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 Chavez to nationalize Venezuelan gold industry...

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lexie
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PostSubject: Chavez to nationalize Venezuelan gold industry...   Thu Aug 18, 2011 4:20 pm

August 18, 2011

hummmm... follow the money??

Chavez to nationalize Venezuelan gold industry



CARACAS, Venezuela will nationalize its gold industry and is moving its international reserves out of Western countries, President Hugo Chavez said on Wednesday in a combative step ahead of his re-election bid next year.

The moves will make the finances of South America's biggest oil exporter even murkier as the 57-year-old socialist leader gears up for an election battle that was already looking close even before he was recently diagnosed with cancer.

Chavez has put large parts of Venezuela's economy under state control and is now targeting the gold industry after his government quarreled with foreign companies who complained that limits on how much gold they could export hurt their efforts to secure financing and develop projects.

Chavez seems to have lost patience and decided to put the whole industry into state hands.

"We're going to nationalize the gold and we're going to convert it, among other things, into international reserves because gold continues to increase in value," the authoritarian but charismatic 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 (the military) because there continues to be anarchy, mafias, smuggling."

Toronto-listed Rusoro, owned by Russia's Agapov family, is the only large gold miner operating in Venezuela. It produced about 100,000 ounces of gold in Venezuela last year.

Continues ...

The nationalization of the gold industry fits with 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 on Wednesday.

A Venezuelan official at regional body Unasur said the group was considering a similar move to repatriate part of the estimated $500 billion its members have in reserves abroad.

"It's a legitimate act, a sovereign act, unquestionable and indeed necessary," Ali Rodriguez told Venezuelan state TV.

Chavez, who has undergone two sessions of chemotherapy in Cuba since he announced in June that he had cancer, often rails against the reliance on the U.S. dollar as the global reserve currency of choice.

The move is in line with Chavez's ideological world view: during his 12 years in power he has often bashed the United States and sought to align Venezuela with emerging powers and opponents of Washington such as Iran.

Worried About Sanctions?

Giordani said the transfers were under way, and that mounting debt worries in Europe and the United States showed that Venezuela needed to diversify where it kept its reserves.

Transferring funds to China for safe-keeping would appeal particularly to Beijing, which has invested billions of dollars in Venezuela's nationalized oil industry.

Some critics have suggested Chavez might be worried about the possibility of sanctions against his government if there is violence in next year's election campaign, and so is trying to ensure state reserves are stored more safely.

The former soldier 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," Chavez said on Wednesday when he called into a news conference by his finance minister.

Venezuela has international reserves of $29.1 billion. About 63 percent of that is in gold worth $11 billion held overseas and $7 billion at home, the government says.

One way it could boost its bullion reserves was to nationalize the gold industry, which had largely stagnated. Production at the state-run gold miner plummeted last year and the company appealed for a $70 million government bailout.

Venezuela has been relatively small in the gold world, with formal mining producing about 6 tonnes a year. But it boasts some of Latin America's biggest gold deposits, buried below the jungles south of the Orinoco river.

Chavez agreed last year to let gold miners export up to 50 percent of production, up from 30 percent previously. The other 50 percent must be sold to the central bank.

But that did not satisfy foreign companies like Rusoro, which said the limits made it much harder for them to get financing abroad, develop projects and create jobs.

One victim of the dispute has been a huge but long-troubled project called Las Cristinas. It has been in limbo since the government canceled a development license with another Canadian miner, Crystallex, in February.

Rusoro had expressed interest in Las Cristinas, which has not been developed since the 1980s but has reserves estimated at 17 million ounces. Locals once found a 1-kilo (2.2-lb) nugget there. But Rusoro's chief executive told Reuters in June it could not take on the project unless the government scrapped its export rules.

http://www.newsmeat.com/news/meat.php?articleId=112778398&channelId=2951&buyerId=newsmeatcom&buid=3281

2011-08-18 12:01:39 GMT (Forexpros)


Gold soars to record high of USD1,818.25 ahead of U.S. CPI data
Forexpros – Gold futures extended gains on Thursday, soaring to a fresh record high as increased demand for safe haven assets boosted the precious metal ahead of a flurry of key U.S. economic data.

On the Comex division of the New York Mercantile Exchange, gold futures for October delivery traded at USD1,814.85 a troy ounce during European afternoon trade, surging 1.35%.

It earlier rose as much as 1.5% to trade at USD1,818.25 a troy ounce, exceeding the previous high of USD1,815.65 a troy ounce it hit on August 11.

Concerns over the global economic outlook were exacerbated after Wall Street investment bank Morgan Stanley cut its outlook for global economic growth for 2012, citing an “insufficient policy response to Europe’s sovereign debt crisis, weakened confidence and the prospect of fiscal tightening”.

The investment bank added that the U.S. and Europe are “dangerously close to recession.”

Gold is often seen as an alternative currency in times of global economic uncertainty and a refuge from financial risk.

Meanwhile, the World Gold Council said in a report earlier that investment demand in India during the second quarter soared 78% to 108.5 metric tons, while jewelry demand increased 17% to 139.8 tons.

Gold investment demand in China jumped 44% to 53 tons in the second quarter, while jewelry demand rose 16% to 102.9 tons, the council said.

On Wednesday, Venezuelan President Hugo Chavez said that he intended to move forward and repatriate as much as USD11 billion in gold reserves held in the U.S. and Europe in order to nationalize the country’s gold holdings.

According to Chavez, Venezuela will transfer 99 tons of gold from the Bank of England to the country’s central bank.

In addition, Venezuela holds gold at Wall Street firm JP Morgan Chase, U.K. lenders Barclays and Standard Chartered as well as Canada-based Bank of Nova Scotia.

Elsewhere on the Comex, silver for September rose 0.12% to trade at USD40.47 a troy ounce, while copper for September delivery tumbled 1.45% to trade USD3.983 a pound.

Later in the day, the U.S. was to publish a flurry of economic data, which will help traders gauge the strength of the U.S. economic recovery.

The country was to produce government reports on initial jobless claims, consumer price inflation, existing home sales, manufacturing activity in Philadelphia as well as a report on natural gas stockpiles.


http://www.forexpros.com/news/commodities-news/gold-soars-to-record-high-of-usd1,818.25-ahead-of-u.s.-cpi-data-222184?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+forexpros-news+%28Forex+Pros+EN+News%29
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PostSubject: Re: Chavez to nationalize Venezuelan gold industry...   Thu Aug 18, 2011 5:17 pm

Good article Lexie!

Very informative......Venezuela obviously know what's coming!
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PostSubject: Chavez to nationalize Venezuelan gold industry...humm follow the $$$$$$$   Thu Aug 18, 2011 7:07 pm

@rosienogg wrote:
Good article Lexie!

Very informative......Venezuela obviously know what's coming!


Thank you !!
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PostSubject: Re: Chavez to nationalize Venezuelan gold industry...   Thu Aug 18, 2011 7:28 pm

Im Glad, the people of Venezuela will get their wealth returned to them. It would be nice if the people here would voice their opinions. I mean come on, what does it mean if the brain behind the Tea Party, is not TEA PARTY ANYMORE????? When the so called Tea Party sidelines Ron Paul and promotes Bachmann it means the people have lost their wealth...their knowledge!
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