Labor dispute costing Bolivia's No. 2 tin mine millions

Thu Sep 13, 2012 3:00pm EDT

* Dispute costing mine $250,000 a day in lost production

* Mine's 2012 tin concentrates production seen at 3,000 tonnes

LA PAZ, Sept 13 (Reuters) - A two-week labor dispute between rival workers at Bolivia's second-biggest tin mine has cost the recently nationalized operation almost $4 million in production losses, the government said on Thursday.

Bolivia's leftist government, headed by President Evo Morales, took over operations at the Colquiri mine in June after weeks of violent protests. The takeover drew an angry response from its former owner, global commodities trader Glencore .

State mining company Comibol, which has been running the mine since it was returned to state control, said the conflict between public sector miners and independent miners could end up affecting production at the Vinto smelter.

Vinto buys almost all its tin concentrate from Colquiri, where zinc is also mined.

"We're losing more than $250,000 per day through lost production and this has been going on for two weeks. That means an accumulated loss of almost $4 million," Comibol President Hector Cordova told Reuters.

The conflict that prompted Morales' administration to seize control of the mine three months ago flared up again at the start of September.

Miners, who remain at odds over who has the right to exploit the richest part of the mine's resources, have been blocking highways and staging protests since Sept. 1, paralyzing operations.

Under the decree that rescinded Glencore's contract, an independent cooperative that had mined one area of the site was allowed to continue working there.

Cordova said Colquiri should produce about 3,000 tonnes of tin concentrates this year, representing about 15 percent of estimated national output of some 21,000 tonnes. Most of the rest of Bolivia's tin is produced at the state-run Huanuni mine.

Mining is Bolivia's second-biggest foreign currency earner after natural gas; its most important metals export is silver, followed by zinc and tin.

Colquiri's unionized mine workers accused the independent miners of violating the terms of the state takeover, which was agreed by both sides, and called for them to be barred from the site. (Reporting by Carlos Quiroga; Writing by Helen Popper; Editing by Leslie Adler)