Exclusive: Anglo-American out of Venezuela in a month

Image taken without permission from Minera Loma de Niquel website, click for original.

Anglo American has a nickel mine in Venezuela. A month from now, from what I hear, that won’t be the case. The concessions now being mined expire Nov. 11 along with the site environmental permit, according to a person familiar with the situation. The government hasn’t renewed the concessions, so it’s lame duck time for them. The company now has a month to comply with its permit requirements — including returning the site in pristine condition. That won’t happen. The site ain’t in bad shape as mines go, but it has some big gouges in the ground where scoops pick up damp, crumbly, pale-blue ore, dump it on trucks, which dump it into some of the most ridiculously hot furnaces you can imagine (1650°C), where the nickel is smelted out and turned into dark pellets that are cooled in little water pools and then loaded into containers (very shallow, or the container would be too heavy) and trucked to Puerto Cabello and thence to points unknown.

The writing has been on the wall for years, as Anglo American has been writing down the value of its sole remaining Venezuelan asset.

As they said in their 2011 financials, “The accelerated depreciation charge at Loma de Níquel has arisen due to ongoing uncertainty over the renewal of three concessions that expire in 2012 and over the restoration of 13 concessions that have been cancelled.”

Imaginary scenario 1: Chávez government makes a big show of the handover of control, citing it as another logro de la revolución, with lots of men in fatigues and rhetoric about how this is the first step in fulfilling his 6-year program with its insistence on increasing control of the mining sector. President announces a JV with Belarus to produce mining dump trucks or something. That would fulfill goal 1.2.6, “Asegurar los medios para el control efectivo de las actividades conexas y estratégicas asociadas a la cadena industrial de explotación de los recursos mineros.”

Imaginary scenario 2: Venezuelan government doesn’t entirely know it’s about to get a mine, and on handover day finds itself with a plant and staff and no environmental permit. It has to turn off the ovens, which start to cool very slowly and within weeks start to suffer damage. Months later, as they continue to cool, workers block the Panamericana highway where the exit to the plant starts, demanding that they be allowed to work again. Nickel prices bump up a wee bit as almost 100 tons a day — 2% of world output — stays offline. This would help fulfill Chávez’s goal number 1.2.9, “Crear la capacidad para influir en la valorización de los precios de los minerales,” although perhaps not in the way he had intended.

Main thing is the Venezuelan state will get control over some nickel. Some of that might end up in coins, some of which may fall on the floor of the Metro de Caracas and do something delightful.

Happy Friday people, I’m off to watch Colombians celebrate football.

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12 thoughts on “Exclusive: Anglo-American out of Venezuela in a month

  1. franzfuls

    Thank you for bringing this into the public arena! Good luck to the Venzuelan state who may soon feel the responsibilities imposed by heavy industry and mining. May the area one day be rehabilitated in a responsible manner.

  2. CarlosElio

    I think scenario 2 is more likely to happen. The entire business of nickel, from production to sales and marketing must be a complex business that requires expertise and good management. The Venezuelan government values only loyalty to the autocrat, it does not value expertise nor good management. The image of the autocrat with his whistle announcing the firing of oil industry managers comes to mind.
    When ideology supersedes management, the mines only yield frustrations.

    1. NorskeDiv

      Interesting, a pro achmadinejad German managed to find her way to this blog. Amazing she has the time to drag herself away from her hatred of Israel long enough to spout her ignorance here as well.

      If you really want to contribute to the revolution, why don’t you go to Venezuela and beat up some opposition members, or better yet shoot some green movement protesters in Iran? There are so many opportunities for militant germans such as yourself, you are wasted commenting online.

    2. Manfredo Ortiz

      The only thing you left clear is that you ignore the reality of a depressed area, as it is where Anglo American has located its plant, and all the good things they provide to near communities and workers that live nearby. Look for information about the reality of mining companies nationalized by the Venezuelan state and check how terrible, both operationally and laboraly, is their situation, just to avoid that kind of mistakes in your opinions

      1. sapitosetty Post author

        Fair comment. Anglo paved the road to the plant and offers reasonably safe, high-paying jobs to hundreds of people. Hard to imagine what it will look like in a month.

  3. Heberto Olaizola

    The most successful mining and metallurgical operation in Venezuela in all its history is only few days away from its disappearance because of the ignorance and autocracy of a small group that seeks only their own benefit. Goodbye Anglo American, welcome to the Chinese (or Bielorussians or Cubans), at the end what is the difference? We will observe the results in only one or two years. Surely some will wish the come back of the south africans, and might be too late

  4. Héctor Mario Rodríguez

    http://www.primerapagina.net.co:9080/Primera/mostrarpagina.jsp?pagi=13&tipo=1&idio=1&codigo=1331946

    La columna sobre Pacific Rubiales que produjo el despido del periodista Daniel Pardo de Kien&ke

    Fue despedido por escribir sobre la persecución de la petrolera canadiense a Primera Página y a Héctor Mario Rodríguez. Denunció que historias en Kien&Ke como “El factor humano de Pacific Rubiales” o “El colombiano que pesa en Pacific Rubiales” son publirreportajes pagados que se presentan como Periodismo. La BluRadio aseguró esta mañana que fue la dueña de Kien&ke, Adriana Bernal, propietaria de Red Assist, quien tomó la decisión de despedir a Daniel Pardo.

  5. Héctor Mario Rodríguez

    http://www.primerapagina.net.co:9080/Primera/mostrarpagina.jsp?pagi=13&tipo=1&idio=1&codigo=1331943

    Despedido periodista Daniel Pardo de Kien&ke por escribir sobre matoneo de Pacific a Primera Página

    El periodista es experto en lavar los trapos sucios del Periodismo, egresado de la Universidad de los Andes y con grado de historiador en Inglaterra. Trabaja para el portal BBC Mundo y hace más de un año tenía una columna en Kien&ke. La dueña de Kien&ke, Adriana Bernal, propietaria de Red Assist, tomó la decisión sobre su salida.

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