Venezuela’s 131-Article Mining Law That was Built in Washington

Introduction

On April 9, Venezuela’s National Assembly unanimously approved an 131-article mining law that opens gold, iron ore, bauxite, coltan, and other strategic minerals to foreign and private capital for the first time since the Chavez era. Venezuela has not allowed meaningful foreign participation in mining since Hugo Chavez began revoking concessions in the early 2000s. Western Companies that had previously been operating in the country, such as Crystallex, Gold Reserve, and Rusuoro, were nationalized, and several won billions in international arbitration awards that remain unpaid. The new law is an attempt to reverse that era entirely.

The new statute permits wholly foreign-owned mining operations and caps the combined fiscal load (royalties plus mining tax) at roughly 19 percent, a rate designed to be competitive with peer jurisdictions such as Peru, Ecuador, and Brazil, where similar fiscal loads range from 15 to 22 %. Concession terms extend to 30 years with two 10-year renewals. Article 9 permits international arbitration for the first time since 1999. However, Venezuela withdrew from the ICSID Convention in 2012, which means any real arbitration will need to be stitched together through individual concession contracts under UNCITRAL or ICC rules.

On its own, this would be a significant reform for a country sitting on some of the largest untapped mineral deposits in the Western Hemisphere, including an estimated 7,000+ tons of gold in the Orinoco Mining Arc alone. The law does not operate on its own. It is one half of a two-part architecture, and the other half was built in Washington.

The Architecture that is Important:

Between March 6 and April 14, the US Treasury’s Office of Foreign Assets Control, the agency that administers and enforces US economic sanctions, issued a cascade of general licenses that together determine who can legally engage in transactions involving Venezuelan minerals. GL-51 and 51A authorized U.S. entities to import and refine Venezuelan gold and minerals. The underlying sanctions on state-owned miner Minerven remain formally in force; without these licenses, no US company could legally buy Venezuelan gold. GL-54 authorized the sale of upstream goods and services to Venezuelan mining operations, opening the door for equipment suppliers and engineering firms. GL55 authorized negotiations for the US to enter investment contracts, effectively giving companies legal cover to start deal-making before the implementing regulations are even written. GL51 authorized financial services with the central bank, which is critical because, without it, there is no compliant way to move money in or out of the country. Every single license carries three conditions: Contracts must be governed by U.S. law. Payments route to a Treasury-held foreign government deposit fund created by Trump's January 9th executive order. Russian, Chinese, Iranian, Cuban, and North Korean counterparties are explicitly excluded. The effect is that the U.S. Treasury, not Caracas, controls the terms of investment. The mining law is the Venezuela-facing half of a bilateral regime designed by the Trump administration. It gives the U.S. effective veto power over every deal and a revenue capture on every dollar, while structurally excluding its geopolitical rivals from any compliant transaction.

The Geology

Venezuela has the Orinoco Mining Arc, a 112,000 km2 zone roughly the size of Portugal. It contains massive deposits of gold, bauxite, coltan, diamonds, and iron ore. However, extracting those materials is a different story.

Take gold: in 1997, formal production was around 22.3 tons; in 2023, it was around 30kg. Global mine production ran at roughly 3,600 tons in 2025, meaning Venezuela currently contributes nothing. Even an optimistic five- to seven-year ramp to 100-150 tons per year would add only 3-5% to global supply, meaningful for Venezuela's economy but not enough to move a market where central banks alone bought 863 tons last year.

Take iron: Ferrominera Orinoco has a nameplate capacity of 25 MTPA but produced only 2-5 MT in 2024-2025. The global seaborne market moves at roughly 1.6 billion tons per year, and new supply from Simandou in Guinea is already ramping up. Los Pijiguaos bauxite has been dormant since 2019 due to chronic power outages, with restart time limits of five years or more

Coltan is the one exception worth watching. Venezuela cannot displace the DRC, which supplies over half of global tantalum, but the US is 100% import reliant on tantalum, and China controls around 60% of processing. Even modest Western Hemisphere production creates optionality that did not previously exist. If Venezuela can produce even a small amount, it gives the U.S. and its allies another option instead of relying only on Africa and China. That doesn’t change the global market much, but it does make supply chains a little more flexible and less risky.

Why Some Majors Aren’t Investing

Venezuela owes more than $20 billion in unpaid arbitration awards. For example, Crystallex is owed $1.4 billion. Article 9's arbitration clause is only as credible as the political risk insurance layered on top of it, and this is a government whose predecessor had its assets liquidated six months ago. Crisis Group estimates 300,000 miners work in Southern Venezuela under armed groups, including Tren de Aragua and ELN. The Guri Dam, which supplies 70 to 80% of the national power supply, has suffered two decades of deferred maintenance, causing nationwide blackouts in 2019 and 2024. Roughly half of Corpoelec’s engineering staff have emigrated. For most miners, the situation in Venezuela is currently too volatile to invest in.

Why Some Majors Are Investing

The companies that are moving each have a specific reason the risk calculus works for them. Trafigura is a commodity trader, not a mine operator. Its Minerva deal is a short-cycle prepayment structure under GL51 that gets gold out of Venezuela and into U.S. refineries quickly, with minimal fixed capital at risk. Gold Reserve has a $1 billion arbitration award it's been trying to collect for a decade. For them, the new law is not a fresh bet on Venezuela but a potential path to just recovering the money they are already owed. The Canadian juniors circling the Orinoco Arc are in a similar position; they hold pre-expropriation claims and are calculating that re-engagement is cheaper than continued litigation. A publicly traded major faces an entirely different set of constraints: institutions and shareholders who would flag exposure to Venezuela, Board-level ESG review processes, and no existing claim to offset the downside.

The New Framework

The Trump administration has effectively built a framework in which the U.S. Treasury decides who can invest in a foreign country's mining sector, captures a share of the revenue, and excludes rival nations from participating, all without formally occupying or governing that country. This goes beyond traditional sanctions relief. It is a model for how a superpower can control access to another country's natural resources through financial architecture rather than direct ownership.

Concluding Statement

If the framework proves durable, the implementing regulations take effect, arbitration awards begin to be settled, and if a major mining company breaks its silence, then the OFAC template may become the playbook for U.S. engagement with critical-minerals jurisdictions across the Americas. The closest parallel is the DRC Minerals for Security Framework, signed in 2025, under which the U.S. committed to providing security assistance to the Democratic Republic of the Congo in exchange for preferential access to cobalt, tantalum, and other critical minerals. The Venezuela model goes further: it is closer to home, involves tighter financial control through the treasury deposit mechanism, and explicitly bars Chinese and Russian participation through sanctions law rather than through bilateral negotiation. If the framework does not hold, if a political transition in Caracas or Washington unwinds the general licenses, or if the implementing regulations never materialize, then the investors who moved on the strength of OFAC assurances will find themselves in the same position as Crystallex and Gold Reserve a decade ago, holding contractual rights that a future government does not intend to honor.