Through a company registered in Mexico – Consorcio Panamericano de Exportación – with no known trajectory or experience, Joaquín Leal made a daring proposal to the Venezuelan Guyana Corporation to “reactivate” the aluminum industry, paralyzed after March 2019 blackout. The business proposed to pay the power supply of state-owned companies in exchange for payment-in-kind with the metal.
While Joaquín Leal, Alex Saab and their partners applied since mid-2019 the virtual bypass to help the regime of Nicolás Maduro to circumvent U.S. sanctions with the sale of Venezuelan oil and coal, they also tried to stretch the limits of their business with the Chavista State even further, until they were at the doors of Corporación Venezolana de Guayana (CVG). This conglomerate of core companies, was once a bastion in the production of iron and aluminum in the south of the country, but today, is part of the harvest of industrial debris left behind by the self-styled Bolivarian Revolution.
As gathered from a large file of documents, jointly obtained and processed by the Spanish newspaper EL PAÍS and Armando.info, which has given rise to this series of investigative reports entitled “Mexican Bypass against Sanctions,” a company unknown in the raw material production business, called Consorcio Panamericano de Exportación (Copaex), proposed to the presidency of CVG a plan to “reactivate the aluminum industry in Venezuela.”
The project with CVG was another idea of Mexican businessman Joaquín Leal Jiménez, an ally of Alex Saab in Mexico, who activated a secret network for the trading of Venezuelan commodities designed from an original request of Venezuelan Vice President Delcy Rodríguez to solve the inconveniences generated by the national 5-day blackout, in March 2019. By a subtle irony, it was precisely that electricity crisis what condemned the state-owned aluminum industry to inoperability… the electricity from Guayana —a Venezuelan region south of the Orinoco River, rich in minerals and water flows— until then abundant, continuous and inexpensive, is one of the essential supplies for this industry to produce. To concentrate aluminum in its cells, Alcasa and Venalum, the two CVG companies engaged in the aluminum market, require around 1,500 megawatts per day.
The blackout represented the coup de grace for an industrial park that in March 2019 reached a production equal to barely 10 percent of its installed capacity. It was the end of a decline that began in 2010, when the late former President Hugo Chávez ordered the aluminum industry to shut down in order to save electric power during the first great crisis of the electric utility, officially blamed on that year’s drought and the drop of the level of the Guri dam, on the upper Caroní River, in the State of Bolívar, one of the three rivers —together with Delta Amacuro and Amazonas— of the Guayana region. If the production of this conglomerate of mineral processing companies has never been the same since then, after the 2019 blackout, it fell to zero.
The debacle, however, looked like a business opportunity for Leal, who was a rising star in Mexico, as a businessman in the electricity sector. He saw within reach the possibility of adding another Venezuelan raw material to his portfolio of products for the global market.
Through the unknown Copaex, he proposed to the Venezuelan counterpart to make a one-off US$ 300-million investment to supply and transport “gas-based power generation plants of 200-MV capacity” which, together with an alliance with the Venezuelan state-owned Corporación Eléctrica Nacional (Corpoelec), would be enough to activate within nine months 125 out of the 905 aluminum cells paralyzed since the blackout of March 2019.
After one more year, according to the document addressed with much familiarity to “Pedro,” referring to Pedro Maldonado, president of CVG and trusted man of Vice President of Economy Tarek El Aissami, Leal and Copaex estimated that all the cells could already be active.
“Copaex will send power generating plants to Venezuela as of July 2019, and expects to complete the installed capacity of 200 MW within the next 12 months. With the 16 MV, it is estimated that 10 cells will be reactivated with a production of 510 tons per month. To start with the production, it is required to enter into a cooperation agreement by and between Venalum and Copaex, where the contributions of the parties and their benefit will be determined,” reads the proposal in an optimistic tone, dated June 10, 2019.
While in the letter addressed to the president of CVG, the Mexican company assured that it was solely motivated to submit the proposal due to its “commitment to the industrial development of Venezuela,” and highlighted that Leal had accumulated experience in the electricity business, the plan fell short when it came to envisioning the eventual rescue of the Venezuelan aluminum industry.
The business proposal acknowledged that at least 1,448 megawatts of generation would be needed to activate all the aluminum cells, but did not disclose whether the new added capacity was part of the proposed agreement or how many power generation plants it entailed. In fact, it ended up explicitly assigning to the state-owned Corpoelec the responsibility of generating and supplying some 1,250 megawatts of the required capacity from the planned Tocoma hydroelectric plant on the lower Caroní River, which never went on stream despite the state’s injection of nearly US$ 10 billion. However, it does make it clear that Copaex’s services would be paid “in kind with produced aluminum.”
The bet on aluminum was a maneuver that Leal attempted to channel income towards the aforementioned Consorcio Panamericano de Exportación (Copaex), created as a variable stock corporation in 1998, but finally registered in the Mexican state of Guanajuato in 2017, with a very broad corporate object, slightly inclined to livestock or agricultural activity. The company was not created by Leal, who later acquired it through relatives.
The company was registered with a capital of 50,000 Mexican pesos and with three members on its board of directors, until August 2019, when its initial corporate purpose —also very broad but now with some ambition in the field of food and oil trading— was modified, and the three directors who were on record at its creation were removed from their positions giving way to two new members, María Guadalupe Villanueva Ayala and Francisco González Ramírez. Ramírez was the signatory of the proposal to CVG, as president of the Consortium, which, based on the dates, he had just joined.
At an Extraordinary Meeting held in October 2019, the company took another turn with the increase of capital from 50,000 to 100,000 Mexican pesos (from US$ 2,500 to US$ 4,500) and the inclusion of a new board member, María Teresa Alfaro Castañeda, Joaquín Leal’s grandmother, which ratifies a common practice in Leal’s companies —he does not appear in the articles of incorporation of the companies, but his relatives.
Three months after that modification, the company made a transfer with a check for 15 million dollars to another company of Leal’s scheme, Libre Abordo, which it gave in turn to the state-owned Seguridad Alimentaria Mexicana (Segalmex) as part of the payment for 210,000 tons of white corn that would eventually be exchanged for oil in Venezuela. This was one of the first moves of a sophisticated corporate structure, in which Alex Saab also participated to obtain resources in exchange for oil and thus evade U.S. sanctions. Then came the control of coal, the interest in collecting remittances from Venezuelans abroad, and aluminum.
A year after that signature, which meant the entry of Leal’s relatives in Copaex, in March 2020, the “variable” capital stock of the company dramatically increased to 100 million pesos (a little more than five million dollars); it multiplied by 1,000. The two former shareholders resigned, as per the minutes to which EL PAÍS and Armando.info have had access, and Leal’s grandmother is joined by a new partner, Carlota Leal Jiménez, Joaquín’s sister, with a minimum 0.5-percent share.
While Copaex was trying to close the deal with CVG, it also offered to place a shipment of 180,000 tons of coal in Central American ports, specifically in Guatemala, for a value of 12.3 million dollars. This sales proposal had much clearer technical specifications than the proposal to reactivate aluminum. Although nowhere it is stated in the document that the coal was of Venezuelan origin, by that time, the network of Leal and Saab was managing the coal exports of the state-owned Carbozulia.
There is no indication that the business proposed by Consorcio Panamericano de Exportación had materialized. Reactivating Alcasa and Venalum with a 200-megawatt gas plant is virtually impossible. An engineer with over 20 years of experience in the aluminum industry, who prefers to keep his name confidential, explains, at the request of the reporters, what is really needed for this basic company to resume operations. “The total energy requirement for a 100 percent production of the aluminum industry is around 1,800 to 2,000 megawatts, equivalent to 18 or 20 percent of the capacity of Guri, with a total capacity of 10,300 megawatts. It is not possible to talk about package power plants of this size or about sectioned plants that are gradually added. It is necessary to have a highly reliable dedicated system, which would require a large investment or the recovery of the national interconnected system within a clear balance strategy between the consumption of the industry and that of the rest of the country.”
On the other hand, the improvised scheme seemed to be a great deal for businessman Joaquín Leal. What began under the guise of a “humanitarian exchange” of oil for goods, ended up opening a source of Venezuelan raw material to feed his energy business in Mexico, as he once envision, or to resell it in a hungry global market, just before the outbreak of the pandemic, for goods like oil, coal and aluminum.
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