Mythic silver lode may alter Bolivia fortunes again
LA PAZ, Bolivia (Reuters) -- The Cerro Rico, history's most fabulous silver
strike, changed Bolivia's social fabric 450 years ago. Now, thanks to
modern mining, it may do so again.
Legend has it that enough metal was extracted from the deposit to build
bridge of silver from South America to Europe. Its heyday is now long past
but miners say the vast lode is still not exhausted.
Already believed to have yielded between 1 and 2 billion ounces of silver
since an Indian named Diego Hualpa discovered it in 1544, the mountain,
whose name means "rich hill," has modern miners pie-eyed with dreams of
more hidden treasure.
"It has an impressive amount of mineral wealth," Rolando Jordan Pozo,
secretary general of Bolivia's association of medium-sized miners, said.
Industry officials say the deposit could vault Bolivia back into the vanguard
of global silver production. But plans to develop the mine, an official World
Heritage Site, are hampered by its indelible imprint on Bolivian culture and
the cruel toll it took on the area's indigenous population.
"The first idea was to do an open pit in 1989. What happened? The local
people opposed it," former Mining Minister Jaime Villalobos told Reuters in
his La Paz office. "The great restriction is the cone. It is represented on
Bolivia's coat of arms," he said.
Spanish conquistadors traced the Incas' mine workings to the Cerro Rico,
more than 15,000 feet above sea level on Bolivia's gray, desolate high
plateau. The mountain straddles a southern silver belt that contained other
massive deposits such as the Mesa de Plata, Porco and Pulacayo.
Eagerly following rich veins containing from 4 to 28 percent silver, the
Spaniards hit peak yearly production of about 13 million ounces in 1580 at a
time when the metal was as valuable as gold.
The city of Potosi was built at the base of the mountain in unbridled colonial
splendor, featuring a mint to produce Spain's currency and a reputation as a
wide-open den of easy money, prostitution and duels. Spaniards to this day
use the phrase "It's a Potosi" for anything superlatively wealthy.
By 1572 the city was the Western world's most populous with 120,000
inhabitants, more than London, Paris or Madrid.
Its silver was smelted in thousands of small ovens and carried by llama
caravans to ports in Peru and Chile. Shipped to Acapulco, Mexico, it was
then taken across the isthmus and loaded onto fleets bound for Spain.
English and Dutch pirates preyed on the boats and it is said the majority
the Bank of England's deposits at the time came from Spanish silver seized in
the Gulf of Mexico. Potosi silver molded the social and political climate of
Spain's Renaissance, built the famed Spanish Armada and bankrolled wars
against Turks, Italians, Flemish, French and English. It also fostered runaway
inflation and killed Spanish industry.
In Bolivia, the Cerro Rico's legacy can easily be seen in Potosi, still
world's highest city with more than 100,000 people. The lofty settlement is a
portrait of rundown elegance beset with water problems, some of Bolivia's
fiercest poverty and a history of native toil in the dusty, narrow mine shafts.
"Without cheap labor the silver lode wouldn't have been so profitable,"
Villalobos, who is now a consultant.
Thousands of coca-leaf chewing cooperative miners still peck away at the
innards of the mountain's dome, shot through with narrow, twisting tunnels
and shaken by occasional dynamite blasts. Their methods are rudimentary,
"similar to Roman times," Villalobos said.
Any mining company set on developing Cerro Rico will have to cut a deal
benefiting the 20,000 cooperative members, he said. "The sentiment of the
people since the time of the Spaniards is that mining only wants to exploit the
wealth, take it somewhere else and leave behind poverty."
Plans to retrieve the Cerro Rico's remaining riches have ranged from an
open pit to subterranean mining, the latter including preservation of the
cone's shape via cement fixings.
The mine is on a long list of pending 1999 privatizations engineered by
state-owned Corporacion for Minera de Bolivia (Comibol), which is
negotiating with the Potosi government over the site's exploitation, Comibol
President Alvaro Rejas said.
"The ideal as a miner would be to lop off the (mountain) top but that's
possible because it is a World Heritage Site," said Johnny Delgado, chief
executive officer of Andean Silver Corp. "It's a very big social problem."
His firm, the Bolivian offshoot of Cayman Islands-based Apex Silver Mines
Ltd., is "definitely interested" in the project, he said. Apex's nearby San
Cristobal mine is set to begin production in 2001 and produce 17 million
ounces a year.
A government study calculated a $118 million subterranean mine burrowing
into the Cerro Rico could produce 266 million ounces of silver over 25
years, churning through 54 million tons of ore graded at 182 grams per ton.
A more roundabout solution is being sought by U.S. firm Asarco, which is
finishing a feasibility study aimed at using loose surface material around the
23-million-year-old mountain. Their blueprint predicts silver production of 4
million ounces a year for 12 to 18 years based on throughput of 5,000 tons
a day and an investment of $48 million.
"Asarco will decide between year-end and the beginning of 2000 if the
project will proceed," said Ruben Terrazas, the company's representative in
Firms eyeing the bigger load lurking in the mountain's interior, which
Terrazas estimated at a minimum 250 million ounces of silver worth $1
billion, remain gun-shy of rumbling dissent in Potosi.
"The majority of the firms say it's a good deposit (but) with many political
and social problems," Villalobos said.