BNamericas reported that the deadline for private sector mining companies in Venezuela to negotiate and form JV gold companies with the state passed a little more than a month ago causing a lot of uncertainty for the sector.

This is even more the case after the Venezuelan government through state gold miner Minerven took on the management of Vancouver based Rusoro Mining's local operations and took complete control of VenRus, a 50:50 JV between Rusoro and the government.

Although the Venezuelan state effectively took control of Rusoro and VenRus in April only now was the executive committee that will be responsible for overseeing their operations appointed.

In addition to these kinds of political decisions are protests from the communities of the El Callao gold region of Bolívar state calling for payment of the USD 6 million that Minerven owes them and which has them facing an economic crisis.

There is also concern because the 6 month extension that the government granted small scale miners to negotiate an agreement over decree 8413 which penalizes the activity ends on June 15th 2012. On this issue it is also unclear what will happen.

In September 2011, President Mr Hugo Chávez' administration passed the gold law that nationalizes all gold mining activity. However, two months later it was announced that the law's implementation would be delayed for 6 months with the possibility of being extended for an additional 6 months.

The decision to extend the deadline was made as indigenous communities in Bolívar state stepped up protests against the gold nationalization law, arguing it is unconstitutional.

The communities had brought a petition to the Supreme Court requesting the annulment of the law claiming that it does not recognize the indigenous communities which were never consulted. There have also been protests by small scale miners in Bolívar's El Callao region who are against the nationalization.

Mr Mariana Almeida mining lawyer said that the sector's current situation is evidence that the law was not written with the aim of developing a mining policy but rather a political concept of mining. They are different things because one is developing a mining policy that has a long-term mission and a future strategy and another is the political concept of mining where the government has the idea that it has to be the main player and adjusts everything so that this is the case, without knowing how to actually do it.

Source - Business News Americas