Gold and diamond mining currently pose a threat to the forests of the Guayana region. Exploration for gold by small-scale miners has occurred since the last century, but it appears that much of the wealth still remains underground. According to the United States Geological Survey, there is a 90 percent likelihood of at least 20 undiscovered gold deposits in the Guayana region, and a 50 percent chance that 40 or more exist (See Figure 6: Overlap between mineral deposits and traditional indigenous territories) [69] Although these deposits are likely to average only slightly over 15,000 ounces of gold each, all of them are economically viable to develop. Gold located near the surface, or placer deposits, appear to occur so frequently that USGS researchers found it difficult to quantify them, labeling their size and numbers as “significant.” [70]
Currently, much of the gold mining occurs along a series of so-called greenstone belts that traverse the Guiana Shield and in Venezuela include the southern portion of the Imataca Forest Reserve, the El Callao district of the Puerto Ordaz- Sta. Elena highway, and the southernmost forest region at the border with Brazil. Diamond-bearing deposits have been identified throughout Bolivar state and much of the mining occurs near the Brazilian border.
Characteristics of the mining industry
In the Guayana region gold occurs in alluvial and quartz vein deposits. Currently, gold and diamonds are extracted using rudimentary methods, although some mining companies, such as Monarch Resources are operating underground and other companies are proposing large-scale, open-pit operations. Most multinational mining companies are not yet operating mines, with only three industrial-scale sites in operation. Approximately 30,000 small-scale miners operate in the region, mostly illegally. [72] The majority are Venezuelan, but at least 2,000 to 3,000 come across the border from Brazil, Colombia, and Guyana, and recent reports suggest the number is rising. [73]
Most mining companies in Venezuela are referred to in the industry as “junior” companies, although a few large-scale companies (“majors”) also have concessions. Many of these companies are based in Canada (See Foreign Gold and Diamond Mining Companies with Holdings in Bolivar State). Junior companies are usually involved in the more speculative exploratory process of mineral development. They may invest between $10 million and $40 million, while major companies may invest hundreds of millions of dollars or more in a potentially profitable mining venture. Once an economically viable reserve is identified, a junior company may enter into a joint venture with a major company or another junior company to exploit the resource. The main objective of major mining companies is extraction, but they also spend considerable capital on exploration. The following chart shows a typology of small-scale and large-scale mining operations.
Mining policy and institutions
The Ministry of Energy and Mines (MEM) has the authority to grant concessions for mineral development in Venezuela, although a regional body was given the right to grant contracts under the supervision of the MEM (See Encouraging Mineral Development in the Guayana Region). Concessions are granted under the 1944 Mining Law, which states that mining concessions can be given in virtually any publicly held land. In addition, the law provides for artisanal mining, which is allowed on unallocated lands (tierras baldias), provided it does not conflict with public interests. Companies win concessions according to their capability to operate a mine – generally interpreted to mean their sufficiency of capital – and to their offers to contribute to community projects or other special programs.
The Ministry of Mines has three professionals to monitor over 400 mining contracts in the Guayana region. None of these inspectors has been trained on the environmental impacts from mining. [74] The regional Corporaci
