Chinese companies hide behind mining cooperatives to loot Bolivian gold

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Foreign companies get rich without paying taxes and pollute rivers with mercury and other toxic waste

Chinese companies hide behind mining cooperatives to loot Bolivian gold

Chinese companies set up machinery to loot Bolivian gold (Credit Los Tiempos)

In the north of La Paz, Bolivia, dozens of Chinese companies operate 24 hours a day, 365 days a year, to extract gold.They hide behind mining cooperatives that receive money from Beijing.

Thus, foreigners enrich themselves with Bolivian gold without paying taxes and pollute rivers with mercury and other toxic waste.

A shocking investigation by Sergio Mendoza Reyes for Los Tiempos from Bolivia, with support from the Rainforest Journalism Fund of the Pulitzer Center,reveals the machinery set up by Chinese companies to plunder Bolivian gold.

Work in the mining camps in Mayaya, a community in the northern Amazon forest of La Paz, never stops, or almost never. Thousands of workers work 11-hour shifts in gigantic areas of barren, polluted, desert soil, which spreads like a disease. From here, warns Mendoza Reyes, the Kaka River is poisoned, whose waters, kilometers below and along with other currents, reach the shores of the Madidi National Park

“The miners work for Chinese businessmen. An illegal association between Bolivian cooperatives and foreign investors (mostly from the Asian giant) have made this devastation a reality with the complicity of the Bolivian State”, reveals the investigation.

The report details that Gold mining has destroyed nature in these towns and the impact reaches Madidi, one of the most important areas in the world in terms of biodiversity.

Every day, every hour, thousands of liters of water with mercury and other pollutants stain the rivers that flow into this protected area

“The cooperative hired us. That's the way it is, the cooperative gets permission from the government and they pay the owner of the land to work here. You earn more than in the city, the lowest salary will be Bs 3,500 (USD 507), others can earn up to Bs 8,000 (USD 1,160) if they operate machines,” Ernesto, who has been working in mining for several years, told Los Tiempos. 12 years old.

Ernesto is from Cochabamba, and reveals that Mayaya, municipality of Teoponte, It is populated by Chinese foreigners, many of them undocumented, who extract kilos of gold without leaving anything in return for the communities, other than destruction.

In recent years, the People's Republic of China became Bolivia's main binational creditor. Until the end of 2021, it was owed 10.3% of the external public debt, equivalent to USD 1,312 million.

Chinese companies hide behind mining cooperatives to loot Bolivian gold

Chinese President Xi Jinping (REUTERS)

The lowest link in the mining hierarchy

The “poceros”, the lowest link in the mining hierarchy, live in tents made up of logs tied together with rubber tires, lined with blue nylons on the that put palm leaves parched by the sun. They have dug shallow ditches around their tents so that, if it rains, the water runs down the sides.

Their nickname, “los poceros”, comes from their activity, explains Mendoza Reyes . They are dedicated to extracting gold from the wells left by the machines when they stop working for two hours a day thanks to an agreement reached between the miners and the communities.

The place is called Catea, a community within the municipality of Teoponte, where the gold rush is at one of its highest points. The place is in the name of a cooperative, according to the miners who work there; But in reality, the one who relentlessly extracts the gold and dumps a lot of toxic waste into the river is a Chinese company. They reached an agreement with the cooperative outside the law, so both benefit: the cooperative obtains between 25% and 40% of the profits without working or investing capital, and the Chinese company gets up to 75% of the value of gold without paying taxes. “The one who loses is the country and the communities, who receive crumbs while they are stripped of their natural resources, as has happened since the colony”, warns the report.

These shady arrangements they have become a custom among mining cooperatives. “Exactly, there is tax evasion,” admitted the president of one of the two most important federations of gold cooperatives in the country (Fecoman), Ramiro Balmaceda. “These are internal agreements outside the law,” he said when asked at a public event in the city of La Paz.

The leader justified these actions by the lack of investment capital of some cooperatives. “There the Chinese, Colombians and others take advantage of it.” His economic adviser, Ramiro Paredes, assured that the government is aware of what is happening.

The leader of another of the most important federations (Ferreco), Eloy Sirpa also admitted that the income received by the cooperatives that camouflage these companies must be greater than 25% for “there to be a profit”.

Shell companies are exempt from paying up to 37.5% income tax (IUE), 13% value added tax (VAT), 3% transaction tax (IT), and up to 7 % of royalties for the regions where they operate. Behind the facade of a cooperative, the regions only receive a 2.5% royalty, and the State is expected  receive only 4.8% taxes in the future. This last tribute, low as none, was granted by the Government for the cooperatives for being its political allies, but in essence it will also benefit shell companies.

These benefits are based on “a policy of surrender” to natural resources, said the researcher specializing in mining issues at the Center for Labor and Agrarian Development Studies (Cedla). , Alfredo Zaconeta. With these advantages, “many choose to pose as cooperatives, others make illegal agreements and the production comes out as if it were from a cooperative and not from a company,” he added.

According to data from the Ministry of Mining, by the first quarter of 2022, 99% of the gold produced in Bolivia was registered as having been produced by cooperatives and only 1%  by private companies; but in reality an enormous and incalculable amount of gold is extracted by private companies hidden behind cooperatives, Zaconeta pointed out.

Tracking down these shell companies is an almost impossible task. Their capitals are suspected of being linked to other illegal activities, such as drug trafficking. Different sources related to the matter told Los Tiempos that they are not registered in the country, their transactions are made in cash, leaving no traces in the financial system, and their gold is sold on the Bolivian black market to take it abroad. The Bolivian Amazon “is becoming a sacrificial territory for a cooperative that it is not,” concluded Zaconeta.

“From Mayaya to a few kilometers before Quendeque, we see Chinese mining companies everywhere, in dredgers on the river, and on the banks of the same. Also some Colombian women”, adds the report.

According to official information, along the entire route from Mayaya to Rurrenabaque there are around 146 mining areas, of which 67% are still in process and, technically, cannot yet operate. Only 23% of the areas have mining contracts and all the documents in order to carry out their activities. However, only one of the 146 areas registers the name of an apparently Asian company, which is still in the process of obtaining an operating permit. This shows that the dozens of Chinese companies present there extract gold without any registration.

In September of this year, new alarming data on mercury contamination in five indigenous towns in the Beni river basin was released. Previous reports already reported that a population, the Esse Ejja, had levels of this toxin well above the limit considered “without risk” by the United States Environmental Protection Agency (EPA). This limit is 1 part per million (ppm).

However, a new study by the Central de Pueblos Indígenas de La Paz (CPILAP) found that the members of five indigenous peoples who inhabit the Madidi have toxic levels of mercury in their bodies. Tacanas (2.1 ppm), Uchupiamonas (2.5 ppm), Lecos (1.2 ppm), Esse Ejjas (6.9 ppm), and Tsimane-Mosetenes (2.7 ppm) are victims of contamination by mining, mainly for the consumption of fish.

The Chinese empire present in Bolivia

The banks of the rivers, deforested, polluted, and Turned into stony places, they are full of machinery of Chinese origin, manufactured by gigantic companies that are mostly linked to the Chinese Communist Party (CCP). There are dump trucks Howo, of the CNHTC (China National Heavy Duty Truck Group Co.), a Chinese People's Government enterprise; machinery of LiuGong, a Chinese public company. The Sinotruck Group company, also part of the CNHTC, has its products distributed in these areas.

There are motorized Detank, a brand linked to the Chinese company Zoomlion , whose executives are members of the PCC.

Sany is another giant in the global construction industry whose products are found in Bolivian gold mines. Its chairman, Liang Wengen, one of the richest men in China, expressed his unconditional loyalty to the CCP with statements such as: “My property, including my life, belongs to the Communist Party.”

Shantui, a company managed by the Chinese government and a world leader in the manufacture of bulldozers, also says that it is present in these spaces that are preyed upon.

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