What's Beneath Venezuela 🪨💰⚒️

Tierra de Gracia in Spanish means the Land of Grace. 

It was the name Christopher Columbus gave to Venezuela in 1498, when he first reached the coast of the Latin American country. The Italian explorer was awestruck by the abundance of fresh water, fertile land, and the promise of wealth that the land held. 

Nearly five centuries later, grace is the last thing anyone would associate with Venezuela. 

Many analysts argue that it is precisely the resources that once inspired such romantic descriptions that now sit at the center of the country’s geopolitical turmoil.

Years of economic collapse, sanctions, and institutional decay turned Venezuela’s resource wealth from an advantage into a source of instability. As the crisis deepened, external powers became more directly involved. The U.S. intervention is the most recent example.

After U.S. forces captured Venezuelan President Nicolás Maduro in Operation Absolute Resolve on January 3, 2026, President Donald Trump immediately tied the intervention to Venezuela’s oil wealth. “We’re going to have our very large United States oil companies, the biggest anywhere in the world, go in, spend billions of dollars, fix the badly broken infrastructure, oil infrastructure, and start making money for the country.” 

But oil is just one part of the story.

What did not make the headlines — and almost never does — is Venezuela’s reserve of critical minerals. 

Away from the oil fields and the capital, beneath forests and sparsely governed hinterlands, lie deposits of coltan, gold, iron ore, bauxite, and rare earth elements. These are not resources that move markets overnight, but they sit at the foundation of modern supply chains. The commodities the United States now finds itself increasingly dependent on.

In this issue of CrossDock, we examine Venezuela’s critical minerals story: where these resources are located, why they remained overlooked for decades, and whether they could alter the United States’ position in an increasingly competitive global race for critical mineral security.

To understand Venezuela’s mineral story — and why it is once again drawing global attention — you have to go back to the early 20th century, when the country’s relationship with its natural wealth first began to take shape.

Venezuela’s modern resource story began with oil. Oil was first commercially discovered in 1914 at the Zumaque I well. 

But the outbreak of the First World War delayed any further exploration. 

However, that changed in 1922, when a well being drilled at La Rosa, in the western state of Zulia, blew out of control. Oil shot more than 200 feet into the air and flowed at an estimated 100,000 barrels a day for nine days. The spectacle drew global attention. Any lingering doubts about the scale of Venezuela’s reserves disappeared overnight.

By 1928, the country had already become the leading oil exporter, producing 300,000 barrels per day. What followed was rapid and decisive. Foreign companies entered, production accelerated, and oil reshaped the country’s economy rapidly. By 1928, Venezuela had become the world’s leading oil exporter, producing roughly 300,000 barrels a day. 

Nearly three decades after oil reshaped Venezuela’s economy, other resources quietly entered the picture. 

In 1956, the Venezuelan government reported the discovery of “startling new riches” in iron, bauxite, thorium, uranium, and other minerals, particularly iron ore. At the time, government and independent geologists estimated Venezuela’s high-grade iron reserves at more than two billion metric tons, excluding even larger deposits of lower-grade ore.

Some observers suggested that mining might one day approach oil in commercial importance.

Case in point: a December 25, 1956, New York Times report noted that Venezuelan iron production that year would reach 11 million tons, placing the country close to Canada’s status as an iron-producing nation. The report went on to suggest that Venezuela’s mineral sector could one day “approach oil in commercial importance.”

But that prediction never materialized. 

So why did Venezuela’s mining sector never develop in a meaningful way despite its potential? There were several reasons why Venezuela’s mining sector never took off, but the most important was what economists call Dutch Disease. 

It occurs when a resource boom strengthens the currency and draws capital and attention into one sector (in this case, oil), making other industries, such as mining and manufacturing, less competitive and gradually displacing them. In addition to investment, political attention, state budgets, and skilled labour flowed toward oil, leaving mining permanently sidelined. 

This remained the case even after nationalization.

When Venezuela nationalized its iron ore and bauxite sectors in 1975, bringing them under the state-owned Corporación Venezolana de Guayana (CVG), the government took operational control but failed to provide sustained capital investment. As a result, production stagnated, and the sector never developed the scale or efficiency needed to compete globally.

But thanks to “critical minerals," Venezuela, for the first time, was briefly out of its oil obsession. 

By the early 2000s, the conversation around minerals had begun to change. Not all resources mattered equally anymore. Some minerals became critical not because they were rare, but because modern technology could not function without them—and because their supply chains were tightly concentrated in a small number of countries. 

Materials such as coltan, rare earth elements, nickel, copper, zinc, tin, and tungsten became the center of strategic planning, as countries with these resources became more deliberate about how they were mined, controlled, and used for strategic advantage.

Long defined by oil and largely dismissed as a mining power, Venezuela quietly re-entered the global conversation through its critical minerals — coltan in particular.

Venezuela’s critical minerals story broke into the open in 2009, and it did so loudly. 

That year, then-President Hugo Chávez declared that Venezuela sat atop what he called a “great reserve” of coltan, a metallic ore from which the elements niobium and tantalum are derived. 

Coltan is used in electronics to make components that allow devices to charge faster, store power more efficiently, and become smaller and more reliable. It is found in smartphones, laptops, electric vehicles, medical equipment, satellites, and military systems, where performance and durability matter most.

President Hugo Chávez announced the discovery of what he claimed were $100 billion worth of coltan reserves, and called it the “blue gold of the 21st century.” He also warned that the metal had fueled “countless wars in Africa” and said he would not allow the same fate to unfold in Venezuela.

The response was immediate. Private mining was banned, and Chávez launched Operation Blue Gold, deploying around 15,000 National Guard troops along Venezuela’s southeastern border to stop coltan smuggling.

The approach was reinforced under Chávez’s successor. In 2016, President Nicolás Maduro formalized state control over mineral extraction by creating the Orinoco Mining Arc, a vast mining zone spanning nearly 112,000 square kilometres across southern Venezuela. 

In addition to coltan, the Orinoco Mining Arc contains deposits of gold, bauxite, and diamonds, and, according to Venezuelan government estimates, contains nearly $2 trillion in mineral reserves.

Despite multiple initiatives, including proposed joint ventures, Venezuela was unable to attract sustained foreign investment because of legal uncertainty, weak governance, poor security in mining regions, and high political and economic risk, which kept most companies on the sidelines.

Interestingly, Venezuelan coltan continued to feed the mineral-hungry mobile phones and laptops of the modern world. This is how the supply chain worked.

With formal mining nonexistent, criminal elements and guerrilla groups filled the vacuum, taking control of extraction.

Small-scale and artisanal miners — often working in remote jungle terrain for days at a time — dug for coltan, gold, and other minerals, while brokers and smugglers moved the ore across porous borders into Colombia and Brazil. There, it was mixed with other supplies and exported into global markets — much of it destined for China, according to reports.

For years, Washington watched from the sidelines as critical minerals from its own hemisphere leaked into illicit supply chains and ultimately into the hands of its primary geopolitical rival. The United States now wants to change that.

While oil has dominated Venezuelan rhetoric, the U.S. administration has quietly turned its attention to critical minerals—commodities that lie at the core of semiconductors, data centers, and the infrastructure underpinning the AI boom.

The question, now, is simple: which critical minerals does Venezuela have that could be strategically valuable to the United States?

Let’s start with gold. More than 200 gold sites are spread across Venezuela with undiscovered gold potential of up to 8,000 metric tons — roughly the weight of the Eiffel Tower. 

Official estimates place Venezuela’s nickel resources at roughly 408,000 metric tons. Meanwhile, a 2018 Venezuelan government minerals catalog estimated the country’s total iron ore resources at approximately 14.68 billion metric tons.

Let’s take the example of bauxite, a key ore for aluminum production. According to geological estimates, Venezuela’s total bauxite resources are approximately 3.48 billion metric tonnes, including about 1.33 billion tonnes of proven reserves. 

Aluminum is critical to U.S. industry and defense, yet America remains dependent on imported bauxite and primary aluminum to sustain its manufacturing base.

While most U.S. imports come from allies such as Australia, Guinea, Brazil, Jamaica, and Canada, China dominates the global aluminum industry, accounting for more than half of global production and refining capacity.

On paper, Venezuela’s critical minerals could help the United States reduce Chinese dominance, but mineral power is not determined by what lies underground; it is determined by what can be financed, governed, secured, and produced — a factor where the U.S. might face a bottleneck. 

The wide gap between Venezuela’s mineral potential and actual production is the first problem. 

In 2024, the country accounted for just 0.84 percent of global gold output and only 0.10 percent of global iron ore production. In fact, conditions have worsened as well. For example, according to U.S. Geological Survey data, Venezuela’s bauxite production in 2021 was approximately 250,000 metric tons, down from roughly 550,000 tons in 2017, representing a negligible share of global supply. That is because, despite long-standing claims of vast mineral wealth, Venezuela never developed the industrial capacity or investment environment necessary to convert these resources into large-scale, sustained production.

Next is the skewed or unavailability of accurate data. Venezuela is not prominently listed among the countries with confirmed rare earth element (REE) reserves in major global datasets, including the USGS’s 2025 analysis of rare earth deposits. For businesses, this creates high uncertainty and elevated risk. Without reliable reserve data, companies cannot accurately assess project viability, price risk, or justify long-term capital investment.

Finally, Venezuela’s mining potential is constrained by weak infrastructure, unreliable power, and limited transport networks. 

Logistics for large-scale mining remain non-existent; add to this insecure corridors and high operating costs in remote mining regions. Ongoing safety risks, illegal mining, and armed group activity further raise operational and insurance risks for investors. As a result, bringing a mine from discovery to commercial production can take 10 to 15 years, even under stable political and regulatory conditions.

Assuming these minerals were extracted at scale, much of the global refining capacity for them would still be concentrated in China. 

Despite these structural constraints, Venezuela remains significant from a critical minerals perspective. According to experts, the country is a potential addition to the United States’ broader effort to rebuild critical mineral security, diversify supply chains, and, most importantly, another region where the U.S. has beaten China. 

Venezuela has been one of China’s most trusted strategic partners in Latin America for more than two decades.

The relationship formally began in 2001, when Venezuela became the first Hispanic country to enter a “strategic development partnership” with China. At the time, trade volumes were modest. That changed sharply over the following decade. Between 2003 and 2012, economic ties deepened rapidly, with bilateral trade expanding nearly twenty-fourfold—from roughly $742 million in 2003 to about $20 billion by 2012. Currently, China used to purchase the majority of Venezuela’s oil, which generates more than half of the country’s fiscal revenue, despite ongoing U.S. sanctions.

The relationship was further strengthened in 2018, following Venezuela's formal accession to China's Belt and Road Initiative (BRI) through a Memorandum of Understanding. Since then, Chinese state lenders have extended more than $60 billion in loans and credits to Venezuela, making it one of the largest recipients of Chinese financing in Latin America. 

In fact, China used the Belt and Road Initiative playbook to gain access to Venezuela’s mineral resources.

According to the South China Morning Post, China has pursued multibillion-dollar deals to secure access to gold, coltan, and other minerals in Venezuela’s Orinoco Mining Arc under its Belt and Road Initiative. Chinese firms have invested in iron ore, bauxite, gold, and rare earth projects operated by Corporación Venezolana de Guayana, the state-owned metals conglomerate, with investment accelerating sharply after 2023.

It should also be underscored that China has emerged as the primary external partner for much of Latin America, steadily expanding its influence across the region; however, the recent intervention will definitely weaken the Chinese influence in the area.

In each case, Washington’s focus is not on short-term extraction but on long-term supply chain resilience: reducing dependence on China, diversifying sources of critical minerals, and anchoring future production. 

This does not mean Venezuela is an easy or near-term solution. Unlike Greenland or Ukraine, Venezuela lacks a functioning mining infrastructure, reliable governance, and transparent data. But as the U.S. expands its global push to secure access to critical minerals, countries once considered too risky are being reassessed. With the right investment and regulatory reform, Venezuela could eventually become a vital player in the U.S. strategy to dilute China’s dominance over critical mineral supply chains.

This newsletter was written by Shyam Gowtham