Idex Online reports that Venezuela’s President Hugo Chavez is seeking loans to finance development of the country’s diamond and gold mining sector. Chavez reportedly plans to pay back the loan with the mines’ output. Last year, Venezuela suspended itself from the Kimberley Process, two years after nationalizing its diamond mines.



Idex Online quotes Chavez as saying: “We are on the verge of acquiring credit with several institutions and countries to invest in the exploitation of gold, diamonds and precious metals. And we will pay a part of this credit with that production."



According to NGO’s, rough diamonds smuggled out of Venezuela are regularly making their way to Panama. Member states of the Kimberley Process demanded that the country be suspended from the certification system until it put a stop to the trade in conflict diamonds. The country subsequently self-imposed a suspension from the Kimberley Process Certification Scheme.



In 2006, Chavez passed a law that tightens the government's hold on natural resources, including areas where permits are pending. Heavy Industries and Mining Minister Victor Alvarez stated then: “We want to reassert our sovereignty over these areas, which were kidnapped years ago.”



Subsequently Russian officials and business executives visited the country to discuss diamonds and gold mining.



Chavez’s goal is to gain control and independently develop the country’s diamond mines. In keeping with this policy, in 2003 he revoked De Beers’ diamond concessions in the country. At the time, Chavez claimed that the revocation of diamond concessions was “absolutely legal.”