Markets

Venezuela to Produce 1.2 Metric Tons of Gold in '11

Venezuela's state gold miner Minerven expects to produce 1.2 tonnes of the precious metal this year, rising to 4.5 tonnes in 2012 as it takes a central role in the nationalization of the sector, state media said on Thursday.

Socialist President Hugo Chavez targeted the gold sector last month after his government quarreled with foreign miners over limits on how much they could export.

Minerven will be "the motor" for developing the sector in the future, state newspaper Correo del Orinoco said.

It is expected to produce 1.2 tonnes this year, down from 1.7 tonnes in 2010, but reverse that going forward as it takes over projects during the nationalization drive.

"Among the projections is the production of 4.5 tonnes in 2012, which it is estimated will stay steady or rise in coming years," Correo del Orinoco quoted Minerven's president Franki Patines.

Venezuela has been relatively small in the gold world, with formal mining producing about 6 tonnes a year. But it boasts some of Latin America's biggest gold deposits, buried below the jungles south of the Orinoco River.

Chavez agreed last year to let gold miners export up to 50 percent of production, up from 30 percent previously. The other 50 percent would have to be sold to the central bank.

But that did not satisfy foreign companies like Toronto-listed Rusoro -- owned by Russia's Agapov family -- which said the limits made it much harder for them to get financing abroad, develop projects and create jobs.

One victim of the dispute has been a huge but long-troubled project called Las Cristinas. It has been in limbo since the government canceled a development license with another Canadian miner, Crystallex, in February.

The nationalization of the gold industry fits with Chavez's broader plan to repatriate his country's bullion and shift most of its cash reserves out of Western nations to political allies including China, Russia and Brazil.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

Commodities