While miners wait, company is on brink of bankruptcy

COPIAPÓ, Chile — While 33 men trapped in a mine cling to hope that they'll get out alive, the company that put them there says it can't afford to pay their salaries and may go bankrupt.

The San Esteban mining company is in such bad shape that it has neither the equipment nor the money to rescue the men; Chile's state-owned mining company is digging the escape tunnel, which will cost about $1.7 million.

In the days after the Aug. 5 tunnel collapse at the San Jose gold and copper mine, company leaders defended their safety measures but have since remained silent, and attempts to reach anyone at San Esteban were not successful.

Lawyers for the small mining company said this week that with the mine shut down and no income, the company was at a high risk for bankruptcy.

How such a financially unstable business was allowed to operate is a question putting one of Chile's top industries under the microscope, exposing questionable regulation that may ultimately reflect more on government priorities than one rogue company.

Sen. Baldo Prokurica, who is on the Senate mining committee, said he has been pushing Congress for years to increase the number of inspectors for the state regulatory agency, Sernageomin. It has only 18, he said, which makes regulating the country's several hundred mines a daunting task.

Prokurica said the mine operator had a poor safety record. In 2007, company executives were charged with involuntary manslaughter for the death of a miner. The worker's family settled, but the mine was closed until it could comply with key safety regulations, Prokurica said.

In 2008, the mine reopened even though the company apparently hadn't complied with all the regulations, he said.

President Sebastián Piñera has fired top regulators and created a commission to investigate the accident and the agency.

The first of many expected lawsuits against San Esteban and the government were filed Thursday, and a judge ordered the retention of $1.8 million of company money in anticipation of the suits.

Despite advances in technology and increased emphasis on safety — at least publicly — mining remains a dangerous profession.

Since 2000, about 34 people have died every year on average in mining accidents in Chile, with a high of 43 in 2008, according to a review of Sernageomin data.

The regulatory agency declined interview requests.

In large part, Chile's stable and regional powerhouse economy is built around exports of copper, gold and other minerals. Copper alone accounts for roughly one-third of government revenue, and the state has a policy of shoring up national reserves during periods of high copper prices.

The government has said it will try to help the workers at the San Jose mine in the face of their employer's economic troubles.

But even how it proposes to do this speaks to a deep dependency on mining: "We want to relocate these workers in other mines so they don't lose their salaries," Prokurica said.

The miners, meanwhile, are in relatively good spirits, officials say, but psychologists are concerned that the miners and their families may soon experience post-traumatic stress once the euphoria wears off from establishing contact Sunday. Psychologists are coaching family members and the miners on what they should say to one another and are filtering notes before they are sent down to the miners.

Health workers are organizing a special exercise and recreation program to keep the men fit during their long wait. And they are instructing the miners about the need to distinguish between daytime and nighttime activities. Beyond the immediate 600-square-foot chamber the miners have sought refuge in, there are ample tunnels in which to move around and find a little privacy, mining- company officials said.

For days after discovering the miners alive, officials avoided telling them it could take months to get them out, for the sake of preserving morale. The health minister, Dr. Jaime Manalich, on Wednesday said officials had told the miners they would not be rescued before Chile's Independence Day on Sept. 18 and "we hoped to get them out before Christmas."

The miners reacted calmly, Manalich said. "But we have the impression that in the days to come they are going to suffer from huge challenges regarding their psychological conditions."

The miners got their first solid food Wednesday afternoon — cereal bars — after four days of liquids. Because of the small size of the borehole, about 4 inches wide, health workers have been struggling to send enough food and liquid.

Associated Press writers Federico Quilodran and Bradley Brooks in Copiapó, Eduardo Gallardo in Santiago, and Michael Warren in Buenos Aires, Argentina, contributed to this report. Material from The New York Times is included in this report.