Venezuela - Mining





Venezuela was the world's largest producer of direct-reduced iron, and ranked in the top ten in the production of bauxite, alumina, and primary aluminum. In Latin America, Venezuela ranked second in iron ore and aluminum, behind Brazil, third in bauxite, alumina, and phosphate rock, and fourth in cement and steel. Other principal commodities were diamonds, ferroalloys, and gold. The top three industries in 2002 were petroleum, which contributed 27.5% of GDP, iron ore mining, and construction materials, followed by steel and aluminum manufacturing. The top export commodities were petroleum (which accounted for 72.5% of exports), bauxite, aluminum, steel, and chemicals. Mining output increased by 8.3% in 2000, and contributed less than 1% of GDP.

Output of iron ore and concentrate, from the Cerro San Isidro (Los Barrancos) and Las Pailas (Bolívar) deposits, was 17.35 million tons in 2000, down from 18.5 million tons in 1997; annual capacity was 25 million tons. Direct-reduced iron output was 6.4 million tons. Iron ore production peaked in 1974, at 26.4 million tons, and bottomed out in 1983, at 9.4 million tons. In 1987–91, production averaged 19.34 million tons per year, ranking Venezuela tenth in the world. The steel sector continued to be effected by a decline in the Venezuelan construction industry, low international prices because of excess supply, and the worldwide recession. Iron mining was developed mainly by the Orinoco Mining Co., a subsidiary of US Steel, and by Iron Mines of Venezuela, a subsidiary of Bethlehem Steel. The industry was nationalized in 1975, and was controlled by the state enterprise C.V.G. Ferrominera Orinoco C.A. Bauxite production, from Los Pijiguajos mine (Bolívar), was 4.36 million tons in 2000, and was used entirely in the domestic production of alumina; the mine's capacity was 6 million tons per year, and deposits of high-grade bauxite totaled 300 million tons. Alumina output was 1.76 million tons.

Gold mine output (metal content) in 2000 was 7,332 kg, down from 22,322 in 1997; capacity was 9,000 kg per year. Gold Reserve Inc. made a proposal to the government to combine projects, to create the second-largest gold mine in Latin America and the world's sixth largest, with an envisioned capacity of 40 tons per year of gold and 57,730 tons per year of copper. Crystallex International Corporation made a pair of acquisitions (including a mine, a mill, and a property), and planned to restart operations in 2001 of an underground mine it operated from 1994 to 1998. Crystallex's legal battle over rights to the Las Cristinas 4 and 6 concessions, the most anticipated project in Venezuela in the last decade, resulted in a write-off of the investment, as the project was deemed not viable. Gold, the first metal found in Venezuela, reached its production peak in 1890, and was exported until 1950.

Gem diamond output was 65,000 carats, down from 199,564 in 1997, and industrial diamond output was 44,600 carats, down from 84,644 in 1997. Diamonds have been mined since about 1930, in the Gran Sabana region (Bolívar). Diamond production increased by 468,200 carats in 1974, to reach 1,249,000. Production of hydraulic cement was 8.6 million tons in 2000, up from 7.56 million tons in 1996; Venezuela was a net exporter of cement, and had an annual capacity of more than 10 million tons. Other minerals extracted were nickel, clays (including kaolin), feldspar, gypsum, lime, nitrogen, phosphate rock, salt (a government monopoly), sand and gravel, silica sand, stone (dolomite, granite, and limestone), and sulfur. Construction of the Minera Loma de Níquel, C.A., open-pit mine and ferronickel plant (on the boundary of Aragua and Miranda) was completed in 2000; it produced 2,472 tons of contained nickel the rest of the year, and was expected to produce 17,500 tons per year of contained nickel in ferronickel for 30 years, from reserves of 42.4 million tons (1.48% nickel). No amphibolite was produced in 1998–2000. Minerals known to exist but not exploited were manganese (with deposits of several million tons), mercury, magnesite, cobalt, mica, cyanite, and radioactive materials.

The mining law of 1999, replacing that of 1945, established the rules for all mines and minerals (except hydrocarbons and some industrial minerals not found in government lands). The country's mineral resources belonged to the nation, and mining was permitted only through direct participation of government, concessions, and production authorization to the small mining sector, mining cooperatives, and artisanal miners. The private sector participated in the production of nonfuel minerals; however, government companies controlled a great portion of the production of bauxite, alumina, aluminum, diamond, gold, and iron ore.

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