Description: Recent legislative reforms, such as the American license exportation to private companies allowing them to start negotiations with Venezuela’s government and acting president Rodriguez’ reforms to open the market for private companies have excelled interest in Venezuela’s resource market. Both the mining and oil exploration efforts remain locked for the time being due to internal and external factors, such as the presence of armed groups and local militias as well as the effects of international sanctions. Venezuela’s Orinoco Mining Arc, which is considered a strategic location for mining development in the country, is under heavy presence of armed militants from Colombia’s ELN, Tren de Guayana and Tres Raices or 3R, which is a local colectivo allied with Venezuela’s ruling Socialist Party, the PSUV. US interior secretary, Doug Burgum’s recent visit to Venezuela further confirmed US support for the country’s privatization as he was accompanied by executives from business consortiums such as Gold Reserve, Hartree, Peabody Energy, Ivanhoe, and TechMet.
Impact: Venezuela’s armed militias could likely cause severe internal destabilization and interfere in the government’s efforts to attract foreign investment as illegal mining operations have been ongoing in the country for approximately 20 years. These groups control the vast majority of mining operations in Venezuela’s Orinoco Mining Arc and work in collusion with government officials to circumvent legislature and legal financial transactions. Foreign companies aiming to enter the resource – rich Venezuelan market would likely have to conceptualize various strategies that must include stable security presence, regulatory and legislative alignment. The armed groups firm grip on mining operations would likely impede Venezuela’s reformation of the country’s energy sector, which in turn could prompt foreign investors to directly avoid cooperation with the government and turn towards private military contractors. President Rodriguez’ rapid expedition of legislature for the time being is vastly symbolic, as the factual control of the country’s mining operations still largely pertains to armed groups and various militias.