China, Venezuela Agree to Develop One of World’s Largest Gold Mines
In order to fill the stomachs of its more than 1.3 billion Chinese, the Chinese government has embarked upon a soft-imperialism approach to resource rich lands in Africa and South America. Like the International Monetary Fund and World Bank before it, China is saddling forein countries with loans for development while striking deals to develop agricultural land and resource rich regions. In its latest move, a Chinese miner has agreed with Chavez and his socialist government to develop a large gold mine in Venezuela. Critics of the move maintain that these resources belong to Venezuela, and that Venezuela and its workers have the capacity to mine for the resources themselves. But, as Venezuela pays off loans to China in oil, the question presents itself: how much sovereignty has Chavez’s government given up in the quest of world revolution to the other foreign Imperialist alongside the US, China.
Venezuelan government officials and the Chinese company China International Trust and Investment Corp, or Citic, signed a deal to develop the Las Cristina gold mine this week. The mine is located in southern Bolivar state and has been estimated to hold approximately 17 million ounces of gold. The latest gold in the world based on metric tonnes (each metric ton is 32,150 ounces of gold approximately) is 165,000. The world mined in 2011 approximately 2,500 metric tonnes of gold or over 80 million ounces of gold.
Venezuelan President Huge Chavez called it an agreement to begin utilizing both gold and copper deposits at the mine. He called Las Cristinas “one of the biggest reservoirs of gold that exists – not only in Venezuela, not only in Latin America, but in the world.”
Financial details of the agreement have been made public, but say it includes engineering, construction and processing of the gold and copper. Chavez said officials also signed an agreement to produce a map of mineral deposits in the South American country. Chavez announced the deals after a meeting with Chinese officials at the presidential palace. Chavez said they also agreed to deepen cooperation in Venezuela’s oil industry.
China’s ties with Venezuela have grown rapidly in recent years. China has grown to be the country’s biggest creditor, having loaned to Chavez’s government more than $36 billion in loans, which are being paid off by increased oil shipments. Just last year, the Toronto-based Crystallex International Corp said it sought international arbitration after Venezuela rescinded its contract to develop Las Cristinas Mine. The company said it had appealed to a World Bank arbitration body, claiming it was owed $3.8 billion US in damages.
This action continues the trend of massive Chinese spending to buy up scarce natural resources globally. This spree is a tacit acknowledgement of China of potential Peak Everything or a time in the future when scarce resources disrupt the globe’s superstructure. China is playing a Winner Take All game of geopolitical chess with the rest of the world, and while US focuses on old school imperialism, China gains. China’s is a economy that Goldman Sachs projected would be one of four emerging markets topping four of out of the five economies in the world by 2050. As a leader of BRIC, China is poised to become the world’s biggest economy by 2025. The leadership in China is working hard to make deals, planning ahead to meet increasing demand and potential shortages, while ensuring an ever-better lifestyle for the country’s elite. China’s strategy includes expanding into key commodities overseas alongside government loan programs.