Venezuela might shut down mining operations to save energy

CARACAS, Jan. 4. - Venezuela might shut down its operations in iron, aluminum and steel to the need to save energy amid a power deficit that takes months, said on Monday the Minister for Electric Power, Angel Rodriguez.

The State mining located in the Guayana region, consuming about a quarter of the hydropower produced in the country.

The 70 percent of the national total power generated in the Guri dam, and Macagua Caruachi in southeastern Guyana.

"If we need to address basic business Guayana, is drying up because the Guri, as there will be closed. The other is to let the rest of the country without electricity, and that's not possible," Rodriguez said in remarks published on Monday by the local newspaper El Mundo.

Companies that belong to the Corporacion Venezolana de Guayana (CVG) are already subject to restrictions of energy that they have reduced their production by 52 percent, the newspaper said.

CVG works in mining and marketing iron ore, bauxite, aluminum and gold, but is plagued by lack of investment, obsolescence and labor issues and has been seeking international financing to overcome its crisis.

Of the companies of the CVG, the aluminum reducer Alcasa has divested two lines of reduction, and Venalum has cut its production. The processing of iron Ferrominera also belongs to the CVG.

Also would be affected Sidor, the largest steelmaker in Latin America which was renationalised in 2008, and it stopped two furnaces as part of its rationing plan, although not part of the corporation but also operates in Guyana.

Across Venezuela, residential areas have suffered power cuts for months that have angered people and led protests against the government of Hugo Chávez, who faces the challenge of maintaining their current majority in the National Assembly in elections in September.

According to the Government, the electricity crisis is due to the lack of rain that caused the climate phenomenon El Niño and increased demand, while the opposition and some analysts say the authorities did not make the investments needed to meet growth demand.

According to Rodriguez, the Guri Dam is in the alarm zone, below the safe zone and alert.

The government says it will undertake the necessary investments, and trusts that the rains were reactivated in the first half of the year.

Six Japanese companies, including Showa Denko and Marubeni, have maintained a stake of 20 percent in the aluminum reducer Venalum. The participation are also included Kobe Steel, Sumitomo Chemical, Mitsubishi Materials, Mitsubishi Aluminum.

(By Patricia Rondon Espin, edited by Monica Vargas)

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