Venezuelan president Hugo Chávez announced over the weekend that he will issue US$300 million in interest free loans to stimulate state-owned steelmaker Sidor as well as public aluminium companies, thus officially commencing the next stage of the nationalization of the country's steel and aluminium industries.
The funds will come from a bi-national investment fund between Venezuela and China worth US$12 billion, Mr. Chávez explained. Sidor will receive two loans, totaling about $50 million.
Minister of Basic and Mining Industries, Rodolfo Sanz, recently said that the sector is experiencing a "chronic deficit" and that the government will continue aiding the companies until prices recuperate.
The loans are part of Chavez's plan to fully nationalize the basic metals sector over a period of 10 years. The plan is structured into two phases begins with the creation of the Socialist Corporation of Iron and Steel and the Socialist Corporation of Aluminium. Chavez announced Saturday that the program has now officially commenced with the creation of these two firms.