Russian-Canadian miner Rusoro Mining Ltd. (TSXV:RML), is asking an arm of the World Bank to intercede in a legal dispute with Venezuela after the country nationalized its gold industry, and took over the junior’s investments without compensation.
The Vancouver-based gold company which was, until recently, the only private gold miner left in Venezuela, said in a statement that the Hugo Chavez administration breached treaty protections by seizing Rusoro’s assets.
The miner learned last September that the Venezuelan government planned to take over exclusive rights for gold extraction in the country. Since then it attempted to reach an agreement with local authorities, without success.
Now Rusoro is seeking arbitration under a treaty for the promotion and protection of investments signed by both Venezuela and Canada.
Venezuela produces 11 metric tonnes of gold each year, compared to global production of more than 2,400 tonnes and China’s production of more than 300 tonnes.
According to The Washington Post, about $6.5 billion in non-gold international reserves, such as bank deposits and bonds, are also being “spread out” to diversify Venezuela’s assets.
The nationalization of mines is currently every mining company worst nightmare, as the latest study from Ernst & Young shows. >> >>