A mining town since silver was discovered there, Oruro was founded in 1606 and is well-known as the Folkloric Capital of Bolivia, largely thanks to its amazing Carnival, considered by many the finest in South America after Rio de Janeiro. By some estimates, 90% of its 182,000 residents are pure Amerindian. It's one of the most colorful places in South America to spend Carnival—the city puts on a lively festival called La Diablada. You'll see a lot of wild devil costumes, which represent the Spanish rulers who ran the mines and forced the indigenous people to work under terrible conditions. (Expect to be pelted with water balloons—one of the festival's customs.)
The city has a number of year-round attractions, including the Virgen del Socavon Sanctuary, the Faro de Conchupata (where the national flag of Bolivia first flew), and three great museums: the Edward Lopez Rivas Museum of Archaeology, which has an interesting collection of masks; the Beaterio Madre Nazaria Museum, which also has some great masks and other Carnival attire; and the Geology and Mineral Museum, which houses one of the continent's largest mineral collections. The artisans who craft Carnival masks and costumes can be found along the Calle La Paz.
Oruro is a jumping-off point for reaching two of the country's natural wonders: the Uyuni salt pans, or salares (vast dry lakes covered by a thick crust of salt), and the Laguna Colorada (a fiery red lake, which is home to a distinctive species of flamingo). From Oruro, you can take a train or bus to the town of Uyuni. Then, with a guide, take a four-wheel-drive truck on a four-day tour of the area. You'll need to take along or rent a sleeping bag—nights are cold. Oruro is 125 mi/200 km southeast of La Paz.
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