Venezuela to ensure security of mining companies, exceed oil production goals: US Interior Secretary

CARACAS, Venezuela – US Interior Secretary Doug Burgum said a new mining law in Venezuela will create opportunities for companies, licences allowing them to operate are on the horizon and the interim government of President Delcy Rodriguez has promised to ensure their security, sounding an optimistic note at the end of a two-day visit.

Mr Burgum, who also heads the US National Energy Dominance Council, has hailed efforts by Ms Rodriguez to open the South American country to foreign investment in oil and minerals, echoing praise by US President Donald Trump. He is the second Cabinet secretary to visit Venezuela since a January US raid that captured then president Nicolas Maduro. US Energy Secretary Chris Wright visited in February.

Despite having massive reserves of minerals from gold to iron ore, bauxite and coltan, Venezuela’s output is at a fraction of capacity, as plants urgently need major repairs and investment for expansions and upgrades.

The country’s main conglomerate, CVG, remains cash-strapped and under US sanctions, as does state mining company Minerven.

Following nationalisations under late president Hugo Chavez, foreign investment has been minimal in the last decade.

Some experts now see room for an immediate export recovery, particularly for gold, but have warned that massive investment – even higher than for the oil industry – is needed, along with renewed efforts for exploration.

Mr Burgum brought more than two dozen mining and minerals companies with him on the visit, he said, and on the morning of March 5 in Caracas met major foreign oil and gas companies as well as the heads of large Venezuelan companies and banks.

Asked about corruption and security issues – including armed groups which participate in illegal mining in some regions – Mr Burgum said the companies interested in coming into or returning to Venezuela have proven track records of integrity, and the new law will be an opportunity for them to create jobs.

“I think you’re going to see this government very concerned about providing the right kind of security. We heard assurances in the meeting today and yesterday that if companies wanted to get to these areas, do due diligence, think about reopening mines, maybe even getting back to mines that they themselves were running 15 or 20 years ago, that this government would ensure their security,” Mr Burgum said.

“I’m feeling very optimistic about an environment where investment is going to flow, not just to offshore oil and gas, not just to Caracas but actually to the interior where these enormous resources exist,” he added.

There will soon be a set of general licences for the mining industry to allow them to operate despite enduring sanctions, similar to some already issued for oil producers, he said.

Oil production

Ms Rodriguez has said that an oil reform passed in January – which lowered taxes, expanded the Oil Ministry’s decision-making power and granted autonomy for private producers, among other measures – is the model for the law to change mining regulations, which the government has said will be sent to lawmakers soon.

The law, the draft of which has not been made public, is expected to include provisions that would allow foreign companies to exploit gold, diamonds and rare earths, and is likely to pass given the ruling socialist party’s control of the national assembly.

Venezuela’s current mining legislation dates to 1999. The country owes billions of dollars to industrial conglomerates, oil and mining companies after the deep wave of nationalisations that prompted many to leave the country.

Exploration has not yet taken place in Venezuela to confirm reserves of rare earths, a grouping of 17 metals used to make magnets that turn power into motion. Rare earths are a subset of critical minerals, the global supply of which is dominated by China.

Mr Burgum added that he is sure Venezuela will exceed its oil production goals for 2026, adding that Chevron, which has maintained a special licence to operate in Venezuela despite sanctions, said in a meeting earlier in the day it had reached record production at its project in the country on March 4.

Oil major Shell inked several oil agreements with the Venezuelan government, it said on March 5, spanning offshore gas and onshore oil and gas opportunities. REUTERS