Venezuela assesses the possibility of allowing foreign companies to participate in the extraction of gold from the Las Cristinas mine only a few weeks after terminating the contract with the Canadian mining company Crystallex, said a government representative on Tuesday.

Source: El Universal newspaper

22/02/2011. ‘It’s a discussion we’re going to have (about the possible involvement of another company). Las Cristinas should be productive and generate economic resources which will help Venezuela diversify its production,’ said José Khan.

Crystallex announced at the beginning of February that the Venezuelan Government had unilaterally decided to terminate their contract to develop under which Las Cristinas. Immediately afterwards, the Russian-Canadian firm Rusoro indicated that it would be interested in exploiting the enormous gold deposit.

‘It’s a discussion we’re going to have (about the possible involvement of another company). Las Cristinas should be productive and generate economic resources which will help Venezuela diversify its production,’ said José Khan, minister for Basic Industries and Mining, before defending his management of the situation to the National Assembly.

‘Nothing has been decided yet,’ he added.

The President of Venezuela, Hugo Chávez, who has nationalized vast sectors of the economy during his 12 years in power, is redoubling his effort to exploit gold deposits in an attempt to reduce the country’s exposure to volatility in the price of oil, the country’s principal export.

However, the mining initiatives have run into innumerable judicial obstacles, which have stopped industrial extraction of the precious metal at various sites.

Crystallex submitted a request for arbitration against Venezuela before the International Centre for Settlement of Investment Disputes, part of the World Bank, seeking compensation of more than 3,800 million dollars in relation to Las Cristinas.

In 2009, the Government took control of Gold Reserve’s Brisas del Cuyuní gold mining project, adjacent to Las Cristinas, for which the firm has demanded at least 1,928 million dollars in compensation.

For months Chávez has been maintaining that the exploitation of gold deposits will only go ahead in association with transnational companies who are willing to be a minority partner in the deal and says that these controls will be incorporated into a new mining law.