Venezuela New Mining Law Could Increase State Role -Lawmaker

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CARACAS -(Dow Jones)- A new mining bill that the Venezuelan National Assembly
will start to examine in August should increase the state's role in the mining
sector through the creation of new state mining companies, joint ventures with
international firms and by possibly revoking some concessions, a lawmaker said
Wednesday.


Angel Rodriguez, head of the National Assembly's Mining Committee, told Dow
Jones Newswires that lawmakers expected to receive a mining bill from President
Hugo Chavez in the first week of August.


The bill could have been approved directly by Chavez without consulting with
Congress thanks to special legislative powers, which are set to expire Aug.1.


Rodriguez said that Chavez will not use these powers to pass the new mining
law and that the National Assembly will now be responsible for approving it, but
that "the final decision will rest with the executive [branch]."


He said that under his watch the Mining Committee will study "the strengths
that the state could have in the mining sector and if we have the capacity to
take charge of that sector through new state companies or if we should partner
with international companies."


Rodriguez added that under the new mining law, new joint ventures with
international mining firms could be created with "a majority stake for the
Venezuelan state."


He refused to specify whether the new mining law could force some companies
doing business in Venezuela into joint ventures with the state. "That's a
decision that the executive branch will have to take," he said, adding that he
had not yet looked at the latest draft.


Regarding mining concessions, he said that the Venezuelan government should
revoke the ones that are being used by international companies to profit in
foreign exchanges without actually producing in Venezuela.


"Mining concessions are a serious problem," Rodriguez said. "There are mining
concessions that have been given out by the government and are being used by
companies to speculate in foreign exchanges."


"Some [of the concessions] should be revoked and that trend should be
eliminated," he added.


Despite booming commodity prices, investment in Venezuela's mining industry
has suffered as labor problems and threats of nationalization have scared
international investors away.


The industry has also been hesitant to carry out new investments, afraid that
the new mining law could hurt private companies and force them into joint
ventures with the government.


-By Darcy Crowe, Dow Jones Newswires; (58) 212 905 6304; darcy.crowe@
dowjones.com



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(END) Dow Jones Newswires
07-23-08 1548ET
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