Mineweb.com - Venezuela formalises gold industry nationalisation - POLITICAL ECONOMY | Mineweb

Mineweb.com - The world's premier mining and mining investment website Venezuela formalises gold industry nationalisation - POLITICAL ECONOMY | Mineweb

President Hugo Chavez's government issued a decree on Monday that prohibits the export of the metal from the country and gives the state 55% of joint ventures

Author: Diego Ore
Posted: Tuesday , 20 Sep 2011

CARACAS, (REUTERS) -

President Hugo Chavez's government formalized the nationalization of Venezuela's gold industry on Monday with a decree that prohibits exports of the metal and gives the state 55 percent of joint ventures.

The new law, published in the Official Gazette "with the aim of overturning the serious impact of the capitalist mining model," also fixes the royalty rate for gold mine projects at 13 percent in general.

That can, however, fall to as low as 3 percent for some small operations of "social interest" such as the participation of indigenous communities or small miner cooperatives.

Socialist leader Chavez, who has nationalized big swathes of the OPEC member's economy, targeted the gold industry last month after his government quarrelled with foreign miners over limits on how much they could export.

The latest takeover fits with the president's broader plan to repatriate Venezuela's bullion and shift most of its cash reserves out of Western nations to political allies including China, Russia and Brazil.

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.

The move is bad news for foreign companies like Toronto-listed Rusoro (RML.V:Quote)(RMLFF.PK: Quote) -- owned by Russia's Agapov family and the biggest gold miner operating in Venezuela -- which had been pushing for greater export limits. .....

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