Posted on 12/28/2008 2:07:21 PM PST by LegendHasIt
Venezuela will seize several gold-mining concessions that previous governments granted private operators, in a bid to supplement falling oil prices with proceeds from state-controlled gold, President Hugo Chavez said on Saturday.
Mr Chavez named no specific contracts or companies to be affected, but his mining minister has vowed to next year take over the nation's largest mine, Las Cristinas, which is operated by Canadian mining company Crystallex International Corp.
'We are taking back some concessions that former governments have given, and whose permits are still held by some rich people,' in order to reduce public reliance on oil, Mr Chavez said.
Venezuela relies on oil for 94 per cent of exports and roughly half its federal budget, making it unlikely that its largely undeveloped gold reserves could ever compete in importance.
Mr Chavez acknowledges that oil prices - down 70 per cent since topping US$147 a barrel in July - will affect Venezuela, but he insists the wealthy will suffer more than the country's poor, who benefit from record social spending programmes that he vows to continue.
'Social investment will not be halted,' Mr Chavez said on Friday. 'This, for us, is sacred.'
Calls to Crystallex's Toronto headquarters went unanswered on Saturday, but a Dec 11 statement said the company had 'received no official communication concerning changes' at Las Cristinas.
Crystallex won a contract to develop the mine in 2002, but was forced to halt construction after Venezuela's environment ministry denied its final permit in May.
Mr Chavez's government nationalised four major oil projects in 2006, and has clashed over permits and labour disputes with several international gold-mining companies this year.
Mining operations have not yet begun at Las Cristinas - located in Venezuela's biologically rich Imataca Forest Reserve, which covers 3.5 million hectares.
Environmentalists warn that mining there could upset the delicate ecology. Venezuela produced roughly 4.3 tonnes of gold in 2007.
The country is also rich in diamonds, bauxite and other minerals.
May be of slight interest to the Precious Metals Ping List.
One of several gold producers, world wide, that have been nationalized or shut down for political and/or safety reasons in the last month or two. Eventually this has to effect the price of gold, despite lowered demand from industry and the jewelery business.
Dear Leader #3 is hurting.
what was the holdup??
I don’t know why Chavez would have delayed in seizing anything of value as soon as he found out about it. Goldmines sound like things of value so they must have been owned by somebody paying political tribute up until this point but Chavez simply ran out of money and needed a quick infusion.
Still, it’s only the beginning of the end of Venezuala. There is still plenty of carnage left to go if Cuba was any measure.
I wonder if this will give our own Dear Leader any ideas.
FMCDH(BITS)
Gold production might be considerably reduced by being taken out of the private sector and wouldn’t come close to making up for oil shortfall anyway.
Dear Leader #1 has a few up his sleeve...
Who is Dear Leader #2?
Hopefully the Canadians will do their part to insure that any Venezuelan who tries to mine gold without knowing how to do so, will soon discover that there is a reason miners are professionals.
Might???? I’d say it is a pretty sure bet that production will fall...
100% of what little they will actually produce with political appointees running the mines will probably be about half of what they could get in royalties from professional operators.
And you are right. Even if they double production, it won’t make up for the shortfall from oil (Which will probably be back up again before the government mines produce their first ounce of government gold.
However, I rather imagine that Hugo’s personal banking gnome in Switzerland is thrilled over the prospect of Venezuelan gold flowing through his hands into Hugo’s private accounts.
Interesting.
If the Russians are going to operate the mines, production may actually go up.
But the people of Venezuela will see even less of the profit. And the environmental impact will also be much worse.
Socialism is like alchemy in reverse; turning gold into lead.
I just discovered that the link I provided may take you to a subscription page instead of the article..... It didn’t earlier.
Sorry.
And I can’t find another link that works, even going through my original source. Fortunately I posted the entire article, (other than the photo of Uncle Hugo that accompanied it).
The way that Russian communism has nurtured mob activity going back into the days of the U.S.S.R. is seldom taken note of. But the fall of the wall has only made the Russian mob more powerful and dangerous. An economy run by oligarchs is particularly vulnerable to the mob.
Here you go, AP wire via yahoo news has pretty much the same story
http://biz.yahoo.com/ap/081227/lt_venezuela_mining.html?.v=2
Thank you, Again!
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