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Chavez to nationalize Venezuelan gold industry

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DejaVu
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« on: August 20, 2011, 12:01:06 pm »

Chavez to nationalize Venezuelan gold industry

By Louise Egan

CARACAS | Wed Aug 17, 2011 2:38pm EDT

 (Reuters) -
Venezuelan President Hugo Chavez said on Wednesday he will nationalize the gold industry, including extraction and processing, and use its output to boost the country's international reserves.

The move follows a dispute between his government and foreign miners who say the rules limiting the amount of gold that can be exported from the South American nation hurt their efforts to secure financing and create jobs.

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

The gold industry will be just the latest part of the economy to be put under state control by the socialist leader, who said he would issue the necessary decree in the coming days and called on the military to help control the sector.

"I have here the laws allowing the state to exploit gold and all related activities ... we are going to nationalize the gold and we are going to convert it, among other things, into international reserves because gold continues to increase in value," Chavez said in a phone call to state television.

The announcement came a day after an opposition legislator revealed a report showing the government's top finance officials were recommending the repatriation of 90 percent of Venezuela's gold reserves held abroad.

The government has not commented on the report, which the opposition legislator said Chavez had yet to approve.

"We've managed to increase the international reserves. We have close to 12 or 13 billion dollars in gold reserves. We can't allow it to continue to be taken away," the president said, referring to reserves held in banks overseas.

According to the report revealed by the opposition legislator, Venezuela has total international reserves of $29.1 billion. About 63 percent of that is in gold worth $11 billion held overseas and $7 billion at home, according to the report.

Venezuela has some of Latin America's largest gold deposits, buried below the jungles south of the Orinoco river. According to official figures, formal mining in the country produces 4.3 tons a year.

Chavez agreed last year to let gold miners export up to 50 percent of production, 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 secure financing abroad, develop projects and create local 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 the company's chief executive told Reuters in an interview in June that it could not take on the project unless the government scrapped its export rules.

Sources at Rusoro said the company planned to make a statement on Wednesday's developments in the coming days.

(Additional reporting by Daniel Wallis and Diego Ore; Editing by Marguerita Choy)

Source: http://www.reuters.com/article/2011/08/17/us-venezuela-gold-idUSTRE77G53L20110817
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The most successful tyranny is not the one that uses force to assure uniformity, but the one that removes awareness of other possibilities, that makes it seem inconceivable that other ways are viable, that removes the sense that there is an outside. --Allan Bloom

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DejaVu
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« Reply #1 on: August 20, 2011, 12:21:16 pm »

Venezuelan President Hugo Chavez Sends Precious Metal ETFs A Wakeup Call

<snip>
It was reported in The Wall Street Journal that Mr. Chavez said “we don’t only have oil wealth; we also have one of the largest reserves of gold in the world so we might as well convert it into our international reserves because gold is increasing in value.”

President Chavez also released documents showing that he plans to transfer billions of dollars in cash reserves held abroad to banks in China, Russia and Brazil. The documents also showed that he planned to move 211 tons of gold it has stored abroad and values at 11 billion to the Central bank in Caracas, where the government keeps its remaining 154 tons of bullion.

While Venezuela is a relatively minor player on the world stage, this could be a big game changer here in the United States because one of the banks that holds 10.6 tons of Venezuela’s gold is none other than JP Morgan. In a recent audit of JP Morgan’s holdings it was reported that they held 338,303 ounces of gold or roughly 10.6 tons. While this is a modest size deposit it is sure to cause some jitters at JP Morgan as they scramble to find the replacement gold which has already been pledged about 100 times across various paper markets to ETF’s like the SPDR Gold ETF (NYSE:GLD). Oddly I had a conversation with one of my readers yesterday about his concerns of holding ETF’s that “lease” the gold that he purports to own. I will certainly be keeping an eye on gold in the illiquid after market and pre market. The long overdue scramble for delivery may be about to begin. “What you do in the Dark, You See in the Light.”


http://etfdailynews.com/2011/08/17/venezuelan-president-hugo-chavez-sends-precious-metal-etfs-a-wakeup-call-gld-iau-slv-gdx-agq/
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The most successful tyranny is not the one that uses force to assure uniformity, but the one that removes awareness of other possibilities, that makes it seem inconceivable that other ways are viable, that removes the sense that there is an outside. --Allan Bloom
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« Reply #2 on: August 20, 2011, 01:09:52 pm »

OPEC States That Venezuela Has Worlds Largest Oil Reserves

Friday, 19 August 2011

The Organization of Petroleum Exporting Countries, a notoriously conservative organization, has stated that Venezuela has world’s largest oil reserves, even exceeding those of OPEC’s top producer, Saudi Arabia.

Oil production in Venezuela is under the control of the state-owned Petróleos de Venezuela, S.A. company, or PDVSA.

Petroleum Intelligence Weekly lists PDVSA as the world's fourth largest oil company, due to its proven reserves, production, refining and sales, MercoPress news agency reported.

PDVSA has recently been roiled by a pension scandal where millions were lost when they were invested in a Madoff-type Ponzi scheme overseen by Francisco Illarramendi, a Connecticut-based hedge fund manager with joint U.S.-Venezuelan citizenship, who used to work as a U.S.-based advisor to PDVSA.

Read more...http://oilprice.com/Latest-Energy-News/World-News/OPEC-States-that-Venezuela-has-Worlds-Largest-Oil-Reserves.html
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The most successful tyranny is not the one that uses force to assure uniformity, but the one that removes awareness of other possibilities, that makes it seem inconceivable that other ways are viable, that removes the sense that there is an outside. --Allan Bloom
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« Reply #3 on: August 21, 2011, 12:24:44 pm »

Venezuelan President Hugo Chavez Sends Precious Metal ETFs A Wakeup Call

<snip>
It was reported in The Wall Street Journal that Mr. Chavez said “we don’t only have oil wealth; we also have one of the largest reserves of gold in the world so we might as well convert it into our international reserves because gold is increasing in value.”

President Chavez also released documents showing that he plans to transfer billions of dollars in cash reserves held abroad to banks in China, Russia and Brazil. The documents also showed that he planned to move 211 tons of gold it has stored abroad and values at 11 billion to the Central bank in Caracas, where the government keeps its remaining 154 tons of bullion.

While Venezuela is a relatively minor player on the world stage, this could be a big game changer here in the United States because one of the banks that holds 10.6 tons of Venezuela’s gold is none other than JP Morgan. In a recent audit of JP Morgan’s holdings it was reported that they held 338,303 ounces of gold or roughly 10.6 tons. While this is a modest size deposit it is sure to cause some jitters at JP Morgan as they scramble to find the replacement gold which has already been pledged about 100 times across various paper markets to ETF’s like the SPDR Gold ETF (NYSE:GLD). Oddly I had a conversation with one of my readers yesterday about his concerns of holding ETF’s that “lease” the gold that he purports to own. I will certainly be keeping an eye on gold in the illiquid after market and pre market. The long overdue scramble for delivery may be about to begin. “What you do in the Dark, You See in the Light.”


http://etfdailynews.com/2011/08/17/venezuelan-president-hugo-chavez-sends-precious-metal-etfs-a-wakeup-call-gld-iau-slv-gdx-agq/
Don't spend a lot of time worrying about Chavez.  He'll be dead very soon.  Cancer came knockin' on his door. 
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