Venezuela's government has said it will take over the country's largest gold mine, as Hugo Chavez' administration attempts to boost foreign reserves amid the global financial crisis.

Rodolfo Sanz, a mining minister, told state radio on Wednesday that the government will nationalise the Las Cristinas mine, bringing it under state control by the beginning of 2009.

"Due to the financial crisis that has extended throughout the world, it's necessary to attempt to recover our gold to increase our international reserves," he said.

Las Cristinas mine, which is rich with gold, diamonds, iron and other minerals, is currently operated by Canadian firm Crystallex International Corp.

Clashes

Crystallex issued a statement following the announcement saying they had "not been notified of any changes".

The company also said that Crystallex representatives had met Venezuelan officials on Wednesday and that "no issues were raised with regard to the control of Las Cristinas".

Chavez's government has clashed with other international gold-mining companies operating in Venezuela in recent months as it pursues pro-nationalisation policies.

Las Cristinas, thought to be venezuela's biggest gold mine, is located within the Imataca Forest Reserve, which is also home to unique plant and animal species.

Environmentalists have raised concerns that major mining operations could cause irreversible damange to the area's senstive ecosystem.