December 27, 2008 / 12:09 AM / 11 years ago

Glencore lays off hundreds in Bolivia: state news

LA PAZ (Reuters) - Workers at the Bolivian subsidiary of Swiss commodities trader Glencore say the company has sacked about 600 of them because it is facing financial trouble, state-run news agency ABI said on Friday.

Glencore is the 100-percent owner of Sinchi Wayra, which produces mainly zinc concentrate but also some lead and employs some 3,500 people in its five mines, according to the company’s website.

The head of the workers’ union at Sinchi Wayra’s Bolivar mine, Rene Velasquez, told ABI that about 600 people have been laid off.

“Sinchi Wayra is talking about falling mineral prices, but it’s just a pretext to fire 50 percent of workers, because (in fact) it’s about to go bankrupt,” said Velasquez.

It was not clear whether he was referring to 50 percent of workers at the Bolivar mine or at the company as a whole.

La Paz daily La Prensa said that Sinchi Wayra has laid off some 1,300 workers, citing the National Federation of Mining Unions.

No one was available for comment at Sinchi Wayra’s La Paz office or at the mining ministry on Friday afternoon.

Sinchi Wayra produces some 240,000 metric tons of zinc concentrate a year, according to Glencore’s website, but prices for the metal have plummeted in the past few months as the global economic downturn has eroded demand.

In October, the Bolivian government said it would buy zinc from thousands of independent miners at a rate above international prices in a bid to keep them at work.

Leftist President Evo Morales nationalized Sinchi Wayra’s Vinto tin smelter in 2007, and Glencore threatened to seek international arbitration.

High-ranking mining officials recently told Reuters that negotiations with Glencore over compensation for Vinto were going well and that the Bolivian government expected to reach an agreement soon.

Morales’ government has said in the past that it wants to become a majority shareholder in three Sinchi Wayra mines.

Mining is the second source of foreign revenue for impoverished Bolivia after natural gas.

In the first nine months of 2008 Bolivia produced $1.6 billion worth of minerals, roughly 60 percent more than in the same period last year, according to the mining ministry.

Reporting by Eduardo Garcia; Editing by Christian Wiessner

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