Oil, gold and rare earth elements: the backdrop to US political tension with Venezuela

The script for the current political crisis in Venezuela rests on two central arguments, regularly invoked by the Venezuelan opposition and the United States government: the alleged links between the Chavista regime and terrorist groups and criminal networks, and the illegitimate nature of Nicolás Maduro’s presidency following accusations of fraud in the 2024 presidential elections. In recent days, Washington has put forward a third reason. U.S. President Donald Trump himself has openly alluded to the importance of Venezuelan oil and the supposed existence of liabilities and energy rights seized from U.S. companies in previous litigation with the Venezuelan state. “You remember, they took all of our energy rights,” Trump stated, referring to Chavismo and its dispute with the multinational Exxon Mobil, which resulted in the company’s departure from Venezuela in 2007. “They took all of our oil from not that long ago, and we want it back.”

Contrary to what some believed, Venezuela’s vast natural resources are part of the subtext of this geopolitical crisis, which is escalating to new levels of tension on a daily basis. Aware of this, opposition leader María Corina Machado recently released a video titled “Land of Grace,” in which she invites Venezuelans to envision a republic capable of overcoming the bankruptcy of Chavismo and calls on investors to consider the business opportunities and growth potential of the country based on its immense natural resources.

The socioeconomic shipwreck of the last decade has created a paradox: a country with abundant and coveted riches, a still considerable infrastructure, and acceptable installed capacity, yet mired in collapse. This abundance in an impoverished society has fueled a persistent myth—that of the “poor rich country”—which has become one of the great torments of the Venezuelan national project.

In addition to possessing the world’s largest oil reserves, Venezuela boasts enormous gas deposits—the sixth largest globally—; vast gold reserves, the most significant in Latin America; iron, ranking 12th worldwide; bauxite, 15th; and diamonds. Before the collapse of the Chavista regime, the country had made significant progress in the exploitation and export of several of these commodities, particularly oil, gas, iron ore, and processed aluminum and steel products, cornerstones of contemporary Venezuela. Furthermore, it possesses a substantial supply of so-called “rare earth elements,” especially coltan and thorium, chemical elements with magnetic and conductivity properties essential for modern technology—mobile phones, electric vehicles, weaponry, and renewable energy. These riches are nestled within a geography of high biodiversity, abundant water resources, and privileged access to the Caribbean Sea and the Atlantic Ocean.

Between 2014 and 2015, when the oil industry hit rock bottom and the country suffered years of brutal shortages of food and medicine, Chavismo relied on mining resources south of the Orinoco River to survive. It did not do so by revitalizing the iron, bauxite, aluminum, and steel companies, which, under Chavismo, suffered the same fate as Petróleos de Venezuela (PDVSA), plagued by underinvestment and mismanagement.

In 2016, Nicolás Maduro signed the decree creating the Orinoco Mining Arc, an area of approximately 112,000 square kilometers—equivalent to 12% of the national territory—located south of the Orinoco River. This area is considered strategic for the exploitation of gold, primarily, but also diamonds, coltan, nickel, and rare earth elements, in a context of favorable international prices. The government has maintained that the Orinoco Mining Arc contains more than 8,000 tons of gold, which would place Venezuela among the countries with the largest reserves of the mineral. It has also spoken of the possibility of exploiting up to one million carats of diamonds, 12,000 tons of nickel, 35,000 tons of coltan, and significant copper deposits. A decade later, far from becoming a development hub, the Orinoco Mining Arc has transformed into a dangerous hotbed of crime, political and military corruption, and smuggling, all against the backdrop of a major environmental disaster. There is no large-scale mining, but chaotic and uncontrolled exploitation.

In gold trading, Chavismo has partnered with Turkey and South Africa. In production, however, it operates a network of “strategic alliances” with companies close to the ruling elite, under the auspices of the Venezuelan Mining Corporation. These alliances coexist with irregular actors such as the Colombian guerrilla group National Liberation Army (ELN), FARC dissidents, and criminal gangs like the Tren de Aragua. Official projections from the government’s mining plan indicate that 79 tons of gold should be produced in this region by 2025. The data, however, is opaque and difficult to verify. Multilateral organizations and journalistic investigations have documented that a large portion of the extracted gold is smuggled out of the country, with only a fraction entering the national treasury, at a high cost in violence, labor exploitation, and human trafficking. A report by Transparency Venezuela estimated that in 2024 only 14% of the value of the extracted minerals reached the coffers of the Central Bank, while the rest was divided between “strategic alliances” and criminal groups.

In 2023, the Venezuelan government declared cassiterite, nickel, rhodium, titanium, and other rare earth minerals as strategic resources for exploration, extraction, and commercialization of this key raw material for the technology industry. The so-called black sands—a market largely dominated by China—are emerging as another prize that the U.S. president hopes to wrest from his trade rival through the pressure he has exerted on Venezuela’s resources. An investigation published in November called Amazon Underworld by the Venezuelan media outlet Armando.info revealed that, although there are official records of rare earth exports through Venezuelan ports, a substantial portion of the minerals extracted in Guayana is illegally traded to Colombia, where their origin is “laundered” before ending up in the hands of Chinese companies, the world’s leading processors of the material.

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