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Venezuela may shut aluminium and steel plant on power crisis

Reuters reported that Venezuela may be forced to close its aluminum, steel and bauxite operations in the south east of the nation due to a drought and electricity shortfall.

Mr Angel Rodriguez Venezuelan electricity minister in an interview with financial daily El Mundo said that “If we have to close the basic industries in Guayana, because the Guri reservoir is drying up, well we have to close them. We have to avoid the reservoir drying up completely.”

Mr Rodriguez told the newspaper “After drastic cuts already at aluminum smelters Venalum and Alcasa, plus steel mill Sidor, the industries may need to be shut altogether to ease strain on the system.

He told “In other countries, they have closed industries. So if we, because of the emergency situation, have to close industries, ministries, and change working hours, we will have to. And the Guayana basic industries form part of this.”

The minister gave no timetable for taking a decision on closing the basic industries.

The Guri, one of the world's largest hydroelectric dams, close to the Orinoco River, supplies about two thirds of the South American oil producing nation's electricity, but is at dangerously low levels.

President Mr Hugo Chavez's government has imposed electricity rationing across the nation, from Caracas shopping malls to the state owned heavy industries in Guayana state that consume around a quarter of the nation's power output. Government blames an unprecedented drought and soaring demand during five years of economic growth from 2004-2008, for the strain on the power grid.

Sidor, which was nationalized from Argentina based Ternium in 2008, said last week it was installing five generators to compensate for power-rationing affecting its production. It has not quantified the impact on output, which was forecast at 3.61 million tonnes of liquid steel for 2009.

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