Behind Bolivia’s nationalization of Canadian mine

Indigenous miners communities from the Malku Kota region protest in La Paz, against mining operations on their lands by the Canadian mining company South American Silver Corp.

by Paul Kellogg
PolEcon.net, September 5, 2012 

For the Financial Post, the actions of the Bolivian government in nationalizing a Canadian mine this summer, confirmed the country’s status as an “outlaw nation” (Grace, 2012). But for less biased observers, the reality was a little different. Responding to pressure from local indigenous communities the Bolivian government confirmed, August 2, that it would expropriate the operations of a Canadian-owned mining project. This represents in the short term, the success of local social movements in putting an end to violence created by the tactics of the corporation, and in the long term, one small step towards ending 500 years of foreign powers stripping the country of its natural resources.

South American Silver, headquartered in Vancouver, described the mining project in question – located in Mallku Khota – as “one of the world’s largest undeveloped silver, indium and gallium deposits” (Garces, 2012b). There are 46 indigenous communities in the area, and, these indigenous communities have “rights over their land which are guaranteed in the New Political Constitution of the State of Bolivia” (Garces, 2012b). South American Silver had succeeded in gaining acceptance of their project from 43 of these 46 communities.

But with three communities yet to sign on, there were a series of violent outbreaks. May 5, at 4 in the morning, 50 police officers broke into homes in Malku Khota. In response, “community leaders made the decision to detain two of the police officers,” later released on May 9 (Garces, 2012a). The police violence crystallized opposition to the mining project, and 19 different local ayllus “united to outline the project, inform their bases” and prepare for an upcoming meeting with the governor of the department (or province) of Potosí. (Anayllu is a form of local organization, traditional to the Quechua and Aymara people of the Andes).

But tensions exploded again May 18 in a confrontation between those for and against the project, resulting in three wounded. Three days later, a leader of the anti-mining group, Tata Cancio Rojas, was arrested and charged with attempted murder.

Again, anti-mining forces, in frustration, resorted to what the press called “kidnapping.” June 29, it was reported that two engineers, working for the Canadian firm – Fernando Fernández and Augstín Cárdenas – had been detained (Noticieros Televisa, 2012). Then July 7, a police “rescue” operation resulted in the death, from a bullet wound, of Jose Mamani, one of the anti-mining activists.

This violence, in the opinion of Bolivian President Evo Morales, was provoked by the transnational company itself. “Unfortunately the so-called transnational companies are like that, these companies pit brothers, in-laws, cousins, neighbours, brothers from the same aylluagainst one another.” (Agencia Boliviana de Información, 2012) This is no doubt true. But the government of Morales should not have let the situation go to the extremes that it did. These kinds of confrontations are inevitable when resting the hopes for development on the profit-driven logic of private capital.

However, quite unlike the “outlaw” portrayed by the Financial Post, Morales responded to this tragedy in a way inconceivable in Canada or the United States. First, he met with the leaders from the aylluswho were opposed to the mining project. Second, he “urged the Public Ministry to carry out a meticulous investigation” into the killing of Mamani. Third, and most significantly, he announced that “the mine will be nationalized via a Supreme Decree.” (Agencia Boliviana de Información, 2012) The response of Morales shows the extent to which his government’s push for effective Bolivian sovereignty remains tightly bound up with the social movements which carried him into office in the first place.

That push for effective sovereignty is a very urgent one. Potosí will be unknown to many readers in North America and Europe. In the 16th and 17th centuries, this extremely poor corner of the Americas produced half of the world’s gold and silver. (Kohl & Farthing, 2006, p. 38) This was an enormous portion of the initial “primary accumulation” of a then young capitalist system, laying the basis for the enormous expansion of production and wealth in the centuries which followed.

But none of that wealth stayed in the terribly poor deparment of Potosí. The gold and silver poured overseas, to line the pockets of the wealthy in Spain, Britain and the other colonial powers. Potosí, to this day, remains one of the poorest places in our hemisphere.

The Financial Post is acutely aware that Bolivia today is trying to redress this 500 year history of pillage by foreign powers. “Expropriation has a long history in Bolivia, going back to 1937 when the government grabbed Standard Oil (now ExxonMobil), but under Morales the country has become a world leader in this department. He nationalized Bolivia’s national gas industry in 2006, its biggest telecommunications company in 2008, its hydroelectric complex in 2010 and its leading power company in 2012.” (Grace, 2012)

For these corporate writers, this makes Bolivia an “outlaw” nation. But the real outlaws are the foreign states and companies which have been stripping wealth from Bolivia for centuries.

© 2012 Paul Kellogg. Cross-posted with permission

References

• Agencia Boliviana de Información. 2012. “Bolivian Government, Indigenous Communities Resolve to Nationalize Canadian Mining Company.” Rabble.ca.
• Garces, Celia. 2012a. “Mallku Khota: A Briefing on South American Silver’s Actions in Bolivia.” The Bullet.
• ———. 2012b. “Bolivia’s Mine Nationalization of South American Silver Corporation.” GlobalResearch.ca.
• Grace, Kevin Michael. 2012. “An Outlaw Nation — Bolivia Seizes South American Silver’s Malku Khota Project.” Financial Post.
• Kohl, Benjamin H., and Linda C. Farthing. 2006. Impasse in Bolivia: Neoliberal Hegemony and Popular Resistance. New York: Zed Books.
• Noticieros Televisa. 2012. “Indígenas Bolivianos Secuestran a Ingenieros De Minera Canadiense.” Noticieros Televisa.