Venezuela's opposition presidential candidate seen as positive for mining

Caracas (Platts)--15Feb2012/705 am EST/1205 GMT

The victory of opposition candidate Henrique Capriles in Venezuela's primary election Sunday is seen as encouraging for Venezuela's mining sector, industry observers in Caracas said Tuesday.

"It's positive, no question about it, the bigger-than-expected turnout and the way he won," Venezuelan Mining Chamber president Luis Rojas said.

Almost three million Venezuelans cast ballots and Capriles, the Miranda state governor, won by a margin of 64% over his nearest challenger, Zulia state governor Pablo Perez. Incumbent President Hugo Chavez remains the favorite, however, in his fourth presidential campaign bid with elections to be held October 7.

Over the years, the socialist president has intensified efforts to expropriate private property, cancel contracts and force multinationals to abandon their projects here, notably in the gold mining sector.

Even if Capriles, wins, however, one analyst said it is not clear whether companies such as gold miner Canada's Crystallex would automatically get back their mining rights. The Chavez administration ended Crystallex's contract for the Las Cristinas mine in February 2011.

"But he is running on a platform that proposes that the new government would sit down with individuals and companies and ask them if they want their properties and projects back, or to receive fair compensation for them," said Robert Bottome, director of VenEconomy Publications Group.

While Capriles has thus far run his successful campaign based on the promise to retain the broad-based social programs that have helped Chavez remain in power since 1998, Bottome says that the candidate has solid credentials as a businessman.

"He is business-oriented and his father and grandfather were industrialists," he said. "What he wants to do is apply the law fairly and to reinstitutionalize Venezuela, so that separation of powers is guaranteed."

--George Soules, newsdesk@platts.com

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