Venezuela’s Maduro Signs $4.5 Billion Mega-Mining Deal

Venezuelan President Nicolas Maduro signed eight agreements totaling USD $4.5 billion with national and transnational mining firms on Friday.


Caracas, August 8, 2016 ( – Venezuelan President Nicolas Maduro signed eight agreements totaling USD $4.5 billion with national and transnational mining firms on Friday.

The accords mark the first round of investment in the Maduro government’s controversial Orinoco Mining Arc, which will see the opening of 112 square kilometers of the mineral-rich southeastern state of Bolivar to open-pit mining– the equivalent of 12% of the nation’s territory.

Among the deals is a contract with the Canadian mining firm Gold Reserve to form a joint venture with the Venezuelan state dedicated to copper and gold exploration and mining projects. 

Gold Reserve was active in the South American country until 2009 when then President Hugo Chávez suspended the company’s Las Brisas concession over ecological concerns, sparking a seven-year legal battle in international arbitration bodies. In February, the Maduro government signed a $5 billion deal with the transnational firm, settling the dispute. 

The contract with Gold Reserve is set to last 27 years and will reportedly generate $14 billion in revenue for the country, according to the newly created Ministry of Ecological Mining.

Apart from Gold Reserve, Maduro closed a $330 million deal with the Faox Corporation for the extraction of 5,000 tons of coltan, which is expected to yield $10,225,000. 

Under the contracts, the Venezuelan state is guaranteed 55% of all profits on top of taxes and royalties. 

The head of state also signed memoranda of understanding with several other national and transnational mining companies, including Energold Metals of Canada, Supercal from Argentina, the US-Canadian Guaniamo Mining Company, as well as the Venezuelan firms Hydrocal C.A. and Minera de Nueva Esparta.

Lastly, the government finalized an accord with the Military Oil, Gas, and Mining Company (CAMIMPEG) for the refurbishing of oil wells. The CAMIMPEG was created in February under the purview of the Ministry of Defense and has been frequently described as a “parallel PDVSA”, referring to Venezuela’s state oil company.

In addition to the agreements, Maduro approved a pair of new executive orders: one mandating that 60% of all revenue obtained from the mega-projects go towards social programs and the other prohibiting the use of mercury in all mining activities and granting the state exclusive exploration and exploitation rights over coltan as a strategic resource

“The new mining development policy is profoundly environmentalist, independent, and with a vision towards balanced development,” the South American leader declared, speaking at a signing ceremony with investors at the Central Bank.

Despite the government’s vocal assurances about the mega-project’s eco-socialist character, the Mining Arc has sparked mounting criticism over the negative social and environmental repercussions of open-pit mining, from both within the ranks of Chavismo as well as among indigenous communities.

In June, Venezuela’s Supreme Court admitted a lawsuit filed by former high-ranking government officials challenging the constitutionality of the Orinoco Mining Arc.

On Friday, Maduro responded to his critics, suggesting that opposition to the initiative was being financed by criminal groups engaged in illegal mining.

 “Behind some of the spokespeople who oppose the Mining Arc, there is a lot of money from the mafias who control the mining. I say to these traitors that the Mining Arc goes forward,” he vowed.

Maduro’s remarks have, however, been roundly condemned by social movements organizing against the project.

“President Maduro smears those of us who oppose the Mining Arc as criminals and traitors in an effort to close all possibility of political debate on the issue,” warns Marianela Tovar of the eco-feminist collective La Danta Las Canta.

For the Caracas-based Chavista historian and LGBTQ activist, the outcome of the initiative will not be independence and socialist development, but “genocide and ecocide”.

“Mining extractivism not only means more rentierism, but according to our projections, will have immeasurable consequences beginning with the destruction of the rich ecosystems of the region and the ways of life of the indigenous populations, affecting especially indigenous women, adolescents, and children,” she told Venezuelanalysis.