Venezuela Seeks Greater Control In Mining Sector -Mining Min

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CARACAS (Dow Jones)--Venezuela will seek to modernize its mining sector next
year and boost the role of the state in the production of some key resources,
the mining minister said Monday.


One of the key government plans is to control the production of diamonds with
the help of foreign companies, Rodolfo Sanz, the mining minister said in an
interview with state television.


"We have to put under the control of the state the production of diamonds,"
Sanz said, adding the government's overarching goal is "the industrialization of
the production of all our resources."


The government will seek partnerships with companies from "India and possibly
other countries," for developing Venezuela's diamond production, which Sanz said
is currently mired by illegal activities and trading.


Other projects include building a gold refinery to turn a portion of the
country's gold production into monetary gold that can be incorporated into the
central bank's international reserves.


Sanz also said next year he expects the country to double its production of
gold to 8 tons from the current 4 tons.


The mining minister made no comments regarding the future of Las Cristinas
gold mine, which is still under control by Crystallex SA (KRY). On Nov. 6, Sanz
said the government will take control of Las Cristinas, which has one of the
largest gold reserves in Latin America.


The minister said despite the global credit squeeze Venezuela can obtain a
large part of the investment it needs to develop its mining industry by pledging
to lenders some of its proven mineral reserves.


"Like in the early period of the Soviet Union, we have the advantage of our
huge mineral reserves," to help Venezuela bolster its economic development said
Sanz, who has penned several books on Marxism and socialism.


"We have to develop our mining industry like we have done with our oil
production," Sanz said.


Regarding the nationalization of Sidor, the country's largest steel-mill,
which used to be controlled by Ternium SA (TX), Sanz said the "transition, like
all transitions has been difficult."


Sanz, who is in charge of Sidor, said production in the plant was close to its
capacity 4 million tons of liquid steel per year.


He added the government still planned to carry out $900 million in investments
in the plant and accused Ternium, which is still waiting to settle with the
government its compensation for the seizure of Sidor, of ignoring some areas in
the plant that were in need of financing.



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



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(END) Dow Jones Newswires
12-15-08 1201ET
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