As a combination of a sectoral performance crisis coupled with unrelenting US economic pressure continually reduces Venezuela’s once powerhouse oil & gas sector to the status of an unreliable economic asset, pressure to find options is reportedly compelling the country, increasingly, to look to gold as an economic life raft.
Back in August, sections of the international media were reporting that what has traditionally been a limited but nonetheless lucrative gold-mining industry in Venezuela is beginning to grow at a noticeable rate. Statistics cited by an international media agency recently suggest that land use for mining may have tripled in just over a year and that the sector is likely to grow even further following reports that six rivers in the Bolivar State region are likely to be used to further increase gold extraction.
Gold mining is nothing new to Venezuela – nor is it to the country’s neighbours in the region, including Guyana and Brazil – though its once colossal economic powerhouse, has been overwhelmingly responsible for the country’s growth over the years. In fact, illegal gold mining has been the cause of cross-border incidents between Guyana and Venezuela in which illegal Venezuelan ‘miners’ have been known to cross the border to conduct gold-mining operations in Guyana’s territory.
Gold mining-related connections between Guyana and Venezuela have also existed at the level of the purchase by Guyanese miners of fuel from Venezuelan sources that are significantly cheaper than the supply sent to the gold-bearing regions of Guyana from the coastland. Both countries have, officially, turned a blind eye to this practice.
Very recently, the authorities here reported a clash between what was believed to be illegal miners from Venezuela and the local security forces. Criminal elements from inside Venezuela are believed to control several illegal mining operations in Venezuela.
Since gold does not lend itself, in quite the same manner as oil does, to the sanctions with which the Trump administration has been targeting Venezuela, Washington is likely to see the possible emergence of a lucrative Venezuelan gold mining sector as a revenue stream that could thwart its efforts to remove the Maduro administration. Unsurprisingly, sections of the US media have already reported that backers of an expanded Venezuelan gold mining industry are seeking to snuff out what is reportedly an environmentally-driven opposition to gold mining. Back in August, reports surfaced that thirteen indigenous Venezuelans lost their lives in the course of a protest over the installation of new mining equipment in the Caura River, a tributary of the Orinoco River, in Venezuela’s Bolívar State. There have even been suggestions in the media that Venezuela’s gold-mining ‘industry’ has attracted the interest of powerful figures in countries in the Middle East interested in trading the commodity for what one media source described as “hard to get US dollars.”
Since gold-mining operations in South America are indeed attended by illegal operations, including criminal gangs and outrageous environmental transgressions, the continued growth of a Venezuelan gold-mining industry that reflects an indifference to environmental considerations could attract controversy with other countries in the region as well as with watchdog environmental organizations, though an already under-pressure administration in Venezuela may simply decide to weigh the risks and then to take them.
The Maduro administration is currently locked in a court battle with the country’s US-anointed President Juan Guaido over control of around US$2 billion in Venezuelan gold currently being held in a London bank vault. An Appeal Court ruling in London days ago set aside an earlier decision by a British judge who granted control of the gold to Guaido. While London has retained diplomatic ties with Caracas, it has declared its recognition of Guaido as Venezuela’s President. The appeals court has ordered a deeper investigation into the matter before either side is given access to the gold inside the Bank of England. The Maduro administration has reportedly said that it wants to assign some of the proceeds from the sale of the gold to the United Nations Development Programme (UNDP) to secure supplies to help the country’s response to the coronavirus.
The gold, it seems, is now firmly at the centre of the now protracted schism in Venezuelan politics with other countries, including the US and in this instance, Britain, serving as arbiters in the process.
