Venezuela pushes out small gold miners as Maduro seeks more revenue

Mongolian Mining

12/09/2022 14:00

By Maria Ramirez and Mayela Armas
    EL CALLAO/CARACAS, Sept 12 (Reuters) - In Venezuela's El
Callao mining region, countless small, artisanal miners that
once sold gold to the government have left the area in the last
year because accessible local supplies are depleted and
President Nicolas Maduro has been striking deals with bigger
miners, seeking more production and more revenue for the
treasury.
    Nationalizations in 2011 pushed out private miners and gold
production stagnated. Now, Maduro wants to ramp up production by
building "strategic alliances" with select private companies, a
dozen sources told Reuters. These partnerships are forcing out
informal miners in places like El Callao, in the country's
south, businessmen, government officials and miners said.
    "They are looking to have more gold. It is what the state
has (always) wanted," said Alexis Chauran, director of an
association of gold millers in La Ramona in eastern Venezuela,
near the Brazilian border.
    The government has granted 12 private companies permissions
to build 30 processing plants, which use sophisticated equipment
to extract gold-bearing sand from nearby mines, sources said.
Most are already up and running.
    The move came after the cash-strapped government was forced
to sell off some of its existing central bank gold reserves
while crude exports were squeezed by U.S. sanctions and
Venezuela's oil production dropped.
    The bank's gold bar reserves have fallen by 60 tonnes in
four years. Reserves, equivalent to 73 tonnes or $4.33 billion, 
are at their lowest in five decades, according to data on the
bank's website. urn:newsml:reuters.com:*:nL1N2ZR13H
    The latest government budget estimated income from gold
royalties this year equivalent to $232 million, 70 times higher
than 2021 gold projections yet far behind oil revenues. 
    Still, many of the new plants are failing to process serious
quantities of gold, according to several sources, because they
depend on initial processing by small-scale millers.
    "The plants are monsters and many run out of material
because there are few millers and only a few tonnes are
processed," said Vidal Garcia, owner of a mine in El Callao.
"Before there were fewer plants and more miners."
    The mining and communications ministries and the state-owned
Mining Corporation did not respond to requests for comment.
    Authorities have not disclosed terms of the alliances or
named companies involved.
             
    'FORCED OUT'
    There is no official government data, but the World Gold
Council estimated Venezuela's 2021 gold mining production stood
at just 35 tonnes. Most of this was from small "wildcat" miners,
who often labor in dangerous conditions.
    Maduro's government bought gold from artisanal miners for
years, selling it to allies for food and hard currency, a 2019
Reuters investigation revealed.  urn:newsml:reuters.com:*:nL1N1ZC05F  
    Now they are being pushed aside.
    In the past year, artisanal miners have been hit by a dearth
of fuel and shortages of mercury used to extract gold, but which
NGOs have linked to contaminated water supplies and
environmental damage. Many have also accused government
officials of extortion and complained of violence by illegal
armed groups, according to sources and NGOs involved in the
mines. Also, the most accessible supplies of above-ground gold
have been depleted.
    "Surface gold is running out in some areas," one industry
source said.
    Some informal miners have been displaced by of private
companies.
    Chauran said several miners have already arrived in his area
after being displaced from other parts of Bolivar state.  
    Elsewhere, some have said the state mining corporation is
pressuring some miners to work with the government's partners,
though contractual terms are unclear.
    Diomar Perez, a gold trader in El Callao, said he used to
buy 200 grams a day from artisanal miners. Now he buys just 10
grams.
    "Gold doesn't reach these parts anymore."

 (Reporting by Maria Ramirez in El Callao and Mayela Armas in
Caracas, Writing by Isabel Woodford, Edited by Vivian Sequera,
Adam Jourdan and David Gregorio)
 ((isabel.woodford@tr.com))