There appears to be no end in sight to the political and economic woes of the government of Venezuela’s President Nicholas Maduro. Among the Bolivarian Republic’s more recent trials was the disclosure in sections of the international media that the Canadian gold-mining company Crystallex had won the right to go after Venezuela’s prized oil refineries in the United States in its quest to collect US$1.4 billion it lost in a takeover by the late President Hugo Chavez ten years ago.
The takeover of Crystallex was part of a wider acquisition of foreign assets by Chavez as part of his administration’s Bolivarian revolution and last week’s court ruling in the United States Federal District Court in Delaware means that Venezuela now stands to lose one of its more valuable assets outside the country.
Long considered to be one of the major players in the global gold mining industry the Venezuelan government, earlier this year, disclosed plans to achieve an annual production of 1.2 million ounces of gold for the next three to 18 years though the current crisis confronting the country may cast doubts on those projections. The country is believed to have the fourth largest gold mine in the world situated in a small area within the Orinoco Mining Arc, in the state of Bolívar though it still failed to ‘make’ the top fifteen gold producers in the world in 2017.
Venezuela’s gold reserves decreased to 150 tonnes in the second quarter of this year from 184.90 tonnes in the first quarter.
Gold Reserves in Venezuela averaged 332.15 tonnes from 2000 until 2018, reaching an all-time high of 372.93 tonnes in the third quarter of 2011 and a record low of 150 tonnes in the second quarter of 2018.
Chavez in early 2009 announced Venezuela’s takeover of the Canadian mining operations in Bolivar state, having accused mining companies of damaging the environment and violating workers’ rights.
Crystallex spent years trying to negotiate a deal with Venezuela before making its case in 2011 to a World Bank arbitration panel, which sided with the Canadian firm, despite Venezuela’s vigorous fight.
If the order is executed Venezuela could be forced to liquidate it to make good on the court order.
The gold mining region once operated by Crystallex is now reportedly largely under the control of rogue miners who employ dangerous and unfriendly gold recovery methods in what has become a dangerous, conflict-ridden part of the country.