In a Critical Resource Q&A, Bolivia’s Minister of Mines, César Navarro, reflects on the future of Latin America’s Left and calls for a new relationship between investors, society and the state.
César Navarro has been Bolivia’s Minister of Mines and Metallurgy since 2014. Between 2006 and 2010 he was a deputy in Bolivia’s legislative assembly representing the Department of Potosí. He is a member of President Evo Morales’ Movimiento al Socialismo (MAS).
Mining’s legacy in Bolivia: pollution, poverty and exploitation
“Mining is complicated – it involves labour conflicts, environmental conflicts and conflicts with the community. The legacy of mining in Bolivia is basically one of pollution, poverty and exploitation. In the 19th century there were destitute miners practically ready to die at the age of 40 while fat mining barons sat in London drinking fine wine and eating smelly cheeses. In the 20th century the wives of miners went on hunger strikes and brought down the military dictatorship, paving the way for a democratic government in Bolivia. That’s why they used to say “sangre de minero, semilla de guerrillero” (“blood of a miner, seed of a revolutionary”).
Today we find ourselves in another historic moment, in which we have to transform how foreign investors behave. Mining isn’t a panacea, but the world needs minerals. Therefore, it is essential that the nature of investment changes. If a community doesn’t see an investor as an agent of development, of enrichment, then it will reject the investor. When poverty collides with wealth it inevitably sparks a negative reaction. We have to drastically change the behaviour of private companies and modify their relationship with society and the state.”
Sumitomo and Pan American Silver have done better than the rest
“There are two mining projects – Sumitomo at San Cristobal and Pan American Silver at San Vincente – that have a particularly interesting relationship with the local community and the state. San Cristobal is in the south of Bolivia, in my home department of Potosí. It’s a cold, arid and sparsely populated place. The deposit was in the middle of a community and because it was an open pit operation, Sumitomo decided to move the town. The company constructed new homes and developed social initiatives on education and healthcare. Sumitomo now has a robust relationship with the community and as a result local people defended the company when there were calls to nationalize the project. This shows that the relationship between companies, the community and the state can be transformed. Pan American have worked to build similarly positive relationships at San Vincente.”
Nationalization has allowed Bolivia to weather the downturn better than its peers
“In Latin America we lived through a harsh era of neoliberalism. The state stopped contributing to anything. The private sector, meanwhile, stepped up its involvement, but it failed to meet society’s expectations. In theory, neoliberalism requires investment. However, in the case of the Bolivian mining sector there was none. Today we’re working to rectify this lack of investment in research, exploration and subsequently in production.
The Morales government arrived and nationalized the hydrocarbons sector. That was because out of every $100 of hydrocarbons sold, only $18 went to the state. We’ve managed to reverse that. Now between 2 and 14 percent of proceeds go to investors and the remainder stays with the state. As a result, the government has far greater economic resources. This has boosted our investment capabilities and helped to fill the gap left by the private sector – which in turn has helped us to weather the economic crisis relatively successfully.”
The Left has fundamentally shifted Latin America’s entire political scene
“With the arrival of leftist presidents like Chavez in Venezuela, Ortega in Nicaragua, Mujica in Uruguay, Lula in Brazil, Kirchner in Argentina, Correa in Ecuador and Morales in Bolivia there was a reconfiguration of Latin America’s entire political scene. We created ALBA (the Bolivarian Alliance for the Peoples of Our America), CELAC (the Community of Latin American and Caribbean States) and UNASUR (Union of South American Nations) as political responses to the FTAA (Free Trade Area of the Americas) and the US’s ‘free trade’ zone.
Before then we were subordinated to the US through the OAS (the Organization of American States). It was Latin America’s only organization and they could intervene as they chose in any country. For example, they didn’t like Panama’s President Noriega, so in the 1990s they intervened militarily and took him off to the United States, end of story. They financed coups throughout Latin America. But the arrival of progressive, left-wing governments across the continent completely changed the diplomatic scene in a very positive way. It’s something Latin Americans can’t lose. In the last 8 to 10 years we’ve advanced more than we were able to advance in the entire last century.”
Argentina’s President Macri is the worst possible response to the Kirchner years
“I think Argentina’s recently elected President Macri is the political right’s worst possible response to the Kirchner government. He is a businessman linked to football and completely politically inept. He used his popularity as the president of one of Argentina’s most popular football clubs, Boca Juniors, to become mayor of Buenos Aires and later to jump to the presidency. I think Kirchnerismo will return with even more strength in four years’ time.”
Bolivia’s investment outlook: metals, lithium & renewables
“For metals we want to incentivise investment in exploration. The idea being discussed is that the costs associated with prospecting and exploration should somehow be recoverable by investors. With regards to lithium, the state is developing that. But in the industrialization phase we may seek private investment. For example, battery production requires significant capital and technology. We don’t have any problem with foreign investment in renewable energy, including solar, wind and geothermal, and we’d welcome investor interest in that sector.”