MercoPress. South Atlantic News Agency

Bolivia's Morales “delays” mining nationalization

President Evo Morales backed off his plan to nationalize Bolivia's mining industry, saying his government can't afford it “for now” but he still wants to eventually recover control of the nation's mineral wealth.

Mining is Bolivia's second-largest source of export income after natural gas, which Morales nationalized May 1 and completed the process over last weekend.

President Morales said the government plans to "totally consolidate" the hydrocarbons nationalization this year and has "a complete package waiting" for the mining industry.

"But we also recognize as a government we do not have the necessary economic resources to nationalize the mines" he admitted. "That does not mean the process has stopped."

"Bolivia has many riches, but they are poorly distributed," Morales said. "Now is the time to recover those riches and better distribute them in Bolivian society."

Over the weekend, the government succeeded in striking last-minute deals with foreign energy companies allowing them to continue operating in Bolivia under Morales' oil and gas nationalization.

President Morales hopes ultimately to see the state benefit more from mineral exports, which have increased dramatically this year. Bolivia shipped some 485 million US dollars of zinc, silver, gold, and tin during the first half of 2006, on pace to easily top last year's total mineral exports of 536 million.

A crash in world tin prices during the 1980s prompted the Bolivian state mining company Comibol to lay off tens of thousands of workers. But more recently, rising demand, particularly from China, has helped to drive up Bolivian metals prices and encourage foreign investment which has more than tripled between 2003 and 2005.

Morales proposed the mining industry nationalization after 16 people were killed in a clash in early October between rival bands of miners over the right to work the state-controlled tin mine in Huanuni, 280 kilometers south of La Paz.

Mining reforms are to begin with a major expansion of Comibol's operations at Huanuni, where on Tuesday afternoon Mining Minister Guillermo Dalence was still negotiating an agreement between independent miners' cooperatives and state-employed miners.

The proposal would grant some 4,000 independent miners salaried jobs at the mine, where they would work alongside their state-employed counterparts. Only weeks ago, the two groups battled each other with rifles and dynamite over access to Bolivia's richest tin deposit.

Bolivia's minerals remain the property of the state, though many deposits have been worked by foreign concessions since the eighties.