MAC: Mines and Communities

Venezuela Gets To Grip With Corruption-ridden Mining Sector

Published by MAC on 2005-09-22

Venezuela gets to grip with corruption-ridden mining sector editor & publisher Roy S. Carson writes: Continuing its disinformation thrust, and in the face of official statements from the Venezuelan government, the Associated Press is continuing to insist that Venezuela has "backed off a mining license threat."

Correctly reporting that "foreign companies abiding by Venezuelan law will not have their mining licenses canceled by the government," the US-based news (?) agency had misreported last week statements by Venezuelan President Hugo Chavez which were little more than a policy statement that the (Venezuelan) government had decided to revoke idle mining concessions and to stop issuing concessions per se to foreign (and domestic) companies.

The statement was nothing new to Venezuela's mining industry which had already been put on notice that the Chavez administration was not going to sit idly by and watch fat cat investors grow rich by doing nothing with concessions granted decades ago, where they should be creating jobs and mining precious metals and stones from government-owned land.

National Assembly (AN) permanent parliamentary Energy and Mines Commission president, Pedro Jimenez was forced to explain, Friday, that the move to create a new national mining corporation would only encompass concessions which the government (and the courts) consider to be inactive or in violation of (Venezuelan) law ... put quite simply "All investors that follow the law will be respected completely!"

The statement clarified a legal situation that has remained unchanged throughout the Chavez presidency and, from all indications, will remain the same for many years to come ... "put up, or get out!"

Stock market opportunists, however, leapt on investor's machine translations from Spanish to English and got everything completely haywire ... panicking to sell in what they anticipated to be a wholesale NATIONALIZATION of Venezuela's mining sector, apparently ignorant of the fact that it had already been nationalized close to thirty years ago in 1976 ... and by another pro-USA government!

Jimenez told the media, Friday, that existing projects were not at risk ... dependent, of course, on the continued endeavors and goodwill of those entrusted to fulfill the terms and conditions of explicit mine operating contracts.

Worst hit in the stock market freefall was Toronto-based Crystallex International with disinformers ('bashers') working overtime on anonymous trading forums to panic 'nervous nellies' into ditching their holdings at bargain basement prices with an eye to making huge profits the following days when Crystallex surged 23% on the clarifying news.

Jimenez left North American paranoiacs in no doubt saying "the Las Cristinas project is of vital importance for Venezuela and is needed for the local economy ... the project includes a contract with Crystallex and small groups of miners ... Venezuelans know that this Canadian company has made efforts to alleviate social tensions in the area!"

Catching their breath, Crystallex officials insisted that their company remains on track to begin commercial gold production in the second half of next year, at an initial rate of about 300,000 ounces a year ... the "mere formality" of final environmental permits are all the company is waiting for to kick-start what is considered to be one of the largest gold-mining projects in South America if not the world.

Nevertheless, AP, Reuters and hack journalists in shackles to Venezuela's opposition media are hell bent on keeping up the pretense that Venezuela is about to be plunged into alternatively Cuba-style 'Communism' or Pinochet-style dictatorship.

Take your pick, it'll be amusing to see what tack the international wire services will take to wipe last week's egg of their faces as Venezuela gets to grip with a corruption-ridden mining sector against all the odds and all the heavy-barreled black-bag propaganda launched against it in the last seven days!

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