Writing in today's (January 21) edition of the regional newspaper Correo del Caroni, Naralie Garcia says that the head of Mibam (also president of the state-owned heavy industry conglomerate, the Venezuelan Guayana Corporation-CVG) Rodolfo Sanz has detailed the reorganization of Venezuela's mining sector and the reversal of several concessions and operating contracts back into the hands of the Venezuelan State.
- Most immediate, Sanz said is to deal with the situation in CVG aluminum subsidiaries where remedial measures will be taken in the next few days. Meanwhile, he said that CVG Ferrominera Orinoco has increased production of iron pellets from 1,026,000 in 2007 to 1,442,000 tonnes in 2008.
On the subject of ecological damage in the Kilometer 88 area and surrounding areas, Sanz says that he has flown over the area ... "the truth is that the destruction by artisanal mining, mining by garimpieros is very high. We need to instigate a process of industrialization of all our mineral reserves, not just the gold. I have already raised this issue, and it has been approved President Hugo Chavez."
"We know the location of our diamond reserves in Santa Elena de Uairen (on the border with Brazil) and in Guaniamo ... geological surveys indicate that there may be a diamond formation that allows us to use industrial processes. We know also know of other minerals on the border of Amazonas and Bolivar State as well as uranium."
In 2009, Sanz says that the government will complete a database of strategic minerals, to certify Venezuela's national mineral reserves. He adds that the Las Cristinas project, which has about 31 million ounces of proven gold, valued at about US$33 billion, can get internal financing and that the companies that have been involved in their operation have continuously been quoted on (North American) stock exchanges based on the nation's gold resources. "We will re-take Guaniamo (diamond mine) within 15 days, including a diamond processing plant and the State will also exercise sovereign control over Las Cristinas. "
With regard to Guaniamo -- considered one of the largest diamond deposits in South America -- the government says that rights granted in 2004 have expired and that the mine must be return to the nation ... a national diamond company is to be created to service the Guaniamo diamond district.
"As for Las Cristinas, managed by (the Canadian trans-national) Crystallex, the state has not given the proper environmental permits for their operation. We have always questioned, and President Chavez has said that Venezuela should be empowered to do what foreign companies have been done since these are Venezuela's sovereign reserves."Somewhat less dramatically, Minister Rodolfo Sanz says that the aluminum sector is going through a "difficult" phase exascerbated by the global crisis ... "our production costs are above the $3,500 per tonne, and the precipitous fall in prices means that at $1550 per tonne we would be selling below production costs." Sanz says that the government will shortly announce a series of meetings with union leadership, where the workers will try to find a solution that will effectively lead to productive investment in the plant and meet some worker demands. "I believe the workers to understand that the situation imposed on us and created by the global crisis means that we must confront the problems and contribute to the failure of businesses. We must be aware that some sacrifices will have to be made to achieve a structural reorganization of companies in the aluminum sector."
Sanz said that the start of major industrial projects in 2009, including four sawmills and a factory for structural panels, using CVG-Proforca's Caribbean pine plantations, is under control and no losses have occurred. This year we are going to major investments in steel and other basic industries. Already in September we should be opening the Cerro Azul cement plant in Monagas State in partnership with the Iranians ... we must move 45% of the plant's aluminum rolling capacity to Caicara del Orinoco and we must reach 80% production capacity at the Iron ore smelting plant in Ciudad Piar, which is a tremendous facility. We will be advancing $120 million to begin building the new steel works in Ciudad Piar and at Siderurgical del Orinoco (Sidor) we will invest nearly $200 million in a plant to produce lime pellets."