Bolivia cancels mining concessions amidst drought

Bolivia scrapped mining concessions near a glacier vital to the capital's water supply as the Andean country battles its worst drought in 25 years.

The government canceled two tungsten mining licenses on Mount Illimani near La Paz as one was inactive and another had signed an unauthorized contract with a mining cooperative, mining minister César Navarro said.

The family-owned concession, granted a decade ago, had been illegally ceded to a cooperative in exchange for a 1% production royalty, Navarro told state news agency ABI.

The 6,438m Andean peak, a major source of water for La Paz, is home to 40 mining concessions awarded during the government of former President Gonzalo Sánchez de Lozada, according to the ministry.

Bolivia's mining industry, a major producer of zinc, silver and tin, is widely blamed for drying up the area's water supply and contributing to severe shortages in the capital.

President Evo Morales last month last declared a national emergency and sacked state water officials for failing to warn the government about the lack of water supply in La Paz, a highland city of 800,000 inhabitants. State water company Epsas has extended rationing in the capital to 150 neighborhoods, where water availability is restricted to three hours/day.

The region is facing the effects of the La Niña phenomenon, where cooler ocean temperatures cause drought in the highlands. The El Niño phenomenon, which causes warmer sea temperatures, caused flooding in much of South America last year.

Crackdown

Governments across the region including Bolivia, Colombia, Ecuador and Peru are clamping down on informal mining, which is blamed for widespread deforestation, pollution and money laundering.

Last week Colombian government and military officials raided an illegal gold mining operation in Caldas department, while Peru's energy and mines ministry (MEM) signed an agreement to formalize the country's 200,000 small scale miners.

Informal mining in Peru alone accounts for about US$3bn in annual revenue, with much of the gold illegally produced in the southern Amazon jungle shipped across the Bolivian border.