Monday, April 26, 2010

Nationalizing Gold Mining in Venezuela

The latest move by Venezuelan President Hugo Chavez to take over the economy of the country is nationalize gold mining concessions, adding to the already nationalized metal, utilities and oil in the country.

While this is at the threat stage from Chavez, it's highly likely he will follow through with it, as he's ready to end the grants because of the “capitalist mafias” which exploit his country, according to the dictator.

After nationalizing the oil industry, ConocoPhillips (NYSE:CON) and Exxon Mobil (NYSE:XOM) have pursued a process of arbitration against Venezuela, who essentially stole the assets of these companies from them.

The good news is there aren't too many gold mining companies working in the country, and the gold reserves aren't that important in the overall picture, as the country doesn't produce that much, so it'll be easily replaced by ramping up production at mines outside Venezuela.

One gold mining company already battling Chavez is Gold Reserve Inc. (AMEX:GRZ), which is based in Washington, who has also entered arbitration against Venezuela for having their gold mining projects taken over by the country. The company poured $300 million to develop the projects before the government took them over.

And for anyone dumb enough to do it, Venezuela has announced they're looking for partners to help them develop the Las Cristinas project, which is one of the larger undeveloped gold deposits in the world.

1 comment:

Anonymous said...

The dictator is going to do the same thing his papa castro did in cuba, destroy the entire country, no one is safe, feel sorry for the people in venezuela