An agreement has been signed between the Bolivian Ministry of Mining and Empresa Minera Huanuni for the injection of US$20 million into the mining company to purchase essential supplies and pay off debt of approximately $17 million with its suppliers, according to local news sources.
The current manager of the Huanuni mine, Zelmar Andia, had been vocal about the mines precarious financial situation in recent weeks, at one point threatening his own resignation. He claimed the mine was at a crisis point and risked not being able to afford the materials necessary to maintain production.
Eddy Calle, the leader of the Huanuni mineworkers union, said of the influx of funds: “First it will pay the debts we have with our suppliers, and then it will also enable the purchase of materials needed for production in the coming months [Translation]”. He also stated that the company will aim to pay back the debt from 2018, by which time it is hoped the mine will returned to profitability.
During negotiations the Minister of Mining and Metallurgy, César Navarro, had proposed that employees contribute 20% of their income for 10 months to help alleviate the situation, but this was rejected by the workers. In addition to the $20 million loan to sustain mine operations, the government has also granted a $15 million loan that will be used for the payment of social benefits to workers leaving the company voluntarily due to illness or retirement; the mining company currently has 3,750 employees.
ITRI View: The Huanuni mine is the largest tin producer tin in Bolivia, with production in 2014 totalling some 8,500 tonnes of tin. However, the mine was hit particularly hard by low tin prices in 2015 due to the cost of its excessively large labour force. While construction of a new mill has been completed with the capacity to produce up to 3,000 tonnes of tin concentrate per month, it will not start operating until current construction of a new tailings dam is complete.