Photo: All Gold Mined in Venezuela to be Sold to Government
Effective this week in Venezuela all gold mined in the country must be sold to the government. The decree was authored by President Hugo Chavez and his administration in an effort to control gold mining production in the country.
In addition, private enterprises will still be allowed to mine but will be forced to maintain a minority ownership position to the government. This particular initiative was an effort to deter illegal mining of gold throughout the country which are usually small-scale operations.
All miners from small scale to foreign owned to illegal miners are ordered to create joint ventures with the government within the next 90 days. The government going forward will always control a majority stake of 55% in all these ventures and receive a 13% royalty.
Several foreign enterprises with mining operations in the country are suing Venezuela in international courts for billions in loses when Chavez seized their operations.
Chavez last month announced his gold initiative by repatriating about $11 billion in gold reserves held in foreign banking including the U.S. The country produces 11 metric tons of gold a year.