Deputy minister proposes diplomacy to improve minerals trade

Friday, February 15, 2008

Bolivia's deputy mining minister, Pedro Mariobo, has proposed that the country's foreign ministry take diplomatic steps with Peru to seek an agreement that prevents saturating the local markets with a surplus of lead and silver and keep prices from dropping.

"The La Esperanza lead-silver deposit was discovered in Peru, which will have twice the resources of the San Cristóbal mine in Bolivia and it's obvious that we need to seek an agreement between the producers," the official told BNamericas.

Mariobo said his ministry is concerned about the issue and he believes the situation is the same in Peru. "We need to do something similar with other producing countries around the world," he said.

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Bolivia is experiencing problems in terms of marketing lead and silver concentrates, particularly in Potosí where producers have nowhere to sell their output, Mariobo said.

Potosí miners had been selling their output to local middlemen who then marketed the concentrates in Peru.

But "Peru - anticipating that it will be able to rely on its own production - is no longer receiving the minerals that used to come from Bolivia. A lot of producers, especially in Potosí, can't move their minerals along the same traditional avenues," he said.


The week ending February 15, silver averaged US$17.38/oz while lead averaged US$1.36/lb, which Mariobo called record prices.

"I think the fluctuation will be minimal over the next 4-5 years," he said.

"From a market point of view, our perspective is that prices will begin to stabilize in the mid-term due to structural and strategic factors," the official said.

The structural factor is based in sustained development of the Asian block, led by China, while the strategic factor is the US' war on terror, according to Mariobo.

"That puts the war industry into action and requires minerals because war is not fought with plastics. That scenario stimulates prices," he said.