Bolivia fears collapse at Potosi, limits mining
October 20, 2009 - Reuters

LA PAZ, Oct 20 (Reuters) - Bolivia's government has banned thousands of independent miners and U.S.-based Coeur d'Alene from mining silver in part of the legendary Cerro Rico mine because officials fear it could collapse, the deputy mines minister said on Tuesday.

Freelance miners, who scrape out a living by extracting mineral ore from the mountain, are likely to protest against the ban, while Coeur d'Alene (CDE.N) said the decision would not affect its operations.

Cerro Rico (Rich Mountain), which lies in the central Potosi region, has come to symbolize a colonial past where thousands of Inca slaves died mining silver for the Spanish conquistadors.

Five centuries of mining have turned the mountain's cone into a sponge of flimsy tunnels that threaten to cave in, prompting officials to ban mining at the peak.

"The board of directors of (state-run mining company) Comibol has issued a resolution suspending mining operations above 14,400 feet (4,400 meters) to preserve the morphological shape of the Cerro Rico," Deputy Mining Minister Gerardo Coro told reporters.

According to the government, there are nearly 200 mine shafts into the mountain, which rises to some 15,400 feet (4,700 meters).

The ban will remain in place for the six months the government says it needs to assess the risk of collapse, but it could be extended depending on the study's findings.

A spokesman for U.S. miner Coeur d'Alene, which operates the San Bartolome mine at Cerro Rico, said the government measure would not affect its operations.

"The recent public notice by COMIBOL regarding a request to (Coeur's local subsidiary) Manquiri and the cooperatives to temporarily halt mining above 4,400 meters on Cerro Rico does not impact our current operations," the spokesman said.

San Bartolome is the world's largest pure silver mine. In 2009, its first full year of production, it is expected to produce approximately 9 million ounces of silver. It mainly extracts silver ore from gravel deposits at the base of the mountain.

Thousands of ill-equipped, independent miners extract ore from Cerro Rico every day, and conditions have not changed much since Spanish conquerors brought slaves there 500 years ago.

Cerro Rico's vast reserves turned the nearby city of Potosi into the most populous in the Americas in the 17th century, with some 120,000 inhabitants -- more than London, Paris or Madrid at the time.

(Reporting by Carlos Quiroga; Writing by Eduardo Garcia; Editing by Christian Wiessner)