How Many Lives Will Be Lost at Bolivia’s Cerro Rico for A Few Pieces of Silver?

by on
Style:
Category:
Precious Metals

There are no ends they say to man’s greed, or to put it more compassionately, to his willingness to take risks in pursuit of a return.

FREE Download: The Monthly MMI® Report – covering the Precious markets.

A New York Times article this month chronicles the extraordinary collapse of Bolivia’s most famous mountain, an icon that appears on it’s national flag and has been the source of untold wealth since the days of the Incas. Cerro Rico, or Rich Hill, stands more than 15,600 ft at it’s peak, or it did before the peak collapsed as a giant sinkhole opened up. Cerro Rico is said to be the richest silver resource in the world and has been mined since those same Incas lived there, but most extensively since the Spanish conquest in 1545. The mountain is so riddled with mine shafts and old workings that it literally collapsed within itself and is said by the Bolivian Mining Corporation (Comibol) to be in imminent danger of further collapse, yet some 1,500 workers still burrow in the upper reaches of the mountain between 14,435 ft and the summit.

Thousands more mine further down the mountain where conditions are believed to be somewhat more stable but still represent a considerable risk if shocks reverberate from falls higher up. The mountain is said the be an ant hill of old shafts, both horizontal and vertical, with some old ones partially filled in with old mine waste. Comibol pulled out of mining the area back in the 1980’s when silver prices collapsed and it has since been worked by cooperatives loosely licensed by Comibol and by all accounts completely unregulated.

To be fair to the authorities,  miners have been offered work elsewhere but they say the alternative mines are not as rich and the returns would be even less lucrative than the living they are currently scratching from the hill. The next time you hear of a mine collapse in Bolivia and the death of miners – assuming you do hear anything as most mining deaths are kept quiet – remember this story. It raises a serious moral issue, should the Dodd-Frank Consumer Protection Act, Section 1502 as applied to Conflict Minerals, not be extended to ensure at least a bare minimum of safety or oversight in resource extraction around the world?

It becomes hugely more complex than the qualification for Conflict Minerals, of course, because the definition of what constitutes safety is different in every country whereas a conflict can be determined more readily by federal authorities. If not an extension of such legislation then a first step could be an outright ban on Bolivian silver until the state steps in and takes control. Bolivia is the world’s 6th largest producer as this table courtesy of the Silver Institute shows.

Top 20 Silver Producing Countries in 2013(millions of ounces) Source: The Silver Institute
Mexico 169.7
Peru 118.1
China 118.0
Australia 59.2
Russia 45.4
Bolivia 41.2
Chile 39.2
Poland 37.6
United States 35.0
Argentina 24.7
Canada 20.8
Kazakhstan 19.8
India 12.1
Sweden 10.8
Guatemala 10.4
Morocco 8.2
Turkey 6.0
Indonesia 6.0
Armenia 3.2
Papua New Guinea 2.9

 

Production is a fraction of leading countries like Mexico, Peru or China, but for Bolivia it is an important mineral export. Major mines like San Bartolomé operated by US-based Coeur Mining would unfairly get caught up in a country-wide ban but it is clear external pressure will be required for significant action to be taken. That or a major loss of life, one hopes the former comes before we hear of the latter.

Leave a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.