I think it probably goes something like this (assuming no hanky panky going on between the Chinese and Venezuela):

Fung left the Chinese in charge of getting the permit thinking that they would have a better chance of negotiating than the Gringo capitalists. The Chinese are attempting to bargain in good faith with bureaucratic idiots that have no idea how to run a business, how to make a profit....or the concept that it makes no sense to invest capital or run a business if terms are unprofitable.

The Venezuelans want the mine built and operated at terms that are unprofitable and probably hear Rusoro in the background whispering how they could give them a better deal.

The Chinese told the bumbling idiots they are negotiating with what their bottom line was.

Hugo threw a hissy fit and cancelled the MOC (idiot that he is).

RM concurred with the notion that earnest negotiations typically don't begin in Venezuela until arbitration is filed and a high powered consulting law firm advises settlement to the bureaucratic idiots that were previously conducting negotiations.

On the one hand....maybe CRRC could give a crap about this whole thing. On the other hand....a case could be made that they don't want to lose an opportunity like this. They know they will go from 2\3 of one of the largest gold mines on the planet to zero point jack sh!t and KRY will go on to profit handsomely in arbitration (taking Fung at his word regarding financing). Assuming that the Chinese don't want to lose an opportunity like this....and assuming that Venezuela won't settle until the arbitration bomb has been dropped, it not unrealistic to think that the Chinese will stay involved (perhaps financing arbitration behind the scenes) until outside legal counsel injects a dose of reality into the situation and negotiations can resume with respect to approval of JV\Permit, buyout or whatever. CRRC is in business to make money. Business is business. I don't think they would walk just because they are afraid of offending Chavez by staying involved in this deal. The oil deals have already been made and Chavez needs China more than China needs Chavez. How would Chavez retaliate....hire the Russians to build infrastructure instead of the Chinese? I don't think that is much of a threat. Perhaps the Chinese are afraid of losing the right to invest in the Coltan mines or future oil deals? If they can't come up with profitable terms for Las Cristinas (especially being GIVEN a 2\3 stake)....then why would they want to lose money on future mines? Building a railroad is different than building a mine in terms of revenue stream, etc. A totally different animal. Think about it....if the Chinese goal is to build many more mines in Venezuela....then this deal is the prototype. They need to educate Venezuela on basic capitalist principals that will form the basis of future deals....after which they can go after the Coltan, etc., etc.

As far as white knights are concerned.....RM told me point blank...."no gold majors are interested in investing anything in Venezuela".

Bottom line. We are dealing with total idiots that don't have a clue. Their learning curve is about as steep as the Mohave desert. As a result....this "process" will continue to take way more time than it should.