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Commodities

Venezuela steel, aluminum output hit lowest level in 30 years

CARACAS (Reuters) - Venezuela’s production of aluminum and steel in 2014 fell to their lowest levels in three decades due to limited investment, aging machinery and chronic labor conflict, according to the industry ministry’s annual report.

Output at Venezuelan steelmaker Sidor, nationalized in 2008 by late socialist leader Hugo Chavez, dropped 33.5 percent from the year before to reach 1.03 million tonnes of liquid steel, its lowest level since the mid-1980s.

“Financial limitations were caused by low (revenue) resulting from constant labor stoppages that made it difficult to acquire raw material,” the report says, adding that Sidor operates at 31 percent of its capacity.

State-run aluminum smelter Venalum saw production drop 14 percent from the year before to reach 109,536 tonnes. The firm acknowledged in March that it will no longer be able to meet purity standards due to its deteriorating financial situation.

Production at another aluminum smelter Alcasa, run by state metals and mining conglomerate CVG, reached only 17 percent of its 170,000 tonne capacity. That left overall national aluminum output at three-decade lows as well.

Iron ore output at state-run Ferrominera rose slightly to 11 million tonnes from 10.7 million tonnes the year before, though production there is still less than half of the installed capacity of 25,000 tonnes per year.

Venezuela has in recent years steadily reduced its exports of metals including iron ore, primary aluminum and flat and rolled steel products as a result of chronic operational problems at its facilities.

President Nicolas Maduro’s government has said it hopes the metals industry will recover productive capacity in 2015.

Reporting by Diego Ore, writing by Brian Ellsworth; editing by Andrew Hay

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