Bloomberg News: Anglo American Venezuela Unit Loses Six Concessions

Click for original

Jan. 8 (Bloomberg) — Anglo American Plc’s Loma de Niquel unit, which mines nickel in Venezuela, had six concessions nullified by the South American nation after the government accused the company of violating contract terms.

The Ministry of Basic Industries and Mining today published its decisions to cancel Anglo’s Cofemina 1, 2, 4, 5, 6 and 7 concessions in the Official Gazette, the formal record of government actions. The measures are dated Jan. 4 and give mining inspectors 90 days to seize the 1,935 hectares (4,780 acres) of land and equipment associated with the concessions.

Anglo American joins other mining companies that have clashed with the government of Venezuelan President Hugo Chavez, who wants the state to hold a controlling ownership in all new projects. Gold Fields Ltd. left the country in October after it failed to receive water permits, and Crystallex International Corp. has been unable to obtain the permits it needs to start its Las Cristinas gold mine.

Anglo, based in London, is “assessing” the government order and will take “all appropriate action to protect the rights of the company,” according to a statement read over the phone by spokesman James Wyatt-Tilby. The decisions published today say they can be appealed within 15 days. Mining Vice Minister Ivan Hernandez didn’t return a call seeking comment.

In today’s orders, the mining ministry said the company failed to maintain roads near the mine or provide workers with low-cost food, among other violations.

Anglo American owns 91.4 percent of Loma de Niquel, which produced 16,600 metric tons of nickel in 2006, Wyatt-Tilby said. Anglo has a minority stake in a western-Venezuelan coal mine owned by Peabody Energy Corp. and the Venezuelan government.

The mine was the country’s fifth-biggest non-oil exporter in 2005, the last year for which records were available. It exported products valued at $131.2 million that year, according to a government economic report from February 2006.

Anglo’s American depositary receipts, each worth a half a common share, fell 27 cents to $28.56 in Nasdaq composite trading as of the close at 4:30 p.m. New York time. The FTSE 350 Mining Index rose 2.1 percent as gold climbed to a record.


About Steven Bodzin

Steven Bodzin is a reporter. He blogged when he was a freelancer.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: