Chavez Nationalizes Mining

(Caracas, Venezuela) On the heels of congratulating President-elect Obama, Venezuelan President Hugo Chavez celebrated by nationalizing one of the world's largest gold deposits, the Las Cristinas project. Las Cristinas, operated by Crystallex International Ltd. of Canada which has been seeking environmental permits, is believed to contain more than 16 million ounces of gold.

"This mine will be recovered and will be operated under the state's administration," Venezuela's Mining and Basic Industries Ministry said in a statement.

Therefore, along with the oil, electricity, steel, cement and the telecom industries, Hugo Chavez now has government-run mining.

In other news,

Minister Rodolfo Sanz told a Russian delegation that a memorandum of understanding would be signed on Friday with Russian-owned Rusoro to operate the Las Cristinas and Brisas projects with the government. [...]

Nearby Brisas is operated by Gold Reserve, which has a concession for the gold and copper project but was also waiting for environmental permits.

It appeared that Sanz intends to replace the Canadian companies with Rusoro, although he did not mention their names.

"We have to rescind our relationship with a company that has been working in the zone," Sanz said apparently in reference to Crystallex. "We have a legal problem there," he said.

He said the memorandum would not mention Las Cristinas and Brisas by name for legal reasons but assured the Russians they would have access to the projects.

Frankly, nobody should be surprised by this latest news from Venezuela. Any self-respecting police-state socialist knows that mines are needed for reeducating the more difficult members of the population. The Soviets used salt mines but gold mines work just as well.

Companion post at The Jawa Report.