Mineral-laden Venezuela on Thursday shut the door to new gold projects andthreatened other mining and logging concessions in a step by leftist PresidentHugo Chavez to tighten control of natural resources.
Environment Minister YuviriOrtega said the South American country will not give permits for any open-pitmines and will not allow companies to look for gold in its vast Imataca ForestReserve.
Venezuela will deny environmental permits for the open-pitmine exploitation, Ortega told Reuters in an interview. Neitherprivate or public companies will for now explore Imataca's gold.
Citing ecological damage, Ortegasaid the government was also revising all its mining and timber concessions.
OPEC member Venezuela is one of the world's top oil exporters. With itscoffers bulging from record crude prices, it feels it does not need to riskfurther harming its environment with more mining and logging.
For the moment we do notneed to exploit these minerals; as the president says, we don't need diamondsor gold, or coal, she said, but did not give further details.
Much of the Caribbean state remains largely unpopulated and it housesdiverse eco-systems including a significant chunk of the Amazon rain forest.
The ban on mining in the 9million acre (3.8 million hectare) Imataca reserve and the end to permits foropen pits was a blow to Crystallex and Gold Reserve. The Canadian companieshave long been seeking environmental permits to exploit their concessions inthe reserve.
Chavez last year launched anationalization drive, increasing state control over the country's oilindustry. The U.S critic has since taken over key sectors of the economyincluding electricity, telecoms, cement and steel companies.
He has been especially tough onforeign companies but typically pays a fair price for nationalized assets.
The Imataca reserve, whichincludes a town called El Dorado in remote southeastern Venezuela, sits on what is believed to be one of Latin America's largest gold deposits.
Several large and mainlystate-run companies dig iron ore, coal and bauxite in Venezuela. Workers last week halted operations at Venezuela's Isodora gold mine owned by Hecla, demanding itbe nationalized.
It was not clear if the U.S. miner would be affected by the new contractrevisions.
Crystallex and Gold Reserveshares were largely unmoved on Thursday. The stocks have taken a battering inrecent weeks as news filtered out suggesting the government would not give thempermits.
(Writing by Frank Jack Daniel;Editing by David Gregorio)
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