONES MINING PLAN UNTIL 2007 
 
REF: A. LA PAZ 2944 
 
     B. LA PAZ 2860 
 
1. (U) Summary: President Morales chose not to unveil his 
much-hyped mining plan October 31 (ref A), instead announcing 
that the GOB would postpone it until 2007, ostensibly because 
of a lack of financing.  Morales attempted to divert 
attention to a supreme decree authorizing the conversion of 
cooperative miners in Huanuni to salaried employees of the 
state, as promised in the aftermath of October 5-6 conflicts 
(ref B).  End summary. 
 
2. (U) President Morales chose not to unveil his much-hyped 
mining plan October 31 (ref A), instead announcing that the 
GOB would postpone it until 2007, ostensibly because of a 
lack of financing.  Morales told the press the GOB wanted to 
"consolidate" the hydrocarbons nationalization but would 
continue working on a plan to reactive the mining sector. 
 
3. (U) Morales attempted to divert attention to a supreme 
decree authorizing the conversion of cooperative miners in 
Huanuni to salaried employees of the state, as promised in 
the aftermath of October 5-6 conflicts between miners' 
cooperatives and unions (ref B).  The supreme decree directs 
Comibol, the state-owned mining company, to assume control of 
all activities in Huanuni and convert members of the region's 
four cooperatives into regular laborers; the decree does not 
dictate salaries or specify the number of miners Comibol may 
hire but says conversions and mining activities must meet the 
terms of the company's operating plan.  The decree also 
allocates approximately $9.7 million to the development of 
new mineral deposits, the expansion of processing facilities, 
and the construction of a tailings dam. 
 
4. (SBU) Comment: The GOB may indeed face a funding 
shortfall, but Morales' postponement was more likely a 
political maneuver designed to retain for future use a means 
of rallying the people and boosting approval ratings.  From a 
political perspective, it may make sense for Morales to keep 
something in his back pocket, but from a business 
perspective, it seems less wise, as foreign and domestic 
investors alike will have to cope still longer with 
uncertainty.  Morales may also face opposition from social 
sectors, including cooperative miners, who have said they are 
seriously opposed to any nationalization.  End comment. 
URS