Venezuela approves mining overhaul to attract foreign investors amid illegal mining crisis

Venezuela’s legislature has approved a sweeping mining reform law aimed at attracting foreign investment into a sector long associated with illegal mining, armed groups, and alleged corruption . The bill, passed by lawmakers aligned with acting President Delcy Rodríguez , seeks to formalize an industry that has operated for years largely outside state control, particularly in the mineral-rich southern regions.

The reform focuses on Venezuela’s vast reserves of gold, diamonds, bauxite, copper, coltan, and rare earth minerals , much of which is concentrated in the Orinoco Mining Arc , a sprawling Amazonian region covering over 100,000 square kilometres. While the area has been promoted for development, it has also become a hotspot for informal and illegal mining operations .

Despite its mineral wealth, the sector has been widely described as a lawless economy , where armed groups, criminal networks, and local power brokers exert influence. Reports have alleged that military and political actors benefit from mining revenues in exchange for allowing operations to continue. The region has also seen violence, human trafficking, and environmental damage , with limited state enforcement.

The U.S. State Department has previously estimated that billions of dollars in gold are mined annually in Venezuela, much of it flowing through unregulated channels , making the true scale of production difficult to verify.

The new law establishes formal mining categories for small, medium, and large-scale operations , introduces concessions of up to 30 years with renewal options , and allows international arbitration to reassure investors. It also bans senior officials, including the president and ministers, from holding mining rights.

Additionally, it introduces strict penalties for illegal mining and environmental harm , including prison terms and state authority to seize illicit minerals. The bill still requires review by Venezuela’s Supreme Court before implementation.

The reform comes amid severe economic pressure, with widespread poverty pushing many Venezuelans into informal mining. The government says the law will help boost revenue, attract global investors, and reduce criminal control , though challenges remain in enforcing regulation across remote mining regions.