The Ruskies better get in line (UPDATED)

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Gold: it's just so shiny...

So, now that President Chávez has pledged to nationalize the Gold Mining industry, what’s going to happen to Rusoro?

You know Rusoro: it’s the politically-connected Russian mining company that had recently taken the lead, in partnership with Venezuela’s state owned CVG, in developing the giant Las Cristinas mine. Well, in all likelihood, they’re going to end up in International Arbitration.

Good luck with that!

While you’re in line waiting to file your papers at ICSID, be sure to say hi to the lawyers from Crystallex – the Canadian miner that…filed for arbitration just a few months ago when their contract to develop Las Cristinas got suddenly terminated.

And don’t miss the chance to say howdy to the legal team from Gold Reserve, another Canadian miner that’s just upped its arbitration claim over its concession for the near-by Las Brisas mine.

And be sure not to snub the lawyers from MINCA, the Canadian company (always Canadians for some reason) that had the Las Cristinas concession before Crystallex got it until – wait for it – they also had their contract irregularly terminated.

On second thought, you better bring some reading material…

UPDATE: Setty once again makes the rest of us look bad by picking up a phone and perpetrating an act of journalism instead of just ranting. Good show. But Rusoro’s “what, me worry?” shtick is…not very convincing.

1 COMMENT

  1. You just know that the investment climate of a country is bad when even the Russians (whose ethical restrictions are… flexible) can’t figure out how make a profit.

    • That is a good one, Roy. Too bad it is/has been seriously true for 12 years..
      The Russians do have sources of income though-guaranteed
      arms sales to Chavez ,loans to be repaid plus interest..billions and more billions.

  2. The basic point shouldn’t be missed, though: Venezuela is now at risk of having to pay out not once, not twice, but three times on arbitration claims arising from the same fucked up mine project.

    This is a mine that, as far as I can tell, has never produced an ounce of gold: a massive golden White Elephant that’s made a comfortable living for hundreds of lawyers in Toronto and Calgary for a generation, a living that’s ultimately going to get paid out of…PDVSA’s export stream.

    Chamo, the moral rot of the Zero-Dolientes petrostate is written all over the Las Cristinas saga.

    • Rusoro has one joint venture with the government, but also has several mines that it is either currently exploiting or developing on its own. There are concessions owned by the Cisneros family, or at least there were on the last map I saw, adjacent to the main Las Cristinas site. But the main thing is that the outlaw guarimpero miners are pulling more ounces out of the ground than all the legit miners together. They also destroy the environment. Of course, “nationalizing” them is a control fantasy. Nagahapn.

    • We should note that Repatriating Gold reserves and Nationalizing the Gold Mining Industry are entirely different subjects. The former is arguably innocuous. The latter is another multi-billion dollar money pit in the making.

          • Well, to have the gold in England is not casual. The Bank of England is the most prominent and reputable certifier of the existence, purity and true value of this gold. Now the certifier of the existence, purity and value of this gold will be Merentes at Esquina Carmelitas. Here is where I make a connection with the whole sector nationalization affair…see where I´m leading to? Credibility issues…

          • The gold will come back home and three years from now Chavez will claim that it was all fake, that the British sent us back fake gold, and will rail against the Queen or against Charles and Camilla or William and Kate or whoever is uneasily wearing the crown. Nothing will come of it, and the real gold will end up in the Cayman Islands or something, which technically is part of the Commonwealth anyway.

  3. Thanks for the linky. Funny thing is I too had a rant all ready to publish, but wanted to check with Agapov first — ever since working at a wire service, I get a sick feeling every time I am about to publish without first talking to the target of my post.

    As far as the arbitration, yes, that’s one possibility. But there is a better option for them. Venezuela always offers book value for expropriated companies.

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