Venezuela puts nation's interests first in mining

Por Venezuela Real - 22 de Junio, 2008, 11:07, Categoría: Prensa Internacional

Washington Post
June 22, 2008

CARACAS, Venezuela -- Venezuela's environment minister said Saturday that the government will put national interests first in the mining sector and forbid mining in a biodiverse forest reserve that is home to two of the country's largest gold concessions.

Minister Yubiri Ortega did not give a direct answer when asked if the government is planning to nationalize the mines. But she said Venezuela is "taking control" in order to "save and appropriate what is ours."

The government will consider future underground mining concessions as well as those that are currently under revision, Ortega said. But it will not permit open-pit mines that cause environmental degredation and contaminate the country's water supply with cyanide and other toxic chemicals.

She added that the government will also forbid mining in the Imataca Forest Reserve, which covers about 8.6 million acres (3.5 million hectares) and is rich with gold, diamonds, iron, bauxite and other minerals. It is also home to unique plant and animal species.

Ortega said the government needs to "take measures" to avoid ruining the reserve's sensitive ecology, and complained that foreign companies and illegal miners have exploited Venezuela's gold, coal and diamond deposits and left only "garbage" behind.

Venezuelan President Hugo Chavez's socialist government has clashed with international gold-mining companies in recent months over permits to operate in the country's southern Bolivar state.

In May, Crystallex International Corp. of Toronto said the Environment Ministry had denied it a permit for its Las Cristinas gold mine. The company estimates that Las Cristinas _ located in the Imataca Forest _ holds about 17 million ounces (480 million grams) of gold.

Crystallex said in a statement on Tuesday that it has filed an appeal with the ministry. Vice President Richard Marshall could not be reached by telephone on Saturday, but he told The Associated Press in May that "this would be the final permit" to complete the mine's construction phase. The company had hoped Las Cristinas would start producing in 2010.

Plans for the company's two other Venezuelan mines, Tomi and La Victoria, could be exhausted this year, Marshall said. Last year, Crystallex _ which has been operating in Venezuela for 16 years _ produced more than 33,000 ounces (935,000 grams) of Venezuelan gold.

Also affected is Gold Reserve Inc. of Spokane, Washington, which announced in May that its 2007 permit to begin construction on the Las Brisas gold mining project _ also in the Imataca Forest _ had been rescinded. The company said in a news release that it is meeting with government officials to resolve the issue.

On Thursday, Idaho-based Hecla Mining Co. announced a US$25 million deal to sell its Venezuela subsidiaries to Rusoro Mining Ltd. of Vancouver, British Columbia.

Venezuela's mining ministry had said it was considering rescinding Hecla's concessions over a labor dispute at the company's underground Isidora gold mine outside the Imataca Forest.
Associated Press writer Sandra Sierra in Caracas, Venezuela, contributed to this report.

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