Venezuela's Chavez Seeks Law to Gain Control of Mines (Update3)
June 16 (Bloomberg) -- Venezuelan President Hugo Chavez is seeking to take control of non-productive gold and diamond fields in the country with a proposed law sent to congress today.
Non-productive fields would include those awaiting government permits, Heavy Industries and Mining Minister Victor Alvarez said during a press conference today in Caracas. Among companies that have gold concessions or contracts but haven't started production are Gold Reserves Inc. and Crystallex International Corp., Deputy Jose Ramon Rivero, head of the mining subcommittee, told reporters.
The reform is to rescue areas which aren't in operation, where they haven't finished exploration, where they haven't initiated mining,'' said Alvarez, who declined to comment on specific cases. When asked if non-producing areas included those awaiting government permits, Alvarez said, ``Too often the permit process is used as an excuse and a pretext for inactivity.''
Chavez, who has forced oil companies to pay higher taxes and convert their operations into joint ventures with the government, said last year that Venezuela would stop granting mining concessions to foreign companies while creating a state- owned mining company. Venezuela is the world's fifth-largest oil exporter.
Shares of Crystallex rose 7 percent to C$3.74 as of 1;25 p.m. The company's New York shares rose 7.4 percent to $3.33. Gold Reserve, a U.S. miner, fell $0.19, or 3.6 percent, to $5.09.
`Sovereignty'
``We want to reassert our sovereignty over these areas, which were kidnapped years ago,'' said Alvarez.
Certain mines or fields will also be taken over by the government to be given to small miners or mining cooperatives, Alvarez said.
The government doesn't want to exclude private investors from mining, Alvarez said.
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