Can Chile's mining minister work another miracle?
Wed, 19 Jan 2011 8:45a.m.
By Eva Vergara
The Chilean official widely cheered for overseeing the rescue of trapped miners was besieged by hundreds of angry protesters overnight as he tried to resolve a paralysing strike over gas prices.
Laurence Golborne, whose warm manner and skilled management of the rescue of 33 trapped miners last year made him highly popular, was given the additional job of energy minister Sunday and President Sebastian Pinera sent him to Punta Arenas in southernmost Chile to end blockades that have stranded hundreds of foreign tourists.
About 1,000 people chanting anti-government slogans converged on a radio station where Golborne was being interviewed, prompting officials to call in riot police, who escorted the minister out of the building through a tunnel of shields, his head tucked beneath an officer's arm.
Hours later, Golborne met with more protest leaders and offered to reduce the planned 16.8 percent price increase to 3 percent while also maintaining the amount of subsidized gas each customer gets. Chile's state-owned National Petroleum Company (ENAP) had planned to reduce the amount from 25,000 cubic metres to 1,000.
Some protest leaders said they were drafting an agreement to end the strike, and some blockades were relaxed overnight, but it is unclear whether all of those involved would go along.
Solving the region's long-term energy needs may prove to be a more complex challenge than extracting men from a collapsed copper and gold mine, and Golborne - who polls suggest has the best shot at succeeding Pinera three years from now - could see his popularity plummet if he doesn't find a solution.
The deaths of two women who were knocked into a bonfire last week when an unidentified trucker rammed through a blockade radicalised many residents, and Golborne lost manoeuvring room when Interior Minister Rodrigo Hinzpeter threatened to invoke a "state security" law that could ultimately involve sending in soldiers to dismantle the blockades and jail the organisers.
Organisers had been letting some trucks and buses get through for humanitarian reasons, but Hinzpeter's announcement made them call for a total blockade of Punta Arenas. Mayor Vladimiro Mimica said it was like trying "to put out a fire with gasoline".
Golborne's offer of a 3 percent price hike, roughly equal to inflation, came with promises of other subsidies and money to help weatherize homes for the region's 158,000 residents.
The strike has cost the Magallanes region more than US$4 million in tourism income, industry leaders say, since trucks, buses and taxis in Punta Arenas blocked access roads to the airport, seaport and highway. The city is a jumping-off point for destinations across southern Chile and Argentina.
To the north in Puerto Natales, about 1,600 tourists have been stranded, many of them Americans and Europeans who can't get in or out of the Torres del Paine national park. The Argentine air force said Monday that it managed to fly out 113 of its citizens, but many travellers from other countries are still stuck, and food supplies are running scarce in places.
"The hotels are already empty, without tourists," Torres del Paine Mayor Anahi Cardenas complained. "We don't know if we're going to be able to recover."
The state security law calls for imprisoning people "who impede the free access to bridges, streets, roads or other public spaces". But protest organisers said invoking it against peaceful demonstrators only strengthens their resolve.
"We haven't broken a single window. That's why we don't understand the logic of the application of this law," said one spokesman, Dalivor Eterovic.
ENAP is nearly US$4 billion in debt and heavily subsidizes energy prices in far southern Chile, where frigid temperatures require more consumption and the cost of living is 30 percent higher than elsewhere in the country.
The Magellanes region is the only place in Chile, which imports 93 percent of its energy, where natural gas is extracted.
ENAP sells 60 percent of this methanol to Methanex, a Canadian company, to defray the cost of subsidising the other 40 percent to power the region's homes and industries. Developing more reserves is a priority because the current supply is due to run out in just seven years.
ENAP general manager Rodrigo Azocar said the subsidies must be removed to increase profit margins and thus incentives to develop more local gas supplies.
But local union and civic leaders suspect the company also wants to reduce subsidised consumption so that it can sell more gas at higher prices to Methanex.
Pinera - who promised during last year's presidential campaign not to raise energy prices - has said the long-term solution is to develop Chile's energy infrastructure, with renewable sources and a better transmission network. But this could take many years.
For Golborne, the opportunity to solve Chile's latest crisis may prove to be a Trojan Horse - attractive, but dangerous, said Bernardo Navarrete, a political analyst at the University of Santiago.
"What Pinera is doing is seeing to it that all of his ministers have to bear political costs," Navarrete said.
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