Camiven: Government eyeing nationalization of mining companies - Venezuela

Venezuela's mining chamber Camiven believes the government is looking to nationalize mining projects such as Las Cristinas, Las Brisas and the company Promotora Minera de Guayana (PMG), Camiven president Gilberto Sánchez told BNamericas.

"The government hopes to nationalize those companies so it can have a majority stake," he said.

However, the executive said it is not likely that companies in the private sector will continue signing JVs with the government "because their own standards won't allow them to."

"Nobody is going to invest money in a company where they don't have control," he added.

The Las Cristinas gold project held by Toronto-based Crystallex International (TSX: KRY) holds 20.8Moz of gold reserves while the Las Brisas copper-gold project owned by US miner Gold Reserve (TSX, AMEX: GRZ) contains 10.4Moz gold and 1.3Blb (589,670t) copper.

"It seems strange that mining companies that are producing, that are successful and that meet all mining and environmental requirements are the ones being inspected," he said.

The executive was referring to the Venezuelan government's recent decision to withdraw concessions from nickel operation Loma de Níquel, owned by London-based Anglo American (LSE: AAL), as well as start a review of concessions held by PMG, controlled by Canada's Rusoro Mining (TSX-V: RML).

"Why isn't it doing the same thing with small-scale mining, which is the area that needs the most attention? Not just in terms of inspections, but where they also need technical help and support?" Sánchez asked.

UNION POINT OF VIEW

On the other hand, César Castillo, union leader at Loma de Níquel, told BNamericas that employees are in favor of nationalization but "only in cases where the employees benefit from the measure."

The minister of Venezuela's basic industries and mining (Mibam), Rodolfo Sanz, recently said the government is looking at revoking the concessions for mining areas in Bolívar state's El Callao zone where PMG operates.

Douglas Coriano, administrative coordinator for unions in Guayana region, confirmed that the government is performing inspections at mining companies in the zone, "especially companies related to Agapov group."

In late 2007, Russian investment group Agapov - Rusoro's parent company - submitted a program that calls for investments of over US$100mn to develop underground mining and to install and later expand a plant in the El Dorado area.

Rusoro's Choco 10 mine in El Callao churned out 27,790oz of gold in fourth quarter 2007, up 176% over the previous quarter.

Harvey Beltrán
Business News Americas