GUANTA/CARACAS – Around the port of Guanta in eastern Venezuela, hundreds of trucks line up every day to unload tons of scrap metal as part of the government’s attempt to turn waste into a source of foreign exchange.
The collection and sale of scrap has intensified the financial urgencies of Nicolás Maduro’s administrationweighed down by low oil production due to years of industry divestments and difficulties selling casks amid US sanctions imposed in 2019.
“Venezuela will be bright because they’re removing all the scrap metal,” said Douglas Lugo, a truck driver on the outskirts of Guanta who was an outsourced oil industry employee and now works hauling discarded materials. In his truck he transported iron scraps such as sheet metal, wheels, vehicle parts and parts of rusty doors.
In the past, waste was sold abroad in very small quantities, but since 2020 these exports have been encouraged by private companies.
In 2021, Maduro increased his interest in scrap metal, considering it “strategic” for local industry and allowing its surplus to be exported, subject to approval by authorities.
Burdened with obsolete plant, machinery and equipment due to years of inactivity, government and private companies have been increasingly tempted to sell them for scrap. Although the state is behind some of these lawsuits, prosecutors say there have also been thefts of equipment intended to be sold for profit.
The exported scrap comes from the dismantling of disused equipment belonging to the state-run PDVSA and other public enterprises, crippled construction works and old private machines, said about 15 sources, including businessmen from different sectors, transport companies, workers and officials.
Dismantling and trading in scrap are not officially prescribed. The Ministries of Communications and Production did not respond to requests for comment.
According to port records, scrap is exported from Venezuelan ports to countries such as India, Taiwan, Thailand, Turkey, China, Ecuador, Belgium and the Netherlands.
The scrap that arrives at the ports is received by a state-owned company, which even sold material to Turkey and China in 2019.
That company is signing deals or “alliances” with private companies for export, according to a document and two sources, to circumvent Washington’s measures that do not ban Venezuelan companies from trading abroad.
The companies will pay the scrap to the state corporation in cash in foreign exchange, and after the cancellation steps will be taken to export the material, two other sources consulted added. Ezequiel Zamora Corporation, which handles the scrap, did not respond to a request for comment.
In 2021, 45,500 tons of iron, steel and copper waste worth $55 million were exported from two of the country’s major ports, according to figures from Import Genius, a consulting firm that prepares import and export customs documentation.
The volume of material sold abroad will double in 2020 compared to exports from the same two terminals.
No figures are available for the other ports. Bolivariana de Puertos (Bolipuertos) did not respond to a request for comment.
Scrap sales “have increased significantly during the months of the COVID-19 pandemic, when government revenues have been tight,” local firm Ecoanalítica said in a report.
On the international market, a ton of scrap costs between $300 and $700 per ton, depending on the type of material. Meanwhile, local private companies are buying the scrap at prices between $80 and $120 a ton, two sources and two transport companies said.
Tanks and pipes are being dismantled in northern Monagas, an oil zone in the east of the OPEC nation, said an oil sector source and two workers who saw the materials being cut into flakes. “Nothing is being salvaged today, everything is for sale,” added a source.
But with the advent of scrap trading, crimes such as theft of equipment in oil zones and public companies are also emerging, according to security forces and prosecutors.
In March, Attorney General Tarek Saab said on state television that 326 people had been arrested and 373 tons of scrap metal and other iron products and steel seized for dealing in “strategic material” from the oil industry, the state electric company and hydrology companies.
The state-run PDVSA did not respond to a request for comment, nor did the Oil Ministry.
With scrap trading, some hauliers who used to work for PDVSA or hauling coal across the border are now turning to hauling waste because they make more amid high inflation. They earn about $100 for each shipment of scrap metal to the ports, and they can earn $300 a month, ten times the $30 minimum wage.
“Everyone works with scrap metal. You haven’t seen that before,” said Antonio Astudillo, a truck driver who used to load and transport food from Brazil to various states in Venezuela but was hired to transport scrap metal in December, according to Guanta. “You deserve something to survive.”
(Reporting by María Ramírez in Puerto Ordaz, Mayela Armas and Deisy Buitrago in Caracas. Additional reporting by Tibisay Romero in Valencia, Mircely Guanipa in Maracay and Anggy Polanco in San Cristóbal.)