August 13, 2010 / 3:40 PM / 9 years ago

CORRECTED - Protests hurting Bolivia mines drag on, talks stall

* Production at two major global silver mines disrupted

* Protest leaders demand to meet with President Morales

* No end in sight to protests in mine-rich Potosi region

(Corrects output figures to kilograms instead of tonnes)

By Carlos Quiroga

LA PAZ, Aug 13 (Reuters) - Protests disrupting output at two of the world’s top silver mines in Bolivia continued on Friday, with no end in sight after talks between the government and demonstrators faltered.

The two mines, which also extract zinc, lead and tin, controlled by Sumitomo Corp (8053.T) and Coeur D’Alene (CDE.N), produce over 80 percent of the nearly 1.1 million kilograms of fine silver produced in Bolivia last year.

Protests over state investment in infrastructure in the mineral-rich Potosi region have dragged on for over two weeks, hitting the mainstay mining industry in Bolivia, a major global producer of zinc, silver, tin and lead.

President Evo Morales’ leftist government has clashed in negotiations with protest leaders, signaling what could be a prolonged demonstration in the major silver producer. Demonstrators are demanding to meet with Morales.

The protests have had no impact on world base metals and silver prices as worries over the global economic recovery have trumped markets’ fundamentals, analysts say.

Still, a prolonged protest could lift lead and zinc prices, some experts say.

“In the case of lead, where the concentrate market is already tight, the mine wouldn’t need to be closed for too long before it started to impact the metal market,” said Gayle Berry, a commodities analyst with Barclays Capital in London.

Morales, a leftist who has nationalized natural gas, mining and telecommunications companies, is highly popular in the Potosi region, but has so far struggled to end protests.

The demonstrations are not seen hurting Morales’ socialist agenda in the commodity-rich country.

The San Bartolome mine, the world’s largest pure silver mine controlled by U.S. based Coeur D’Alene, has been shut for about two weeks while Sumitomo reported earlier this week its silver-zinc-lead San Cristobal mine was forced to stop processing ore due to the unrest.

The San Cristobal mine is the world’s third-largest producer of silver and the sixth-largest producer of zinc, according to Japan’s Sumitomo. It was the top silver mine in Bolivia producing some 620,000 kilograms of fine silver in 2009, according to government data.

Coeur D’Alene said on Thursday operations at San Bartolome had been temporarily stalled due to the unrest but that it was maintaining its 2010 output guidance for the mine. [ID:nWNAB7183]

Coeur D’Alene’s local Manquiri unit, which operates San Bartolome and buys minerals from other mines, produced some 260,000 kilograms of silver last year, the mining ministry said.

A Glencore official has said the smaller Porco mine, which produces silver and zinc had also shut due to the protests. (Additional reporting by Frank Tang in New York; Writing by Luis Andres Henao and Eduardo Garcia. Editing by Alonso Soto)

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