The President of Venezuela, Hugo Chavez has signed the law that makes the nationalization of the country’s gold mining industry legal. The signing took place at a ministerial meeting broadcast by state media. The natural law reserves the exploration and management of gold, as well as the connected activities, to the state.
As he put his signature down to the document, President Chavez said that in order to reinforce national independence, economic independence, I sign this national decree for gold. He then showed the media members present a sample gold bullion from the Central Bank of Venezuela's coffers. The bank holds 154 tons of gold worth about $7.2 billion.
The signing of the new law on Tuesday is aimed at giving the government total control over gold produced in the South American country. The law gives increased powers to the government to evict wildcat miners from illegal mines. There is widespread illegal mining and smuggling of gold prevalent in the country which results in the government not benefiting from the natural resource economically.
The Venezuelan President also announced that the repatriation of US$11 billion in Venezuelan gold reserves currently held in U.S. and European banks would begin within several weeks. According to the World Gold Council Venezuela, with an estimated 365.8 tons of gold is the holder of the 15th largest gold reserve in the world.