Venezuela’s legislature approves a new mining law in a first vote, opening the sector to private and foreign firms for gold, diamonds and rare earths.
CARACAS: Venezuela’s ruling party-controlled National Assembly has approved a new mining law in an initial vote, a key step in opening the sector to private and foreign investment.
The draft law repeals a 1999 regulation and allows companies to exploit gold, diamonds and rare earths. It also increases concession terms from 20 years to 30 years.
While mineral deposits remain state property, the draft stipulates that disputes will be resolved through international arbitration. It also creates new tax calculations for mining projects.
The law must pass two more debates before final approval, which is likely given the socialist party’s control of the legislature. The initial vote saw backing from lawmakers despite abstentions from at least one opposition party.
The opposition party complained legislators received the draft just before the session and lacked time for review. National Assembly head Jorge Rodriguez rejected the complaint, stating all lawmakers received the draft simultaneously.
This law is the latest in a package of US-backed economic changes following the removal of President Nicolas Maduro. The administration of US President Donald Trump has supported moves by Acting President Delcy Rodriguez to attract investors and stabilise the country.
US Interior Secretary Doug Burgum expressed optimism about the law during a visit last week, saying it will create opportunities for companies. Rodriguez has promised to ensure their security.
The day after Burgum’s visit concluded, the US issued a license authorising certain transactions involving Venezuelan-origin gold. This allows dealings with state-owned mining company Minerven and its subsidiaries, provided contracts are governed by US law.
Acting President Rodriguez has hailed a recent oil reform as a model for the mining changes. That reform lowered taxes, expanded the oil ministry’s decision power and granted autonomy to private producers.
Venezuela owes billions of dollars to industrial conglomerates and mining companies after waves of nationalisations two decades ago. Creditors include Crystallex, Gold Reserve and Rusoro Mining.
Exploration has not yet confirmed Venezuela’s reserves of rare earths. These 17 metals are used to make magnets that turn power into motion.
The Sun Malaysia
