YESTERDAY'S HEADLINES JUN 11, 2008 6:37PMCamiven: Government will not announce sector changes yet

Business News Americas

Venezuela's mining chamber Camiven believes that, from a political point of view, the administration of President Hugo Chᶥz will not make any major announcements regarding the sector, the chamber's executive director Luis Rojas told BNamericas.

"We are holding governmental and mayoral elections in November and it's more likely that things will stay as they are and only urgent issues will be addressed, like the case of small-scale mining," he said.

Rojas pointed out that Chᶥz's deadline is about to expire to approve a mining law reform via the enabling law, which allows him to rule by decree on a broad range of issues for 18 months as of February 2007, bypassing the legislative branch.

The government may make other announcements "that call for a degree of political capital but nothing as profound as what mining needs for sustained growth," Rojas said, adding that the government is not looking at the long-term measures the sector requires.

Meanwhile a sector executive said that major announcements are definitely on hold, "but it's because the president is concerned about the upcoming elections since there are regions where surveys show that he could be losing."

MINING LAW

The draft mining reform law drawn up by the ministry of basic industries and mining (Mibam) establishes that a private company can only participate in mining by forming a JV with the state, where the state holds the majority.

"That means we know that the policy is to gain operating control over mining and for employees and small-scale miners to have a larger share, but how that will happen is still not known," lawyer Mariana Almeida, a partner in Colombian-Venezuelan law firm Incolven, told BNamericas.

Almeida said the deadline on the enabling law is not an issue troubling President Chᶥz since congress can issue another enabling law with a new deadline.

"That is possible as long as the national assembly [AN] approves it," she said. The AN is mostly composed of members of the ruling party.

Venezuela is host to several operations including the Choco 10 gold mine, owned by Canadian Rusoro Mining (TSX-V: RML), Anglo American's (LSE: AAL) Loma de N���el mine along with gold operations run by state-owned Minerven.

The country also is home to the 20.8Moz Las Cristinas gold deposit owned by Toronto-based Crystallex International (TSX: KRY) and the Las Brisas copper-gold project held by Canadian miner Gold Reserve (TSX, AMEX: GRZ) which contains 10.4Moz gold and 1.3Blb (589,670t) copper.