Mining Cooperatives

In Bolivia, most miners work in cooperatives. However, cooperatives are exempt of paying most taxes. The philosophy behind this policy is that the cooperatives have a social function. Originally, they were the ‘escape route’ for many thousands of miners that were fired after the state gave up state mining companies in the 1980s. As cooperatives, they obtained concessions to continue mining in the locations that the state had given up.

The cooperatives that take part in the small-scale mining sector in Bolivia, have a substantial influence in the current administration. Critics say that the cooperatives have converted into private, profit-driven companies and that they are privileged because they form part of the government’s power base. They are organized in the Federación Nacional de Cooperativas Mineras (Fencomin).

This year the Mining Code has been modified. Although lipservice is being paid to the idea of respecting Mother Earth (pachamama), in practice, many critics agree, the law gives disproportional benefits to the cooperative mining sector. They hardly pay taxes or royalties, easily obtain concessions, and in practice are hardly being monitored. Even the official obligation to sell all the gold to EBO is, many observers state, often respected in the breach. Many elements of the new law are indications that political interests prevailed over considerations with regard to the environment, labor protection and genuine state control on mining.