Gold prices encouraging informal mining, environmental damage, executive says

Friday, February 11, 2011

Given the expectations of rising gold prices, the number of informal miners in Venezuela's Guayana region is increasing and causing environmental damage, the head of Bolívar state mining authority Iamib, John Madero, told BNamericas.

"The price of gold encourages informal mining and creates a complicated problem because it causes very serious ecological damage," Madero said.

The small-scale miners in the area are unable to invest in the preventative or regulatory measures the activity requires, according to Madero.

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"This is something the government has to understand to start up large-scale gold mining, because if there is no regulation, people will always be tempted to mine illegally," Madero said.

There is a need to implement measures to formalize the operations of small miners so they can take on the activity like a company, Madero said.


Recently, basic industries and mining (Mibam) minister José Khan authorized small-scale miners to mine parts of General Mining de Guayana's Increíble 6 concession in Bolívar.

"They will be able to conduct their mining operations temporarily until their relocation is settled once and for all," Khan said.

The move involves a partnership between small miners and the state through the so-called socialist mining company, which will be responsible for handing over the areas with gold potential to be developed by these independent workers.


Meanwhile, the central bank (BCV) is planning to set up an office in Puerto Ordaz city to oversee the sale of gold produced by small-scale miners in the area.

Despite Madero's concerns and the government measures to organize the activity, the former president of national mining chamber Camiven, Gilberto Sánchez, said in December that gold produced in Venezuela is likely leaving the country illegally.

"I don't think that Venezuela is producing less than 10t/y of gold. Its estimated production is close to that amount and much of this leaves the country without any control," Sánchez said.