Venezuela to take over some private gold mines

The Business Times (Singapore) ^ | December 29, 2008 | none credited

[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.

[LegendHasIt]

Here is another article... Can't believe I missed it earlier... Potentially a bigger story since it is an even larger producer than Venezuela:

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Guinea coup brings new uncertainty to the country's mining sector. Gold mining suspended: -----------------------------------------------------------
Dang, I was hoping to see the price of gold to go down a bit in the next couple of days, as I wanted to buy a bit. Guess that is unlikely to happen.

[LegendHasIt]

Yep, Big price spike already: ~ $880 an ounce.... (Although that usually happens right after the market opens anyway)

[fella]

I wonder if this will give our own Dear Leader any ideas.

He knows for a fact that there are two very large gold mines on Capitol Hill with a potential one just across the street.

[justa-hairyape]

Major commodities spiked a little at opening then fell back. Oil now going back up. Oil will probably be leading the way here. At historic lows with Israel basically declaring War on Hamas. The key factors will be regional middle eastern player reactions and the length of this war.

[justa-hairyape]

historic lows should read 2008 lows. Although it seemed like an eternity, 2008 was only 1 year.

[ml/nj]

'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,

What a great line! Will the Anointed One use it here?

ML/NJ

[trumandogz]

Where do all the people that voted for and signed legislation to pass the Trillion Dollar Nationalization of the banks and Wall Street?

Do you like that Socialism?.

[Dallas59]

That's only the first step. Once Chavez and Ayers become a regular at the White Peoples Revolution House and we are all arrested...then I'll declare full Socialism for the USSA.

[sinanju]

Not to worry, under Big “O”’s leadership, we will soon catch up to Hugo.

[myknowledge]

The ugly face of Venezuelan Socialist Chavezism.

[Tarpon]

Socialism needs more free pies, STAT.