Three months following the U.S. raid that captured socialist President Nicolas Maduro on 3 January, the Venezuelan National Assembly approved a new law on Thursday loosening the state’s grip on mining investments to open the sector for private and foreign companies.
U.S. President Donald Trump's administration has been bullish on the law, with U.S. Interior Secretary Doug Burgum saying, during a March visit, that it will create opportunities for companies and that Venezuelan interim President Delcy Rodriguez has promised to ensure mining companies' security.
The law repeals mining regulations from 1999 and 2015 and allows domestic, foreign, state-owned and private companies or consortiums to exploit gold and "strategic minerals". Concessions will be for a maximum of 30 years, but can be extended by up to two 10-year periods.
Mineral deposits remain the property of the state and disputes can be resolved through arbitration, according to the law, which also creates a royalty tax of up to 13% of the gross production value of the mineral and up to a 6% tax on companies carrying out primary mining activities. The central bank will take charge of gold sales.
The National Assembly passed the law unanimously.
Rodriguez has repeatedly said the same message, saying last month that 120 potential energy investors, largely from the United States, have visited Venezuela since she took up her post and that investors will have legal and security guarantees.
Trump has supported a series of moves by Rodriguez to attract investors and stabilise the country since the January capture of Maduro, with the U.S. president repeatedly praising Rodriguez for cooperating with Washington.
The law is long overdue, said a mining businessman applying for licenses to export equipment to Venezuela and mine Venezuela's deposits, especially rare earths, which remain largely unexplored in the country.
"The incentives for the industry are not quite there yet, and it's also necessary that the U.S. speed up licenses and authorisations. If they want to take advantage of the momentum the Middle East conflict is creating, agility is needed," he added.
The U.S. has issued a license authorising certain transactions involving Venezuelan-origin gold and with state-owned mining company Minerven and its subsidiaries, as long as U.S. law governs contracts.
Venezuela owes billions of dollars to industrial conglomerates, oil and mining companies after waves of nationalisations two decades ago, including to Crystallex, Gold Reserve and Rusoro Mining. Improved inflation rates
The law comes amid overtures to spur outside capital in the struggling Venezuelan economy.
Venezuela's inflation in March stood at 13.1% month-on-month, down from February's slump to 14.6%, the central bank said on Thursday.
Adding March's data, annualized inflation was 649.4%, according to Reuters calculations based on the central bank's figures. In February, inflation slumped to 14.6% from 32.6% in January, the South American nation's central bank said.
The acceleration of prices has been driven by exchange rate depreciation since the start of last year, and coincides with a lower supply of foreign currency in the exchange market.
This has prompted several small and medium-sized Venezuelan companies to turn to alternative foreign exchange markets.
Cumulative inflation in the first three months of this year was 71.8%, the central bank said.
Post-Maduro transitionVenezuela has been witnessing a sweeping change in policies since Maduro's capture, including the National Assembly's confirmation on Thursday of Larry Devoe, a close ally of Rodriguez, as the country's new Attorney General, following the February resignation of long-standing Attorney General Tarek Saab.
Devoe, 46, had been serving as the South American nation's interim attorney general since Saab's resignation, and was previously the head of the National Council of Human Rights.
A legislative commission recommended Devoe after examining a list of more than 70 candidates and his designation was approved with 275 votes, assembly head Jorge Rodriguez, brother of the acting president, said during the session.
Opposition lawmaker Henrique Capriles nominated long-time legal academic Magaly Vasquez and she received 10 votes.
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