Gold, Maduro’s New Oil

Gold, Maduro’s New Oil

By Geraldine Cook
July 30, 2019

There is a fact that Nicolás Maduro struggles to hide: a notable increase in gold production. Subject to U.S. sanctions since November 2018, Venezuelan gold has been linked to illegal activities worldwide, both in neighboring Colombia, and as far as in remote Uganda.

“The regime uses it [the gold] to finance itself, without complying with the law,” said Luis Francisco Rivero, gold expert and engineer affiliated with the Venezuelan Society of Mining and Metallurgic Engineers, based in Caracas. The illegal component in gold mining “in the last 20 years [under Hugo Chávez and Maduro] has become exacerbated,” Rivero added.

According to the Venezuelan consulting firm Ecoanalítica, Maduro is expected to make between $1.6 and 3 billion in gold sales in 2019. The business is quickly replacing the century-old oil industry to generate income to sustain the regime. Data explains the gold boom: oil production has dropped drastically since 1999, when Chávez took office.

Golden numbers

In a rare admission, Maduro’s government reported in mid-June the production of 10 tons of gold in 2018. Analysts disputed this amount, as did former service members who worked at the Mining Arch, an area covering 12 percent of the Venezuelan territory that includes the northern states of Bolívar and Amazonas, south of the Orinoco River. In 2014, two years before Maduro created the Mining Arch, Venezuela reported its production of gold at about 14 tons.

For its part, the World Gold Council estimates that Venezuela produced 23 tons of gold in 2018. “They’re producing at least 35 tons of gold per year,” said a former service member who worked in the mining area and is now against the regime, and who asked to remain anonymous.

In May 2019, the National Defense University, a U.S. Department of Defense institution, published a report titled “Maduro’s Last Stand,” confirming the regime’s increasing dependence on gold. Although Venezuela sold 73.2 tons of gold to Turkey and the United Arab Emirates in 2018, gold reserves at the Central Bank of Venezuela increased by 11 tons in the same year, the report says.

Where does all this gold come from? The report points to the Bolivarian Joint Criminal Enterprise (BJCE), a criminal network of companies, regional structures, and individuals who deal in worldwide operations involving gold, oil, drugs, leftist governments, and insurgent groups. The former service member considers that El Equipo (the team) — a BJCE arm — is involved.

El Equipo in action

The former service member describes El Equipo as a vital part of BJCE that involves miners working in slave-like conditions for shell corporations in the Mining Arch. Among its members are remnants of the Revolutionary Armed Forces of Colombia, members of the National Liberation Army (ELN, in Spanish), and gang leaders of the Ciudad Bolívar jail.

“ELN indoctrinates native communities in the mining area. They evangelize, really. They brainwash locals, so that they support El Equipo,” said the former service member, while sharing photos of an armed guerrilla giving a speech surrounded by native Venezuelan children.

According to the former service member, everyone obeys a structure of power, which Iván Hernández Dala, head of the Military House (Maduro’s security detachment at Miraflores Palace) leads, with the participation of Cilia Flores.

For his part, General Manuel Cristopher Figuera, who was forced to escape Venezuela after turning his back on Maduro’s regime, spoke about gold in an interview with The Washington Post on June 24, where, for the first time, he implicated Maduro’s son, Nicolás Maduro Guerra, in the gold mafia. The U.S. Treasury Department sanctioned Maduro Guerra on June 28 for having “profited from Venezuelan mines, along with Maduro and his wife, Cilia Flores.”

Gold departs Venezuela toward Guyana on the east, or to the west toward Colombia. Some has been seized in the Dominican Republic, while sources refer to a large buyer in the Miami area. In early June, an investigation from The Wall Street Journal indicated that the gold ended up in Africa, in a refinery in Uganda.