reuters.com Fri March 14, 2003 01:21 PM ET By Missy Ryan

LIMA, Peru (Reuters) - Texas native Adyadet Cabret, suitcase in hand at Lima's airport, was close to clinching the $10,000 payment for smuggling 11 pounds (5 kg) of cocaine in a corset pressing tightly into her stomach.

Then the Peruvian police woman tapped her on the shoulder.

"I was shaking; my heart was beating fast. I turned around and thought, 'Oh my God,"' said Cabret, 28, clasping her bright auburn hair as she sat on a wooden bench in the crowded prison that has been her home for nearly three years.

Around her, the prison yard buzzed on visitors' day with mothers, toddlers in diapers and friends who braved hot sun to see inmates. Some inmates are foreigners like Cabret including Dutch, Spanish and German nationals and many more are Peruvians who took the gamble as human drug "mules" and failed.

A growing tide of mules, who stash, tape to their bodies and even swallow lucrative drugs cargo bound for Europe and the United States, are a problem for this poor nation that boasts the unenviable title of the world's No. 2 producer of cocaine.

In 2002, Peru snared 239 mules, double the 120 captures in 2001. A push to capture drug mules is just part of President Alejandro Toledo government's plan to quash illegal drugs, on the rise in Peru as neighbor Colombia, the world's biggest cocaine producer, puts the squeeze on its drug runners.

Most cocaine, made from the traditional Andean coca leaf, is snuck out of Peru by truck, in light aircraft, in giant boat shipments and other methods. But officials are worried about a spike in mules who take matters into their own hands.

'A SURE THING'

In April 2000, Cabret, a mother of three desperate for cash, traveled from her home in Waco, Texas, to South America to pick up a drugs shipment and carry it to Switzerland.

Her first trip outside the United States, it was a sure thing, her contacts said.

Three strangers met her in Quito, Ecuador, dressed her in a corset and tight shorts -- both of which, she was told, had cocaine sewn inside -- and sent her on a Lima-bound bus to catch a KLM flight to Europe. There, she would get $10,000.

In Lima's airport, Cabret was nervous and disoriented, sweating in a jacket buttoned up to her neck, when she was pulled aside by police. They strip-searched her, cut the cocaine out of the corset and shorts, and tossed it on a table in front of her.

"At that moment, I didn't care about drugs, about the money. I just wanted to go home," she said. She was sentenced to six years and eight months in jail, but will likely not serve the entire time.

"Drug runners round up people ... and offer them a sum of money that for them is extraordinary -- $4,000, $5,000 -- to carry a drug load," Marco Draganac, head of special operations for customs, told Reuters in a recent interview.

"That will keep them afloat for some time if they take the risk," he said. Most of Peru's mules are headed for Holland, he said, followed by Spain, the United States, and Russia.

Some 50 customs agents are specially trained to spot suspicious travelers -- people with humble clothes and expensive looking luggage, for example, or people bundled up in winter wear for a trip to Miami and passengers with suitcases or backpacks that look like they might have been tampered with.

CAT-AND-MOUSE

Besides the "mummies" who duct-tape drugs around their thighs, shins, or stomach, some mules carry cocaine in false-bottom suitcases, wine bottles, fake shampoo bottles or jars of jam.

In one complex process, cocaine is liquefied and then applied to clothes -- to be worn or packed -- as a "starch" which will later be melted off. Customs agents are also on the lookout for a new scheme that entails solidifying cocaine into flat discs identical to music CDs.

"Human ingenuity in efforts to outwit authorities is limitless," said Gen. Edy Tomasto, head of Peru's anti-drugs police, adding the drug mules often work in small groups -- of which one is caught and others slip by -- to mislead agents.

Agents use high-tech methods to find drugs like X-rays and special wands that detect even minute traces, but they also rely on eyeballing. "We play a cat-and-mouse game," Draganac said. "We're like a soccer goalie just waiting for the penalty kick to see who is better -- (the mule) or us."

Some hardy souls swallow up to 2 pounds (0.90 kg) of drug "capsules" that consist of cocaine deposited in tied-off condoms or fingers from surgical gloves. They are trained to stomach the drugs by swallowing whole grapes and ice cubes.

While the drugs are in their system, those mules take special drugs to stop regular digestive functions such as production of stomach acids that erode plastic, but it is still a dangerous game.

"If one of those bursts, they die immediately," Draganac said. He said several mules have perished, generally from convulsions as a massive amount of cocaine enters their system, in police hands in Peru or on international flights. Just drinking a soda, for example, can trigger those stomach acids.

But it is hard to tell whether Peru is getting better at capturing mules or whether there are simply more to capture.

Fighting drugs is a tough task in Peru, where more than half of people scrape by on $1.25 or less a day and officials struggle for basics like electricity, sewage, and schoolbooks.

"We don't have enough money," Draganac said.

BEHIND-BARS BEAUTY QUEEN

Twenty-one-year old Norlin Mota from Venezuela worked in Caracas promoting cell phone sales until she came to Peru on a mission to smuggle 5.5 pounds (2.5 kg) of cocaine in a suitcase.

The police "grabbed me," she says glumly. "I got cold feet but (the drug traffickers) told me it was my life or the trip."

Mota, wearing a bright blue tank top, her dark hair pulled back loosely, tells with an ironic smile of her election last year as queen of the prison's beauty contest. She won a stereo and beauty treatments like facials.

"I just want to get out ... and start over," she says.

U.S. citizen Cabret's children, meanwhile, are now in foster care and her family has sent word she needs to get herself out of the mess. Looking at the table in front of her through thick glasses, she says she feels used.

"I needed the money and I did it for my kids," she said. "It was my first time and I got caught."

www.vheadline.com Posted: Friday, March 14, 2003 By: Patrick J. O'Donoghue

El Nacional newspaper has officially apologized to Petroleos de Venezuela (PDVSA) president, Ali Rodriguez Araque for a report involving his deceased son in alleged illegal business deals.

Rabid anti-Chavist columnist, Ibeyise Pacheco wrote a piece on February 14 accusing Rodriguez and his son, Ali Rodriguez Garaton of shady gasoline distribution deals.

El Nacional CEO Manuel Sucre admits that the piece was not accurate or truthful but defends the top bracket journalist, pointing to her correction of the error in her February 28 column.

The mistake is attributed to one of Pacheco’s sources but Sucre insists that El Nacional's editorial policy is not to damage reputations or the memory of the deceased.

“We ratify our apologies to the family and reiterate our disposition to publish any reply from Dr. Ali Rodriguez Araque and members of his family.”

www.vheadline.com Posted: Friday, March 14, 2003 By: Patrick J. O'Donoghue

Venezuelan Ambassador to the United Nations (UN) Milos Alcalay has supported Chile and Mexico’s position at the UN debate on Iraq.

Welcoming Guinea to the presidency of the Security Council, Alcalay highlights his government’s complete adherence to international law, especially compliance with decree 1441.

Venezuela’s position, Alcalay points out, is in line with a decision taken at the Non-Aligned Nations meeting in Kuala Lumpur.

Addressing the General Assembly, the Ambassador stated that the Venezuelan government agrees with the Chilean Foreign Minister’s call to seek a resolution that has the unanimous support of the Security Council.

“A solution through diplomatic channels would establish peace as the supreme value and bolster the UN's prime objective.”

Venezuela also supports efforts of UN Secretary General Koffi Annan to seek a peaceful solution to the conflict.

www.vheadline.com Posted: Friday, March 14, 2003 By: Press Releases

Re: News Release - Friday, March 14, 2003   Crucitas And Las Cristinas Updates

VANCOUVER, B.C. March 14, 2003 -- Vannessa Ventures Ltd. (VVV: TSX, OTC-BB: VNVNF,  Berlin: VVT -  WKN 914781) is pleased to  announce that its  wholly owned subsidiary, Industrias Infinito, has received  the long-awaited reply from  the Costa Rican government  on the filing of its Environmental Impact Study. The  reply  clarifies  the  concerns  SETENA  (the  Costa  Rican government's  environmental agency)  has and permits  the Company to file a response and continue the permitting process towards final approval for the development of the Crucitas Mine.

The EIS was reviewed by SETENA's technical group and has  subsequently been reviewed  by a commission of representatives of various Government agencies who resolved that the study in its current form could not be approved.

The Company will therefore immediately

(a)  deal with deficiencies in the study material related to the references and guidelines  given  to the  Company by SETENA at the time the study  was requested, and

(b) appeal the  introduction of new topics, which the company  feels  are expanding the scope  of  the study  and which were neither included  in the initial references nor  are  they  directly related  to  the  environmental concerns regarding the operation of a mine.

The filing of the revisions and explanations of indicated deficiencies will be undertaken over the next three days, and will include an appeal that the new  topics, which  were introduced  now and which were not included in the terms  of  references given to the Company last year, be withdrawn at  this time.

In Venezuela, a comprehensive  update on  the Las Cristinas legal issues is currently  being prepared  and  will  be distributed  to  our  shareholders shortly.

While it was our intention to let the court action take its course, we have been  consistently  forced to  rectify statements made by  Crystallex International Corp. which  can only be interpreted  as  blatantly self-serving.  The statements either contain the facts veiled in misleading language or omit the facts altogether and present false information.

A good  example  is Crystallex's statement in its letter to investors dated March 11, 2003 (Item #4) in which it states  that  MINCA formally withdrew its  action  against  CVG regarding  the cancellation  of  the MINCA mining contract. Responsible due  diligence  by Crystallex would  have ascertained that the MINCA versus CVG case regarding the mining contract's cancellation is still active and advancing.  The case that has  been withdrawn  was  for "Abuse of Power" by  the CVG against MINCA, of which  CVG is a shareholder, and the damage incurred by  MINCA as a result of  the abuse. The reason for the withdrawal is that current ongoing investigations  have provided  MINCA with substantially more  evidence and  the  case  is being  re-filed on the basis of this additional information.

"MANFRED PESCHKE" Manfred Peschke, President VANNESSA VENTURES LTD.

The  TSX Venture  Exchange has  not  reviewed and  does  not accept responsibility for the adequacy or accuracy of this news release.

========================================= Copyright (c) 2003 VANNESSA VENTURES  LTD. (VVV)  All rights reserved.  For more  information  visit  our website at  www.vannessa.com or send mailto:info@vannessa.com Message sent on Fri Mar 14, 2003 at 9:04:07 AM Pacific Time

www.latintrade.com March, 2003

Tough times, tight money and increasing competition are now pitting Latin America’s largest companies against each other and a handful of foreigners in a feud for strategic acquisitions in the region.

Latin American output shrank in 2002, the first time in 19 years. Private capital flows to the region plummeted almost 50% to US$25 billion, reports the Institute of International Finance in Washington, D.C. Completed mergers and acquisitions fell 24% to less than $38 billion, its lowest level in six years, according to Thomson Financial.

The limited number of done deals, however, masks the underlying movements of a select group of Latin America’s most powerful businesses. They’re busy grabbing up assets from both retreating multinational companies and beleaguered family-run empires.

TELECOM Mexican billionaire Carlos Slim is expanding his telecom interests across the Americas. He spun off his $3.2-billion Carso Global Telecom into holding company Telecom Américas, then invested $2.3 billion buying out big partners U.S. telecom SBC and Bell Canada International. The famed bottom-fisher hunts big game in Brazil and beyond. Spain’s multinational wireless company, Telefónica Móviles, continues to pressure Slim with strategic purchases in Mexico. Brasilcel, the merger of its Brazilian operations with Telecom Portugal, recently acquired Brasilia-based mobile operator Tele Centro Oeste for almost $1 billion. Still unclear: What will happen with Brazilian and Mexican long-distance companies Embratel and Avantel, holdings of financially troubled U.S. carrier WorldCom.

OIL Brazil’s state-run oil giant Petrobras is making a play to secure its position as a leading Latin American oil company. In October, Petrobras paid $1 billion for 59% of private energy group Perez Companc, which expects to spend another $2 billion over the next five years to beef up international production, mainly in Venezuela but also Peru, Bolivia and Ecuador. Earlier, Petrobras swapped a billion dollar’s worth of assets with Spanish-Argentine energy giant Repsol-YPF for a share of its Argentine retail gasoline and refining business. National strikes, meanwhile, have paralyzed Petróleos de Venezuela, the region’s largest oil company, where the government talks of selling the state-run company’s U.S. refining subsidiary Citgo.

BEVERAGES Brazil’s Ambev and Colombia’s Bavaria have staked out territory as the No. 1 and No. 2 brewers in South America. Ambev snatched Argentina’s Quilmes Industrial from minority shareholder Heineken. Similarly, Bavaria ripped Peruvian powerhouse Backus and Johnson from the clutches of Venezuela’s Empresas Polar. Heineken has pushed forward with acquisitions in Brazil and Central America, but the big prizes in the major countries seemed to have slipped away, for now. With its acquisition of Miller Brewing Co. in the United States, South African Breweries gained a foothold in Costa Rica and proceeded to expand its operations in Central America.

BANKS Bradesco President Marcio Cypriano and Banco Itaú CEO Roberto Setubal, chiefs at the No. 1 and No. 2 private banks in Brazil, continue to consolidate control over the country’s banking market. The two institutions spent almost $2 billion last year. Banco Santander Central Hispano (BSCH), BBVA and Citibank also took advantage of the down market to consolidate. BSCH and Banco Santiago merged in a $1.7 billion deal to consolidate control of Chile. BBVA increased its holdings in subsidiaries in Mexico, Argentina and Uruguay. Banacci, Citibank’s Mexican affiliate, bought full control of its pension fund subsidiary for $1.2 billion.

POWER The next big wave of mergers and acquisitions appears poised to happen in the power sector. Debts in dollars but earnings in local currencies meant that devaluations and slow growth nailed international Big Power. “The bottom line is that the only way they’re going to grow is with demand, and that depends on the [domestic] economy,” says Jason Todd, director of Latin American power ratings for Fitch Ratings in Chicago. What’s ahead for the Latin power kings? Here’s the play-by-play:

AES Corp. After bingeing on Latin American assets during the headier days of a rising stock market, global power giant AES reported a US$2.7 billion dollar hit in the fourth quarter of 2002. Among leading reasons for the pain: Brazil and Venezuela, where write-downs and currency losses added up fast. Projects in Argentina and Colombia defaulted as well. It’s quite a comeuppance for a company that acquired so much, so fast in the region. What’s ahead: Facing reality, AES renamed its Turnaround Office the Restructuring Office, which it says is now actively managing its assets in Chile, Argentina and Brazil. AES tells investors it is busy now trying to figure out which companies can be rescued and which must be “sold or abandoned.”

Duke Energy International North Carolina’s Duke Energy perhaps can breathe a sigh of relief: It’s foreign holding unit, Duke Energy International, reported only slight losses in 2002, down US$221 million, almost entirely from European dealings. Meanwhile, it has built up a portfolio from Guatemala to Buenos Aires, more than half at Companhia de Geração de Energia Elétrica Paranapanema in southwestern São Paulo state, Brazil. What’s ahead: While Duke overall took a slight hit on a slowing economy, the company reports $2.9 billion in available credit. Duke’s managers, however, say they’ll batten down the hatches and make sure each unit is producing according to demand.

Endesa By the end of 2002, facing skeptical investors and slipping domestic economies, Spanish utility Endesa began hedging its bets in Latin America. Chilean holding company Enersis, Endesa’s base of operations in the region, took $290 million in accounting charges on lost investments in Brazil and Argentina as short- and medium-term debts of $2.2 billion cast a cloud over the company. What’s ahead: Don’t look for $4.5 billion-revenues Endesa to bail, just regroup and look for new opportunities. Even as it cleans up the books in Chile, Enersis put $100 million into Brazil’s Companhia de Eletricidade do Rio de Janeiro, increasing its stake to almost 73%. And the Spanish power giant is looking closely at power-hungry Mexico.

PSEG Global New Jersey energy company PSEG Global holds interests in 1,900 megawatts and distribution assets in Brazil, Chile, Peru and Venezuela. There was no hiding from Argentina’s decline, though: In 2002, the company reported $541 million in charges, $370 million from lost investments in the collapsing Southern Cone economy. What’s ahead: PSEG settled out-of-court to sell its stakes in several Argentine distributors and generators to AES Corp. for $30 million, a fraction of its original asking price of $376 million (AES had invoked a “political risk” clause to avoid paying full price). In Peru, meanwhile, PSEG’s ambitions have been frustrated by privatization delays.

Top Financial Advisers Rank ‘02 Rank ‘01 Adviser Value Deals US$ millions    1 1 Citigroup/Salomon Smith Barney 9,244.10 16 2 2 JP Morgan 8,151.40 29 3 6 Credit Suisse First Boston 8,056.30 24 4 3 Goldman Sachs & Co 6,923.90 10 5 4 Merrill Lynch & Co 6,690.90 12 6 5 Morgan Stanley 3,875.20 9 7 9 UBS Warburg 1,968.10 6 8 17 Credit Lyonnais 1,681.70 3 9 7 Santander Central Hispano 1,583.90 14 10 19 Dresdner Kleinwort Wasserstein 1,573.00 3       Source: Thomson Financial    

Author: Mike Zellner & Greg Brown • Miami