After meeting representatives of the miners on Monday the government said it would freeze the cooperatives' taxes at current levels until further notice in a move described as "reasonable" by Alfredo Rada, the interior minister.

Insufficient concession

The proposed tax increase would be directed instead at larger private mining companies operating in Bolivia, officials said.

"We hope that this proposal will not continue to be met with intolerance and irrational actions like those of the cooperative miners this morning," Rada said.

But the concession failed to deter the thousands of miners already gathered in La Paz's poorer twin city of El Alto from marching down the hill into the capital on Tuesday morning.

"We have asked the government not to impose this tax," Andres Villca, the leader of the National Federation of Mining Cooperatives, said.

The government plans to increase
its collection of mining taxes [Reuters]
"Instead, we have asked them to look for a way to control the sale of the minerals, which is the fundamental part."

Rising international metal prices, fed in part by growing demand from China, have doubled the value of Bolivia's mineral exports, from $547 million in 2005 to over $1bn last year, with cooperatives accounting for just over a third.

Collection increase

The metals, mostly zinc, silver, gold, and tin, together represent Bolivia's largest export after natural gas.

But the Bolivian government only collected $45.5 million in mining taxes in 2006, and aims to dramatically increase its collections this year, perhaps to as much as $300 million.

The proposed tax increase is a first step toward Morales' announced goal of nationalising Bolivia's mining sector, though how the process will proceed beyond the tax increase is unclear.

Bolivia's extensive mineral deposits are already owned by the state, which operates a handful of mines through state mining company Comibol. The rest are mined through concessions granted to the cooperatives or to international companies such as US-based Coeur d'Alene Mines and Apex Silver Mines.

Around 55,000 independent miners belong to cooperatives in Bolivia and in the past protests by miners have helped to topple presidents.

Last year 16 miners died in dynamite battles for control of Huanuni, the country's largest tin mine.