An agreement signed by the government of Venezuela and the Chinese state-owned company Citic Group for prospecting and mapping the country’s mining reserves is being challenged by both the opposition and experts who argue that it will leave valuable natural resources dangerously exposed.

Oil and Mining Minister Rafael Ramírez said “the mining map will be used to explore, confirm and quantify the country’s mineral resources” and, over the five years in which the agreement will be implemented, some 400 Venezuelan engineers will be trained “to serve as custodians” of the data compiled by the Chinese consortium.

So far the Venezuelan government has said nothing about how the knowledge gathered by China –the world’s largest consumer of raw materials– will influence future mining decisions and whether it will entail benefits or advantages for the Citic Group.

But simultaneously with the prospecting agreement, Citic Group was awarded a concession to operate the group of gold mines Las Cristinas, which has already seen several operators since Hugo Chávez took office in 1999, including the Canadian companies Placer Dome, Vanessa Ventures and Crystallex, and the Russian company Rusoro.

Las Cristinas, in the southeast region of Guayana, has some 20 million ounces in confirmed and potential reserves, valued at about 32 billion dollars, according to current New York market gold prices.

The location of Las Cristinas, situated near a town that bears the name of the legendary lost city of gold used by indigenous peoples of South America to lure European conquistadors away in the sixteenth century, puts China almost literally at the gateway of a modern El Dorado that is no myth.

Legislator Américo de Grazia, who represents the opposition Radical Cause party in the National Assembly’s Energy and Mining Committee, spoke with IPS about the agreement signed on Sep. 21, 2012 between Chávez and Citic Group President Chang Zhenming, questioning the government for not making the terms of the deal public.

“Parliament should oversee this operation — which it was not consulted about — because of the magnitude of what it involves and because it poses a threat to our sovereign rights over underground resources that are protected under the constitution,” said de Grazia, who represents mining districts bordering with Brazil and Guyana in southeast Venezuela.

The prospecting agreement is part of a growing alliance between the two countries, which has turned Venezuela into a major source of petroleum for China, while the Asian giant is meeting the South American country’s growing need for credit to finance its constant outflow of public funds.

Venezuela exports over 600,000 barrels of crude oil a day to China, according to Ramírez, although other sources put the figure at half that much. Beijing, in turn, has granted Caracas more than 38 billions dollars in credits, and at the same time it participates in energy and construction projects.

Mapping out mining resources in South America and other such activities, “are very valuable to China, which has an increasingly greater need to access dependable and lasting supply sources for all kinds of raw materials, to guarantee that it will have the basic elements necessary to implement its long-term National Development Plan,” Chilean expert Chihon Ley told IPS.

With this plan, China hopes to become the world’s leading economic power by 2048, or earlier, said Ley, Asia Programme director at Chile’s private Adolfo Ibáñez University.

Although globally Venezuela is known primarily for its great oil production, it also has massive mineral reserves. It has enough iron reserves, for example, to supply China, the world’s leading consumer of that metal. Other reserves with export potential include bauxite (the main source of aluminium), phosphates, gold, diamonds, copper, uranium and even coltan and thorium, two rising stars of technology industries.

The Democratic Republic of Congo and Brazil currently export most of the world’s coltan, used in many electronic devices manufactured primarily in Asia, but reports in the Venezuelan press have revealed that unauthorised operators are already mining the ore in the southern state of Amazonas.

While thorium is presently only used in experimental reactors and not commercially, it is considered to be the energy source of the future.

It is a radioactive metal that is not fissionable like uranium, but is three times more common and can generate 40 times more energy than uranium. The United States Geological Survey estimates global reserves of thorium at 1.2 million tonnes.

According to a study by Eduardo Greaves and Haydn Barros, professors at the Simón Bolívar University in Caracas, the Impacto hill, an area six kilometres long by two kilometres wide located some 500 kilometres south of Caracas, could contain enough thorium to produce more energy than the Orinoco Belt, which is thought to be the largest petroleum reserve in the planet.

What does Venezuela get out of granting prospecting rights over all of its mineral wealth to a Chinese consortium? For Fernando Soto, a legislator of the governing United Socialist Party of Venezuela who heads the Energy and Mining Commission, the Chinese survey “would allow us to locate and quantify mineral deposits occurring at great depth,” in contrast to available studies, which are relatively superficial.

But de Grazia questions the decision arguing that if that is indeed the case then the government “should have awarded this prospecting contract to the highest bidder through an international competitive bidding process.”

Citic Group lacks the necessary credentials in the field, de Grazia said, and as for training, “China has five universities with geologist training programmes, while in Venezuela we have six, which were ignored, as was the experience of the public bodies operating in the sector.”

Venezuela has a state mining institute, which has not commented on the agreement with China, and “there is a census of more than 1,500 geologists and post-graduate studies on the subject that was prepared two decades ago,” Jean Pasquali, emeritus professor at the Geology School of the Central University of Venezuela, told IPS.

Pasquali said “it is unusual for countries to hire foreign or private companies to assess their mining potential.”

In the first place “because that knowledge has many applications, in terms of selecting areas that are appropriate for deposit exploration and for detecting natural risks and planning programmes for risk minimisation and land management,” Pasquali said.

In addition, research in the earth sciences “is a ongoing process that is highly dependant on scientific developments, much like population and ecological studies, which is why they are entrusted to official institutes,” he argued.

Small-scale gold prospectors in southeast Venezuela, many of them members of the Pemon indigenous people, have also voiced their objection to the agreement.

In contrast, Ley said he thinks “a prospecting agreement with a Chinese company, which has the approval and support of both governments, was the best option.”

“Venezuela’s strategy so far has not generated a scenario in which it can negotiate and access the prospecting technologies and financial resources available to the large multinational mining companies. Enormous human, economic, financial and technological resources are needed” for such operations, he said.

For that reason, Ley believes the agreement and its implementation will be beneficial for the country, provided it meets certain conditions.

The first is that “all the data gathered through prospecting, and not just the general data, remain with the Venezuelan government for future management.”

Another condition is “that the agreement must not establish any prior obligation of the state to grant the (mapped) resources to any Chinese company in particular, and that once prospecting operations are completed the state will be free to grant mining rights over those resources to the highest bidder, through a bidding process or otherwise.”

Lastly, “the data gathering work and subsequent mapping must be done by a binational team of professionals, so that the technical know-how will remain in Venezuela to further (the country’s) human and technological development,” Ley concluded.

“It’s possible that two children died so that you could have that mobile phone,” says Jean-Bertin, a 34-year-old Congolese activist who wants to end the “absolute silence” around the crimes committed in his country to exploit strategic raw materials like coltan.

The Democratic Republic of the Congo (DRC) has at least 64 percent of worldwide reserves of coltan, the colloquial African name for a dull black ore composed of two minerals, columbite and tantalite.

Tantalum, the metal extracted from this ore, is a rare, hard, blue-gray, lustrous transition metal that is highly corrosion resistant. It is used in the production of capacitors for electronic equipment such as mobile phones, computers and tablets, as well as in earphones, prosthetics, implants and turbine blades, among many other products.

Mobile phones ready for recycling. Credit: Courtesy of Entreculturas

“The DRC’s greatest curse is its wealth. The West and all the others who manufacture weapons have their noses stuck in there,” laments Jean-Bertin, who arrived eight years ago to the southern Spanish city of Málaga from Kinshasa, where his parents and two brothers still live.

The extraction of coltan contributes to maintaining one of the bloodiest armed conflicts in Africa, which has led to more than five million deaths, massive displacements of the population, and the rape of 300,000 women in the last 15 years, according to human rights organisations.

This fact was acknowledged by the United Nations Security Council in 2001, which confirmed the “links between the exploitation of natural resources and the continuation of the conflict in the Democratic Republic of the Congo.”

As of 2003, a Panel of Experts convened by the Security Council had identified 157 companies and individuals from around the world involved in some way with the illegal extraction of valuable raw materials in the DRC.

The exploitation of coltan in dozens of informal mines, scattered throughout the jungle in the eastern DRC, is used for financing armed groups and the personal enrichment of military and government officials.

Artisanal mining, with no controls, is carried out in semi-slave labor conditions and causes significant damage to the environment and the health of workers, including children, according to the 2010 documentary film “Blood in the Mobile” by Danish director Frank Piasecki.

But industry sources, such as the Tantalum-Niobium International Study Centre (TIC), take pains to stress that the coltan reserves in the DRC and elsewhere in central Africa are far from being the world’s main source of tantalum.

Australia was the leading producer of tantalum for several years and production has recently grown in South America and Asia, in addition to production from other sources, such as recycling.

According to the TIC, the largest known reserves of tantalum are in Brazil and Australia, and discoveries have recently been reported in Venezuela and Colombia.

The DRC possesses other forms of natural wealth that are also widely smuggled, such as gold, cassiterite (a tin oxide mineral), cobalt, copper, precious woods and diamonds. Nevertheless, the country ranks in last place on the 2011 Human Development Index.

Faced with this situation, civil society organisations are placing ever more emphasis on raising awareness among consumers of products containing these materials.

In Spain, a network of non-governmental groups and research centres that focus on the DRC launched a campaign in February to demand a commitment from manufacturers that they will not use illegally sourced coltan.

The discovery of new sources of tantalum and recycling should contribute to reducing the demand for Congolese coltan.

The NGO Entreculturas and the Spanish branch of the Red Cross have joined forces since 2004 in a campaign called “Dona tu móvil” (Donate Your Mobile), encouraging the public to drop off their old electronic devices for reuse or recycling of their components. The money raised is invested in educational, environmental and development projects for poor sectors of the population.

As of this July they had collected 732,025 devices and earned more than a million euro, Ester Sanguino, the coordinator of the campaign for Entreculturas, told Tierramérica.

But the organisations and companies involved in recycling consulted by Tierramérica concurred that it would be impossible for this source of tantalum to contribute to meeting the growing worldwide demand for the metal to any significant extent.

Market pressures encourage people to replace their mobile telephones after only a short time, which means that even if recycling took place on a large scale, the tantalum obtained would not meet demand, said a source at BCD Electro, a company that specialises in the reuse and recycling of electronic and computer equipment.

And mobile phones represent just one market segment in which tantalum is currently used.

Apple and Intel announced in 2011 that they would no longer buy tantalum from the former Belgian colony. Nokia and Samsung have made similar pledges.

Samsung states on its website that it has taken steps “to endeavour that our mobile phones do not contain materials derived from illegally mined Congolese coltan.”

Such corporate codes of conduct essentially fill the void left by the lack of prescriptive rules.

The most far-reaching effort in this regard is that of the OECD (Organisation for Economic Co-operation and Development) Guidelines for Multinational Enterprises, since it extends to all of the industrialised nations that are members of this group.

But the long and shadowy paths travelled by Congolese coltan make it difficult to prove whether these codes are upheld.

Illegally mined minerals are smuggled through neighbouring countries like Rwanda and Uganda to Europe, China and other markets.

“Rebel groups proliferate because of the land’s wealth of coltan, diamonds and gold,” said the coordinator of the humanitarian organisation Farmamundi in the DRC, Raimundo Rivas.

Neighboring governments are “complicit” and “up until now this has all been supported and covered up by the companies that benefit from these riches at their final destination,” he told Tierramérica.

“There are many economic interests around the coltan business,” stressed Jean-Bertin, who describes himself as one of the “combattant congolais”, Congolese living abroad who protest and denounce the human rights violations in their country. In the meantime, in the DRC, “the killings are real. The blood is everywhere.” And nevertheless, “it is as if the Congo didn’t exist.”

This is why expectations have been raised by a recent decision of the U.S. Securities and Exchange Commission (SEC), which adopted new rules on Aug. 22 under Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act relating to the use of “conflict minerals”.

Section 1502 establishes that all national and international companies already required to report annually to the SEC which manufacture or contract to manufacture products containing at least one of four conflict minerals (tin, tantalum, tungsten and gold) must adopt measures to determine their origin through supply chain analysis.

But the first report would not be filed until May 31, 2014, considered an overly long waiting time by human rights defenders, who stress that crimes continue to be committed in the DRC despite the presence of a UN peace mission since 2010.

Holding his six-month-old daughter in his arms, Jean-Bertin is visibly upset as he describes how armed groups in the DRC “give weapons to children and force them to join with one side or the other.”

For Rivas, “the only solution is a strong government in the DRC that can respond to the attacks, and real international support that penalises companies suspected of importing minerals from conflict zones.”

* This story was originally published 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, United Nations Environment Programme and the World Bank.