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Editorial Commentary
VenEconomy:
Sights set on the mines
Last week, the government expropriated the steel mill Sidor, and now it is going after the mining sector.
Although this sector has been on the receiving end of harassment for some years, on April 15 this year, Basic Industries and Mining (Miban) Minister Rodolfo Sanz gave yet another warning that all mining concessions were “under review” on the orders of President Chávez, and he even said that they are preparing a mining bill that aims to recover deposits that are idle and that would permit a revision of existing agreements with companies operating in the sector, in particular those mining gold, coal, and diamonds.
One of the strategies that are apparently being used to take control of mining companies is to act through groups of workers allied with the government, who, under the pretext of fighting for their labor rights, are besieging the companies. Via this route, three years ago, government took over a number of companies, among them Venepal and CNV (National Valve Company), today no more than co-managed revolutionary scrap piles that produce nothing. The same procedure was used recently to expropriate Sidor.
Now this worker spearhead has been activated against El Callao Gold Mining, an affiliate of Hecla Mining, a US company. Workers have been blocking access to Isidora gold mine for the past two weeks, and while Miban denies any involvement, an inspection of the mine by the judicial authorities conducted on April 25 found that work at Isidora is being paralyzed by a group of workers who say they are acting “on the orders of the Basic Industry & Mines Minister” and the “Guasipati Inspectorate.”
Apart from that, it is too much of a coincidence that the Russian company Rusoro Mining Ltd, which controls the largest mines in the country, is also being accused by mining groups in the area of riding roughshod over its workers.
Another important development is that, last week, the government arbitrarily refused to issue environmental permits for the Las Cristinas Mine (Crystallex) and Las Brisas Mine (Gold Reserve Inc.). Here it looks as though the government is doing its own dirty work, with a view, analysts say, to expropriating the mines or to forcing the companies to switch over to a mixed enterprise model. What makes this excuse particularly barefaced is that Las Cristinas and Las Brisas not only adequately comply with legal requirements in matters of environmental protection, but that they have also developed and implemented programs to make room for small miners and provide them with guidance on complying with all the environmental regulations.
The corollary to all this is that, sadly, the only revolution that this “mining policy” will bring about is more anarchy in the sector, less control, and more contamination and destruction of the environment, not to mention fewer jobs and the smuggling of gold and diamonds out of the country.
VenEconomy is a Venezuela's leading specialized publisher in the economic and financial area. VenEconomy's Points of View on the issues of the day, as seen by VenEconomy during the last week. Petroleumworld does not necessarily share these views.
Editor's Note: This commentary was originally published by VenEconomy , on 05/09/2007. Petroleumworld reprint this article in the interest of our readers.All comments posted and published on Petroleumworld, do not reflect either for or against the opinion expressed in the comment as an endorsement of Petroleumworld. All comments expressed are private comments and do not necessary reflect the view of this website. All comments are posted and published without liability to Petroleumworld.
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Petroleumworld News 05/13/08
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