November 05, 2008
CARACAS, Venezuela -- Venezuela announced plans on Wednesday to take over the nation's largest gold mine, operated by Canada's Crystallex International Corp., as President Hugo Chavez gradually brings mining operations under state control.
The Las Cristinas mine will operate under state control beginning next year and it will eventually help boost Venezuela's foreign reserves, Mining Minister Rodolfo Sanz told state radio.
"Due to the financial crisis that has extended throughout the world, it's necessary to attempt to recover our gold to increase our international reserves," Sanz said.
"The company has not been notified of any changes," Toronto-based Crystallex said in a statement.
Crystallex representatives met with Venezuelan officials on Wednesday "and no issues were raised with regard to the control of Las Cristinas," the statement said.
Chavez's government has clashed with several international gold-mining companies in recent months. Crystallex, which operates the Las Cristinas project under a contract, announced in May that Venezuela's Environment Ministry denied the company a permit to complete construction of the mine.
Crystallex said on Wednesday that the company "will continue to press its case for the issuance of the environmental permit so the project can advance."
Las Cristinas is located within 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.
Environmentalists have raised concerns that major mining operations could cause irreversible damage to the reserve's sensitive ecosystem.
Sanz said Venezuela hopes to increase its annual gold production from 4.2 to 8.2 metric tons next year.
Over the past year, Chavez has nationalized Venezuela's largest telephone, electricity and cement companies. His government also is negotiating compensation for the takeover of the country's biggest steel maker, Sidor.