Marilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication. She is one of Canada’s most senior mining commentators.
The nationalization of the Las Cristinas gold project by the Venezuelan government looks like a done deal. There has yet to be an official pronouncement, but Toronto-based Crystallex International looks to have lost its chance to develop and operate this project.
Where is the outrage over such actions, asks Fredric Hambler, a financial systems analyst in San Francisco. “I say it’s time for Crystallex, and the Canadian Mining Journal, to loudly condemn the actions of the Venezuelan government. Thomas Bowden of the Ayn Rand Institute has an excellent article on the subject of ownership rights and the Las Cristinas project, which is available online at: http://www.aynrand.org/site/News2?page=NewsArticle&id=21879&news_iv_ctrl=1021”
Our reader is right, of course. We are outraged by the turn of events in that Latin American country. The planning, hopes and money expended by Crystallex will never be recovered. The truly angry among the industry can call this an outright theft. But what is to be gained by ranting and raving?
We North American writers could unleash every angry thought that has gone through our minds, but the situation will not change: Venezuelan president Hugo Chavez made a political decision, and there is nothing we can do to change his mind no matter what we write.
Perhaps Crystallex is making plans to appeal the decision. To what court? Who could enforce such an order? Certainly Chavez would merely ignore a decision in Crystallex’s favour.
I am sorry that Crystallex has come out on the short end of this particular stick, but it is not the first company to have its assets nationalized. I happened to Sherritt in Cuba in the 1950s, and Romania pulled the rug out from under the Rosa Montana gold project that Gabriel Resources owns.
All mining companies accept certain risks when they find promising mineralization. One of them is the political stability of the regime in which their claims are located. Others involve the grade and size of a deposit, the ability to raise money in the markets, the length of time permitting takes, the availability of skilled labour, etc. Would-be producers acknowledge such risks, plan for them, and find ways to mitigate the worst outcomes.
In the end, however, the industry’s influence on political policy in foreign countries is very limited, perhaps nonexistent.
Yes, I am disgusted by the Venezuelan government’s recent actions. But I’m going to save my energy for situations on which my opinion might affect the outcome.
If any readers know of a way to change the Chavez’s political stance, please let us know.