Venezuela hopes to lure back international miners

Venezuela’s efforts to attract foreign investors for the development of its gold, bauxite and iron seams have enthusiastic support from the Trump administration, but face big challenges. These include armed groups that have deep interests in the chaos and largely illegal prospecting industries which developed during the last 20 years.

Sources in Bolivar, a sprawling state in the southeast of Colombia, said that they are skeptical about international companies’ ability to invest meaningfully if there is not a major improvement in security. Local criminals work alongside Colombian rebels. State security forces and the Colombian government have been accused by criminals of working together to support illegal gold operations.

“The (crime syndicates) control the mines.” In many mines, they are the ones who enforce the laws and set the rules. Ines Garcia is a 51-year old informal miner from El Callao. “Depending on the situation they can be violent and impose punishments,” she said. “You have to look out for yourself because just talking can be a danger.” Since Delcy Rodriguez became acting president of Venezuela in January, the administration of U.S.-President Donald Trump has supported her efforts to attract investors. This includes a mining bill passed by the ruling party’s national assembly in April, led by Jorge Rodriguez’s brother, that allows private and foreign companies to extract strategic minerals and gold. Venezuela’s oil-dependent economic system has been crippled for years by hyperinflation and other problems, including international sanctions, deteriorated infrastructure, and corruption. After Washington ousted former President Nicolas Maduro from office in January, Venezuela desperately needs money to pay for Rodriguez’s promise to improve public services. Mining investments could provide another source of income, including taxes, royalties and jobs.

U.S. Interior Secretary Doug Burgum stated during a visit to the U.S. in March that the law would create opportunities for businesses and that Rodriguez would ensure their safety. The U.S. already has a license that authorizes certain transactions with Venezuelan gold, such as those with the state-owned Minerven.

“You are guaranteed, you enjoy legal certainty, political stability, and peace of mind, so that your investments will be fully developed — not just in the hydrocarbons industry, which offers many opportunities, but in the mining sector as well,” Rodriguez said to visiting investors during a March event. The Bolivar government has not provided any details on its security plans.

Gold Reserve of Canada, which had said that it intended to resume mining in Venezuela and was a member of the Burgum delegation was granted a U.S. licence allowing them 30 days to negotiate. Gold Reserve has not responded to questions regarding whether or not it is seeking the return of the Brisas Mine, which the government seized in 2009.

Trafigura, a Swiss commodities trader, is already working on a responsible “sourcing” program with Venezuela’s Minerven state gold miner. The work was announced last month. Trafigura said that the work is compliant with a U.S. Treasury license. Hartree Energy, Peabody Energy Ivanhoe, and TechMet mining companies, who were listed in the local press as being part of Burgum’s delegation, have not responded to questions.

Although many international miners are familiar with the challenges of security, those who live and work within the Orinoco Mining Arc in Bolivar, a grouping of four municipalities designated by Rodriguez’s predecessor as strategically important for mining development, feel that corporate interests come before their own.

For real investment to occur, it is important to resolve supply chain transparency, security – because this is an area with armed groups – and oversight of the social-environmental impacts of operations. This engineer worked for Minerven over a decade. He asked to remain anonymous out of fear of reprisals.

Sources said that former members of Colombia’s Revolutionary Armed Forces of Colombia, now demobilized (FARC), as well as Colombia’s National Liberation Army rebels (ELN), are active in Bolivar. They are also local criminal groups Tren de Guayana, 3R and unnamed gangs run by gang leader aliases Fabio and Juancho.

Pedro Yepez, who has been mining in El Callao, Sifontes and other municipalities for two decades, says that criminals have provided mining equipment, fuel, and weapons to the area, and also extracted gold. He said that criminals could not do this without the permission and complicity of the government.

Community activist who has been monitoring human rights violations for decades in the area and requested not to be named out of safety concerns said that armed groups are in control of the mines, and they work in conjunction with the government. Residents and community leaders shared his concerns. Several said that criminals extort business while the government turns a blind eye. The Venezuelan Communications Ministry, which is responsible for all government press inquiries, has not responded to any detailed questions regarding the allegations of “complicity” by the military or security plans for this region.

In 2023, the military launched ‘Operation Roraima’ to combat illegal mining. It has continued to do so in the following years, and top leaders have publicly celebrated the destruction of illegal’mining camps’ and equipment by posting pictures of controlled explosions on social media.

The U.S. Department of the Interior has not responded to specific questions regarding security concerns in the area.

UN REPORT DETAILED ALLEGATIONS OF MILITARY INVOLVEMENT

In a report from 2022, the UN Human Rights Council’s fact-finding team said that both the military and armed group were implicated in murders and disappearances in the region. They also expressed concern about worker exploitation, child labour, human trafficking and violations of Indigenous rights.

In a 2021 report, the Organization for Economic Co-operation and Development stated that there has been an increase in gold exports from Venezuela ever since Maduro established the Arc. This is primarily due to informal and illegal mining. The report highlighted environmental destruction, human rights violations and military collusion.

In an open letter, 16 local nongovernmental groups expressed concern about the continued military control and said that the new mining law would “provide a veneer of legality” for “severe environment degradation and ongoing human right violations”.

The letter stated that “Military presence at mines is historically associated with human right violations, corruption and hybrid governance structures.”

Some activists and residents are concerned about the impact of foreign mining companies on the local communities, and the possible effects that a foreign presence could have on the livelihoods and small-scale miners in the area, as well as the Indigenous groups.

Who benefits? “You must put the word ‘benefits’ in quotation marks. “The same state that seeks out investors and negotiates forgets about all the problems,” Italo Pizarro said, a Sifontes activist.

Bolivar geologist who has more than 40-years’ experience in this sector says it will be difficult to remove tens and thousands of informal miner who work in the area, as well criminals who make a living from extortion. “This won’t be easy.” Reporting by Maria de los Angeles Ramirez. Editing by Julia Symmes Cobb, and Claudia Parsons.