Bolivia Threatens Chile's Copper OutputBolivia Threatens Chile's Copper Output With Water Dispute
By Matthew Craze
Dec. 27 (Bloomberg) -- Bolivia plans to ``industrialize'' a river that supplies water to Chile's Atacama Desert, threatening the world's largest copper mining district.
Bolivia placed a 20-man military post on the banks of the river, about 4 kilometers away from Chile's border, as a first step to tapping the water resource, Bolivia's government state information agency ABI said today.
The Silala River flows from 4,000 meters above sea level in the Andes cordillera to Chile's Antofagasta region, which produces most of the nation's copper. Mining companies need water to extract metal from bare rock.
Bolivia President Evo Morales urged plans to industrialize the water resource which is now being ``diverted illegally into Chile,'' ABI reported. Morales, who formerly campaigned for coca- leaf growers, plans to bottle the water and sell it with the slogan, ``Drink Silala water for sovereignty,'' ABI said.
Morales, who became Bolivia's first indigenous leader last year, attended an Army parade with at the outcrop today wearing military uniform.
Chile's state-run Codelco, the world's largest mining company, uses Silala water to turn ore from its Chuquicamata and Radomiro Tomic mines into copper concentrate, an intermediary product which is refined into metal. BHP Billiton, the world's largest mining company, also operates its Escondida mine in Chile's Antofagasta region. Escondida is the world's largest copper mine, while Chuquicamata is the third-largest.
Bolivia lost the Antofagasta region in a four-year war with Chile and Peru in the late 19th century. The two countries have severed diplomatic ties and Bolivia has petitioned the United Nations to grant it access to the Pacific Ocean.
Bolivia is South America's poorest nation.
Copper prices have quadrupled since 2002 on the London Metal Exchange because of a global shortage caused by surging demand from China.
To contact the reporter on this story: Matthew Craze in Buenos Aires at