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Venezuela leans on scrap metal exports to up currency

GUANTA/CARACAS, April 1 (Reuters) – On the outskirts of the eastern Venezuelan port town of Guanta, hundreds of trucks line up everyday to unload tons of scrap metal, part of the government’s attempt to turn waste into a source of foreign currency.

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The gathering and sale of scrap has been booming due to the financial needs of President Nicolas Maduro’s administration, crippled by low oil production as a result of years of under-investment in the industry and obstacles to selling its most lucrative export due to U.S. sanctions.

“Venezuela is going to get lighter, because they’re removing all the scrap,” said Douglas Lugo, a truck driver on the outskirts of Guanta who used to work in the oil industry before he started to transport scrap material. His truck was weighed down with iron waste such as sheet metal, car parts and pieces of rusty doors.

In 2021, Maduro designated scrap as “strategic”, clearing the way for any surplus to be exported, saying it was necessary to “turn it into foreign currency … to take advantage of every last resource that is out there”.

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During eight years of economic chaos in Venezuela, state controls have increasingly slowed industries such as manufacturing and construction, while mismanagement and underinvestment have hurt the OPEC member’s oil sector.

The dismantling of equipment and its trade has not been confirmed by the authorities. The communication and production ministries did not respond to requests for comment.

Still, port records show that Venezuelan scrap is being exported to countries such as Turkey, India and Taiwan.

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Scrap metal sales “have increased considerably during the months when the COVID-19 pandemic was most severe, when state revenues were low,” local firm Ecoanalítica said in a report in February.

On the international market, depending on the type of material, the scrap which the local private companies buy for between US$80 and US$120 per ton can be sold for US$300 and US$700, two sources and two carriers told Reuters.

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“Everyone is working with scrap metal. Before you didn’t see that (…),” said Antonio Astudillo, who used to transport food from Brazil to various Venezuelan states, and since December has been working in the transport of scrap metal to Guanta.

“You can make money to survive.”

A cash-strapped Venezuela leans on scrap exports to raise hard currency  Reuters Canada

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