’s state-owned mine made a loss of US$6.7 Million last year, according to local news sources, as government statistics show that underinvestment and widespread drought resulted in a 25% year-on-year fall in tin-in-concentrate production in 2016 to 6,460 tonnes.

Bolivia’s worst drought in 25 years has been the major factor affecting output and has continued to be an issue so far in 2017. The impact has been compounded by ongoing reliance and underinvestment in Huanuni’s ageing Santa Elena ore dressing plant. of the new, US$50 million Lucianita processing plant was completed at the end of 2014 but it is still not operational as it lacks sufficient supplies of water, and tailings capacity.

While the annual financial deficit was been reduced from $17.8M in 2015 to $6.7M last year, the ongoing losses are a sign that financial problems remain. While the number of employers fell by 203 during 2016 to 3,543 due to worker retirement, this remains far higher than the 818 workers employed in 2006, the year prior to the nationalisation of the mine. The workers themselves took a 20% salary cut in 2016 to assist with the mines troubling financial position and we understand they did not collect end-of-year bonuses due to the mine’s poor performance last year. There are signs of rising discontent, with a number of news reports indicating significant theft of minerals from the mine. The leader of the Huanuni workers union, Eddy Calle, has suggested that this could currently represent 30% of output.

View: While higher tin prices should help support production and potentially see a return to profitability this year, the outlook for the mine’s medium to long term performance is heavily dependent on the pace and level of investment in infrastructure necessary for the new processing plant to begin meaningful operations. Total Bolivian state-mine tin production in 2016 was 10,691 tonnes (provisional) with production from the mine effectively unchanged in 2016 at 4,231 tonnes.