PUERTO CARREÑO — A Canadian mining company project in the Vichada department of Colombia seeking to extract key minerals for the energy transition has divided indigenous communities and raised questions about the permits received, the Orinoquía natural region's potential, illegal mining and minerals trafficking across the Venezuelan border.
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In April 2023, Auxico Resources Canada made a surprising announcement: Orinoquía's regional environmental authority, Corporinoquía, had granted the company's Minastyc project an environmental license for the exploitation of rare earth elements. With this permit, Auxico, which produces critical minerals, high-value metals and rare earth elements, would be the first company authorized to legally extract these minerals, fundamental for the energy transition, in Colombia.
Rare earths minerals are used in countless everyday products, including rechargeable batteries, fiber optic, cell phones and airplanes. These 17 elements have similar geochemical properties and are generally found together in geological formations. Despite their name, these elements are relatively abundant in the Earth's crust.
The “rarity” is finding deposits of “commercial utility”, that is, those that merit an economic investment and whose extraction and refinement (they are very difficult to separate) is profitable.
Auxico claims to have found such a deposit at its Minastyc property, where it plans to extract 1 million metric tons in 17 years.
A key social and environmental area
Founded in 2014 in Montreal, Auxico is engaged in the acquisition, exploration and development of mining projects in Mexico, Brazil, Colombia, Bolivia and the Democratic Republic of the Congo. Now, with the project in Vichada, just 15 km from the department's capital, Puerto Carreño, it hopes to place itself among world's top three largest rare earth miners.
On paper, Minastyc looks like a great success. The company said in a statement that the project could generate $220 million in profits thanks to one of the highest grades of heavy rare earths in the world. Yet questions remain over the mine's titles and environmental permits as well as its relationship with surrounding indigenous communities.
The area in question is located in the heart of a key environmental conservation area.
Just a few years ago, the 189.7 hectares of Minastyc were part of a nature reserve called Agua Linda, which was withdrawn in 2009. Today, Auxico plans to buy the Agua Linda property.
The area in question is located in the heart of a key environmental conservation area. On one side, it borders the Bojonawi Nature Reserve, a biodiversity refuge that has served for decades as a living laboratory for scientists and research institutes. More than 1,500 species of animals have been identified there, and a biological corridor has been consolidated.
On the other side, it borders the Guacamayas and Maiporé Indigenous Reservation, which is made up of three communities of the Amorua indigenous peoples. Along the area, stretches the great Orinoco River, which also serves as the border with Venezuela.
Tension within indigenous communities
Of the three Amorua indigenous communities (Morrocoy, Caño Verde and Warrawanae), two say they have never met with Auxico nor were they aware of the Minastyc project.
The company, which has said it is committed to ensuring maintaining communication and a positive relationship with indigenous communities as well as discussing all aspects relevant to communities in Colombia, had signed a memorandum of understanding with the Colombian company Minampro Asociados.
Minampro had the license to sell, buy and export industrial sands containing various metals, including tantalum and niobium (which are extracted from coltan). It also claims to have an exclusive agreement with the indigenous reservation for the purchase of industrial sands and minerals, a product of a traditional indigenous extraction permit that this reservation has.
Both the document between Minampro and the Reservation and the indigenous mining title are signed by the former governing council. But this council is no longer the highest authority, and the entire reservation was not aware of its decisions at the time.
What is left for the communities?
Today, the former council's decisions have created divisions and confrontations among the reservation's communities. "It is generating a conflict among us, among those who do want mining and those who believe it can affect the territory,” said an indigenous leader in the area.
In September 2022, Auxico met with representatives of the Warrawanae community, who told Climate Tracker that the purpose of the meeting was "to discuss different aspects of business activities that would potentially be developed within the territories inhabited by indigenous communities or in their surroundings."
The only time that the Morrocoy or Caño Verde communities were invited to a conversation, they were told the purpose was to give children clothes and hats.
The communities requested information from the Vichada department and received information that left them more confused: According to the memorandum of understanding, Auxico would acquire 70% of the profits from industrial sands exploitation of the Guacamayas and Maiporé Indigenous Reservation, and Minapro would keep the remaining 30%. "And what is left for us?” the communities asked.
Social conflicts in the territories
This is not the first time that Auxico has triggered social conflicts in Colombia. In 2018, the then Governor of Guainía, Javier Zapata, signed a memorandum of understanding for mineral extraction in his department, south of Vichada. The news sparked demonstrations that led him to reverse his decision and promise to seek alternatives initially agreed upon with the general population, unions and indigenous peoples.
Today, members of the Guacamayas community who had participated in conversations with the company say "the Minastyc project is a farce.” One community source said that “although there is material to extract, it is not in the volumes that Auxico has stated.”
“The communities extract a maximum of 30 kg (66 lb.) a day. No matter how well they do, they extract 700 kg a month by hand,” said a mineral merchant in the area. “Removing more than 10 tons a week is impossible,” he added.
Rumors of a mineral plantation
At least seven sources in the region told Climate Tracker the same story: several years ago, a man named Clímaco Unda brought minerals from other regions or from Venezuela, and buried them on the property where the Minastyc project is currently located. This is known in the area as “sowing minerals".
They made him disappear.
Unda was the son of Clímaco Unda Barrios who sold Auxico, according to company documents, the right of possession to the land for 60 years at a value of COP $750 million (a little more than USD $182,000).
Unda disappeared and was murdered. “My cousin died. They made him disappear. He was already working with minerals, but he brought coltan and tin from the other side. He began to dig large holes and cover them, with the idea of selling that property where there are minerals,” one of the sources said. Climate Tracker could not corroborate that his death had anything to do with planting minerals.
Certifiying minerals "origins"
In the mining sector, documents certifying the origin of minerals are valuable, especially in an area where illegally extracted minerals are abundant, and where their transit across the border has been documented both by journalistic investigations and by the authorities. Materials without origin documents are confiscated.
As one source explained, “planting minerals allows us to certify that the materials were taken from a desired area. Even if they were brought from somewhere else, they are certified as if they were extracted from that area."
For years, journalists and authorities have focused on the Venezuela border region for its illegal exploitation of minerals such as coltan. According to a report by Colombia's Ombudsman's Office, a large part of the illegal mining business in southern Venezuela is controlled by the National Liberation Army (ELN) and dissidents of the Revolutionary Armed Forces of Colombia (FARC).
A 2018 report by the Ministry of Mines warned about the situation in the region, stating that "mining titles are being used to facilitate the commercialization of irregularly exploited minerals. While others are being subject to the 'fattening of titles' for subsequent sale to multinational companies.”
In December 2021, Colombia's Prosecutor's Office seized 30 tons of coltan that belonged, according to the investigation, to FARC and ELN dissidents who, as they indicated, exploit indigenous communities to extract the minerals.
In this context, the first rare earth mining project in Colombia generates more unknowns than certainties.
Auxico does not hold the status of mining owner [...] nor does it have any mining application.
Colombian daily El Espectador learned that the National Mining Agency is reviewing everything related to the project between Auxico and Unda Barrios. The agency is planning a visit and that will not provide new statements until certain questions are clarified.
Lack of clarity on licenses, property and the real scale of the project
While Auxico had repeatedly said the mining rights and surface of the Minastyc property belong entirely to the company, the titles and permits with the mining and environmental authorities are in the name of Clímaco Silvestre Unda Barrios.
Auxico told Climate Tracker that the transfer of titles and property is “being finalized” with the authorities. Yet both Corporinoquía and the National Mining Authority (ANM) told Climate Tracker that no such requests have been made for Minastyc. “Auxico does not hold the status of mining owner, nor is it listed in RUCOM as an authorized marketer, nor does it have any mining application. Nor does it currently have any mining title in Colombia in their name,” ANM sources told the media.
The license granted by Corporinoquía to Unda Barrios, is a two-year temporary license and establishes a limit of 50,000 tons per year, at least until a global or definitive license is approved.
The environmental authority told El Espectador that “although the mining estate in the process of legalization has an area of 189.7 hectares, the area of the exploitation estate authorized by this Corporation has an area of 3.94 hectares.” Moreover, it said that the authorized extraction would only be manual, "with the use of conventional tools such as a pick, shovel, bar, etc.”
That does not coincide with what the company has announced in repeated press releases. On April 12, for example, Auxico said that the approval of the Environmental Impact Study "is a key milestone towards allowing the Company to move equipment on site, including heavy machinery for bulk sampling and a processing facility."
*This article is part of our Climate Journalism Mentoring program