TED Case Studies
Venezuelan Gold Mining
CASE NUMBER: 358
CASE MNEMONIC: VENGOLD
CASE NAME: Venezuela Gold Mine
1. The Issue
Gold miners in Venezuela are wreaking havoc on the Amazon rain
forest, and its inhabitants, because of their destructive mining
techniques. These miners are the same ones who were expelled for
damaging the Amazon and the Yanomami Indian reservations in the
Brazilian state of Roraima in 1990. The central government has
been debating methods of enforcing tougher border controls, as well
as tougher statutes on the export of gold from Venezuela, however,
at present, the state is powerless to intervene.
2. Description
Upon their expulsion from Roraima State in Brazil in 1990, tens
of thousands of gold miners, known as garimpeiros, have descended
upon the remote Venezuelan state of Amazonas to continue their
destructive mining techniques. As most of Venezuela's proven gold
reserves lie near the surface, its extraction is easy and
profitable for large scale mining operations. These garimpeiros
utilize high power water cannons, connected to nearby rivers, to
blast away vast amounts of soil and vegetation. As the soil in the
Amazon rain forest is of poor quality, and fragile, the
deforestation caused by the miners is, in essence, irreversible.
The removed soil is carried away, leaving open pits which are
filled with water. The resulting mud holes are a breeding ground
for malaria-carrying mosquitoes. Also, the soil which is removed
causes increased sedimentary silt build ups which clog the turbines
at the Guri Dam on the Caroni River, the nation's main source of
hydroelectric power. This has caused the abandonment of plans to
further expand the facility.
In addition, mercury has been extensively utilized as it aids
in the gold amalgamation process. This mercury has turned up in
unsafe quantities in the livers of widely-consumed fish, as well as
at popular beaches and in the water taps of local residents.
An additional difficulty for the Venezuelan government is that
once the gold has been mined, it is extremely difficult to track.
This is due in large part because the gold is removed from the
country somewhere along the country's forested border with her
neighbors. The government has placed control over the mining
operations on the back shelf, as it has been confronted by a series
of economic and banking crises since the beginning of 1995.
Therefore, it is highly unlikely that any effective government
response to the problem will occur at any time in the foreseeable
future.
3. Related Cases
BRAGOLD case
BOLGOLD case
BEN case
BRAZIL case
PERUMINE case
ECUADOR case
PAPUA case
YELLOW case
4. Draft Author:
Brian Schwab (June, 1995)
5. Discourse and Status:
DISagree and Allegation
6. Forum and Scope:
Venezuela and Unilateral
Venezuelan National Legislature (no legislation pending due to
political confusion over recurring economic crises in the country,
(however debates are continuing).
7. Decision Breadth:
1
8. Legal Standing:
LAW
It is as yet uncertain whether Venezuela's oft deadlocked political
system will be able to reach a consensus decision on this issue
with all other ongoing difficulties it is presently encountering
(such as the current economy and banking crisis).
9. Geographic Locations
a. Geographic Domain: South America
b. Geographic Site: Northern South America
c. Geographic Impact: Venezuela
10. Sub-National Factors:
Yes
11. Type of Habitat:
Tropical
12. Type of Measure:
Regulatory Standard
13. Direct v. Indirect Impacts:
Indirect
14. Relation of Trade Measure to Environmental Impact
a. Directly Related to Product: YES GOLD
b. Indirectly Related to Product: NO
c. Not Related to Product: NO
d. Related to Process: YES Pollution Land
15. Trade Product Identification:
Gold
The product is unwrought gold, either non-monetary bullion or
other tradeable forms, and is in the raw, intermediate and final
stages of production.
16. Economic Data
Unofficially, about $58 million in gold is mined annually in
Venezuela. Unofficial revenue estimates are approximately 3 times
higher.
17. Impact of Trade Restriction:
LOW
18. Industry Sector:
MINE
19. Exporters and Importers:
Venezuela and Many
The main importers in this case are mainly Venezuela's immediate
Amazon neighbors: Brazil, Colombia, and Guyana.
a. Leading Exporters
| Union of South Africa: | export revenue figures were unavailable at the time of writing. South Africa possesses roughly 2/3 of the world's known gold supply and mining is extensive. Estimates of South Africa's revenues from gold exports place the figure somewhere near $1.5 to 3 billion per year. |
| Brazil: | 91,258,390,000 grams worth $1,246,140,000.00 (mostly low grade quality) - 1989 estimate |
| Canada: | 22,395,771 grams worth $279,410,000.00 |
| Venezuela: | 4,665,450 grams worth $58,050,000.00 - 1989 estimate |
| Colombia: | 1,896,895 grams worth $20,318,000.00
|
b. Leading Importers
| United Kingdom: | 108,822,793 grams worth $1,325,109,000. |
| Switzerland: | 95,019,993 grams worth $1,126,389,000. |
| Hong Kong: | 64,714,124 grams worth $794,995,000.00 |
| Taiwan: | 32,453,759 grams worth $403,845,000.00 |
| United States: | 27,395,046 grams worth $332,095,000.00 |
20. Environmental Problem Type:
21. Name, Type, and Diversity of Species
22. Resource Impact and Effect:
Low and Product
23. Urgency and Lifetime:
Low and 100s of years
24. Substitutes:
Synthetic
Conservation as well as possible recycling efforts could be
implemented as alternatives to destructive mining. In addition,
mining lower grade ores from other parts of the country as well as
employing environmentally safer mining methods in the Amazon could
also be substitutes to destructive strip mining techniques.
25. Culture:
Yes
The indigenous native population who inhabit the affected area in
Venezuela have been subjected to murderous attacks by miners,
operating with at least tacit local government support. Thus, the
Yanomami culture is in danger of suppression or even destruction.
26. Trans-Boundary Issues:
Yes
The miners were pushed out of Brazil into Venezuela. At issue is
also the porous border between Venezuela and Brazil (and
Venezuela's other neighbors) in the Amazon region. Some of the
more radical Venezuelan legislators have proposed militarizing the
border as a means of establishing control in the region.
27. Rights:
Yes
The Yanomami Indians populate the area, and have been the object
of numerous attacks. The most notable of these occurred in
January, 1993, when sixteen young Yanomami were slaughtered by
miners, with the tacit support of the local Venezuelan government
officials. Other infractions against the aboriginies include the
invasion of reservation areas by garimpeiros and government
officials who seek access to the gold region.
28. Relevant Literature
"Assault on the Amazon", Time, Nov 5, 1990, Vol 136, No 20, p. 100-
101.
"Amazon Gold Prospectors", National Catholic Reporter, Feb 23,
1990; Vol 26, No 18, p. 7.
"High Cost of Gold: Another Part of the (Rain) Forest",
Commonweal, Nov. 8, 1991, Vol 118, No 19, p. 631-632.
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I. Identification