After nearly half a billion dollars have been invested to develop gold projects there, the public policy pendulum of the Imataca Forest Reserves has swung yet again as Venezuela's environment minister Saturday announced she had decided to ban mining in the forest reserve.
Although debate on mining in or near the Imataca Forest Reserve has been on-going since the 1990s, President Hugo Chavez issued a decree in 2004 which set aside special areas within the reserve to permit legal hardrock mining.
Minister of the Environment and Natural Resources Yubiri Ortega did not give a direct answer when asked Saturday if the government plans to nationalize the Las Cristinas and Las Brisas gold projects, but she did say, Venezuela is taking control in order to save and appropriate what is ours.
An Associated Press report quoted Ortega as stating that the government will consider underground mining concessions, but will not permit open-pit operations. She also specified that the government will forbid mining in the 8.5 million acres of the Imataca Forest Reserve.
Hecla Mining is already migrating out of Venezuela, selling its stalled La Camorra Unit gold operation to Rusoro Mining in a $25 million cash-and-stock deal. AP reported that Venezuela's mining ministry was considering rescinded Hecla concessions over a labor dispute at the Mina Isidora underground operation outside of the Forest Reserve. Since Venezuelan operations yielded less than 3% of Hecla's overall revenues, Hecla can afford to take the loss.
However, the loss of the Las Cristinas gold project will seriously cripple Toronto's Crystallex, which lost CEO Gordon Thompson earlier this month after the Environmental Ministry denied its final permit for its gold mine. Crystallex has filed a rebuttal with the Minister of the Environment and Natural Resources of Venezuela (MinAmb) under the administrative laws of the Bolivarian Republic of Venezuela. This appeal to the Minister is in response to the denial of the Company's first appeal to the Director General of Permitting in MinAmb.
Spokane-based Gold Reserve received formal notification last month that the March 2007 permit for the construction phase of the Brisas project has been rescinded by MinAmb.
Despite the Chavez Government's newly renewed vows of a desire to protect the forest reserve, President Chavez has been on an expropriation spree since the early days of his presidency when he halted planning privatization of the nation's social security, aluminum and oil industries. He has also nationalized the nation's electrical sector, telecommunications, the country's top steelmaker, and petroleum refineries.
Chavez has unsuccessfully campaigned for a constitutional change to even strengthen the government's power of expropriation. He has even argued that the government should be able to control assets of private companies before winning a court expropriation ruling.