According to estimates by the country's Mining and Metallurgical Industry Association, Venezuela's basic industries require investments of USD 10 billion in order to normalize operations and return to capacity production levels.
Mr Jorge Roig president of AIMM told BNamericas that "Almost all the plants need to be rebuilt."
Venezuela's basic industries include aluminum, steel and iron ore, among others.
Mr Roig said that "In the case of state owned steelmaker Sidor, investments required in the company to resume production levels of 4.3 million tonnes are USD 1.5 billion. Much of Sidor's required investments are in infrastructure, in particular the roof which fell and repair costs are roughly USD 400 million. Furthermore, all installations are in terrible need of maintenance."
According to Mr Roig, Sidor has approximately USD 60 million in environmental liabilities and an additional USD 30 million in labor liabilities.
Sidor's goal for 2012 is to produce 1.8 million tonnes, whereas last year it produced 2.8 million tonnes. Before nationalization, production levels reached 4.3 million tonnes per annum.
Briquette production companies require investments of around USD 1.5 billion in order to regain the production capacity they had. Briquette producers in Venezuela include Comsigua and Orinoco Iron.
Nonetheless Mr Roig emphasized that these figures were estimated without considering investments in the Guri dam and the energy sector, which are essential for basic industries.
Mr Roig said that the Guri hydroelectric plant currently operates at less than 25% of its capacity, the Tocoma project is two years behind schedule and there has been no further mention of the Caruachi project.
He added that "We can't accomplish much with these companies in operation if there isn't enough electricity to maintain them."
Current production capacities are Sidor 4.3 million tonnes per annum, FMO 20 million tonnes per annum, Bauxilum 2 million tonnes per annum, Venalum 480,000 tonnes per annum and Alcasa 240,000 tonnes per annum.
Source - Business News Americas
(www.steelguru.com)
