Overview
This post is the first in a series on global trends in the illicit gold trade.
Several US-designated criminal and militant organizations, including Tren de Aragua, Cartel de los Soles, and the Colombian National Liberation Army (ELN) control significant territory in mineral-rich southern Venezuela, centered on the country’s Bolívar state. The illicit local mining sindicatos enjoyed over a decade of protection from these organizations, as well as from corrupt Venezuelan political and military officials. The mining activities primarily produce gold, which is used by the illicit actors for sanctions evasion, bribes and funding further illicit activities. The US, having captured Nicholas Maduro in January, has engaged in military cooperation and economic support with the new government in Caracas to disrupt entrenched organized crime by targeting illicit mining operations. If these efforts are successful, the new Venezuelan government could become more stable and local criminal organizations could lose a key source of revenue and money laundering. However, if implemented haphazardly, the reforms could further entrench corruption networks in the country’s mining industry.
Venezuela’s Gold Economy: State-Enabled Anarchy
The rapid growth of illicit mining in Venezuela’s Bolívar state originates in part from indirect state support. In 2016, Maduro’s government initiated the Orinoco Mining Arc National Strategic Development Zone to formalize existing artisanal mining activities in the remote areas of southern Venezuela and encourage foreign investment. The initiative created a bureaucratic layer controlled by Maduro’s government and senior military officials that was exploited by criminal actors. Illicit organizations funneled bribes through the Mining Arc apparatus to government officials in return for allowing for the expansion of illegal mining activities. According to US Department of State reports, between 2020 and 2025, the Mining Arc produced $2.2 billion of gold annually. The exports helped supplement Venezuela’s sanctions-hit economy, the bribes enriched corrupt officials, and the remaining revenues funded the criminal and militant organizations controlling the mines.
By the time Maduro was apprehended in January 2026, the area covered by the Orinoco Mining Arc in southern Venezuela had become de facto governed by nonstate militants. State presence was limited to military officials who extracted rents from the mining operations or purchased unrefined ore for state-owned refineries. Reports indicated that ELN and Tren de Aragua representatives extracted taxes from gold mining sindicatos, controlled border crossings and enforced order between the illicit miners. Local communities in Bolívar state endured worsening environmental degradation, endemic violence and human trafficking.
Gold is a Coveted Criminal Asset
South American criminal groups have sought to expand their gold interests. US terrorism designations against ELN and Tren de Aragua increase financial reliance on sanction-resistant assets such as cryptocurrency and gold. Sophisticated black-market networks allow criminals to exchange physical gold for stablecoins tied to the US dollar or gold, providing access to liquid currency without worrying about sanctions-related asset seizures. Illegal miners also exploit inconsistent global refinery sourcing standards. Once gold is refined or re-exported from a high-risk origin, many buyers are unable or unwilling to investigate the mineral's ultimate origin.
Criminal organizations also utilize gold to supplement and diversify existing criminal activities. Mine labor is sourced in part from existing human trafficking networks. Revenues from drug trafficking can also be “converted” into gold by investing drug profits into new and expanded mines. Gold, as a physical asset, acts as a relatively safe store of value for illicit actors, unlike bank and cryptocurrency accounts that can be seized or frozen remotely.
Illicit gold mining has been further incentivized by surging global gold prices over the past five years, driven primarily by geopolitical instability. Gold prices rose from $2,000/oz in 2023 to over $5000/oz in early 2026. Despite a fall in recent weeks to just over $4,000/oz, ongoing international conflicts and geoeconomic disruptions will likely sustain the metal’s elevated price over the next year. The high price, combined with gold’s value as a money laundering vehicle, will continue to attract investment in Venezuelan mines from criminals and militants without a strong intervention.
The US Response: Carrot and Stick
The US is attempting to reform Venezuela's gold trade through a militarized response against illicit miners while simultaneously encouraging the development of a formalized mining industry.
The militarized response has been led by Venezuelan security forces with US backing. On June 12, Tren de Aragua leader Héctor "Niño" Guerrero was killed in Bolívar state in an air strike coordinated between the US and Venezuelan militaries. At the same time, Caracas deployed security forces for an aggressive campaign in Bolívar state against illegal mining operations. Local residents reported explosions, gunfire, drone strikes and helicopter-borne raids. The US is reportedly providing military and technological support to the Venezuelan deployment. The military campaign supports Caracas’ promise to provide security guarantees to foreign miners in the previously lawless region. The military deployment will likely persist for the rest of 2026 and may receive further support from the incoming Colombian government, which has an interest in dismantling anti-government rebel networks that operate in Bolívar state.
To induce the formalization of Venezuela’s mining industry, the US is promising potential economic development, foreign investment and sanctions relief. In early 2026, the US issued a sanctions waiver to allow commodity trader Trafigura to purchase semi-refined gold doré from Venezuela’s state mining firm, Minerven, and ship it to US refineries. Trafigura also promised to help Minerven develop an effective sourcing due diligence program and reform its past complicity in Maduro-era gold smuggling. Delcy Rodríguez's government, with the support of the US Interior Department, also passed a new mining law in April allowing foreign firms to participate in gold mining concessions. Any significant foreign investments in Bolívar state mining operations will likely be delayed until the Venezuelan military regains sovereign control over the region, as surveying or exploration operations would otherwise likely require military escorts.
Potential Pitfalls
Numerous reports by civil society and intergovernmental organizations accused senior Venezuelan military officials of supporting and benefiting financially from criminal mining operations during Maduro's government. The links between the illicit mining operations and senior Venezuelan military and political officials likely endure despite Maduro’s arrest. Corrupt military figures may resist efforts to open the country's mining industry to foreign investment and replace allied illicit miners with multinational corporations. However, the military may also see the initiative as an opportunity to maintain more direct oversight over the industry rather than rely on local criminals and guerrillas. The US may also see a stable mining industry controlled by the Venezuelan military as preferable to one controlled by militants and designated terrorists with ties to global money laundering networks.
Efforts to formalize Venezuela’s mining economy will also require dismantling the existing sindicatos. Otherwise, such initiatives risk a repeat of Maduro’s Orinoco Mining Arc program that only served to entrench corrupt ties between local illicit actors and officials in Caracas. Foreign companies will also likely remain skeptical of investing in Bolívar state if their operations come under threat from criminal extortion or armed groups. Given the scale of investment and development needed to reach untapped resources in the Venezuelan jungles, as well as Venezuela’s history of expropriating private mining assets, foreign investors will likely demand strong commitments to ensure stability and property rights. These may include promises to abide by international arbitration proceedings or additional deployments of security forces near mining sites.
The unprecedented military cooperation between Venezuela and the US in Bolívar state implies a high level of commitment from the US to support economic reforms and political stabilization in Venezuela. However, the massive earthquakes that hit northern Venezuela on June 26 will pull resources away from anti-crime operations as military units assist in reconstruction efforts. Continued US backing will also be redirected to ensure the Venezuelan government remains stable enough through aftermath of the earthquakes and continue confronting nonstate actors in Bolívar state. Southern Venezuela’s path to liberalization, as well as critical mineral reserves, will continue to be a priority for the US government in its campaign to degrade narcotrafficker networks.
