* Russian miner says it received no reply from government
* Chavez nationalized gold industry last year
* Chavez bowing out of world settlements tribunal
* Had quarreled with companies over export rules
By Diego Ore and Daniel Wallis
CARACAS, July 18 Russian miner Rusoro
became the latest company to seek compensation from Venezuela
through arbitration at a World Bank tribunal, saying President
Hugo Chavez's takeover of the gold industry last year meant it
had lost all its assets.
Chavez's government already faces about 20 cases, including
multibillion-dollar claims by U.S. oil companies Exxon Mobil
Corp and ConocoPhillips, before the World Bank's
International Center for Settlement of Investment Disputes, or
The socialist leader, who is seeking re-election this year,
said in January that Venezuela was pulling out of the tribunal.
Analysts, however, say ICSID's 140 other member countries will
still view its judgments as enforceable, meaning claimants could
obtain court orders to seize Venezuelan assets.
Chavez set his sights on the gold industry after quarreling
with Rusoro and other foreign companies, which had complained
that limits on exports were hurting their efforts to secure
funds and develop projects in the South American country.
A new law came in force in September aimed at "overturning
the serious impact of the capitalist mining model" by banning
all exports and giving the Venezuelan state at least 55 percent
of joint ventures.
It also fixed the royalty rate for most projects at 13
percent, which foreign miners said would scare away any
investors who were still deciding whether to work in Venezuela.
Toronto-listed Rusoro, which is owned by Russia's Agapov
family, was the biggest gold miner operating in the country and
had enjoyed good relations with Chavez's government. It produced
nearly 150,000 ounces in Venezuela in 2010, and about 80,000
ounces last year before the new rules took effect.
Rusoro's president and chief executive officer, Andre
Agapov, told Reuters on Wednesday that the company had spent
months seeking a friendly agreement with Venezuelan authorities.
"We tried to find an amicable solution but we never heard
anything from the government, so then we decided to file the
arbitration," he said in a telephone interview from Moscow.
"We lost it all. We don't understand the situation now. We
have no operations in Venezuela."
Rusoro has not said how much it wants in compensation. Last
year, a senior executive in Caracas said the company had assets
in Venezuela worth more than $1 billion.
VENEZUELA QUITS TRIBUNAL
Rusoro had said last year that if "fair compensation" could
be agreed upon, it would be happy to remain in Venezuela as a 45
percent partner with the government.
Agapov declined to give more details on Wednesday about how
much money Rusoro was seeking. "It is a long process. It's up to
independent experts to make the estimate," he said.
"We spent a lot of money in the last 10 years. And, of
course, the value of the company could be very high because the
price of gold went up so high in the last few years."
Chavez's administration says arbitration panels violate its
sovereignty, and on Jan. 25 it said Venezuela was withdrawing
from ICSID because it was incompatible with its laws.
Countries can "denounce" the tribunal via a written notice,
but the move only comes into effect after six months.
Agapov said that had a bearing on the timing of his
company's decision. "They're leaving (the tribunal) at the end
of July. That's why we filed before they left," he said.
Rusoro had been operating Venezuela's open pit Choco 10 mine
and the high-grade underground Isidora mine, which was a 50/50
joint venture with the Chavez administration.
It had also hoped to partner with the government in the Las
Cristinas project, which is one of Latin America's largest gold
deposits and has estimated reserves of 17 million ounces.
In February, Chavez said Venezuela would develop Las
Cristinas with Chinese state investment company CITIC instead.
Venezuela is a relatively small player in the gold world,
with its legal mining industry producing about 6 tonnes in 2010
and informal, small-scale mining thought to add a further 12
tonnes to the country's annual output.
But it boasts some of Latin America's biggest deposits of
the precious metal - its proven reserves are more than 4,600
tonnes - buried below the jungles south of the Orinoco River.