Morales Quiets Chants & Dynamite with Investment Promise

The hard-hatted miners whistled and chanted as they filed through the center of the capital city in the protest against the tax proposal they say would unfairly burden hundreds of small independent miners' cooperatives.

Police said they had confiscated some 284 sticks of dynamite from the protesters, along with hundreds of detonators and rolls of fuse -- all sold in Bolivia without restrictions.

After negotiations with the miners Monday night, the government announced that the cooperatives' taxes would be frozen at current levels until further notice. The proposed tax increase would be directed instead at larger private mining companies operating in Bolivia, officials said.

Bolivia's mineral exports were worth more than $1bn (£507m) last year, but the government says it only collected $45.5m in taxes from the mining sector. It is hoping to recoup $80m in mining taxes.

Some 50,000 miners are members of co-operatives. Last year, a group of them were involved in deadly clashes with miners from the state sector over control of a pewter mine.

In a show of force by a sector known as Bolivia's most fearless street protesters, more than 20,000 hard-hatted miners filled the streets of the Andean capital on Tuesday to decry a tax increase central to Morales' plans for "nationalizing" the country's mining industry.

Before Tuesday's march even began, government officials announced they would freeze the cooperatives' taxes at current levels, and instead direct the tax hike at larger private mining companies operating in Bolivia.