Gilberto Sanchez
President
Mining Chamber of Venezuela (Camiven)
Published: Friday 04 May 2007

In late March, the Ministry of Environment (MinAmb) of Venezuela approved the environmental impact study and social (EIAS) from the Gold Reserve de Venezuela company, a subsidiary of the American Gold Reserve, and gave him permission to begin the construction phase .


Permission was granted in the midst of a project to reform the mining law, which aims to return inactive mining properties to the State. The National Assembly (AN) of Venezuela approved the project in mid-2006 and launched a series of public consultations with academia, mining companies, indigenous sectors and environmentalists. The reform project has not had much support from the private sector.


The president of the Venezuelan Mining Chamber (Camiven), Gilberto Sanchez, conversed with BNamericas on the decision to surrender the permit environmental Las Brisas in the midst of a process of reform to the mining law and how it might affect the development of the sector, among other topics.

BNamericas: Do you think the granting of the permit environmental Gold Reserve creates a better environment for the sector in Venezuela?


Sanchez: No, there is uncertainty as to the statements. Because they [the government], what they are doing is making statements which contradict the minister to the deputy minister. It says that everything goes well, but the minister said that it is considering applying the same in mining project that was applied to oil, where the state has a majority or controlling shareholder of the companies, but through contracts operation , that is a joint venture [venture contract] and no longer under concession.


BNamericas: What uncertainties?


Sanchez: It gave him permission to Gold Reserve and began to invest in plant equipment, are ready to bring Venezuela, but what happens if the new Mining Act requires it to do the same thing they did with the oil? Las Brisas would have to sell 51% of its shares on the grant, for example.


While tankers also have concessions for mining projects the difference is clear: Las Brisas is giving, and Crystallex [the Canadian company that hopes to develop the proposed Las Cristinas gold neighbour] has no concession; has an operations contract and CVG [Corporación Venezolana de Guayana] is not concessions, which has a contract to develop areas, and was the CVG it signed with Crystallex, which is a very big difference.


In addition, the minister [of Mines and Basic Industries, Jose Khan] has said that Crystallex also must process the copper content in Las Cristinas. Since the company was working on a project only to exploit gold, copper aside for further refine the State, must now take this into account. This is the last thing that is known about this project. I believe that the departure of the problem is that copper is processed by Las Brisas.


BNamericas. In regard to the mining sector in general, what is the current situation?


Sanchez: Now we are concerned that in terms of materials, inputs and raw materials for the construction industry and the manufacturing industry, there is a very high demand due to the infrastructure being developed all at the same time. After the sharp drop in the sector in 2003, no one was prepared for this demand.


There have acquired new equipment, there were no investments, and aggregate production plants are very outdated. There has been no investment in these new areas, so there has been a shortage of cement primarily to meet this strong demand.


BNamericas: Why firms have not made investments?


Sanchez: Part of the delay in delivering environmental permits, which has prevented exploring and exploiting new sources of non-metallic minerals, which are the ones to the manufacture of cement, glass, ceramics, sanitary appliances, blocks of clay and pottery .


Without more areas, there is more production. If the demand is maintained over the coming years, the government should seek a way out to ease environmental permits.


BNamericas: So there is a problem of supply by lack of materials?


Sanchez: There is a bottleneck, but some cement plants lowered their export levels and are trying to increase production for the local market. All plants are working at full capacity.


The slowness in granting environmental permits continues. Therefore no new exploration, which is why no new deposits and therefore no new investment and has not been able to increase mine production in Venezuela.


BNamericas: The solution is to speed up the delivery of permits to gain access to new sources?


Sanchez: And to promote an atmosphere of confidence, because the nationalization-brackets-nationaliza... of private companies continues to cause uncertainty among investors. The investments are all on the floor.


BNamericas: How has raised the camera that need?


Sanchez: We raise these things two years, and nothing. Only if it's the gold, concessions, and yet everything stays the same.


BNamericas: We were conducting meetings with different sectors to discuss changes to the Mining Law, does it continues doing?


Sanchez: It's in the same situation last year, it does not work well. Mining has to work, first, with geological studies and mining engineering, and that is not being implemented. In fact, what the government is signing agreements with countries such as Bolivia, Cuba and Iran, and they know nothing about mining. Here there is a shortage of qualified human resources to handle this issue.


In addition, deposits that were operating were closed.


BNamericas: Why?


Sanchez: Because the companies do not have permits and because of the price regulation that there were already pressures and interventions deposits. Therefore, the management of the mining industry in Venezuela has made an effort to maintain a quantifiable mineral production.


BNamericas: In this context, what is your expectation for the sector in the medium term?


Sanchez: Here one has to be a magician to predict something. All I can be clear about is that the government, with its enabling act, you have no need for a new law on mines, but will make changes through a decree. We believe that if it comes to having a new Mining Act, it will be the end of 2007 or in 2008, because the [law] enabling it granted for 18 months and ends in July 2008, so for us now or we care.


ABOUT THE COMPANY:

The Venezuelan Mining Chamber (Camiven) is a civil association nonprofit, business and union with legal personality and its own assets which aims to develop, promote, study, investigate, defend and protect any activity that the law allows for their Members mining-related and related to it.


In addition, the entity to help design and implementation of policies and strategies relating to the mining industry and is involved in strengthening the private sector and its interaction with the government branch in the field of mining.



By Harvey Beltran