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BMI's Executive Summary[TOP]
In BMI's newly-released Venezuela Mining Report 2007, we predict that the nation's mining industry will remain broadly unchanged in size over the next five years. We believe that the value of output will grow strongly in 2006 (thanks predominantly to higher commodity prices) to around US$3.7bn. Going forwards, though, the effects of higher production volumes – and especially of gold at Crystallex International Corporation's Las Cristinas project – should be offset by softness in mineral prices. In world terms, Venezuela is a major player in the energy industry. However, it is fairly unimportant as a supplier of non-fuel minerals. Including companies that are active in energy and construction materials, there are around 30 companies in Venezuela's mining and minerals sector. This number includes energy giant Petróleos de Venezuela SA (PDVSA) and 11 of the 15 operating subsidiaries of Corporación Venezolana de Guayana (CVG). PDVSA is a state-owned monopoly. CVG, as we explain in this report, is a government agency charged with the social and economic development of much of Eastern Venezuela. In the cement industry, which – like the energy sector – falls outside the scope of this report, players include local subsidiaries of Holcim, CEMEX and Lafarge. In general, though, major multi-nationals are thin on the ground. Steel maker Sivensa is the only significant Venezuelan listed company. Venezuela's mining/minerals sector is not important relative to exports, GDP or total employment. Venezuela is emphatically not the only country in Latin America (or, for that matter other parts of the world) where government policy and rhetoric have appeared to discourage the participation of major multi-national companies. However, it does seem that Venezuela is a country in which the government (and, perhaps, public opinion) is particularly hostile to inwards foreign investment. On top of this, it is clear that CVG and its subsidiaries are responsible primarily for meeting social, as opposed to commercial, objectives. These themes run through many recent news stories. There are two other themes, neither of which is germane for the long-term development of the Venezuelan mining industry. Firstly, employees and community stakeholders often enjoy considerable power vis-à-vis employers in negotiations over pay and/or other benefits. The other is that decisions relating to the industry (whether made by the government in its own right or by one its agencies, such as CVG) appear sometimes to be driven by diplomatic/political (as opposed to economic or commercial) considerations. |
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Contents[TOP] Executive Summary Chapter 1 - Industry Trends And DevelopmentsMarket Overview Regulatory Structure General Chapter 2 - Project And Property UpdatesMetals/ Minerals Table: Operations In Venezuela Chapter 3 - SWOT AnalysisVenezuela Political SWOT Venezuela Economic SWOT Venezuela Business Environment SWOT Chapter 4 - Business EnvironmentAmericas: Business Environment Profile Table: Business Environment Legal Framework Independence Of The Judiciary Effectiveness Of System Property Rights Intellectual Property Rights Corruption/Red Tape Labour Force Size Structure Regulation Industrial Unrest/Strikes Foreign Investment Policy Overview Table: Venezuela, Annual FDI Inflows Table: Value Of Exports By Category FDI Regime Political Environment Re-election Paves Way For Revolution The Revolution Will Not Be Televised Ratings Update Chapter 5 - Industry Forecast ScenarioCorrection To Continue Lower Metal Prices, But Still Historically High Risks To Outlook Global Overview Regional Analysis Venezuela Mining Industry Forecast Table: Venezuela Mining Industry Forecast Chapter 6 - Competitive LandscapeTable: Venezuela Mining - Key Players Chapter 7 - Company MonitorCorporación Venezolana de Guayana (CVG) Hecla Mining Company Crystallex International Corporation Appendix A: Mining Ratings: Methodology Introduction Breakdown of Ratings Breakdown Of Components Appendix B: The World Economy Outlook and Risks Table: Global Assumptions United States Soft Landing Ahead Risks To Outlook Europe Moderating, But Solid Economic Growth Medium-Term Growth Outlook Japan Japan In 2007 & 2008 Japan's Medium-Term Prospects China China In 2007 & 2008 China's Medium-Term Prospects Commodities Correction To Continue Lower Metal Prices, But Still Historically High Risks To Outlook Oil Appendix C: Regional Demographic Data Wages (ave. per annum), US$ Population Household Spending Per Capita, US$ Private Consumption Per Capita, US$ PPP Market Size, GDP, US$bn |
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