CARACAS – Venezuela will nationalise its gold industry and is moving its international reserves out of western countries, according to President Hugo Chávez.
Mr Chávez has put large parts of Venezuela’s economy under state control and is now targeting the gold industry after his government quarrelled with foreign companies. They had complained that limits on how much gold they could export harmed their efforts to secure financing and develop projects.
Mr Chávez now seems to have lost patience and has decided to put the whole industry into state hands.
“We’re going to nationalise the gold and we’re going to convert it, among other things, into international reserves because gold continues to increase in value,” the president said in a phone call to state TV.
“I’m going to approve a law to begin taking the gold areas and there I count on it [the military], because there continues to be anarchy, mafias, smuggling.”
Rusoro, owned by Russia’s Agapov family, is the only large goldmining company operating in Venezuela. It produced about 100,000 ounces of gold in Venezuela last year.
The nationalisation of the gold industry fits with Mr Chavez’s broader plan to repatriate his country’s bullion and shift most of its cash reserves out of western nations to political allies, including China, Russia and Brazil.
“It is a question of prudence and protection,” finance minister Jorge Giordani said yesterday.
Mr Chávez, who has undergone two sessions of chemotherapy in Cuba since he announced in June that he had cancer, often speaks out against the reliance on the US dollar as the global reserve currency of choice.
The move is in line with his world view: during his 12 years in power he has often criticised the United States and sought to align Venezuela with emerging powers and opponents of Washington such as Iran.
Mr Giordani said transfers were under way and that mounting debt worries in Europe and the US showed that Venezuela needed to diversify where it kept its reserves.
Some critics have suggested Mr Chávez might be worried about the possibility of sanctions against his government if there is violence in next year’s election campaign, so is trying to ensure state reserves are stored more safely.
The former army officer appeared to allude to the possibility of reserves being seized by foreign powers.
“Look what’s happening in the Arab world with the use of international reserves . . . [there is] practically a confiscation of those resources, which is something we have to prevent at any cost, linking our economies to the BRIC nations and South Africa,” Mr Chávez said this week. – (Reuters)