While already operational, the complex will reportedly be the 5th largest in the continent upon completion.

Mérida, November 25, 2019 (venezuelanalysis.com) – The Venezuelan government has launched its first gold processing complex as part of efforts to overcome US-led sanctions.

According to government sources, the Manuel Carlos Piar Complex in Matanzas, Bolivar State will initially process twenty kilograms of gold per month. When completed, it will reportedly have a capacity of 200 kilograms a month, which would make the complex the fifth largest in Latin America. The installation employs 150 workers and is made up of nine heap leaching plants which transform gold ore into commercially marketable gold bars.

Venezuela has 32 certified gold fields and the world’s second largest gold reserves, but currently depends heavily on costly foreign assistance to process the material. The gold industry was nationalised by former-president Hugo Chavez in 2011.

Speaking Wednesday, President Nicolas Maduro claimed that the funds saved by domestic gold processing will be allocated to government social spending in “medicine, food, and education.”

The president also decreed the status of Special Economic Zones for gold exploration and commercialisation to three sectors of mineral-rich Bolivar State which, along with the new gold complex, form part of the controversial Orinoco Mining Arc.

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The project, which was launched in 2016, opens the way for mega-mining extractive projects in the east of Venezuela, frequently in alliance with foreign firms enjoying sizeable tax breaks as part of the deal. It is unclear if the new gold complex is fully owned by the Venezuelan state or if there is foreign part-ownership.

The mining arc has been heavily criticised by both pro-government and opposition groups for its impact on local ecosystems and indigenous populations, as well as its dependence on foreign investment and open-pit mining practices. Venezuela’s expansive southeast has long been the epicenter of illegal gold mining, which the government has unsuccessfully sought to reign in for years. An injunction against the Orinoco Arc was blocked by the Supreme Court in October 2016.

While grassroots environmental groups have yet to comment on the gold complex, self-declared “Interim President” Juan Guaido alleged that its construction is proof that “Maduro is a thief.” He went on to claim that Venezuelan gold is being used to “finance violent cells in South American nations” such as Colombia, Chile, Ecuador and Bolivia, which have all seen mass anti-neoliberal street protests in recent weeks.

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Speaking from the new complex, Maduro explained that increasing domestic gold processing capacity forms part of his government’s strategy to bypass crippling US-led sanctions.

“The people should hear about the magnitude of the efforts that we are making against the blockade, the financial persecution, the coup-mongering and fascism,” he told the nation.

Washington slapped broad sanctions on the Venezuelan oil industry in January on top of previous financial measures cutting the country off from global credit markets in 2017. These actions were followed by sanctions against Venezuela’s gold industry in March and a general embargo in August prohibiting US citizens and firms from dealing with Venezuelan state-run entities. The embargo also paves the way for potential secondary sanctions on non-US firms engaging in trade with Caracas, including international banks processing state-run payments.

In recent years, Venezuela has increasingly looked to allies like Turkey to process its gold ore out of fear that traditional commercial partners would fail to return the processed material. In 2018, the Bank of England confiscated around US $550 million worth of Venezuelan gold as part of its “standard” anti-money-laundering measures.

Figures announced in September show a drastic fall in Venezuela’s gold reserves, with the value of the bars in the Central Bank’s vaults dropping 18.5 per cent in 2019 to US $4.62 billion, its lowest value in 75 years.

Featured image: The Manuel Carlos Piar gold extraction and processing complex was inaugurated in Bolivar State on Wednesday. (@CVMVenezuela / Twitter)

Source URL: Venezuelanalys.com