THERE is a town actually called El Dorado deep in what is...


August 13, 1993

THERE is a town actually called El Dorado deep in what is known as the Guayana Shield, the site of a modern-day Venezualan gold rush. Fifteenth century Spanish conquistadors chased the legend of a place of fabulous riches as assiduously as others sought the fountain of youth. And, lo and behold, they might have been not too far off the mark.

According to a report issued by the Institute of the Americas, Venezuala's portion of the Guayana Shield, a geological formation it shares with neighboring countries, is estimated to contain $105 billion in gold reserves.

That's three times the nation's national debt. The area is sparsely inhabited, short on roads, richly covered with Amazon rain forest and also amply endowed with diamonds, iron, ore, bauxite, titanium-bearing black sands and other minerals.

Like so many of the world's dwindling frontier areas, this one is in ecological peril as big mining companies unleash individual prospectors who do not hesitate to slash and burn, use #i high-pressure jets to wash away soil and rely on poisonous mercury to recover gold dust.

As Wolf Petzall, a Caracas energy consultant, writes: "Influential people with the right connections to obtain gold concessions have found that leasing the rights and equipment to small miners and Brazilian garimpeiros can yield high returns. . .with much less effort than trying to mount a properly organized and environmentally acceptable mining operation of their own."

Mr. Petzall acknowledges there are no easy solutions. Third World nations seek wealth where they can find it and the big mining companies have yet to determine that preservation of the environment is really the only way of doing business.

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