Recent local press reports in Bolivia have identified various suggested solutions to the financial problems faced by the Vinto smelter and Huanuni mine. These include a merger of the two separately managed units, more government subsidies to both operations, the settlement of debts owed by Vinto to Huanuni and cuts in the inflated wage bill at the mine.
The Vinto smelter is reported to owe over $30 million for concentrates supplied by the mine, with some debts going back to October 2013. However Marcelino Quispe, CEO of state mining company Comibol, which controls the mine, told local newspaper La Razón that this would be paid in full “in the coming days”, allowing normal production through the second half of this year. Union representatives at the mine had threatened to halt operations unless the debt was paid.
Meanwhile commentators including ex-government ministers have argued that the workforce at Huanuni, variously stated as between 4,400 and 5,000, must be cut and also noted that wage rates are well above the national average, although this is strongly resisted by the union. Production at Huanuni was reported to have dropped to 558 tonnes of tin-in-concentrate per month in the first quarter of 2014, compared to a peak rate of over 830 tpm in 2009. The operation made a small financial loss of US$2.4 million in the first half of this year after generating a marginal profit of less than $1 million in 2013. The poor performance of the operation has been compared unfavourably to that of the more recently nationalised Colquiri mine, which has increased production considerably but has a much smaller workforce. Official statistics show that refined production at the Vinto smelter rose by 12.2% to 5,427 tonnes in the first half of this year.
ITRI view: Both operations have long-overdue expansion plans, which the current reports suggest may be further delayed. The main constraint is lack of investment in mechanised underground mining at Huanuni to match well-advanced work to increase ore-processing and smelting capacity.