Background information
The threat
Over a decade ago, within the Bolivar state a vast dam was built across the regions
principal river – the Caroní river. Baptised the Guri dam, it now supplies more than 70% of
Venezuela's electricity demand.
In
addition to energy, the region is rich in
tropical timber and in minerals, specifi-cally
gold and diamonds. Until recently
mining in the region has been small
scale and informal, although is already
causing problems with mercury poisoning
and sedimentation along some sections
of the Caroní river. Industrial scale
mining and logging depends on the
development of a secure source of energy. This will now be made available on the
completion of a 1500km transmission line running from the Guri dam across the Imataca
Forest reserve, Canaima National Park and indigenous-lands contained within to the
Brazilian frontier. The Swiss-based company Asea Brown Bovery
- ABB has been contracted to construct the electricity line. Also
involved is a Venezuelan company, Corporación Venezolana de
Guyana – CVG, responsible for the construction of the Guri dam.
This power line will make available the energy required for
industrial development of the region. Initially this will be focused
on 3 regional gold mining centres - Las Claritas, Ikabaru and
Imataca Forest Reserve. In an attempt to legalise the expansion
of the mining industry in the Imateca Forest Reserve, the govern-ment
passed a decree, 1.850, which would open up 50% of this
protected area to mining interests. However the decree is
considered by many to be anti-constitutional and is being contested by environmentalists
in congress. If the decree holds, the electricity supply from the Guri line will supply the
energy required for large scale mining operations in this fragile area. Placer Dome, a
Canadian mining multinational already established within the Imateca forest reserve, is
helping fund the completion of the line. Other mining multinationals such as Crystallex and
companies from North America and Japan are eagerly waiting developments.
Additional development plans on completion of the line include
the construction of a chain of luxury hotels within Canaima
National Park. Finally, through the frontier connection electricity,
sold at half the national rate, will be supplied to Brasil. In
exchange for the cheap energy, Venezuela is seeking the
support of its rich industrialised neighbour in easing its entry
into a South American trade block, known as the Merco Sul.
The initial budget for the project was set at $176 million, however
expenditure has already surpassed $400 million. The Vene-zuelan
Government is the principal financial backer, although
it is not clear whether this includes Loans or Credit guarantees
from sources overseas.