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Socialist Project • E-Bulletin No. 646
June 5, 2012
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Mallku Khota

A Briefing on South American Silver's Actions in Bolivia

Prepared by Celia Garces in conjunction with CEDIB, Cochabamba

Map of Bolivia

The indigenous community of Mallku Khota is in a state of emergency for resisting the continued operations of South American Silver Corporation's (SASC) subsidiary, Compañía Minera Mallku Khota (CMMK). On May 28th, 2012, the governor of Potosi pleaded to the national government to militarize the zone where mineral exploration is ongoing. His calls to militarize the zone follow several weeks of rising tension between the community of Mallku Khota (opposing continued operations), neighbouring communities in favour of continuing operations and the department of Potosi.

On Saturday May 5th, 2012 at four in the morning, approximately 50 police officers entered into the homes of the families of indigenous community, Mallku Khota located in Northern Potosi, Bolivia. The community lives among the current area of exploration of the Compañía Minera Mallku Khota subsidiary of South American Silver, a Canadian junior league exploration company. According to community members who experienced the violence, not only were the sleeping resident's homes gassed, but also women and children experienced physical violence, and some community leaders were apprehended, later to escape.[1] Now, over three weeks later, the community is facing further persecution with one of the main political figureheads of the conflict, Tata Cancio Rojas, recently being apprehended and charged by the commander of the police department of Potosi with attempted homicide among other charges. The crime, according to both the accused, his defense, and those working closely with him, is not only unjustified but outright political fabrication aimed at demobilizing the culminating dissent against the company and its continued explorations.

Immediately following the police repression, community leaders made the decision to detain two of the police officers involved in the attack. Members of the community blockaded the entrance into the community and demanded that CMMK cease its operations and withdraw from the community. The police officers were later released on May 9th 2012.

Lake Charque Khota

Lake Charque Khota.

Escalation of Events

Assimilating community consent in Mallku Khota and the surrounding communities has not been easy for the CMMK. Despite continuous press releases from the SASC arguing that the community is elated to have them come and work in their territory, as early as 2009 CMMK had commissioned a local NGO[2] and two doctoral students to work on ‘improving community relations.’ While on site, following the police repression, we were stopped by the director of community relations of CMMK. He claimed that he wanted an opportunity to give the company's side of the story on the escalating tensions within Mallku Khota. He argued that only 2 of the 42 surrounding communities were opposing the project, an opposition that, as he assured us, CMMK was presently “working out.” We observed the evidence of these attempts to “improve” community relations in the days that followed.

On May 17th nineteen ayllus[3] against the company from the surrounding region united to outline the project, inform their bases, and prepare for the meeting, which would follow between the governor of Potosi, Minister of Mining and community leaders in Acasio. At this meeting members produced a declaration strengthening the spine of the Mallku Khota community demands, demanding the withdrawal of the company from the area. This declaration they produced in order to present at the meeting the following day.

In Acasio on May 18th, tensions between communities in favour of exploration and against exploration erupted in front of City Hall in Acasio, resulting in three wounded.[4] Following the eruption of the conflict, community leaders entered into the meeting with the governor, and the Vice-Minister of Mining but no meeting took place given the preceding conditions. Community leaders demanded that the governor be held accountable, along with the company CMMK, for their provocation of the violence that erupted that morning, and continued to erupt into that evening.

Indigenous leader injured in violent confrontation in Acasio.

Following the confrontation between community members in the town of Acasio, the community of Mallku Khota, and various surrounding ayllus affected by the mining project collaborated on a resolution denouncing the activities of the CMMK under the SASC. In this declaration they demand the cancelation of the mining concessions granted to the CMMK, condemn the repressive acts unfolding in their community, and call on their national indigenous organization CONAMAQ to support them in nation-wide mobilizations against South American Silver in protection of the environment, their territories, and their social well-being. The increased support and mobilization from the supporting ayllus comes in response to events that occurred against the community of Mallku Khota earlier this month.

On Monday May 21st 2012, Tata Cancio Rojas, after leaving the Ministry of Mining in La Paz was encircled by approximately 15 community members in favour of CMMK's actions in Mallku Khota. After escaping the situation and fleeing to the police station for protection in the morning he was prevented from leaving the station because his assailants followed him to the station and were waiting en-masse outside of the office. At this time, executives of CMMK maintained a presence, refraining from making official press-statements instead distributing food to those community members who had attempted to assault Cancio Rojas. It is important to note that, despite requests by Cancio Rojas and other members of CONAMAQ to the police to retain the menacing community members so that they could leave the station after he gave his denunciation, the police refused. Instead, at the time of planned departure, Tata Cancio was conveniently presented with a letter of detention summoned by the District Attorney in Potosi. Despite the fact that Tata Cancio Rojas was in La Paz, and not in Mallku Khota on May 5th during the repression or the detention of the police officers who are now pressing charges, he was detained on May 21, 2012 when attempting to leave the station. Early the following morning he was transferred to Potosi where he remains imprisoned indefinitely awaiting judicial revision of his case, despite denunciations from the permanent assembly of Human Rights. It is important to note that the prosecution, up until the day of his arrival in Potosi where he was to present himself in front of the judge, did not have a case file prepared on Cancio Rojas’ case.

In light of these escalating events, on May 28th 2012 CONAMAQ's IX March in Defense of the sacred lake of Mallku Khota departed from Mallku Khota en route to La Paz to support the 16 ayllus and surrounding communities of Mallku Khota in their demands. The march plans to arrive in La Paz, coinciding with the arrival of the TIPNIS march which is presently also making its way toward the nation's political capital. Both marches have expressed overlapping demands, which include the recognition of protected indigenous territory, the guarantee of the constitution's pre-consultative process in extractive projects, and the cancelation of the imperialist projects in question in favour of a national forum.

Who is South American Silver Corporation?

South American Silver (SASc) is registered both under the TSX and U.S. OTC stock exchanges as a junior exploration company, engaged presently in financial speculation. Junior companies are primarily exploration companies, but given their relatively weak capital capacity they often sell, or enter into partnerships with larger corporations once the project reaches its operational phases. Presently SASc has two operations, both in the exploration phase, the Escalones project in Chile, and the Mallku Khota project in Bolivia.

SASc has been working in Bolivia in Mallku Khota as SASc since 2006. SASc was, until 2006, subsumed within the General Minerals Company (GMC) until its incorporation, and the eventual transfer of CMMK to SASc. The GMC had been working in Bolivia since the 1980s on various projects including what turned out to be the most important interest for SASc, Atocha, a silver mine approximately 25km North of what is now the Mallku Khota mining concession. According to the present CEO of SASc, GMC followed a vein they were working southwards discovering, Mallku Khota. GMC bought the rights to what are now the Mallku Khota concessions in 2003 and incorporated the company Compañía Minera Mallku Khota (CMMK). CMMK began preliminary explorations in 2004, and in 2006 became a 100% owned subsidiary of the Canadian, South American Silver Corporation.

It is entirely possible that SASc is sitting on the CMMK in order to sell it once all of the studies, permits and piloting are in place. This is the pattern of junior exploration companies who primarily speculate in order to increase their share value; particularly this has been the case with junior companies in Bolivia. However, there is more at play which suggests that SASc might opt for partnering on this project. Repeatedly over the past six years, SASc has decided to sell and/or cut-off funding of their other projects in order to maintain Mallku Khota – arguing that it is their flagship property. Further, their annual and semi-annual reports constantly revealed that they were looking for partnerships or possible buyers of other projects they had, and still have, in order to ensure investment into Mallku Khota.

As a junior league corporation, SASc is entirely dependent on its shareholders and continued investments. As of March 31, 2012, the company had a working capital of $21.8-million, including cash and cash equivalents of $23.4-million. Total initiating capital required for the MK project, according to the 2011 Preliminary Economic Assessment (PEA) is $411.4-million.[5] That is to say that, without continued and maintained investment and rising stock prices, SASc would not be financially capable of continuing its explorations in Mallku Khota. As such, company image, at least outside of Bolivia is integral to its continued actions, which makes it unlikely that a military intervention, at least at first, is the route the municipality of Potosi and the company would take. Such an act would unavoidably make international press – or at least spread to stockholders and investors, resulting in speculated instability, and investor anxiety. Rather, it is more than convenient for CMMK to continue to encourage and fuel the intercommunity war that is rising in order to eventually continue explorations.

Territorial Conflicts, TCOS and
the Mallku Khota Concession

Figure I. INDIGENOUS TERRITORIES (TCOs) and CONCESSIONES

(With Zone of Exploration and Mallku Khota Community Identified)

Figure II. PERFORATION AREA AND LAKES

SOURCE: Katsura, k. 2006. Report on Mallku Khota Property, Department of Potosi, Bolivia. Prepared for South American Silver.

Figure III: PROPOSED PIT DESIGN

The rights to the Mallku Khota concessions (except for the Norma concession whose purchase was finalized in 2008) were purchased by the GMC in 2003. The company owns the rights to 5,475 hectares within the region. The CMMK concession lies in the middle of two provincial lines, Charcas and Alonso de Ibáñez, and directly affects 42 TCOs[6] (see Figure I). Based on the data provided in the PEA update 2011, we superimposed the area of exploration over the concession where the major perforation activity has occurred in the zones of Limonsa, Wara Wara, and Sucre, and the planned operation (Figure III) will directly occur in the middle of the community and lake region, with an approximate 8 X 5km area affected.[7] There is a note in the PEA that displacement of the community can only occur upon declaration of the land under public direction by the municipality. The company states they are waiting for that decision to be made.

This makes it an area of conflicting interest between that of the province and that of communities directly affected by exploration (like Mallku Khota) and that of communities within the surrounding area. (See Figure I and II) As it is clear from Figure II, the exploration site not only borders the community of Mallku Khota, but it also explores directly beside the lake Wara Wara. The Wara Wara zone has the second highest concentration of perforations to date in the concession and is planned to house the Wara Wara pit. (see figure III)

According to the New Political Constitution of the Plurinational State of Bolivia, indigenous communities having rights to TCOs have the right to what is called the consulta previa which means that they are to be consulted prior to the signing of extractive projects within these territories.[8] That being said, this conflicts with the legislation currently in place in two ways. First, the legislation claims consultation takes place before any activities within the territory are performed, and since this project remains in its exploratory phases and the company has operations undergoing the Constitution requires consultation. And second, because the company obtained the rights to the concession to work in the area (prior to 2006) and these rights are being given precedence over the TCOs (even though the company denies that these TCOs actually exist).

Project Economics

The proposed mining project for Mallku Khota is two-fold. The primary ore extraction will occur through the exploitation of three open-faced pits, which concentrate in the three primary zones of exploration; Limonsa, Wara Wara and Sucre and are found within the vicinity of the areas four glacial lakes and the community of Mallku Khota. According to the projected size of the operation, along with the areas of perforation provided by the company, we can estimate that the operation will nearly overlap with the lakes within the community, the waste dumps spread out in three areas beyond the pits, and the leach pad area centers between the pits and close to the lakes. It is most likely that the operation will require the displacement of the immediate Mallku Khota community from the area. (See Figures II and III) Due to the scale of the entire operation, and the fact that it requires three open-faced pits displacement may occur if not directly by the operation then indirectly by the impacts of the size of the project.

Average mineral extraction per day is calculated at 40,000 t/d. Ore that is extracted from the pit is then transferred to the leech pad station. The second phase of production is the extraction of the metals from the ore. This process, in order to extract not only silver but also the other projected minerals, Indium, Gallium, Zinc, Copper and Lead, occurs by chemical leeching using an Acid-Chloride Leaching process. Over the life of the mine (15 years) the Mallku Khota project is expected to produce 158 million ounces of silver, 1,184 tonnes of indium, 191 million lbs of lead, 135 million lbs of zinc, 88 million lbs of copper, and 212 tonnes of gallium. Given the price cases the company presents in the PEA, the mine has the potential to accumulate (raw prices, lowest price scenario) $2,844-million from silver extraction and $594-million from Indium. Silver represents 70 per cent of revenue before taxes and costs of production, and Indium 15 per cent of total anticipated revenue. (See Table I)

According to the Updated Pre-Economic Assessment of 2011, Mallku Khota is projected to be one of the largest silver deposits in the world, and the second largest in Bolivia behind Sumitomo's San Cristobal (6th largest silver producer in the world) with a projected production of 410.57 mt/yr over the first five years, and an average production over the life of the mine (15 years) of 326.59 mt/yr. San Cristobal's current production is around 600 mt/yr. With the recent release of the 2011 results, the SASC expresses a 60% increase in measured silver reserves (compared to a study released in 2009), claiming the presence of 230 million ounces of silver with inferred resources of 140 million ounces of silver. The key to these figures is that according to this economic plan, the company has only explored 30 per cent of the concession. This leaves the magnitude of the project still unknown – and the company projecting the deposit to eventually be one of the largest of the world. With the global industrial demand for silver rising, and forecasted demand continuing to rise,[9] sitting on potentially some of the largest deposits in the world makes these concessions particularly important. It also means that, as we are witnessing, the demands of capital and the possibilities of accumulation are continuing to silence the voices of those who will bear the brunt of this project.

Beyond the silver reserves there is another element to the equation worth mentioning which also suggests the road to partnership – Indium. Indium is a metal that is often found in the presence of Zinc reserves, as is the case with Mallku Khota. Indium's primary end-uses are electronics. It is used as a coating for LCD screens and other high-tech devices, whose major refinery production (79%) takes place in China, Japan and the Republic of Korea.[10] According to the president and CEO of SASc Greg Johnson, it is estimated that once in production, Mallku Khota will produce around 10 per cent of the world's supply of Indium and Gallium. Not surprisingly then, on May 7th 2012, SASc announced the closing of a share transaction with “strategic Asiatic countries” involving the unconditional sale of $16-million worth of shares.[11] Although information of what companies are involved in this transaction has yet to be released, it is a significant indication of the interests behind Mallku Khota's production. It is also important to note that recent strategic partnerships have been made between Chinese and Korean companies and the Bolivian government with regards to lithium production and refining, another technological metal, which suggests that possibly those already invested in Bolivia in these areas could be involved in this transaction.

Uncovering the Myths Behind Mallku Khota

TABLE I: RAW VALUE OF PRODUCTION OVER LIFE OF MINE
(PEA 2011)
MetalBase CaseMiddle CaseRecent Case
Production (millions) based on life of mine
(15 years)
$/unitRaw value of total production (millions USD) $/unitRaw value of total production (millions USD) $/unitRaw value of total production (millions USD)
Silver (Ounce)158182,844253,950355,530
Indium (kg)1.84500592570674.9650769.6
Gallium (kg)0.21500106570120.8730154.8
Lead (lb)1910.90171.911911.20229.2
Zinc (lb)1350.90121.511351.10148.5
Copper (lb)8832643.70325.64.30378.4
TOTAL
(millions USD)
4,099.45,397.37,210.5
Data assembled from Updated PEA 2011.

According to the most recent press release by South American Silver:

“Over the past year South American Silver has significantly broadened its community relations activities and the Company has entered into Impact and Benefit-type agreements with local indigenous communities to facilitate local economic and business development through the various stages of project implementation. The project contributes significantly to the local economy and it is estimated that the construction phase would likely create as many as 1,000 new jobs in the region with over 400 fulltime workers directly employed during mine operations. Feasibility and baseline environmental work is planned to begin in the second half of 2012. The Company anticipates continuing to build on its Community Relations Initiatives to support the feasibility and permitting stages in 2012 and 2013.”[12]

Similar to Impact-Benefit agreements that are signed between Canadian indigenous communities and companies, there are perks or, better named – bribes, that the company offers to the community in order to continue their operations without conflict. Often those ‘gifts’ come in the form of promises of infrastructure, opportunity, and employment. This theme constantly re-appeared in our conversations with those in favour of the company's continued operations. The company has provided a select number of youth with scholarship opportunities, and is maintaining the highways between exploration sites facilitating transportation for community members. According to the company and the government, considering that there was no constitutional framework regarding a consultative process. And, as a result, the consultation process did not legally have to take place. Beyond legislation, however, in order for the company to ensure its continued operations without conflict with the community bribes are central to maintaining consent. In Canada, what usually happens is the company negotiates on a community-to-community basis when convenient. This contributes to creating divisions within communities and between them. Based on the conflicts emerging and growing we can assume similar arrangements have been made.

Environmental Concerns

It is appalling to note that six years into exploration the company has yet to complete the social-environmental baseline study. According to existing legislation upon beginning exploration, the company must apply for an exploration licence, but this does not go through the ministry of environment. The environmental license currently required for exploration is simply a document that gets signed by the department in question to permit explorative activities.

The company, since its prospectus report in 2006 has continued to argue that there are no perceived environmental risks with the project, despite acknowledging that few environmental studies have been completed. From our visit we observed equipment for operations that were occurring on the shore of lake Wara Wara. The community rely on fish that live in those lakes; they draw and consume the water from those lakes. In the Mining Code of 1997, it is clearly stated that: “...the mining concessioner cannot realize mining exploration or exploitation activities a) within the vicinity of communities... and, b) in the proximity of roads, canals, lakes...”[13] Despite this existing legislation, the company has explored in the near vicinity of the lakes, refer to Figure II. In fact, at the time of our visit, the company had perforation machinery set up on the beach of lake Wara Wara.

Area of Desertification in front of lake Wara Wara.

The community of Mallku Khota is especially important for the main watershed Amazonica, which supplies water to the Amazonian region of the country – making Mallku Khota yet again, of national interest. Mallku Khota houses a sub-basin Rio Grande, which directly feeds into the watershed Amazonica. Given the location of the proposed project, and the consumption of water required for the operations, the company, based on results from a study completed by a Chilean consultant, claimed that water supply will be negatively affected in the future during the dry season. We noted during our visit that Mallku Khota is undergoing a process of desertification, and community members confirmed that they struggle with daily water consumption during the dry season. That is to say that water is not necessarily in abundance. Further, given that the leeching process requires chemical processing, according to the PEA, there is the possibility of chemical contamination into the local water supplies, which will also require maintenance.[14]

Mallku Khota is an agricultural and pastoral region – water is central to their daily survival. The community of Mallku Khota is located at a superior altitude to some pastoral and agricultural communities that are situated at the foot of the mountain. The nearby valleys channel run-off water from the area of exploration to the lower surrounding communities. If this water is contaminated, it will contaminate the entire local watershed, and beyond local, enter into the subterranean basin carrying contaminated water to the agricultural and pastoral regions in Santa Cruz and the amazon.

Finally, open-pit mining is extremely environmentally destructive. The company predicts an extraction of 198.8 million tonnes of ore over the lifetime of the mine and 443.5 million tonnes of waste. This waste will be disposed of directly behind the pits in order to minimize its transportation. Between 3 open-face pits, and 3 dumping areas to account for 440 million tonnes of rock waste, where will this community be able to graze their sheep? Where will their livestock be able to take in water? Where will they be able to plant their crops? These are real concerns for those living within the immediate vicinity of the company's present operations, concerns that are echoed in their demands to expel the company and either cease destruction, or open dialogue surrounding the possibilities of extraction that accounts for their dependence on agricultural production, the protection of their rights, and those of the environment.[15]

Work

In terms of the ‘excellent’ employment opportunities that the operation will offer, according to the PEA, the majority of employment will come with the contracting of construction work prior to the operational phases of the project. In terms of direct employment – that is to say – labour required for operation, the majority of the positions offered are contracted hourly, with the highest concentration of employment offering 275 positions.[16] More secure contracted positions are reserved for professionals and specialized staff, some of whom, according to the company, will be foreigners. And so, again, based on the desire for employment opportunities and the relatively poor conditions of these communities, precarious labour without security and benefits is what will enable one of the soon-to-be largest silver operations in the world to keep wages low and maximize accumulation. Maintaining these conditions ensure a cheap and willing reserve army of labour to work the mine, with a select handful of professionals and foreigners granted the security of salaried work. That being said, for some, employment is employment, and the promise of work, regardless of its type or consequences, resonates as opportunity when work is scarce.

Neoliberalism and Regionalization of Politics

What makes these agreements signed between community members and the company most effective is the material conditions of the community in question. In the case of Mallku Khota and the surrounding communities, Northern Potosi is one of the poorest areas of the country. This is paradoxical, but also telling of the political-economic tendencies of the Evo Morales administration, given that Potosi houses San Cristóbal, the 6th largest silver producer in the world, and several other important mining operations. These operations could be contributing to the improvement of these communities through national re-inversion in services and infrastructure. However, due to their transnational control they do nothing but suck the resources out of the department and out of the country. San Cristóbal has remained untouched, and untouchable by the Morales administration.[17] The inter-community conflicts emerging within Mallku Khota are another example of emerging inter-sectorial conflicts resulting from a scarcity of resources and a failure of the discourse of nationalization to translate into material policy change. We saw a similar tendency with the inter-sectorial conflicts that emerged with TIPNIS conflict.[18] What makes these communities particularly vulnerable to foreign investment, and thus extremely appealing to foreign investment, is their economic marginalization. According to an interview conducted in the community by newspaper Erbol, community members claim that there is a lack of services and resources. This contributes more and more to emigration away from their communities to larger centers for work,[19] or contributes to dangerous forms of work by engaging in extraction by mining cooperatives.

Because of the neoliberal reforms of the 90s, royalties generated by the mining operations were offloaded to the departments, and later to the municipalities (2007).[20] This meant that revenue that once went to the state was transferred to the municipalities and departments. This of course contributes to conflicts emerging at local and regional levels of governance with departments, municipalities, and communities all fighting for scraps of royalties – while the larger politic, that of the sheer insufficiency of the royalties that remain in the country, goes unnoticed. It also enables hand washing at the national level when conflicts do erupt, which enables the inter-sectorial conflicts to occur within the pretext of communal squabbles, and obfuscates the fact that there are real material inequalities that exist in these areas – inequalities that are continuously erased, or manipulated, in favour of transnational capital.

In the case of Mallku Khota, after the MAS administration announced the revision of the Mining Law of 1997, Morales was quoted saying that natural resources are the direct property of Bolivians and that there was the chance that privately owned concessions could be taken over by the national mining company, COMIBOL.[21] Speculators of the Mallku Khota project identified the possibility of SASc losing their rights to the Mallku Khota concession. However, despite Morales’ announcements that some properties would be up for revision and possible expropriation, SASc executives appeared a few days later reassuring their investors that the Mallku Khota property would go untouched, and that business would continue as usual. Greg Johnson, CEO and president was quoted saying, in response to some fears that Mallku Khota would undergo national revision with the possibility of being turned over to COMIBOL, “...based on our regular discussions with the Bolivian government we believe that they want to encourage foreign private investment in mining and that they specifically support the development of the Malku Khota project.”[22]

Having seen the economic weight that the Mallku Khota project holds it is ever more important to return to the demands of the community of Mallku Khota. The community is demanding the cancelation of the concessions with CMMK and the immediate stoppage of all work being done in the area. As such it is an important political conjuncture moment, one that could open up new ways of conceptualizing resource management and extraction, but one that also could reveal the MAS’ mining politics. These communities argue that at no time will Bolivians have a say, nor a means of control over their natural resources if a private transnational is controlling the project.

There are ways in which the Bolivian state could (and should) intervene in this project, and others like it in the country. Since the neoliberal reforms of the 1980s and 90s, Bolivians have witnessed the near disappearance of the Bolivian State Mining Corporation, COMIBOL. Particularly over the past 20 years, they have seen the three most productive projects in the country by foreign transnational interests. One of these projects is the silver giant San Cristobal whose production is the 6th largest worldwide. Bolivia has always been a raw materials producing nation, a trend which continues today despite the rhetoric of the Morales government, and is increasingly dominated by the private mining industry which now accounts for over 70 per cent of mineral production, while being dominated by transnational interests.[23] Bolivia does not need more mines, particularly more mines that produce raw-materials for export, the majority of gains never resting in the country.

Canada's Foreign Policy

This is not the first reported incident of a Canadian mining company working in an area where violent interventions have become the only way to guarantee their actions. In fact, recent denunciations by human rights activists in Mexico regarding Goldcorp and Comsin's repressive joint actions with the Mexican government against mining unions and community organizers, in conjunction with recent militarized repression of mining camps in Cajamarca demonstrate the political agenda at hand. A politic that not only uses, but requires and anticipates the use of repression for the extraction of raw materials. I emphasize anticipated use of force because it is evident as these conflicts unfold the ways in which the Canadian government, hand in hand with the corporation have developed mechanisms to legitimate violence and repression in the name of capital.

It is obvious in examining the case of Mallku Khota that Canadian mining companies are far from ‘corporately responsible.’ That being said, the Canadian government is also aware of how far a mining company ‘must go’ in order to ensure that projects continue, regardless of the consequences. As such, the Canadian government has taken steps to ensure that, in the event that conflicts occur between mining companies and communities, that there are protections made available for that company, to avoid any bad public relations or potential stockholder anxiety. One of the ways that this has been recently put in practice in Bolivia is through the Promoting Effective Corporate Social Responsibility (A034537-001) program implemented by CIDA for 2011-2016. According to CIDA's program overviews, this program, in which the Canadian government through CIDA has invested $6.6-million aims to “improve access to resources” by “building the capacity of regional and local governments and communities” involved in extractive sector development projects. Of the total funding, 75 per cent of the funds are explicitly directed for the use in “mineral/mining policy and administrative management.”[24]

Pro and against CMMK confrontation in Acasio, May 18th.

On the 21st of May the governor of Potosi, Felix Gonzales, declared that they were meeting with national government officials to determine how they would control the situation in Mallku Khota. He claimed that a group of police were on standby and that they were not discounting the possibility of sending in the military to ensure that the company's constitutional rights were protected.[25] They did not send in the military, first, because it would require the assembly of a military base given the geographic isolation of the community. Second, in this case, it does not serve the government at behest of the company to enter directly into the community with militarized force – at least not yet. They have not yet built up a strong enough case of resistance within the community, have not been able to successfully prove extensive damage of private property, and, aside from Cancio Rojas’ apprehension have not been able to legitimate the presence of military force. However, what is working in favour of the company are the rising tensions[26] within community members, tensions that are becoming increasingly violent in nature – it is much easier to instigate and fuel the internal tensions that are arising and then justify intervention than it is to outright justify militarized intervention. On May 28th, the governor revived his call to the national government, urging that they militarize the zone to protect the company and those communities that are in favour of the exploration.[27]

With the march having departed from Mallku Khota and set to travel through communities in favour of the operations, the eruption of conflict that could potentially end in bloodshed is highly possible. The fact that South American Silver is surely aware of the risks of such an explosion and yet continues with their operations is simply the last nail in the coffin. Their inaction represents a deliberate political project, one that can lead us back to Canadian mining policy at home and abroad which enables and encourages these actions, cloaking them under the guise of ‘social corporate responsibility.’

The Harper government continues to make headway into ensuring that their mining companies continue their imperialist paths both at home and abroad. Canada will participate in the OAS’ 42 General Assembly meetings, which will be hosted in Cochabamba, Bolivia the first week of June. Canada's Minister of State of Foreign Affairs, Diane Ablonczy will be attending and participating in the events. Surely Canada will be attempting to sell their companies as front-runners in industry based on our pro-active solutions to social-political conflicts. Surely Minister Ablonczy will be presenting their companies as socially responsible. Regardless of the presentation, she will be preaching to the choir – groups of foreign ministers and heads of industry who, in practice, continue to seek ways of capital accumulation, steamrolling those communities who attempt to stand in their way.

Nothing has changed either within Canada or abroad in terms of Canadian extractive policy – the names have become more ‘investor-friendly’ but the project is imperialist, and is founded on the expropriation, displacement, repression and death of those most affected by its imperial arms. •

Celia Garces is an investigator in Natural Resources at the Center for Documentation and Investigations (CEDIB) in Cochabamba, Bolivia.


Endnotes:

1. Interview May 17th 2012, Mallku Khota.

2. Cumbre del Sajama is the name of the NGO working in Mallku Khota. The company CMMK also has several executives who form the “community relations” arm of the work on the ground. We encountered the head of that body during our visit.

3. An ayllu is a territorial-political organization that includes a particular number of indigenous communities, and is the basic unit of political organization. A group of ayllus forms a Marka. The leader of the Marka of Sacaca, Cancio Rojas, is the community member who is currently under pressure by the municipal government.

4. Indigenous authority against exploration wounded in Acacio on May 18th.

5. South American Silver. Condensed Interim Consolidated Financial Statements. First Quarter Ended March 31, 2012.

6. Tierras Comunitarias de Origen (TCOs) are communal indigenous land titles.

7. It should be noted that this data is estimated based on perforation coordinates and the data provided in the Updated PEA.

8. Article 30, Paragraph II, number 15 of the New Political Constiution of the Plurinational State of Bolivia: 2009.

9. According to the Silver Institute's report: The future of Silver Demand (2011) the forecast for silver industrial demand is an increase of 37% by 2015, from 487.4 million ounces in 2010 to a forecasted 665.9 million ounces in 2015, due to rapidly expanding industrial industries in China and India (5).

10. According to the USGS Commodity Survey (2010) in 2008, China produced 310 tons, Korea produced 75 tons and Japan produced 65 tons out of a total of 570 tons produced globally.

11. Canada Business News. April 17, 2012. Asian investment creates buzz about South American Silver. Available Online.

12. May 14, 2012. South American Silver Files First Quarter 2012 Financial Statements and MD&A and Project Update. South American Silver Press Release.

13. Chapter 4, Article 44 a and b. Ley # 1777: Codigo de Mineria 1997.

14. South American Silver. 2011. Updated Preliminary Economic Assessment.

15. South American Silver. 2011. Updated Preliminary Economic Assessment.

16. South American Silver. 2011. Updated Preliminary Economic Assessment.

17. Diaz Cuellar, V. 2012. La vigencia de la legislación neoliberal en Minería. Petropress, 28.

18. See Francescone, K. 2011. Internal Fractions and the right in Bolivia. The Bullet, 548.

19. May 24, 2012. Españoles explotaron plata del Mallku Qota, indígenas crían truchas en la laguna. Erbol.

20. Diaz Cuellar, V. 2012.

21. April 12, 2011. Morales anuncio la estatización de las empresas mineras que aún no fueron recuperadas. Pagina Siete.

22. April 15, 2011. South American Silver Clarifies Private Ownership and Status of the Malku Khota Project, South American Silver News Release.

23. Diaz Cuellar, V. 2012.

24. Promoting Effective Corporate Social Responsibility - Bolivia, CIDA.

25. May 21st, 2012. La Policía aprehendió a Cancio Rojas, presunto principal instigador de los problemas en Mallku Khuta. Radio Fio, Potosi.

26. Photo taken in front of municipal office in Acacio (May 18th) during confrontation between communities in favour and against SASc operations.

27. May 28th 2012. Gobernador de Potosí urge militarizar Mallku Khota para evitar nuevos enfrentamientos. Agencia Boliviana de Informacion.

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