MAC/20: Mines and Communities

Venezuelan miners organise general strike as Chavez dawdles

Published by MAC on 2012-05-08
Source: Business News Americas

Rusoro is the leading foreign investor in Venezuelan gold mining.

Last August, the company's Russian head honcho appeared unfazed by a threat to part-nationalise the gold sector, posed by an announcement from President Chavez.

See: Venezuela moves to nationalise gold industry

As the government continues stalling over making a decision on the issue, so Rusoro has reportedly halted its operations.

Meanwhile, Rusoro's workforce gets the short end of the stick.


Miners organizing general strike to demand sector's development - Venezuela

By Harvey Beltrán

Business News Americas

3 May 2012

Workers at the mining companies in Venezuela's Bolívar state are preparing a general strike to call for the government to resolve the problems they are facing.

"We need them to resolve the legal situation for companies such as Rusoro and VenRus, because with the lack of clarity regarding their situation, they haven't invested, they've halted operations and they've increased layoffs," Alfredo Vargas, a union leader from state gold miner Minerven, told BNamericas.

Vancouver-based Rusoro Mining still does not have a plan to follow, said Vargas, who added that "[the company] is waiting for the situation to be resolved."

However, the date for the stoppage, which will involve Bolívar state's entire community, still has not been set, he said.

Rusoro recently closed down its operations and halted all mining pending the government's decision regarding control of the concessions it was operating.

Rusoro controls 95% of the open pit Choco 10 gold mine and 50% of the underground Isidora mine through VenRus, a 50:50 JV with the government.

Rusoro has been in talks with the authorities for several months to define the terms of the migration of its assets to a new JV with the state that fulfills the requirements established in the gold nationalization decree that the Venezuelan government passed last September.

Under the nationalization law, all gold producers operating in Venezuela must form JVs with the government to continue exploration and mining.

The state is required to have a majority share of 55% in the JVs and all the gold produced must be sold to the central bank, generally below international market rates.

The negotiations with Rusoro, which ended without an agreement on March 14, involved the terms of compensation for the nationalization of the company's assets.

"The oil and mining ministry is continuing to analyze how these mining companies will be made into JVs," the former president of Minerven, Luis Herrera, told BNamericas.

Herrera recently said that although the Venezuelan mining sector has been in crisis in recent years, the government is making the appropriate changes and providing the guidance needed to improve it.

With Rafael Ramírez's experience as mining minister, the process to come to agreements with mining companies that want to work with the government is expected to speed up any day now, according to Herrera.

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