Myths and realities “Tantalum and Niobium (COLTAN) in Venezuela”

Venezuela mining power.  

Myths and realities.

            One of the strategic objectives of the State of Venezuela is the diversification of non-oil revenues and the overcoming of the rent scheme that has dominated for more than a century in the country.  In this sense, the mining sector represents the potential opportunity to become the fundamental alternative of economic consolidation, motivated by the diversity of mineral resources the country has.

            During the raid into its goal of expanding the mining business, Venezuela longs for the expectations of quickly entering the global market for strategic minerals.  For Venezuela, this strategy of incursion in the international market has a series of questions about the traceability of the Tantalum (Ta) and Niobium (Nb) minerals, in order not to catalog the Venezuelan mineral product as Minerals in Conflict, observing closely the errors of the historical experience of the Congo, which conditioned its traceability in the international markets, which must be generated from the moment of its exploitation until its last step of transformation.

            In the particular case of MINE3 Services, under my leadership and after maintaining relationships with this small group that manages the entire value chain, research and operations in the mining field, MINE3 proposed the development of a mining business scheme under innovative parameters within the region and worldwide; specially applied to strategic minerals and in particular to Tantalum (Ta) and Niobium (NB), based on six fundamental principles or pillars interdependent with each other.

Characteristics of the Venezuelan Case.  ¡Venezuela, land of grace!

From a morphological perspective, the areas where deposits of Tantalum (Ta) and Niobium (Nb) are located belongs to the "Escudo de Guayana"(which occupies more than 45% of the Venezuelan territory surface), with alluvial sediments contributed mainly by the Villacoa River Sub-basin, direct affluent of the Orinoco River, sub-basin between the Meta and Cuchivero rivers and residual soils.  As for its geomorphological conformation it is composed of hills, domes and meadows, constituting the hill as predominant relief. It has convex profile and a very steep topography with slopes greaterthan 60%, with an average annual temperature between28 °C – 29 °C.[1].

From a perspective of the concentration of minerals, this area has the peculiarity of having found Tantalum (Ta) and Niobium (Nb), whose purity content exceeds 45%, which is determined by the oldest geological conformation on the face of the Earth, represented by the "Escudo de Guayana". 

From a socioeconomic perspective, in Venezuela the area where the sites of Tantalum (Ta) and Niobium (NB) are located is in the “Estado Bolívar” specifically in the Municipality of Cedeño, which constitutes the largest state of Venezuela, with an area of 240,528 km2, representing 26.09% of the national territory, possessing an estimated population of just 67,400 inhabitants, of which 7,656 are indigenous people represented in greaterproportion by the ethnicPiaroaand Eñepa.[1]   

            From the political-juridical perspective, from the year 2011, the National Executive ordered the exploitation of the potentialities of the mineral resources that the country has,  opening step so that in the year 2015, in the framework of a Policy called "The Strategic Engines” Decree Nº 2,165, where the Venezuelan state reserves the activities of exploration and exploitation of gold and other strategic minerals, including tantalum (Ta) and Niobium (Nb), in Venezuela, no private enterprise can be attributed the right of exploration and exploitation of these minerals, except through the establishment of joint ventures where the State of Venezuela owns a majority shareholding or through strategic alliances.

In this context, at the beginning of the year 2016, the mega-miningproject called “Orinoco Mining Arc”(occupying 12% of the national territory) was created, and at the end of that year 2016, we participated in the creation of the three mixed companies with capacity to explore development, exploitation and commercialization of strategic minerals: (1)“Empresa Mixta Minera Ecosocialista Metales del Sur, S.A.”;(2) Empresa Mixta Minera Ecosocialista Oro Azul, S.A.”; and, (3) “Empresa Mixta Minera Ecosocialista Parguaza, S.A.”;and are part of the “Corporación Venezolana de Minería”,  attached to the  “Ministerio del Poder Popular de Desarrollo Minero Ecológico”. 

Discovering the Blue Gold.

            In Venezuela, referring to terms such as "Coltan", in its best known expression, in the case of Tantalum (Ta) and Niobium (Nb), as a recent data, even though there are references of some specialized studies that were elaborated in the decade of the 70s. by the US Government. The reason or motive of this reality is that, in terms of national interest for the production of minerals, our country has historically set its interests in a mining policy aimed at concentrating on traditional mineral resources such as gold, iron, bauxite and coal mainly.

            It is from the year 2009 when officially the Venezuelan National Executive decides to have strong presence, supported in the timely action of the FANB in the mining zones located in the “Escudo de Guayana”, motivated to the allegations of smuggling of the minerals object of this article mainly towards Colombia. This route of mineral bleaching has allowed the illicit trafficking of tantalum (Ta) and Niobium (Nb), motivated to the vast and remote of the areas where these minerals are located, its limits with Colombia in its old area controlled by irregular groups of that country (mainly in the Department of Vichada where deposits of these minerals have been located) and by the Scarce presence of authorities from both Venezuela and Colombia in these areas. (3).  

But this is a myth in fact, since the story of the smuggled to Colombia is of a smaller scale, represented in sacks of kilos of material, not tons, since in the practice of international marketing, nobody risks buying mineral in the world under uncertain provenance conditions. In our tour to Colombia, we observed some miners with a stock of approximately 1,500 tons of tantalum and niobium for more than 5 years that no company buys, both so that a ton can cost US$ 5,000, which auction price.

The same happens with Curaçao, where we understand there is a stock of 500 tons of these minerals, which nobody buys, and less in crude; first by the conditions of incorrect practices and second because you must be part of this select group of serious bidders and claimants with trajectory in the world of Tantalum (Ta) and Niobium (NB).

            This, without the so-called sales representative of mineral brands such as Apple, Samsung, Nokia and HP, taking into account that none of these brands of technology have representatives in Latin America buying raw mineral, much more considering that these companies, as world-class organizations, have their own suppliers, such is the case of FOXCONN, who are responsible for the entire process of acquiring these strategic minerals, taking care very much that they catalogue it as companies that buy mineral in conflict, example of this is Apple, where on their website explicitly declare the non-purchase of minerals without traceability or in conflict in fulfillment of its policy of Social Responsibility and the Dodd Frank law. This is definitely smuggling, it's not a business. By taking care very much that they catalogue it as companies that buy mineral in conflict, example of this Apple, where on their website explicitly declare the non-purchase of minerals without traceability or in conflict in fulfillment of its policy of responsibility Social and the Dodd Frank law. This is definitely smuggling, it's not a business.

Venezuela´s debut in the International Market   

            In May 2018, Venezuela formally ventures into the international market of Tantalum (Ta) and Niobium (Nb) crude, with the export of 5 Ton to Europe (specifically to Italy).  Surprise!!more than 1000 questions flooded my LinkedIn profile of which I will just mention 5 with the answers I gave.  The most repeated where:

1.   How does a fourth company export? What happened to the three joint ventures that were created? 

A:The Venezuelan Mining Corporation exported directly.  This is the mining company of the State of Venezuela and is a partner of all the Coltan Joint Ventures in Venezuela. The three joint ventures and other companies that have alliances with the Venezuelan Mining Corporation for the Coltan have delivered their exploration samples of their areas of exploitation to make the first sale.

2.     How is crude mineral sold to Italy if it does not have a processing plant for these crude minerals?

A:It was sold to a company as a sample for the design of the first plant to concentrate the Tantalum up to 99%.

3.   How do you declare the price if you did not present the SGS technical data sheet, the card is the basis of the price, not the Certificate of Origin? 

A:Because it was a sample, a test.

4.   Why didn't they meet the Radioactivity labels? 

A: The material contained 0.04% ThO2 and 0.06% U3O8, the concentration of radioactivity would be: (0.04% * 35.6) (0.06% * 104) = 1.42 6.24 = 7.66 Bq/g. 

In this case, the material would be below the exemption level of 10 Bq/G for transport and could be transported as general cargo.

5.     What standard of transportation was used for Radioactivity?

A:The IAEA rules of the United Nations Model Regulations for Dangerous Goods for International air, land or sea transport.

         The international market of strategic minerals and in particular that of Tantalum (Ta) and Niobium (NB), has its own dynamics and rules, arranged by a number of limited actors (39 plants in total), and if you are not part of this group, you will never be able to participate in the upper stages of the formal tantalum business. As main characteristics of this market we can state the following aspects:

·      Lack of open information regarding negotiations, reference prices for the construction of the value chain of these minerals, which allows a great variability in the prices.

·      Stability in world production in a range of 1,900 Ton/year, with a limited increase in global demand for these minerals (determined by technological advances and new applications) linked to a perverse game "zero sum" between the various countries producers.

·      Resistance to the regulation of suppliers and buyers in commercial matters despite the efforts made in the field of international law.

It seems that Venezuela's first incursion into the international market of Tantalum and niobium left out the effect of ignorance of market characteristics.

The Six Pillars:  My answer to the Venezuelan case.

            After studying and analyzing the world market of Tantalum and Niobium and with the support of international advisors specializing in the field, I am dedicated to developing a new scheme that arises from the need for change and overcoming structural barriers that have been woven around these minerals and in accordance with laws like the Dodd Frank, whose ultimate goal is the production of "conflict-free minerals.

1.   To create measures of international confidence: this implies the regulation of market conditions, through the participation and coordination of policies and actions between the Governments of the region, mining actors in all their scales and other actors intervening that affect the value chain, generating more fair conditions at the base of the pyramid that constitute the artisanal miners (which represent 60% of the mining workforce).

This vision implies the adoption by our Governments in the creation of internal legal conditions articulated with the good practices established in the international law, in order to avoid the emergence and dominion in the zones of exploitation of parastatal actors that give rise to practices that are not in line with mining development.

With this vision, it would create the first link that would allow the harmonious development of the areas where these mining projects are carried out, which as in the Venezuelan case is in areas of difficult access. These legal conditions involve their harmonization with the development of social spaces, as some social problems are so complex that they even affect the viability of mining projects. In view of this, the main challenge of mining companies in the region and in particular in Venezuela is to overcome structural factors such as the limitation of resources in comparison to social needs, the historical imbalance in terms of allocation of resources by our governments that generate social inequalities and the dynamics of regional or local governments; before which we must confront and adapt our policies of social responsibility in order to carry on our projects.

2.   Democratization of information:access to information on Tantalum (Ta) and Niobium (Nb), implies reliable knowledge through public sources of data, which generates a shared market intelligence in terms of prices, structure of the Value chain, suppliers and claimants of the mineral, only in this way it will be possible to demolish the veil in reference to these minerals, and to eradicate the great asymmetries, distrust and perception of smuggling between the different businesses that are generated around these minerals.

This condition, has generated in the first term, a perverse effect where many actors "unskilled" (because they do not have infrastructure or experience to implement good practices for doing business), in their desire to act as "traders or brokers", create price distortions and conditions that lead to negotiations between suppliers and claimants of failed minerals (as shown in Figure 3).  Thus, as in our case study in Venezuela, we did a sampling in the year 2016 of 100 companies from whom we received offers to buy and sell Tantalum & Niobium unseparated Ore crude, resulting that only 1% were offers from companies market serials such as Hc. Strack and Malaysia Smelting; 80% of the companies they offered sent false documentation, such as letters from banks and alleged suppliers or representatives without even having funds, and; the other 19%, there was no idea what they were bidding or buying, just wanted to act as "traders or brokers", under the mirage of achieving large commissions in the short term.

On the other hand, ignorance of the value chain of these minerals generates expectations in the sale prices by the bidders and failed transactions or short-term commercial relations, mediated by a fraudulent perception. 

1.   Protection of artisanal mining: Speaking of artisanal mining, for many it is synonymous with illegality, depredation and conflict, having as cognitive references the case of Africa (DRC) globally and specifically in South America of the extraction of gold and other strategic minerals. However, artisanal mining constitutes 60% of the mining workforce worldwide, even more the implementation of small scale mining, implies its alignment in terms of compliance with international standards such as the Dodd Frank law, under strict international oversight, its organization, the generation of adequate working conditions and "fairer" gains for this segment.

In the case of Tantalum (Ta) and niobium (NB), due to its superficial or alluvial exploitation in Venezuela, it implies that this scheme is the most suitable, since, on the other hand, it implies from an environmental perspective, the rejection of pollutants (sulfides and mercury) or the logging and dredging lunar landscape generator; the implementation of an effective policy of environmental recovery and the reintegration of animal and plant species.

From an economic perspective, this decants in the generation of economies of scale and development of these peripheral zones in terms of services and the banking of these miners, which affects the improvement of economic conditions and low of the prices of the Inputs and services in these peripheral areas, that is to say, to the extent that more development is achieved, generates more infrastructure, improvement of communications and standardization of prices with respect to the populated centers.

From the government perspective, it implies an effective control of the mining zones, the maintenance of equilibrium relations between the residents of these zones (indigenous and settlers), and the authorities; As well as the joint coordination of public policies that tend to the development of the aforementioned zones.

2.   Mitigation of adverse environmental effects: through the minimization of predatory effects, integration with communities under an environmental awareness of sustainability.  This means not only the proper closure of mines, reforestation, water treatment, the recuperation of flower and animal species, environmental awareness campaigns; but a real articulation between all the actors involved in the areas of exploitation, for the implementation for the implementation of effective policies that tend to reverse the negative environmental effects.

3.   Technology and processes:this implies the standardization of procedures and implantation of clean technologies for the removal of Uranium (U) and Thorio (Th), cleanliness, concentration of all strategic minerals.

In the case of the separation and processing of strategic minerals, such as rare earths and specifically the Ta and Nb, so far have been used acids, chlorides and sulphides, which have a high cost in terms of obtaining, transport, use and treatment, and also its harmful effects on the environment.  In view of this, the need for technological substitution, which tends to implement "green or clean technologies", is urgent. Mine3 particularly propose the use of technologies that use water, in addition to being mobile, assures the utilization of up to 98% of the minerals contained in the alluvial deposits, very characteristic of the ores of Tantalite (Ta) and Niobium (Nb), that recycles approximately 95% of the water used, technology that also complies with the Protocol of environmental legislation qualified as type "A" by the Canadian government.

Perhaps the central focus of this discussion is on access to these technologies and their cost; however, it should be noted that access to technology is available to producing countries (an example of this is the hydrometallurgy-based concentration plant in the process of implementation in the Republic of Zambia with Canadian technology), the costs represent a amortization of the investment in the long term, motivated to its low environmental impact, as well as financing through multilateral financial institutions.

4. Mitigation of adverse environmental effects: Through the minimization of predatory effects, integration with the communities under an environmental awareness of sustainability. This implies, not only the proper closure of the mines, reforestation, water treatment, recovery of floral and animal species, environmental awareness campaigns; but also a true articulation between all the actors involved in the exploitation areas, for the implementation of effective policies that tend to reverse the negative environmental effects.

5. Technology and processes: This implies the standardization of procedures and implementation of clean technologies for the elimination of Uranium (U) and Thorium (Th), cleaning, concentration of all strategic minerals. In the case of the separation and processing of strategic minerals, such as rare earths, Cassiterite and specifically among them Ta and Nb, acids, chlorides and sulfides have been used so far, which have a high cost in terms of their obtaining, transportation, use and treatment, adding their harmful effects on the environment. In view of this, there is an urgent need for technological substitution, which tends to the implementation of “green or clean technologies”. I particularly propose the use of technologies that use water, in addition to being mobile, ensures the use of up to 98% of the minerals contained in the alluvial deposits, very characteristic of the minerals of Tantalum (Ta) and Niobium (Nb), which recycles approximately 95% of the water used, technology that also complies with the protocol of environmental legislation qualified as type “A” by the Canadian government.

Perhaps the central axis of discussion in this regard, revolves around the access to these technologies and their cost; however, it should be noted that access to technology is available to producing countries (an example of this is the concentration plant based on hydrometallurgy in the process of implementation in the Republic of Zambia with Canadian technology) and the costs represent an amortization of the investment in the long term, motivated by its low environmental impact, as well as its financing that can be achieved through multilateral financial organizations.

6. Creation of blockchain mechanisms or commercial exchange platforms: These innovative technologies will allow us to overcome the existing barriers of distrust and alleviate the asymmetry in prices. Through the implementation of blockchain and commerce platforms, we can facilitate more transparent, secure and efficient commodity exchanges. In addition, these mechanisms will allow more transparent means of payment in cryptocurrencies and a global interconnection, improving the liquidity and scope of the market of minerals and strategic commodities.

• “Capacity” of interconnection between suppliers, demanders and other actors involved in the value chain, through agreements that guarantee the compliance of the stipulated conditions, through their subscription in countries and governmental instances capable of establishing mediations, arbitrations and fair commercial legal processes between the parties, under strict international oversight that endorses their conflict-free origin. ·
• “Capacity” of articulation with a sense of timeliness of the other actors involved in the commercialization process, where transport, custody and storage of minerals, certifiers, customs agents, among others, stand out. ·
• “Capacity” of representation in the commercial agreements of fair profits for the artisanal miners, through the establishment of conditions for the suppliers that guarantee this aspect. ·
• “Capacity” in the dissemination and rejection of mineral commercializations in conflict conditions, that is, all those transactions that entail a voracious degradation of the environment, use of resources to finance war conflicts and illicit activities, human exploitation, must be rejected. ·
• “Capacity” in the monitoring and public dissemination of the mineral commercialization prices. This, my proposal for Venezuela, more than for the country, is a regional solution. We are advancing in the creation of an instance or international organization, that fosters commercial exchange and facilitates the aspects dealt with in the pillars mentioned above, soon CCSCEX. In my opinion, only in this way, we will be able to have a strengthened mining market in the region and generate confidence worldwide.

Article Submitted to the Anders Gustaf Ekeberg Tantalum Prize 2018 and 2019:

The Anders Gustaf Ekeberg Tantalum Prize is named after the discoverer of this rare and resistant metal, which has multiple uses in science and technology. The prize is awarded to the main author of the article or patent that, according to an independent panel of experts, has made the greatest contribution to the advancement of knowledge and understanding of tantalum, either in its processing, its properties or its applications. The prize is open to any article or patent published that relates to tantalum and its benefits for humanity.