One day after the U.S. military captured Venezuelan President Nicolás Maduro and took control of the country’s government, Trump administration officials touted its critical mineral resources.
Commerce Secretary Howard Lutnick told reporters on Sunday that Venezuela has “a great mining history that’s gone rusty” and Trump is “going to fix it.” A White House official told Latitude Media in an email that the administration is “closely looking” at Venezuela’s critical minerals and possible rare earth elements “in conjunction with the private sector.”
But that effort may prove to be a pipe dream, several global supply chain experts said.
Venezuela has deposits of critical minerals widely used in the IT equipment supporting artificial intelligence and defense systems — two top priorities of the Trump administration — as well as in renewable energy technologies. But there isn’t reliable data on those deposits, and the gold and critical mineral mining sectors have been overrun by illegal guerilla groups, according to news investigations. Beyond those obstacles, it’s anyone’s guess when Venezuela’s institutions will be stable and transparent enough to attract foreign investment.
“In theory, yes, Venezuela has a lot of interesting critical minerals resources,” said Tom Moerenhout, critical materials lead at Columbia University’s Center on Global Energy Policy. “In practice, those resources are only relevant if they are economically recoverable reserves. We don’t have that level of detail just yet.”
Actual development would require billions of dollars in capital, decades of waiting times, and lots of political and economic risk, Moerenhout added. Most big Western companies are focused on expanding production at existing mines. The idea that they would jump on Venezuela “without advanced political guarantees,” he said, “seems unlikely.”
Alexis Harmon, assistant director of the Global Energy Center at the Atlantic Council, a nonpartisan U.S. think tank, said potential foreign investors in Venezuela can’t guarantee contracts nor political stability. U.S. sanctions on the country’s gold mining have had a chilling effect on investment in that sector. And Congress blocked the International Development Finance Corporation, a U.S. federal agency that offers political risk insurance, loans, and equity investments to private companies doing business abroad, from investing in Venezuela.
“I don’t think the political risk insurance is going to be enough here,” Harmon said. “So what tools does the administration really have?”
At least one U.S. gold and copper mining company, Gold Reserve Ltd, has publicly supported Maduro’s arrest, but said it couldn’t give any guidance to shareholders on “when, or if, we will be able to return to our Venezuelan properties.” The company had its assets expropriated by the Venezuelan government, and said the sites are now being mined illegally.
Critical minerals, but little infrastructure
Venezuela’s mining ministry in 2018 stated that the country holds large amounts of gold, nickel, coltan, iron ore, and bauxite. It doesn’t mention rare earth elements.
Nickel is on the U.S. list of critical minerals. It plays an essential role in EV batteries and wind turbines, as well as high-strength steels. Coltan is the source of niobium and tantalum, which are on the U.S. list of critical minerals because they are vital to smart phones, EV batteries, and military missile defense systems. Bauxite is processed into aluminum, which is on the U.S. list, as well.
But unlike the Venezuelan oil sector, which already has infrastructure to be improved, there’s little industrial-scale mining of coltan and bauxite in Venezuela, according to Gracelin Baskaran, director of the critical minerals security program at the Center for Strategic and International Studies.
She wrote this week that for decades, Venezuelan leaders including Maduro and his predecessor Hugo Chávez have repeatedly boasted of the country’s mineral abundance — but crucially never built the infrastructure or a safe investment environment to boost production.
Since Maduro in 2016 designated 12% of Venezuela’s territory as a strategic development zone known as the Arco Minero del Orinoco, it’s become a hub of illegal mining. His plans in 2019 to revive bauxite production were quickly abandoned due to unstable power supply and a lack of imported materials.
Safer bets abroad
When it comes to rare earth elements, Harmon said it hasn’t been confirmed if Venezuela has them at all. And even if the country does, it may not matter. The real problem isn’t supply, but rather the fact that China controls much of the world’s mineral processing, she said.
To curb that influence, the Trump administration is investing in boosting the U.S.’s own rare earths and critical mineral sector, while partnering with allies like Canada, Australia, and Malaysia to shore up mining and processing capacity. This includes taking a government equity stake in three separate critical minerals projects.
Venezuela is “so far from being the path of least resistance,” Harmon said.
The White House did strike a mineral deal with another conflict-torn country just last month: the Democratic Republic of the Congo. DRC, which has vast cobalt and copper resources long dominated by China, agreed to give U.S. buyers preferential treatment for minerals sold by its state-owned companies in exchange for U.S. government financing and military support. It was part of a broader peace agreement that the Trump administration helped broker between DRC and Rwanda, although fighting hasn’t stopped.
Baskaran said DRC, unlike Venezuela, has a more established mining history and confirmed large-scale mineral deposits. (That said, DRC’s mining industry has long been fraught with severe human rights abuses, including child labor.)
A White House official didn’t comment further, only saying that the U.S. and Venezuela will benefit from greater economic cooperation.
For now, it appears that seizing Venezuela’s oil supply is Trump’s primary target. On Tuesday, Trump announced that the country was sending up to 50 million barrels to the U.S. for it to sell on the market.
