Andean Group - May 2026

In a move that echoed the opening up of Venezuela’s hydrocarbon industry earlier this year, on 9 April the national assembly approved sweeping legislation aimed at transforming a mining sector plagued by illegality and environmental degradation into a hub for the West’s critical mineral supply chains.

The law, which passed with unanimous support in the legislature after weeks of wrangling, is part of the economic opening orchestrated by President Delcy Rodríguez in an awkward tightrope act that seeks to balance the socialist legacy of her predecessors, Nicolás Maduro (2013-2026) and Hugo Chávez (1999-2013), with the interests of the US government that captured Maduro in January and is seeking to benefit from Venezuela’s natural resources.

The law seeks to formalise a sector that has long been dominated by informal, often criminal, activities and to provide the legal certainty required by deep-pocketed institutional investors from North America and Europe. The core of the new law is a radical restructuring of the fiscal and legal terms governing mineral extraction. One key change is a cap on royalties, which will be levied at 13% alongside an additional mining tax of 6% of gross revenue. This places Venezuela in competition with South American mining powerhouse Peru, but the royalty rate remains higher than in other leading countries such as Brazil and Ecuador.

“We are no longer just looking to extract raw materials; we are looking to attract capital that brings technology and remains in the republic,” national assembly president Jorge Rodríguez, who is President Rodríguez’s brother, said during the reform’s final debate. “This is a vehicle for the construction of future prosperity and an instrument that protects our workers and our soil.”

In addition to oil, Venezuela is rich in gold, copper, coltan, bauxite, diamonds, and other precious mined resources. Coltan is prized as a raw material from which niobium and tantalum are derived, two critical minerals used in products such as smartphones and EV batteries.

For decades, Venezuela’s economy has been inextricably tied to the production of crude oil, of which it boasts the world’s largest reserves. However, with the global energy transition accelerating, the thinking is that the Arco Minero del Orinoco (Orinoco Mining Arc) – an 112,000km² ‘strategic development zone’ rich in gold, diamonds, iron, and coltan – can serve as an additional source of income to help rebuild a nation with much of its infrastructure in disrepair and much of its population living in poverty.

Venezuela possesses some of the world’s largest untapped gold deposits but currently accounts for less than 1% of global production, according to the Center for Strategic and International Studies (CSIS), a US think tank. In January President Rodríguez set a target of raising gold production by 30% this year. State television channel VTV cited Rodríguez as saying that gold production stood at 9.5 tonnes in 2025, and that this was the result of an 81% year-on-year increase in production by the public sector and a 34.8% increase by the private sector.

Venezuela has for some time used illegally obtained gold to boost its international monetary reserves, which have mounted a modest recovery in recent years to stand at US$13.29bn in January 2026, up from US$6.63bn in January 2020, on central bank (BCV) figures. The BCV reportedly sold five tonnes of gold in 2025, representing around 11% of its stock, to purchase hard currency. Strong reserves are a requirement to stabilise the bolívar and help slow runaway inflation.

Key provisions of the law

• Extended concessions: Mining titles have been extended from 20 to 30 years, with options for renewal, reflecting the long-term horizons required for large-scale industrial projects.
• International arbitration: Crucially for foreign investors wary of Venezuela’s history of expropriation, the law permits disputes to be settled via independent international arbitration rather than solely through domestic courts.
• Ownership liberalisation: The mandate for state-led joint ventures has been scrapped, allowing for full international ownership.
• Oversight: The sector will be overseen by a new mining regulator, the Superintendencia Nacional de Actividad Minera (Sunamin).
• Central bank rights: Venezuela’s central bank (BCV) retains a right of first refusal over all gold extracted, a move intended to stabilise the national currency and rebuild foreign reserves.

President Rodríguez has framed the mining law as a cornerstone of the ‘New Venezuela.’ During a press conference following the law’s approval, she said that “we are showing the world that Venezuela is open for business under rules that are fair, transparent, and sovereign,” adding that “every resource from Venezuelan soil will now translate into wellbeing for our people”.

Beyond the fiscal impact, the law aims to create national added value by offering tax breaks to companies that establish processing and industrialisation facilities within Venezuela, rather than simply exporting raw ore.

“The enactment of the Organic Mining Law is a milestone for the Venezuelan mining sector,” Paul Rivett, executive vice president of US-headquartered mining firm Gold Reserve, said in a 23 April statement. He added that “we are enthusiastic about these new measures, which together create the necessary conditions for the responsible development of Venezuela’s significant mining potential.”

Critical minerals

Venezuela’s limited industrial mining operations are focused on gold, but in the long-term there will be US interest in securing access to the country’s untapped deposits of critical minerals. The US has heightened its focus on ‘near-shoring’ and securing supply chains for minerals like bauxite (for aluminum production) and coltan (essential for electronics and defence). As the US seeks to reduce its dependence on Chinese mineral processing, Venezuela’s proximity and geological wealth represent a strategic opportunity.

The new geopolitical reality was on full display in early March, when US Interior Secretary Doug Burgum – accompanied by a delegation of American mining executives – travelled to Caracas as part of the White House’s efforts to get new mining legislation approved. “The opportunities for collaboration and synergies between our two great countries of Venezuela and the United States are unlimited,” Burgum said. On 27 March the US Treasury Department’s Office of Foreign Assets Control (Ofac) issued a general licence authorising transactions related to the mining and processing of minerals in Venezuela, and the entry into contingent investment contracts in the mineral sector.

Not only did the US pressure Caracas to open the mining sector, multinational companies also lobbied the government and legislators to adapt the bill to their needs. In its 23 April statement, Gold Reserve said that it “conducted a thorough review of the draft Mining Law during the legislative process and confidentially submitted comments to the relevant authorities”. Gold Reserve added that some of its key recommendations “were incorporated into the final text, including the explicit repeal of the 2015 Gold Law, which eliminates the mandatory majority state participation regime in the gold and strategic minerals sector”.

On 1 May Swiss mining firm Mercuria Energy Group said it had secured, in ​partnership with US-based Heeney Capital, strategic offtake agreements for Venezuelan bulk commodities and gold projects, as part of ​a US government-supported initiative. The ⁠agreements are expected to unlock about US$2.2bn in annual mineral export value.

Security and environment

Despite the new legislative framework, significant hurdles remain. The state is woefully absent in some of the country’s main mining regions, meaning there are few or no public services, including energy and security. One of the main questions is how the government will wrest control from a web of criminal gangs and guerrilla groups that have come to dominate the Orinoco mining region in Bolívar state, which is home to some of Venezuela’s most important mineral deposits.

On paper, the new law introduces stiff penalties for mining in protected national parks or without environmental permits. It also restricts high-ranking government officials from holding mining titles, in an attempt to curb corruption.

Cautious optimism

Potential investors are beginning to weigh the risks against the massive potential rewards. While the legal overhang of past expropriation disputes still lingers, the inclusion of arbitration clauses and the 30-year concession terms are positive steps. The first concessions under the new law are expected to be granted in late 2026. The global mining industry is watching closely. As well as the regulatory changes, Venezuela’s broader economic and political landscape is also under scrutiny.

Venezuela’s energy grid is plagued by repeated blackouts due to deteriorated generation and distribution infrastructure. Meanwhile, foreign energy companies are hesitant to begin reconstruction work without any guarantees on how they will be paid, according to one report by Reuters news agency.

On the political front, questions remain about the stability of the Rodríguez regime, given that it has no popular mandate in a country hungry for a democratic transition. The US has so far shown no inclination to push for elections in the near-term, but the pressure could build significantly if exiled opposition leader María Corina Machado returns to Venezuela. Meanwhile, the ruling Partido Socialista Unido de Venezuela (PSUV) has publicly maintained a united front in support of Rodríguez’s reform agenda, but disillusionment is bound to be rising as her administration cozies up to Washington, lays the groundwork for a possible deal with the International Monetary Fund (IMF), and abandons much of what it stood for over the past quarter of a century.

Growth slows in Q1

Venezuela’s central bank (BCV) released figures on 20 May showing that the country’s GDP grew by 2.51% year-on-year in the first quarter of 2026. Oil-related activity was down by 2.12% year-on-year, while non-oil activity grew by 3.11%, with the steepest increases in financial activities and insurance (+13.46%), vehicle sales and repairs (+8.67%), and food storage and services (+7.48%). Growth was driven by the private sector, which expanded by 3.52% in Q1, whereas the public sector contracted by 0.68%. According to BCV figures, the overall growth rate of 2.51% follows year-on-year GDP growth of 7.19% in Q4 2025, 10.50% in Q3 2025, 8.96% in Q2 2025, and 9.40% in Q1 2025.