MercoPress. South Atlantic News Agency

Venezuela to take over “inactive” mines

Venezuela plans to take over all inactive mining areas to form new joint ventures with a state majority stake and state-backed small mining groups foreseen under a mine law reform, announced Heavy Industries and Mining Minister Víctor Alvarez.

The mine reforms follow measures by Venezuelan President Hugo Chávez to increase state control over the energy industry of the world's fifth oil exporter, where foreign and local companies were this year forced to accept new joint ventures giving the state oil firm PDVSA majority control.

"The areas that are inactive are going to be recuperated and rescued by the Venezuelan state," Alvarez told reporters outside the Congress where he handed over the proposed reforms to lawmakers.

According to Alvarez "most" of the mining fields "acquired more than 10 years ago via concessions or mining contracts remain inactive" with thousands of miners in the southern state of Bolivar unemployed.

Bolivar, which is home to large deposits of quartz, gold, bauxite and diamonds, is also the heart of Venezuela's iron and aluminium industry.

Under the plan some of the recovered mines would be placed under government control for "strategic reasons," others granted to small miners organized in cooperatives and still others "will be given to joint ventures that are majority-owned by the government".

Alvarez added that Venezuelan and foreign companies that have "complied with the law and with their contracts will be respected by the government."

Chávez, a close ally of Cuba who says he is constructing a socialist revolution for the dispossessed, has attacked oil contracts signed before his 1998 election for "robbing" Venezuela's resources by giving preferential terms to foreign operators.

However Alvarez refused to comment directly when asked whether the reforms would affect Canadian gold miner Crystallex International, which is waiting for the government to approve a final environmental permit to start proper mining.

Crystallex has said its operating contract for the huge Las Cristinas gold mine will not be affected by the mine law reforms. But one lawmaker in the congressional mining commission said he believes the Canadian miner would be included, without giving more details.

"Sometimes the process of getting permits is used as an excuse and a pretext to justify inactivity," Alvarez said, without naming any mine operations.