This should rattle the PM markets a bit tomorrow:
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Venezuela Threatens to Take Over Mines
Tuesday January 24, 6:15 pm ET
By Raul Gallegos
Venezuela Official Says Country Ready to Take Over Gold, Diamonds Mines From Foreign Companies
CARACAS, Venezuela (AP) -- Venezuela's mining minister said Tuesday that the government was ready to take over top gold and diamond mines from foreign companies that have failed to exploit them.
Mining Minister Victor Alvarez accused unnamed foreign companies of using their mining holdings merely to speculate on the market.
"There are areas that have been kidnapped" by foreign companies, Alvarez said at a mining conference in Caracas.
Those areas will be taken back by the government so other companies can exploit them better, the minister added.
Some mining areas will be given to small-scale operators and others will be kept by the government to develop on its own, he said, declining to elaborate or identify which companies were targeted.
Venezuelan President Hugo Chavez, who says he is leading a socialist "revolution" in his country, has taken over farms, businesses and real estate deemed underutilized for redistribution. Foreign oil companies have also submitted to greater state control and higher tax and royalty payments after the government threatened to take over oil fields they operated.
Critics have accused the leftist leader of trampling private property rights, but Chavez claims his policies are justified to weaken the grip of foreign interests and the ruling elite on the country.
Toward that end, Chavez has ordered a review of all mining concessions, pledging to overhaul the sector to provide more jobs for Venezuelans and vowing to issue no new contracts until the review is completed.
Foreign companies with interests in Venezuela's mineral-rich southeastern Bolivar state include Canadian firms Crystallex International Corp., Bolivar Gold Corp. and Cadre Resources Ltd., as well as U.S.-based Hecla Mining Co. and Gold Reserve Inc.
Alvarez said Tuesday the review was almost done and the oldest deals found to be idle will be dealt with first.
Separately, state-owned aluminum company Alucasa said it plans to produce 18,500 metric tons (20,400 U.S. tons) of the material this year, a 25 percent increase from 2005.
Roughly 60 percent of that production should be purchased by national producers and the rest will be exported, said Alucasa president Henry Mijares.
Chavez has pressed state-owned companies to increase production for the local market so the country can reduce imports. The oil-rich Venezuelan economy has for decades imported most of its food and other basic products.
Raul Gallegos is a correspondent of Dow Jones Newswires.
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