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The Emergence of the Tin Industry in Bolivia

Published online by Cambridge University Press:  05 February 2009

John Hillman
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Extract

The political economy of Bolivia has been dominated by the extraction and export of mineral wealth; in the nineteenth century by silver, in the twentieth by tin. The decline of silver in the 1890s neatly coincides with the rise of tin so that there has been little consideration of the origins of the latter. Casual references suggest that they are to be found in the decision of silver miners to turn their attention to tin deposits once the decline in the price of silver destroyed the profitability of working the nobler metal. This shift in attention from one mineral to another was facilitated by the completion of the railway from the Pacific coast to Oruro, the centre of the tin-mining district, in 1892 which reduced the cost of exporting to European markets. The apparent innocence of the birth of the industry contrasts sharply with the negative images that have been inextricably associated with it in its period of maturity. Then it became ‘dominated’ by the figures of Patiñio, Hochschild and Aramayo, and few who have commented on the industry have been able to avoid referring to them as ‘tin barons’.

Type
Articles
Information
Journal of Latin American Studies , Volume 16 , Issue 2 , November 1984 , pp. 403 - 437
Copyright
Copyright © Cambridge University Press 1984

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References

1 There are a large number of studies of varying quality of the Bolivian mining industry–polemics against the large mining companies–these include Sergio, Almaraz, El Poder y la Caida (La Paz, Los Amigos del Libro, 1967);Google ScholarWalter, Hermosa Virreira, Breve Historia de la Mineria en Bolivia (La Paz, Los Amigos del Libro, 1979);Google ScholarJuan, Alberracín Millán, El Poder Minero (La Paz, Urquizo, 1972).Google Scholar The thrust of such texts is countered by Molins, W. Jaime, El Estaño, Fundamento vital de Bolivia (Buenos Aires, 1937);Google ScholarManuel, Carrasco, Simon Patiño, un procer industrial (Paris, 1960)Google Scholar and Charles, Geddes, Patiño: The Tin King (London, Hale, 1972).Google Scholar One of the few comprehensive scholarly treatments is Walter, Gomez, La minería en el desarrollo económico de Bolivia (La Paz, Los Amigos del Libro, 1978).Google Scholar

2 The theoretical treatment of scarcity rents starts with Hotelling, H., ‘The Economics of Exhaustible Resources’, Journal of Political Economy (04 1931).Google Scholar

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5 A comprehensive list would include rents deriving from the super-exploitation of labour, but in the case of tin these are only relevant to South-East Asia.

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11 Phillips, J. A., Elements of Metallurgy (London, 1891), pp. 480–7;Google ScholarBarton, D. B., ‘Techniques of Tin Smelting and Mining’ in Essays in Cornish Mining History (Truro, Barton, 1968), vol. I. The processes of smelting (reduction of ore to metal) and refining (purification of the metal) were undertaken in the same furnace and the term ‘smelting’ is used for both.Google Scholar

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15 Ibid. p. 68.

16 Ibid. pp. 72–3, 76.

17 Ibid. pp. 26–9.

18 Ibid. p. 59.

19 Ibid. p. 70.

20 Ibid. p. 127.

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23 The miners did not own the land on which they worked but leased it in return for dues set on an ad valorem basis. By mid-century this had declined to 5–6% of the value of the ore. Philipps, J. A. and Darlington, J., Records of Mining and Metallurgy (London, 1857), pp. 252–3. The fact that there is no reference to wide variation in rates suggests that the landlords were primarily receiving a scarcity rent, but since they also owned shares in the mines on their properties they would have indirectly received a portion of the differential rents.Google Scholar

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28 Harris, op. cit. pp. 59–60.

29 Barton cites a figure of £30/ton for 1856 (History p. 110), but this was quite exceptional. Smelting costs were £3–4/ton of metal and the spread between the value of metal in the ore and in final form was £10–28/ton.

30 Ibid. pp. 177, 191.

31 Ibid. p. 190.

32 Ibid. p. 207.

33 Antonio, Mitre, ‘The Economic and Social Structure of Silver Mining in XIXth Century Bolivia’, Ph.D. dissertation, Columbia University, 1977.Google Scholar

34 Ibid. p. 46.

35 Ibid. pp. 47–8.

36 Ibid. ch. 2.

37 For a succinct statement of the perspective of the mining bourgeoisie by one of its leading members, see José, Avelino Aramayo, Proyecto de una nueva via de comsmunicacion entre Bolivia i el Oceano Pacífico (London 1863), p. 3.Google Scholar

38 Mitre, op. cit. pp. 153–5.

39 From 1870 to 1890 the sterling price of silver declined by 21%; from 1890 to 1894 by nearly 40%. Mitre, appendix I.

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46 Pentland, J. B., Report on Bolivia, 1827 (ed. Fifer, J. V., London, Royal Historical Society, Camden 4th series, XIII, 1974), p. 216. The unit of currency remained the peso ($), equivalent to US$1.00 or £0.2. Fifer note, p. 184.Google Scholar The currency reform of 1863 replaced the peso with the boliviano. Pentland does not identify the local products. A domestic manufacturing industry remained, though by the end of the century based in Potosí, and tin was used in the construction of stills. Harms Espejo, C., Bolivia en sus diversas fases, principalmente económica (Santiago, 1922), p. 140.Google Scholar

47 Pentland, op. cit. p. 235. In 1796 4 cwt of tin was exported from Buenos Aires to Spain. Humphreys, R. A., British Consular Reports, 1824–26 (London, 1940), p. 55. The U.K. import statistics record tin imports from 1822, all for immediate re-export (see Table I).Google Scholar

48 Joseph, Andrews, Journey from Buenos Aires … in 1825–26 (London, 1827), II, 176–7. Tacna was the commercial centre for the trade with Bolivia since Arica had an unhealthy climate.Google Scholard'Orbigny, A., Voyage dans I' Amérique Meridionale (Paris, 1835), II, 357.Google Scholar

49 Pentland, op. cit. p. 235.

50 Ibid. p. 189.

51 Ibid. p. 235. Edmund Temple also commented on the abandoning of tin workings in Oruro, . Travels in Various Parts of Peru (London 1830), II, 219.Google Scholar

52 Pentland, op. cit. p. 198.

53 Ibid. p. 189.

54 Ibid. p. 235.

55 D'Orbigny, op. cit. III, pt. I, p. 316.

56 Ibid. III, Pt. 3, p. 124.

57 ‘A Tin Mine in South America’, Mining Magazine (New York) I (1853) p. 212, where it is suggested that virtually all tin was of this quality.Google Scholar

58 Leifchild, J. R., Cornwall; Its Mines and Miners (London 1855, reprinted London, Cass, 1968), p. 198. In the British trade all Bolivian tin was called ‘Peruvian’.Google Scholar

59 Peñaloza, , Historia Económica de Bolivia (La Paz, 1953-1954), II, 104–5, 157.Google Scholar

60 Leifchild, op. cit. p. 198.

61 Peñaloza, op. cit. II, 84. The taxes were levied on all Bolivian exports through Arica, and their level during the period of the Peruvian–Bolivian Confederation (1836–9) is not known.

62 Andrews, , op. cit.. 2, 176–7.Google Scholar

63 One of the pioneers was David, Forbes, ‘On the Geology of Bolivia and Southern Peru’, Quarterly Journal of the Geological Society (London), XVII (1861); ‘Researches on the Mineralogy of South America’, Philosophical Magazine (4th Series 08 1865).Google Scholar

64 Hugo Reck was an Aramayo engineer (1858–62), and wrote a survey, ‘Geographic und Statistik der Republik Bolivia’. Dr. Petermann's Mittheilungen aus Justus Perthes Geographischer Anstalt, 6 pts (1865–1867), in which he identified a dozen tin mines.

65 This is a common complaint; see Karl, von Scherzer, Statistisch-Comerzielle Ergebnisse einer Reise um die Erde in den Jabren 1857–1859 (Leipzig, 1867), p. 569;Google Scholarvon Tschudi, J. J., Reisen durch Südarnerika ‘Leipzig, (1869), v, 220–1.Google Scholar

66 Ignacio, Domyeko, Elementos de Mineralogía, (1st ed, Santiago, de Chile, 1845), pp. 157–8; (2nd ed 1860), p. 150; and appendix (1867), pp. 24–6.Google Scholar

67 Detailed metallurgical assessments were not made until the end of the century. Then bars of 92% tin were produced and the process wasted around 20% of the potential tin in the ore; costs per ton of metal were over 8 times the level in Malaya. Louis, H., The Metallury of Tin (New York, 1911), pp. 83, 71. Peñaloza supposes that the main obstacle to the development of domestic smelting was the small quantity of ore to be processed (II, 104–5). However, this was not a problem for the Straits producers.Google Scholar

68 An alternative view is expressed by Gautier, F., ‘Yacimientos de Estaño de Bolivia’ Boletín de la Sociedad National de Minería (Santiago), VI (1894), 249. Gautier considered that Bolivia would follow the Chilean path and develop its own smelting once it had perfected the extraction of ore, but his calculation of the economics of smelting in Bolivia assumes an unrealistically low price for fuel.Google Scholar

69 Leifchild, p. 198.

70 Hegan & Co. to Foreign Office, 1 May 1852, in Foreign Office II (Bolivia), file 13, Public Record Office. Kew. However, E. de Romana claims that 552 tonnes of ore were exported in 1840. ‘Una inspeccion de la Yacimientos de Estano de Bolivia’, Boletín del Cuerpo de Inginieros de Minas del Perú, no. 57 (1908), p. 33, and M. Frochot claims 1,000 tonnes were exported in 1846, ‘L'Etain en Bolivie’,Annales des Mines, 9th series, XIX (1901), 192.Google Scholar

71 Files F.O. 11/12–15 are full of complaints of British interests who considered themselves harmed by Belzú's decrees. Hegan & Co. claimed compensation of $10,000 for the cost of establishing the ore-buying business and a further $50,000 for the loss of profit on the contract, though this was subsequently reduced to $15,000, F.O. 11/12.

72 Peñaloza, , op. cit. 1, 337–8.Google Scholar

73 ‘The Bolivian would prefer a countryman at the head of affairs who would give him 6% profit… in preference to a foreigner, even if sure the latter would give him a profit of 10 %’. Pemberthy, J. in Thomas, H., Cornish Mining Interviews (Camborne, 1896), p. 7.Google Scholar

74 Bolitho Tin Ticketings Book V, 145, Royal Institution of Cornwall, Truro. The overall proportions are of total foreign ores, which at this time included a great deal of Australian.

75 Barton, , History, p. 155, referring to the Bolitho Foreign Tin Ticketings Book, (1873–1893), in the possession of the County Record Office, Truro, but which is not now available for public inspection.Google Scholar

76 Barton, , p. 129. Barton suggests that Enthovens acted as pioneers in order to escape the limitations of the control exercised by the rest of the Cornish smelters. This is a little misleading since Enthovens were also merchants based in Liverpool who arranged for the import and resale of ores. The Cornishmen were visited by a compatriot H. Macaulay Putney who wrote a series of letters to the Mining Journal, (06–08 1863).Google Scholar

77 Mining Journal, (27 06 1863), p. 443; (11 07), p. 479; (6 08), p. 554Google Scholar The prices are originally quoted as pesos/quintal. It has been assumed that they were the debased pesos, since by the 1860s there were virtually no strong pesos in circulation. According to Benavides, J., Historia de la Moneda en Bolivia (La Paz, Puerta del Sol, 1972), p. 39, they contained 18.05 grams of silver, which would make each worth £0. 147.Google Scholar

78 Mining Journal (6 08), p. 554; (27 06), p. 443.Google Scholar

79 Tschudi found 5.5 pesos/quintal being charged from Oruro to Tacna during his visit in 1858. op. cit. v, 220.

80 Mining Journal(18 07, 1863), p. 498.Google Scholar

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83 ‘A Tin Mine in South America’ provides the fullest description of the working of any mine, Huanuni, though grossly exaggerates the level of production.

84 Gautier, op. cit. p. 245.

85 This process Cannot be traced in detail until 1892, when it is clear that higher proportions of their total purchases of ores at the ticketings came from Bolivia than was the case for the older established smelters of Consolidated and Williams, Harvey. Consolidated Tin Smelting Ticketings Book 1893–1900, DD/RG/13, County Record Office, Truro. This trend continued throughout the 1890s, and Penpoll finally built a smelter in Liverpool solely for the treatment of Bolivian material in 1901.

86 The history of the German tin industry remains unwritten. However, production statistics are provided by Neumann, B., Die Metalle (Halle, 1904), pp. 252–5.Google Scholar

87 P. J. Thibault, op. cit. pp. 191, 214; Louis, op. cit. p. 106; output was much below capacity.

88 Bolitho Ticketings Book, v, 145; Consolidated Tin Smelting Ticketings Book 1893–1900.

89 Costa du Rels, op. cit. p. 253, Malcolm, Roberts, ‘Choroique Tin Mines and Alluvial Deposits’, Transactions, Institution of Mining and Metallurgy (London), IX (1900–1901).Google Scholar

90 The Aramayos may also have maintained their interest in Antequera.

91 Wendt, p. 91.

92 Wendt proposed building a special tin smelter, Omiste, M., ‘Ingenios y Establecimientos de Beneficio 1545–1892’, Crónicas Potosinas (La Paz, 1919) I, 221. Royal Silver Mines of Potosi, Report of Directors for 1890,… for 1892.Google Scholar

93 Compañía, Minera de Oruro, Memoria del Jerente, 1890, (Santiago, 1890), p. 15.Google ScholarMinchin, J., ‘The Mineral Resources of Bolivia’, Engineering, 51, (1895), 453.Google Scholar

94 Compañía, Minera de Oruro, Memoria del Jerente correspondiente al 2do semestre de 1891 (Santiago, 1891), p. 4.Google Scholar

95 Compañía, Minera de Itos, Memoria del Directorio… correspondiente al primer semestre de 1889 (La Paz, 1889), p. 6.Google Scholar

96 Compañía, Minera de Itos, Memoria del Directorio, 1888, (La Paz, 1888); Memoria …, primer semestre de 1889; Memoria… segundo semestre de 1889 (La Paz, 1889); Memoria…1890 (La Paz, 1890).Google Scholar

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98 Compañía, Minera de Coiquiri, II Memoria Anual, 1887 (La Paz, 1887), p. 11, III Memoria Anual 1888 (La Paz, 1888), pp. 2, ii, iii.Google Scholar

99 Omiste, op. cit. p. 219.

100 A full description of the smelting process is provided by Praschkauer, M., ‘A Ride through Bolivia’, South American Journal (14 02 1891), p. 216.Google Scholar

101 Omiste, op. cit. p. 221.

102 Ibid. pp. 222–3.

103 Gautier, , p. 242. He simply mentions ‘French industrialists’, and may be including Bebin who subsequently became important in Potosí, and who was certainly an active merchant there at this time.Google Scholar

104 The important exception is Aramayo. When the company was incorporated in London in 1906 as Aramayo, Francke & Co. Ltd, the Franckes held a significant minority block of shares. A similar arrangement may have obtained in Bolivia at this time. Another Chilean company that attempted the transition to tin was Compañía Minera de la Provincia de Lipez, who worked Todos Santos mine.

105 Gautier, op. cit. pp. 242, 247.

106 Evans, P. F., From Peru to the Plate (London, 1889), p. 54.Google Scholar

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115 The story of the foundation of Patiño's success at La Salvadora is told by Geddes, , pp. 45–52, and Querejazu, Calvo, pp. 28–47. Neither provides any details of his ‘apprenticeship’ in Huanchaca.Google Scholar

116 Querejazu Calvo provides an account of Pastor Sainz, pp. 15–16, 75–81; the mine was considered to be worked in a primitive fashion, Ballivian and Saavedra, op. cit. p. 51.

117 E. Basadre Forero, reprinted by Ballivian and Saavedra, p. 114.

118 Bureau of American Republics, Bolivia, Bulletin no. (Washington, 1892). p. 87. Mitre has considered the transport problem for Huanchaca in some detail and has demonstrated the role of the railway in solving the problem of capacity, pp. 232–4. However, the volume involved was considerably greater than for the entire tin industry and the experience of Huanchaca cannot be considered as typical.Google Scholar

119 Metals Market Review (18 06 1892).Google Scholar

120 Pasley, C. S., ‘The Tin Mines of Bolivia’, Transactions, Institution of Mining and Metallurgy, 7 (1899). It should be noted that the rate for llamas is considerably lower than that prevailing in mid-century and they generally appear very low. In 1885, Huanchaca expected to charge itself £7.7/ton and the public £15.5/ton for a much shorter distance. Mitre op. cit p. 238.Google Scholar

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125 The Malay States adopted a sliding scale of royalties on which the minimum rate was 10.5%. In 1899 the average rate was 13.4%. Ken, op. cit. p. 190.

126 Penaloza, op. cit. II, 212–13.