Chavez: Venezuela recalling $11B in gold reserves

CARACAS, Venezuela — President Hugo Chavez announced Wednesday that he is nationalizing Venezuela's gold mining industry and that he intends to bring home $11 billion in gold reserves currently held in U.S. and European banks.

He said the recall of the gold reserves is intended to help protect this oil-producing country from the economic woes in the United States and Europe.

"We're going to start to bring back our gold to the Central Bank," Chavez said in a telephone call broadcast live on state television.

Central Bank president Nelson Merentes said on television that the step was being taken out of "prudence."

It wasn't clear how soon the overseas gold reserves are to be brought to Venezuela.

The Central Bank said recently that the country has about $17.9 billion in gold out of a total of more than $28.7 billion in international reserves. Chavez said $11 billion worth of the gold is held in other countries.

Chavez also said he would soon issue a decree for the nationalization of the gold mining industry, so the government can increase control over the gold produced.

"We're going to nationalize gold and we're going to convert it, among other things, into international reserves," he said.

The Russian company Rusoro Mining Ltd. controls one of Venezuela's most important gold mines in the country's southeast. In February, the government canceled the gold mining concession of a Canadian company, Crystallex International Corp.

It's unclear how Chavez's new decree differs from a 1965 law that nationalized gold mining in Venezuela. In 1977, the government granted itself exclusive rights for extracting gold.

Chavez said the decree will allow the government to "begin to take over the gold zone," where authorities have periodically carried out operations to evict wildcat miners from illegal mines.

The president said the government aims to fight "mafias" that have been taking some of the country's gold.