Minerven Workers Strike

Gold production at Venezuela's state-controlled CVG-Minerven has come to a halt after around 800 workers downed tools in protest at management's refusal to honor a series of benefits. The workers said that collective agreements have expired and have taken the case to the Labor Ministry. Minerven's president Eugenio Medori is seeking a way out of the problem through CVG authorities. The loss-making company decided to reduce its workforce by around 16% (152 employees) in July to avoid closure amid slumped gold prices following a report by accountants Fagundez & Asociados into reasons behind Minerven's US$7.4mn loss in 1998 and US$1.24mn loss over the first five months of the year. Minerven's problems stem from high costs (US$353.19/oz total, US$265.88/oz cash) during January to May when gold averaged US$283.84/oz. Gold has traded below US$260/oz for much of the time since. In their report, Fagundez & Asociados said Minerven should be liquidated, unless shareholders decide to re-capitalize.