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Viewing cable 07LAPAZ334, MINERS' COOPERATIVES CONVERGE ON LA PAZ

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Reference ID Created Released Classification Origin
07LAPAZ334 2007-02-07 19:27 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy La Paz
VZCZCXYZ0000
RR RUEHWEB

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