Venezuelan mining production expected to fall 7% in 2008

Platts reported that Venezuela overall mining productivity is estimated to decrease 7% in 2008 in relation to 2007 figures. It quoted Mr Gilberto president of Venezuelan Mining Chamber as saying that "The drop is the result of widespread labor unrest, the nationalization of certain companies like Sidor steel, the stalling of several major projects and heavier than usual rainfall." Adversely affected are the country major iron, steel, gold, nickel and coal companies. Mr Sanchez noted that Sidor steel is a good example, with its productivity at only 60% right now. Before nationalization in 2002, it produced 5 million tonne of liquid steel and this year its output will be only 2.5 million tonne. Mr Sanchez further said that that “There was less foreign investment in 2008 in large part due to the country currently downgraded risk rating. However, once the labor situation calms down, the mining sector should enter a more balanced period in 2009 adding that it was still early to gauge the effect on Venezuela of the global economic recession.