Venezuela: Industry sounds the alarm on crisis in iron ore, aluminum sectorsPublished by MAC on 2009-04-27
Source: BN Americas
Venezuelan iron ore producer Ferrominera Orinoco (FMO ) has stopped paying its suppliers, "and that is a warning sign for the industrial sector," a leader of the Ciudad Guayana business alliance AEG told BNamericas.
The steel sector is now yielding to the severe crisis already crippling the aluminum sector, the AEG leader said.
Along with FMO and Venezuela's aluminum companies, local steelmaker Sidor and power company Edelca are among the firms experiencing financial and operating problems. "Edelca might halt maintenance works and that would cause power chaos in the country. FMO has stopped paying its suppliers, briquette manufacturers have ground to a halt with no chance of exports and Sidor's output has plummeted," the president of Guayana region's business chamber, Fernando Goyenechea, was quoted as saying by local press.
Gerardo Serrao, former president of mining and metallurgical industry association AIMM ,for Guyana region, said "there is very little time left. Collapse is imminent and we don't understand this silence. Some companies are faced with shutdown in just two weeks."
The current outlook has prompted AEG to request that Bolívar state governor Francisco Rangel Gómez intercede with the administration of President Hugo Chávez to request that it unveil a recovery plan for the aluminum sector. "We need to know what the plans are for the sector before this crisis gets any worse," the AEG leader said.