Mining sector concerned about the content of the bill


CARACAS
Petroleumworld. com.ve, 26 09 2008

Representatives of the mining sector said they do not know all the
provisions including the Bill of Mines at the lack of information
that must by the government. Beatriz Olivo, vice president of the
Venezuelan Mining Chamber (Camiva), said that the organization is not taken into account to participate in drafting the legal instrument.

He assured that the reasons given by the Ministry of Basic Industries and Mining (Mibam) about the creation of a regulation that gives the State sovereignty over resources is not a valid argument, then indicated that the current rules already conferred that right.

He explained that among the few aspects that left knowing the Mibam and are covered under the proposal is that the central government is one that can make operating activities of non-metallic minerals. "This activity is not currently under the Ministry of Mines but the governorate of each state. With the implementation of this new law regions will no longer have that right."

The delivery of exploitation concessions only to joint ventures where the state has a majority shareholding is another point that sets the regulations in force. "That is why we insist that there is no need to create new legislation to include these approaches. That is applied to oil exploration, mining in the area because the investments are high risk. We have to exploit the first and investing millions to determine whether is feasible and that is why investors are not interested in that activity. "

He noted that the existing legal instrument can be considered as it
was recently approved during this period of government in 1999, under the Enabling Act that was granted to President Chavez.

The organization found that joint ventures have no experience in
mining, unlike those formed with less state participation, which was formed on the basis of such activity.

"It is incomprehensible that arise that the mixed format is the only
way to involve the private sector in mining and quarrying and fewer resources means when it says that the company would have to be with a majority of the state capital, which would make it SOEs or State. We think that you can get the tests they want even with a minority equity stake. "

No investment

He explained that current projects which are kept in the hands of the government operate in a "poor" by multiple reasons such as lack of investment and lack of advanced technology. He indicated that companies that hold a majority shareholding of the state-of-its apparently going through a crisis that is evident in the decline in production of metallic minerals.

"The state wants to take on any mining activity but does not have the capacity and is acting as currently produces no good results. There's no greater exploration for mineral reserves found."

Lower production

According to a report of Camiva, the production of metallic minerals
in 2007 dropped 14 percent relative to 2006. As for the non-metallic and industrial minerals there was a recovery of nearly seven per cent that was not enough to reach the averages of previous productions. In 2007 highlighted the following minerals: Bauxite 5.3 MTM (-12.53%); Alumina 1.7 MTM (-14.13%). According to the projections of the House, by the end of 2008 the activity will face a drop of 10 percent.

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