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At the risk of repeating ourselves we ask: where in Venezuelan politics did logic ever count for anything?

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VHeadline editor & publisher Roy S. Carson writes: The tropical sun is scorching the pants of Venezuela's Mining Minister Rodolfo Sanz this week as he tackles a tumbleload of crises that left his predecessor, Jose Khan a physical wreck, forced into early retirement for the sake of his health. So far ... Sanz appears to be of more resilient stuff, although the problems that beset his office as Minister of Basic Industries & Mining (Mibam) and overall head of the Venezuelan Guayana Corporation (CVG), require phenomenal leadership and tenacity.

Sanz has grappled with problems in the wake of the Venezuelan State's take over of Siderurgical del Orinoco (Sidor) and the falling bricks of a heavy industry consortium that has been in disarray for decades. He's facing labor revolts in the deep south of a region of Venezuela that has untold wealth in unexplored mineral reserves where a population of many thousands continue to barely scratch a living ... living on promises of a better future that have remained unfulfilled by a succession of on-the-make politicians for more years than their continuing nightmare.

The Minister has had to play hard-nosed executive and canny diplomat in face-to-face negotiations with stubborn transnational mining executives and a workforce ready to take the law into its own hands in the absence of any apparent move by government to secure their interests. Sure enough, not too many locals are prepared to believe a string of promises from day-tripping politicos but Sanz has to break through the disbelief with actions more than mere words. He's already aborted extensive plans to disenfranchise USA-based Hecla of it's El Callao Gold Mining Company's rights to mine and was on the brink of handing operations over to the Russian Agapov Group's Russoro Mining when he realized that the legal procedures involved would paralyze the local economy for at least three months (probably more!) taking an already hostile local labor situation into the lead-up to November 23 regional elections...

Its virtually the same thing with other, controversial, gold mining projects that were collectively to have secured up to 8,000 direct jobs and perhaps 16,000 indirect sources of income to placate small-scale and artesanal miners in southeastern Bolivar State. The solution is far from easy since Sanz has been thrust in direct conflict with Venezuela's Environment Minister, Yubiri Ortega de Carrizales, who just happens to be the wife of Venezuela's vice president, Ramon Carrizales, and with a sidebar claim to be Venezuela's "First Lady" in the absence (through divorce) of a Chavez spouse.

Ortega de Carrizales has been quoted as saying she will NOT approve ANY open-cast mining in Venezuela and her Ministry has notified the CVG that it will not give final clearance to years of careful planning for gold mining operations to begin at Las Cristinas and Las Brisas del Cuyuni on the pretext that both lie within the environmentally protected Imataca Rainforest Reserve.

On the one hand, the Las Brisas del Cuyuni project is claimed as a "concession" by Spokane (Washington USA) based Gold Reserve; on the other, Canadian Crystallex International has signed a mine operating contract with the CVG (and in extension the Venezuelan State) to mine gold at Las Cristinas. Since the new Mining Act (which is scheduled to come before parliament later this month) specifically does away with any concept of "concession" and invokes the concept of "social-productive mixed companies," it would appear that the former is faced with re-scheduling under the new circumstances to be presented while the latter is already in that "state of grace" under which the property is already exclusively 100% that of the Venezuelan State.

Leaving therefore aside the dilemma that faces Gold Reserve and its claim on Las Brisas del Cuyuni until its inevitable demise under the new Mining Act, Sanz is forced (also as supreme head of the CVG) to consider what to do about Las Cristinas ... already believed to be the largest untapped gold reserve in South America if not the world!

Inasmuch as a contract is a contract, it is clearly Sanz' business now to ensure that Las Cristinas "The Contract" is either continued or abandoned. Certainly, to continue the contract would be the least troublesome route for the beleagured Mining Minister since to do otherwise would tie up any advance on production at the mine for a spate of years that could well extend beyond the life of the current government and/or his own portfolio in charge of Basic Industries & Mines. He does, however, have the formidable presence of the "First Lady" to consider although in the current scenario she has all the hallmarks of the Wicked Witch.
On the plus side, Sanz has the decided opinion of the Parliamentary Standing Committee on Economic Development & Mining but that in itself is at variance with the Parliamentary Standing Committee on the Environment...
Logic therefore dictates that an Executive decision must be taken one over the other ... but where in Venezuelan politics did logic ever count for anything?

For outsiders to the mayhem that is Venezuela's government administration today, it is patently clear that if the current government is to survive past November 23 elections it has got to get its skates on with regard to vitally important employment issues; it also need to urgently kickstart the non-oil economy and it needs to deal resolutely with the various forms of insidious corruption that have applied the brakes to much-needed reforms in just about every level of government and Venezuelan society's perception of democratic government as well!

In balance, it would appear that applied technologies to protect the environment would be more resolutely placed on industrial mining operations than on small-scale and/or artesanal mining operations that habitually pollute the Imataca Rainforest environment with illegally imported mercury and other noxious substances. Huge swathes of the Imataca have already been deforested, devastated, polluted, but these can be recovered slowly, perhaps painfully, by central government action ... or in cooperation with the foreign industrial mining groups who are already in place, geared to start providing jobs, technology and environmental protection that the Venezuelan government alone has proved incapable of providing.

On the other side of the balance sheet we have a situation where Venezuela's reputation as an investment object is already gone way down the drain in a succession of decisions that defy logic. It is natural that President Hugo Chavez Frias wants to serve his people best by securing their future out of the hands of thieving capitalists who have plundered Venezuela's riches for decades is not centuries ... his declared economic policy of profit-sharing through majority-owned joint ventures is gaining ground, very much to the chagrin of Exxon-Mobil and other political power-brokers in the international industry-oil-arms complex, but in the final analysis, the President must also consider what's best for his own countrymen...

Will he allow a situation of continued lawlessness in the Imataca jungle, where often illegal mining operations rape the environment, pollute the rivers; where already massive amounts of extracted gold and precious stones are 'disappeared' over the borders, taking flight from any retention or revenue to the Venezuelan Central Bank?

The answer, we say is logical, but at the risk of repeating ourselves we ask: where in Venezuelan politics did logic ever count for anything?

Roy S. Carson
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Roy S. Carson is veteran foreign correspondent (45+ years in the business) currently editor & publisher of VHeadline Venezuela reporting on news & views from and about Venezuela in South America -- available for interviews -- call Houston (more...)
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