Page 149

  149The Mineral Industry of 
Bolivia 
By Orlando Martino1 
 The downtrend in the rate of economic growth experienced by Bolivia in 1977
continued in 1978 and 1979, which had growth rates of 3.1% and 2.0%, respectively,
compared with the high rate of 6.4% in 1976. The performance of the economy
has fallen below the 7% growth rate targeted in the 5year development plan
that ends in 1980. The gross domestic product (GDP) grew to the equivalent2
of $4.2 billion in current dollars in 1978 and to $4.9 billion in 1979. 
 Bolivia's mining industry contributed 7.1% of the country's GDP in 1978;
its share has been declining since 1970 when the contribution was 9.2%. In
1978, the mining sector's contributions represented 23% of the Government's
revenues. Bolivia's economy remained dominated by its exportoriented mineral
industry, which was responsible for over 70% of the country's foreign exchange
earnings. Bolivia's mineral production and exports continued to decline in
most cases in 1978 and 1979, but rising world prices especially in silver
and tin offset decreased output. 
 The value of exports of mineral commodities, not including petroleum and
natural gas, increased 5% in 1978 to $516 million and 9% in 1979 to $565
million. Bolivia exported gasoline in 1979 but ceased to export crude petroleum
in late 1978 because of domestic needs. As a result, the value of petroleum
exports continued to decline, decreasing 37% in 1978 and 13% in 1979. 
 In 1978, a major milestone was reached in Bolivia's mineral history when
more than 50% of the country's tin production was processed into refmed tin.
Since the revolution of the early 1950's, Bolivia had sought to install and
expand its tin smelter capaci 
ty in order to gain the economic benefits of exporting refined tin instead
of only tin ore and concentrate. In 1978, the Empresa Nacional de Fundiciones
(ENAF), the major State-owned smelter, produced almost 16,000 tons of refined
tin compared with 
6,800 tons in 1971, its first year of operation. In late 1979, Bolivia and
the World Bank 
were in consultation regarding a multiyear assistance program. The proposed
program would provide financing for the state mining company, CorporacIon
Minera de Bolivia (COMIBOL), for mineral exploration and new mining equipment
to improve productivity. The state petroleum company, Yacimientos Petroliferos
Fiscales Bolivianos (YPFB), would receive financing for exploration and oilfield
development as well as for the proposed natural gas pipeline between Bolivia
and Brazil, provided that studies confirm the existence of adequate gas reserves.
 Productivity of Bolivia's mineral industries has been hampered by the lack
of investment by COMIBOL and the private mining companies in exploration
to provide against the declining grade in ore deposits. To help solve this
problem, the International Development Association (IDA)—the World
Bank's affiliate for concessionary lending—approved a $7.5 million
credit to provide financial, management, and technical support to the Fondo
Nacional de Exploracion Minera (FNEM) established in 1977. The credit will
assist the operations program of the exploration fund for the period 1979-82,
estimated to cost $17 million. 
 FNEM will initially concentrate on financing exploration projects of privately
owned small and medium mining enter-