A permanent commission of Venezuela's opposition-led National Assembly (AN) plans to conduct an on-site inspection at state-owned iron ore producer CVG Ferrominera Orinoco (FMO), according to a media report.
The on-site inspection is part of an ongoing investigation into Ferrominera, which signed a contract with US-based logistics, freight distribution and warehousing company Triorient. The contract is said to have brought losses to Ferrominera.
According to the media report, Ferrominera signed a deal with Triorient on April 25, 2014, through Venezuela's state-run holding Corporacion Venezolana de Guayana (CVG). Under the terms of the deal, Ferrominera would receive 604,500 mt of Canadian pellets in exchange for 1.6 million mt of iron ore.
The AN investigation claims that price of pellets Ferrominera received was overpriced compared to benchmarking price assessments.
In terms of value exchanged, Ferrominera reportedly provided $141.9 million worth of iron ore, but only received $70.7 million. The loss “caused damages” to the company, according to the media report citing the country’s National Assembly.
AN estimated it could make the on-site inspection by April. If AN’s claims prove to be true, the case will be passed to the country’s Attorney General's Office.