Venezuela Threatens to Take Over Mines

Venezuela Threatens to Take Over Mines

24th January 2006

All Associated Press News - CARACAS, Venezuela (AP) - Venezuela's mining minister said Tuesday that the government was ready to take over top gold and diamonds 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 mining operators and others will be kept by the government to develop on its own, he said.

Alvarez declined to elaborate further.

Venezuela is in the midst of a review of all mining deals and has vowed to issue no new concessions. Alvarez has said the review is almost done and the oldest deals found to be idle will be dealt with first.

Venezuelan President Hugo Chavez is leading a nationalist policy in the mining and oil industries with the goal of reducing dependence on foreign interests.

Separately, state-owned aluminum company Alucasa said it plans to produce 18,500 tons (20,393 U.S. tons) 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 directed to the local market so the country can become self-sufficient and reduce imports. The Andean economy, rich in oil, has for decades imported most of its food and other basic products.