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VENEZUELA: Government Claims a Stake in Mining
By Humberto Márquez*
CARACAS, Feb 17 (Tierramérica) - The announcement that the Venezuelan government will expand its presence in the country's mining sector doesn't bother foreign-held mining companies, who are confident that their contracts will be honoured. But environmentalists are worried about the environmental impacts.
The government "has to recuperate mining and is not going to allow them to remain idle," Mining and Basic Industries Minister Víctor Alvarez said last month. He also announced that "no more concessions will be granted to national or foreign consortiums," and that the reserves and government production will be entrusted to a new national mining agency.
According to the Chamber of Mining, Venezuela produces 24 tonnes of gold a year - an unknown volume of the precious metal from illegal mining is sold as contraband - as well as 74 kg of diamonds, 20 million tonnes of iron and 5.9 million tonnes of bauxite - all from the southeastern part of the country.
The Venezuela Guayana region has been an important gold and diamond producer since the 19th century. Las Cristinas mine alone, for which the Canadian firms Crystallex, Placer Dome and Vannessa competed, holds reserves of 13 to 16 million ounces of gold in some 460 million tonnes of sand.
The country also produces limestone, sands, gravel and other non-metal minerals and, outside the Guayana region, eight million tonnes of coal and 20,000 tonnes of nickel.
Alvarez announced that the new government mining agency, ENM, will absorb the state-owned Minerven, which produces eight tonnes of gold annually, and has projects worth 300 million dollars that will be revealed after being discussed with Venezuela's President Hugo Chávez, said a source from Alvarez's office.
Consulted by Tierramérica, representatives of the Canadian mining firms, the most active in the sector here, said they trust that the recent announcements will have no effect on their contracts.
"I don't think (the nationalisation) is going to be good for the mining business," said Canadian Stanley Sandner, who has lived in Venezuelan 25 years and heads the company Cadre Resources Ltd.
But as far as the government taking over idle mines, he told Tierramérica "I don't think there will be much of an effect on existing projects or ones that are starting up."
Cadre Resources has invested at least three million dollars in a proposal for the removal of 160 million tonnes of rocks, gravel and sand from the lower Caroní River, in part as an environmental remediation project, but also to extract gold and titanium.
The Caroní, which flows into the Orinoco River and has a watershed extending across 95,000 square km, is an important hydroelectric source, with potential to generate 25,000 megawatts, half of which is already produced by three dams in the river's lower stretch.
"Nowhere has it been said that Venezuela does not intend to honour valid and subsisting contracts with reputable and performing international companies," said Todd Bruce, chief executive officer of Toronto-based Crystallex in a statement. "The company is confident that its contract to develop the Las Cristinas project... will not be impacted by changes recently announced by President Chávez."
Sources from Canada's Mena Resources and its Russian joint venture partner Minería MS said they had met with Venezuelan government officials and "received confirmation of the current legal standing of all our mining titles."
Alvarez said "this country is tired of always having to send signs of tranquility to the market... Mining contributes just 0.72 percent to the gross domestic product. Now we want to send signs of tranquility to our citizens." Venezuela, however, is a major exporter of oil and a member of OPEC (Organisation of Petroleum Exporting Countries).
But there is apprehension on the environmental front, says María Eugenia Bustamante, of the non-governmental Association of Friends of the Great Savanna (Amigransa), where the gigantic National Canaima Park is located, encompassing a large part of the Caroní River basin, and home to unique flora and fauna species, as well as some of the planet's oldest mountain formations.
"We saw with great concern the increase in mining activity in the southeast, both by artisanal miners who deforest and pollute and by the bigger mining companies," Bustamante said in a Tierramérica interview.
Along the Upper Caroní, mining is prohibited, and the vice-minister for environment, Nora Delgado, one of the directors of the new agency ENM, said that an objective of her office is to progressively clear the river basin of mining. There are currently some 70,000 artisanal miners working in that area.
Amigransa calls for revoking some 50 mining concessions in the Caroní watershed and for finalising offers for helping the miners find work in other productive activities.
The government launched a programme for those who leave mining to organise into cooperatives for farming, tourism or construction, among other professions, as "social production companies", a still somewhat blurry concept of integration between company and community.
Those who remain in mining "will maintain with ENM a relation that will monitor to ensure that mining involves adequate work conditions, utilises advanced technologies to better take advantage of the resources without negatively impacting the environment, and without damaging the health of the workers," said Alvarez.
But even if the Caroní River basin is cleared of mining operations, as Amigransa proposes, northeast of there is the Sierra de Imataca, a 38,000-square-km area with 80 percent rainforest but also a band of green rock that could hold more than 8,000 tonnes of gold.
Since 2003 the government has planned to authorise mining in up to 11 percent of that territory. Placing those reserves under the authority of the ENM presages a new confrontation with environmentalists, who see mining as a threat to the Sierra de Imataca, as well as forestry, because the area holds a dozen tree species whose wood is in high demand.
Many times in the past year, indigenous communities from the far northeast of Venezuela have protested against coal mining concessions granted to European, U.S. and Brazilian companies.
During the Caracas edition of this year's polycentric World Social Forum in January, environmental leaders from many countries asked the Chávez government to "re-examine its megaplans" for mining and fossil fuels in "solidarity with a more sustainable Venezuela."
(*Humberto Márquez is an IPS correspondent. With reporting by Stephen Leahy in Canada. Originally published Feb. 11 by Latin American newspapers that are part of the Tierramérica network. Tierramérica is a specialised news service produced by IPS with the backing of the United Nations Development Programme and the United Nations Environment Programme.)
(END/2006)
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