For all the talk of a new US president, plunging stock markets and NYC income tax increases, this little-read headline, “Chavez Takes Over Largest Gold Mine in Venezuela,” warrants some discussion here on MetalMiner. According to the article, Chavez and company will take over La Cristinas, the largest gold mine in the country owned by Canada’s Crystallex. This isn’t Chavez’ first foray into nationalizing metals companies, he did his first big “deal” this summer by taking over Sidor a division of Ternium.
I wonder how successful Chavez’ nationalization strategy has worked out for the people of Venezuela? We had one client who had considered Sidor for their requirement (we quickly nixed Sidor from the supplier list). Given the current global economic climate including a potential very rough landing for China, a very soft European market, a recession-bound US and a slow-down Mexico, Chavez must be hoping for decent domestic demand.
According to this article from Mineweb on the nationalization of Sidor, Chavez stated the rationale behind the nationalization was to support worker’s rights. Lofty goal. Let’s see how that strategy plays out as global and domestic demand slows.