Hugo Chavez to nationalise Venezuela's gold industry

Miner in a Rusoro gold mine in Venezuela Companies said that limits on their gold exports stopped them financing the development of mines

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Hugo Chavez has announced that he will nationalise Venezuela's gold industry to boost the country's reserves.

"The area is run by the mafia," the president said on state TV. "We're going to nationalise gold. We can't keep allowing them to take it away."

The biggest gold miner is Rusoro, a Canadian-listed company controlled by the Russian Agapov family.

The move comes after Rusoro and others complained that Caracas prevents them from selling enough gold abroad.

Last year Venezuela raised the limit on gold exports from 30% to 50% of output, with the rest to be sold to the country's central bank.

But even so, mining companies said the limit still prevented them from being able to raise foreign financing to invest in developing the mines further.

"We are going to nationalise the gold and we are going to convert it, among other things, into international reserves because gold continues to increase in value," said President Chavez on Wednesday.

Gold had hit a new all-time high earlier in the day of $1,795 (£1,084) an ounce.

A day earlier, an opposition member of parliament disclosed a leaked government report that recommended repatriating 90% of the country's gold reserves, some 63% of which are currently held abroad.

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