Venezuela Considering Nationalization of Mining Industry

Venezuela Considering Nationalization of Mining Industry

Venezuela’s foreign minister on Thursday said the country is considering nationalizing its mining industry, a week after President Hugo Chavez announced plans to bring the electricity and telecommunications sectors under state control.

“The basic mining industries should be in the hands of the national state,” Foreign Minister Nicolas Maduro said on the sidelines of a two-day summit of the Mercosur trade bloc.

“Key, basic elements of the economy should be in the hands of a national, democratic and strong state, which guarantees the distribution of riches,” Maduro said. He did not give more details.

A number of Canadian, U.S. and Brazilian mining companies are operating in Venezuela. For the past two years, Caracas has been reviewing all mining agreements with private firms to determine which ones will be renewed or ended.

Canadian mining firm Crystallex International Corp. has an operating agreement to develop Venezuela’s Las Cristinas gold mine, one of the largest in the world. The company is awaiting permits to develop the mine.

For more than a year, Brazilian mining giant Companhia Vale do Rio Doce SA, or CVRD, has been studying the development of coal deposits in Socuy.

Maduro said foreign investment continues to flow into Venezuela and Brazilian construction firms performing large infrastructure works can continue operating normally.

He said the government does not plan to nationalize the auto industry. “Practically 90 percent of the automotive factories are in private hands, and will continue so,” Maduro said.

Chavez said last week before being inaugurated for a new term as Venezuela’s president that “the nation should recover its ownership of strategic sectors.” He has announced an ambitious project to mold Venezuela into a socialist state.

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