Venezuela Signs Controversial $1.16bn Mining Deal

The Venezuela government reached three agreements valued at US $1.16 billion with several national and transnational firms Friday. The deals will expand mining activities in the South American country.

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President Nicolas Maduro announced the agreements on Friday. (Prensa Presidencial)
President Nicolas Maduro announced the agreements on Friday. (Prensa Presidencial)
By Lucas Koerner
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Caracas, July 24, 2017 (venezuelanalysis.com) – The Venezuela government reached three agreements valued at US $1.16 billion with several national and transnational firms Friday to expand mining activities in the South American country.

Under the terms of the first agreement, Venezuelan state-owned CARBOZULIA will partner with the Chinese state mining giant Yuankuang Group, as well as Bogota-based Inter-American Coal and China CAMC Engineering Co. to renovate mining and port infrastructure in Zulia state to the tune of $400 million. 

In a separate $180 million deal, the Venezuelan government will work with Yuankuang and China CAMC to jumpstart nickel mining in the central states of Aragua and Miranda.

Lastly, Venezuela’s Defense Ministry-owned CAMIMPEG signed a $580 million deal backed by joint Chinese and Venezuelan investment to provide services in the areas of mining and gas production.

While the Maduro government has hailed the agreements as a step forward in its bid to construct a new post-oil economy amid languishing global crude prices – the source of over 90 percent of Venezuela’s export earnings – such mega-mining projects have come under fire from environmental and social groups. 

The Sierra de Perija mountain range in Zulia state has in particular been a flashpoint of tension in recent years between grassroots organizations and state and national authorities over the latter’s efforts to expand coal mining in the ancestral heartland of the Yukpa and Wayuu peoples.

In August 2015, a successful campaign by environmental and indigenous groups pressured the Maduro government to backtrack on an executive order authorizing new mines in the mineral-rich region. 

In the lead-up to National Constituent Assembly elections on July 30, eco-socialist movements have called for the new body tasked with rewriting Venezuela’s constitution to reject mega-mining projects and take up “green” proposals for a post-oil economy.