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Sunday, October 04, 2026

 

Panama panel backs path to Cobre Panama restart


Cecilia Jamasmie | September 30, 2026 |
First Quantum nears stockpile processing at Cobre copper mine
Bird’s-eye view of Cobre Panama mine. (Image: Google Earth.)

Panama should negotiate a restart of First Quantum Minerals’ (TSX: FM) Cobre Panama mine to fund its eventual orderly closure without burdening the state, a ministerial committee has recommended President José Raúl Mulino.

The three-minister commission recommendation — part of a list of 17 — follows an audit conducted by independent Swiss consultants, along with an assessment of the mine’s economic, environmental and legal implications. The commission stressed that its proposal was not a final decision, which rests with the president.

The recommendations point toward negotiations that could allow Cobre Panama to operate long enough to meet Panama’s objectives, rather than an imminent shutdown, BMO analyst Matthew Murphy said. The commission’s report cites a 25-year active mine life as an illustrative example, he noted.

“We believe Cobre Panama likely needs to run for decades to satisfy these objectives,” Murphy said in a note. “Risks are elevated but mutually agreeable solutions that preserve value remain possible.”

The document offers a potential route through the economic, legal and environmental problems surrounding Cobre Panama: generate revenue from renewed operations to finance a controlled shutdown rather than leave Panama responsible for the cost. The mine produced about 1.5% of global copper before mining stopped and was one of the country’s largest private investments.

Panama’s Supreme Court ruled in 2023 that First Quantum Minerals’ contract to operate Cobre Panama, the only mining operation in the Central American country, was unconstitutional. Challenges against the contract piled up in court following public protests against the deal signed that year by the government and First Quantum’s local subsidiary, Minera Panama.

Murphy highlighted a potentially important distinction in the commission’s report: the 2023 court decision declared the mining contract unconstitutional but, according to the report, did not prohibit mining activity itself. That could leave room for the government and First Quantum to negotiate a new legal framework for operations.

Any agreement should prevent an extension of the mine’s operating period and resolve outstanding international arbitration proceedings, according to the committee. Mulino has not made a final decision on the mine’s future.

Resolving those proceedings is central to the commission’s recommendations, Murphy said. Claimants are seeking a combined $27 billion through arbitration, while the proposed framework would establish conditions for a restart capable of financing what the commission calls an “orderly, self-funded closure.”

First Quantum said late on Wednesday it would engage “constructively and in good faith” with Panama on a new legal framework for Cobre Panama that is fair, transparent and consistent with the country’s Constitution and laws.

The miner also noted that the commission makes termination of the pending international arbitrations a mandatory condition of any agreement.

Eight guiding principles

The commission laid out eight principles for any new arrangement. It said Panama, as owner of the mineral deposit, should act as more than a state collecting royalties from a mining concession. The government should independently verify financial flows from the operation rather than rely solely on figures reported by the operator, while exercising effective oversight and requiring transparency over both the mine and the use of revenue it generates.

The framework also calls for a definitive closure date with no renewal or extension, prohibits further expansion of the mine site and requires operations to adapt to a progressive shutdown. A clear mechanism would also have to be established to restore and rehabilitate the site, while the use of mining revenues would be subject to transparent mechanisms open to public scrutiny.

“A closure isn’t done in one year, nor in five years,” Commerce and Industries Minister Julio Moltó said in a press conference.

Moltó said the committee’s proposals were based on visits to communities surrounding the mine rather than assessments conducted solely from government offices. He and his team toured Donoso, Omar Torrijos Herrera and La Pintada, where they met mine workers, local authorities and suppliers before presenting their findings as part of the government’s review of Cobre Panama’s future.

First Quantum noted that a sustainable path forward should provide long-term stability and tangible economic benefits for Panama through employment, workforce development, local procurement, community investment and broader economic contributions.

Closure costs

Economy and Finance Minister Felipe Chapman backed an orderly closure while arguing that Panama should not bear its financial cost. The abrupt shutdown inflicted a substantial economic blow to the nation, he said, eliminating thousands of direct and indirect jobs while cutting government tax and royalty revenue.

The recommendation is in line with President Mulino’s previous statements framing a mine reactivation as an “open to close” plan. The giant Cobre Panama mine, which produced as much as 1.5% of global copper before mining stopped in 2023, accounted for about 5% of Panama’s gross domestic product that year, according to First Quantum.

First Quantum shares plunged as much as 36% in early trading in Toronto as the market reacted to the government’s framing of renewed operations as a mechanism for eventually shutting Cobre Panama. They were last changing hands at C$31.1 apiece, leaving the miner with a market value of C$25.9 billion ($18.2 billion).

“We think the market got it wrong,” Scotia Capital mining analyst Orest Wowkodaw said in a note to investors. 

“While additional clarity is required based on today’s public comments from the Committee of Ministers, we see the massive sell-off in First Quantum shares as a buying opportunity for investors,” he added. “We do not think anything has changed with respect to an inevitable permanent restart of the operation under renegotiated terms.” 

BMO’s Murphy shared the view. He said investors might have put too much weight on the closure language and not enough on the potential duration and economics of renewed operations.

“The immediate market response to this report has been to focus on the risk of closure,” Murphy said. “However, we believe the full report details offer a more promising frame of reference and believe a mutually agreeable negotiated outcome is possible that would preserve substantial asset value for First Quantum and satisfy all of Panama’s objectives.”

What comes next

The commission’s deliberations follow months of study into the consequences of shutting one of Panama’s largest private investments. A government study published in September found the closure eliminated close to 36,000 jobs and reduced taxes and royalties flowing to the state by nearly $1.4 billion.

Environment Minister Juan Carlos Navarro argued the mine should never have been built and characterized the problem of closing it as one inherited from the previous administration.

Cobre Panama was First Quantum’s largest revenue generator before its shutdown, accounting for about 40% of company revenue. Its closure followed nationwide protests over environmental concerns and the terms of the mining concession.

First Quantum resumed processing in July previously mined stockpiled ore with government authorization, an activity that does not amount to reopening the mine for new extraction. The company restarted one of three milling circuits during the second quarter and continues to forecast production of 30,000 to 40,000 tonnes of copper from stockpiles this year.

The stockpile program forms part of the government-approved preservation and safe-management plan. Panamanian authorities have said processing the material can reduce environmental risks associated with leaving mineralized ore exposed to rainfall.

President Mulino must now determine whether negotiations with First Quantum can produce an arrangement that addresses the commission’s recommendations while generating enough economic value to cover a permanent closure plan.

First Quantum said it is awaiting guidance from Panama’s government on the next steps for negotiations following the commission’s recommendations.

Murphy’s reading of the report suggests that could mean years or even decades of renewed mining before closure, provided First Quantum and Panama can settle the legal disputes and agree on terms that meet the government’s economic and environmental objectives.

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Half a million miners stand between Bolivia and a critical minerals rush

Bloomberg News | October 2, 2026 | 
Salt flat in Bolivia. Stock image by gaelj.

Rodrigo Paz, Bolivia’s first investor-friendly president in more than 20 years, wants global miners to extract the nation’s copper, gold, silver and other critical mineral deposits. Almost half a million local miners stand in his way.

The cooperatives that represent those miners are one of the country’s most formidable political forces, representing as much as 8% of the workforce and half of Bolivia’s mineral extraction. They have exploited the country’s mineral riches with little oversight and regulation for decades, and repeatedly brought governments to heel through protests that effectively shut the country down.

But Paz is undeterred. “Why do we want to be poor if we have everything we need to become a highly developed country?” he said, referring to the mineral potential of Bolivia, whose export revenues pale in comparison with those of neighboring Peru and Chile.

His challenge was laid bare in May, when thousands of cooperative miners barreled toward the presidential palace in La Paz, some hurling sticks of dynamite. Eventually, the first non-socialist government in decades had largely yielded to the miners’ demands for greater access to fuel, explosives and new areas to dig. Tensions resurfaced in July, when infighting among rival cooperatives forced officials to abandon plans for a rare summit bringing together local and state miners with private firms to chart the industry’s future. 

“You can’t just rub them out,” said Tom Larsen, chairman and CEO of Eloro Resources Ltd., a Toronto-based explorer looking to develop a large silver-tin discovery in Bolivia. “They’re a big contingent in the Bolivian fabric.”

A full-blown overhaul of Bolivia’s nationalistic mining laws would erode many privileges enjoyed by cooperatives. So Paz’s government, already reeling after unrest earlier this year, is instead pursuing more incremental changes. It plans to submit targeted amendments to Congress, including allowing private firms to partner with cooperatives, strengthening development rights for explorers and easing taxes, an official said. In parallel, it’s working on a broader rewrite of the mining code to modernize the industry and improve legal certainty.

“The transition toward making Bolivia a safe place for investment must come through rules and laws, but it also has to involve inclusion of different social sectors,” Paz told Bloomberg’s Wall Street Week in May.

There are signs that Bolivia’s reputation as a destination for only the most risk-tolerant investors is starting to change. Existing private operators are weighing expansions and say they’ve been approached by prospective new entrants. Dozens of junior explorers are considering investments if the government follows through on the planned reforms, the official said. Bringing back global mining heavyweights will be much harder, requiring Paz — less than a year into his five-year term and eligible to seek re-election — to unwind decades of legal and political risk without provoking the powerful cooperatives.

“There are companies quietly looking at things right now,” said Quinton Hennigh, a veteran geologist who heads the Canadian firm that acquired Bolivia’s San Cristobal open-pit from Sumitomo Corp. in 2023. “But it’s predicated on these fundamental changes.”

Success would bring desperately needed export revenue for an economy mired in its deepest crisis in decades while creating a new source of minerals from antimony to zinc as governments around the world race to diversify critical supply chains.

The miners

It’s people like Óscar Chavarría who have the power to make these changes happen.

From his office in Potosi, home to Cerro Rico — the mountain whose silver financed the Spanish Empire — Chavarría leads one of Bolivia’s largest cooperative mining federations. The movement expanded dramatically after the collapse of the state mining industry in the 1980s, and today ranges from subsistence miners to sprawling, loosely regulated commercial operations.

“Potosi should be like Dubai,” Chavarría said. “It should be a marvel, but the wealth that comes out of here just leaves,” referring to the widely held belief among Bolivians that politicians allow foreign companies to strip the country of its natural resources.

Chavarría, like Paz, is right to think there’s much more money to be made. Bolivia shares the same mineral-rich Andean belt as Chile and Peru, hosts the world’s second-largest identified lithium resources and remains a top-10 producer of silver, tin, zinc and lead. Its reserves recognized by the US Geological Survey alone have a gross in-situ value of roughly $75 billion at current prices.

Decades of under-investment and limited exploration have left much of its geological potential underdeveloped or untouched. Economic geologist Osvaldo Arce estimates mineralized areas cover roughly three-quarters of the country and says resources could ultimately prove at least twice current estimates. He calculates projects already at advanced stages could attract about $3 billion in investment while adding more than $1 billion a year in exports.

But the spread of informal mining, community unrest and weak legal protections have deterred foreign investment. Major miners including Glencore Plc and Newmont Corp. have exited the country, while state intervention has at times been more direct: In 2012, Bolivia revoked concessions held by Canada’s South American Silver Corp. No major mine has entered production since 2007, leaving output increasingly reliant on aging operations. Exploration spending lags regional peers, while mineral exports of roughly $5 billion remain a fraction of neighboring Chile’s.  

The government hopes to revive a model largely abandoned under former President Evo Morales, allowing cooperatives that hold mining rights to partner with companies capable of providing financing, exploration, technology and modern processing. Such arrangements could unlock deposits that cooperatives cannot develop alone while giving miners access to better equipment, higher productivity and stronger environmental and safety standards.

“The state has the challenge of taking cooperatives toward greater production, sophistication and sustainability,” said Pablo Ordóñez, a Bolivian lawyer who advises mining companies.

The need for change is visible inside Cerro Rico itself.

After nearly five centuries of mining, the mountain is honeycombed with thousands of tunnels and scarred by roughly 150 sinkholes. Authorities have closed sections of the UNESCO World Heritage site as engineers struggle to preserve its iconic conical shape while cooperative miners continue chasing the remaining silver veins.

Deymar Silvestre, now in his mid-30s, has worked inside Cerro Rico since he was 16. At the end of a shift, he gathers with fellow miners deep underground, chewing coca leaves, drinking shots of liquor and making offerings to El Tío — the horned figure miners believe both protects them from danger and guards the mountain’s mineral wealth.

“Sometimes I want to look for a different job, but there’s nothing else,” Silvestre said. Months earlier, his younger brother was killed in a mining accident.

Hundreds of meters above, Freddy Llanos surveys the mountain from a different perspective.

A former cooperative miner who now heads the Cerro Rico preservation commission at Tomas Frias Autonomous University, Llanos says generations of short-term extraction and limited reinvestment have left Bolivia consuming its mining inheritance instead of building the next generation of mines.

“That’s why we remain poor,” he said. “After 500 years, we’ve grown in a disordered way.”

Mining has shaped Bolivia since before the Spanish conquest, evolving from pre-Hispanic metalworking to the silver boom centered on Cerro Rico before tin became its dominant industry in the 20th century. 

Bolivia nationalized its largest mines after a 1952 revolution, putting them under state-owned Comibol. When tin prices collapsed in the 1980s, thousands of laid-off miners occupied abandoned tunnels, giving rise to today’s cooperative movement. A 1990s exploration boom produced discoveries including San Cristobal before resource nationalism under Morales sharply curtailed exploration.

Budding partnerships

About an hour south of Potosi, the Porco district offers a glimpse of what the government hopes the future of Bolivian mining could look like.

Each morning, hundreds of miners climb onto trucks and motorcycles bound for the mountain. Some work for cooperatives. Others descend into the underground workings of Sinchi Wayra, the Bolivian unit of Santacruz Silver Mining Ltd.

When Vancouver-based Santacruz bought Glencore’s Bolivian mines in 2022, it inherited a relationship with local cooperatives that has become central to its strategy. At Porco, the company allows two cooperatives to mine parts of the mountain it no longer operates while its own employees work deeper underground.

“Our relationship with the cooperatives is essential,” said Wáscar Enríquez, the head of social management at Sinchi Wayra’s Porco mine, overlooking a mountainside riddled with cooperative tunnels.

The arrangement illustrates both the promises and pitfalls of the government’s strategy: Cooperatives gain access to employment and infrastructure, while the company reduces conflict over ground it no longer considers economic. 

Yet higher metal prices can quickly reignite disputes over mining rights, and companies say invasions of concessions remain one of the industry’s biggest deterrents to investment.

“The nature of the cooperatives has been distorted,” said Sinchi Wayra Corporate Affairs Vice President Alfredo Sallés. “They’ve become like private firms run by a few shareholders who hire workers under illegal conditions and avoid taxes through loopholes. That discourages legitimate investment.”

Weak oversight and poor traceability allow ore from informal and potentially illegal sources to be mixed with legitimate production, making the system difficult to police. 

There are similar dynamics elsewhere in the region. Peru’s illegal gold trade has surged, with illicit exports overtaking legal shipments for the first time.

Reform in Bolivia will require compromises, with some cooperatives voicing concerns that deeper partnerships with private companies may see them become little more than contract labor. 

Instead, some cooperative leaders want the state to reclaim underused concessions from private firms and reallocate them to local miners.

“It’s not that we just go in and make money — we take risks,” said Omar Choquetilla, who heads the Potosi Kory Mayu cooperative. “People think we don’t contribute, that we don’t pay taxes. But there are deductions by law, including royalties. We do contribute.”

Renewed attention

Some companies are already positioning themselves for a potential opening.

Santacruz is accelerating one project in Bolivia and scouting for acquisitions, while also helping a handful of explorers navigate a possible Bolivian entry, said Executive Chairman Arturo Préstamo.

The government’s efforts to strengthen legal certainty and engage with cooperatives have reinforced his optimism about Bolivia, Préstamo said, while recognizing that Paz has lost some of the political capital needed to push through reforms.

Industry groups are pressing the government to strengthen protections against concession invasions, speed permitting and provide the legal certainty needed to attract larger investments.

That task is being made more difficult by soaring metal prices, said Ilse Beltran, who heads the association representing private mining companies in Bolivia. “When prices rise, informality tends to grow.”

Even if cooperatives embrace partnerships with private companies, Bolivia’s largest deposits are too capital-intensive and technically complex for their miners and will require experienced international operators capable of investing billions of dollars over decades.

Still, advisers say Bolivia is attracting renewed attention after years on the sidelines. Officials have promoted projects to packed audiences at international mining conferences, signed a critical minerals agreement with the US and stepped up engagement with Canada, Australia and South Korea. The Toronto Stock Exchange held its first investor event in Bolivia this year. While the country continued to rank near the bottom for mining investment attractiveness in the Fraser Institute’s latest survey, it recorded one of the biggest improvements in policy perception.

San Cristobal Mining Inc. is looking into an expansion in Bolivia that could more than double silver output over the next several years. At the same time, CEO Hennigh said it’s in talks with other mining companies about potentially helping them enter the country, with most of that interest emerging since Paz’s election last year.

Still, major miners are likely to wait for evidence that Bolivia can deliver stronger legal protections and a competitive tax regime, rein in informal miners, and show that reforms can withstand the country’s volatile politics. But the change in sentiment is already tangible.

“The honeymoon period has ended, but I believe he is on the right path,” Préstamo said of President Paz. “If these legal and political changes happen, we will see the major mining companies return.”

(By James Attwood and Sergio Mendoza)

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Monday, September 21, 2026

 


Does Delcy Rodríguez have any options?

By Steve Ellner
Published
US Energy Secretary Chris Wright meets with Venezuelan acting President Delcy Rodriguez at Miraflores Presidential Palace in Caracas, Venezuela, September 2, 2026.

Donald Trump’s success in wresting concessions from Venezuela’s interim President Delcy Rodríguez is a clear demonstration of what can be achieved through the barrel of a gun. Just hours after the military incursion that resulted in the kidnapping of Venezuelan President Nicolás Maduro and First Lady Cilia Flores on January 3, Trump boasted, “We’re going to run the country,” and shortly thereafter called himself Venezuela’s “acting president.” He has also heaped praise on Rodríguez for serving both U.S. and Venezuelan interests, explaining “ She’s doing a great job because she’s working with us.”

It’s not hard to understand why Rodríguez — whose father was a revolutionary martyr — has been so compliant. On January 3, just hours after the kidnapping of Maduro and Flores, Trump publicly threatened then vice-president Rodríguez and other Chavista leaders with what amounted to decapitation, along with a far larger military assault. According to Rodríguez, Rubio by phone gave her and the second-in-command Diosdado Cabello 15 minutes to acquiesce to Washington’s new terms or face death. As she put it, “the threats and the blackmail are constant.”

Some critics of the leftist government question the credibility of Rodríguez’s claim. Her version, however, makes perfect sense. Trump himself repeatedly made similar threats in public, though couched in more oblique language. And decapitation is exactly what Washington subsequently did to much of Iran’s leadership.

Washington’s toolkit of coercive measures against Rodríguez includes the use of blackmail. Reuters reported in March that federal prosecutors “put together possible corruption and money laundering charges, and have communicated to Rodríguez that she is at risk of prosecution unless she continues to comply with Trump’s demands.” The prosecutors’ money-laundering allegation in the Venezuelan oil industry is a code word for circumventing U.S.-imposed sanctions.

Trump touts the benefits the United States derives from the neocolonial relationship he has established with Venezuela. On August 28, he announced the reaching of “the biggest oil deal in world history” which gives the U.S. priority treatment for the sale of 65 billion barrels of proven reserves in their entirety, greater than those in the U.S. Other generous aspects of the deal include 20 percent of the oil production to be purchased at cost by the State Department and the Pentagon’s 35 percent ownership of the operating company.

The threat of military force is only part of the explanation for Rodríguez’s willingness to accept the deal. The devastating toll that a decade of severe U.S.-imposed sanctions has taken on Venezuela’s state-run basic industries such as oil, gas, electricity, and telecommunications has to be brought into the picture. The sanctions impaired the ability of the state oil company PDVSA to maintain, repair, replace and operate equipment, as has been recognized by the U.S. congress’ Congressional Research Service and nonpartisan research organizations.

In the latter years of his rule, Maduro acknowledged the deterioration and turned increasingly to private capital. Among those who benefited was Alejandro Betancourt who, unlike Venezuela’s traditional bourgeoisie, had developed close ties with the Chavista government. The new 65-billion-barrel deal under Rodríguez designates Betancourt as the key operator and in doing so recognizes that he is better positioned to attract vast sums of foreign capital than a highly deteriorated PDVSA. The system of sanctions intimidated everyone involved in Venezuela’s oil industry, forcing operations into secrecy and creating fertile ground for corruption. Betancourt himself was accused of illicit dealings. Despite these charges, Chavista leaders prefer dealing with businesspeople like Betancourt, rather than the traditional elite that spearheaded several attempts to topple Chávez. Most of the blame for the corruption rests with Washington.

For all Trump’s warm words about Rodríguez, the sanctions that have inflicted such damage on the Venezuelan economy remain in place. Trump has only selectively loosened them by issuing individual “licenses” in order to favor U.S. capital.

Navigating or selling out?

On several occasions, pressure and threats from Washington forced Rodríguez to swallow her nationalistic pride as a longtime leftist. One was Venezuela’s cooperation with the U.S. Southern Command in carrying out the air strike in June that killed Niño Guerrero, the top leader of the notorious gang Tren de Aragua. Compare that with Mexican president Claudia Sheinbaum’s repeated refusal to accept joint military operations on Mexican territory against drug cartels.

In addition, following Venezuela’s highly destructive dual earthquakes on June 24, Rodríguez met with an Israeli delegation that included military officers at the presidential palace and praised Israel’s role in the relief efforts. Chavista demonstrators protested the U.S. and Israeli military presence following the earthquake with the slogan “This Isn’t Aid, It’s Occupation.” President Chávez had broken relations with Israel in 2009.

The problem, of course, isn’t just foreign policy. The Rodríguez government has reformed Chávez’s flagship legislation the Organic Hydrocarbon Law (LOH), which had set off the abortive coup against him in April 2002. Rodríguez’s reform, which modified the LOH in fundamental ways, set the stage for Trump’s “biggest oil deal in history.”

In the early months of Rodríguez’s presidency, some on the left credited her ability to navigate such a precarious situation. Former Italian Red Brigades militant Geraldina Colotti called it “an act of political maturity in a context of unprecedented blackmail.” Now, however, her deference to Washington has divided the U.S. left, as it has in Venezuela.

Those who support the Rodríguez government run the risk of ultimately being viewed as lending support for an imperial project. Defending Trump’s “biggest oil deal in history” is particularly uncomfortable because leaders on the other side of the political spectrum are denouncing its lack of transparency. Amazingly, economist Ricardo Hausmann, one of the main architects of Venezuela’s neoliberal project of the 1990s, calls the deal “the most imperialistic thing the U.S. has ever done in its history.”

Particularly worrisome is the prospect that the Trump administration abruptly changes course and opts for regime change, before Rodríguez’s strategy for economic recovery gets off the ground. Such a shift from transactional pragmatism — it’s all about the oil — to rabid anti-communism is in line with the position championed by Marco Rubio and other right-wing hawks. The break with Rodríguez is predictable, though not the timing.

Thinking strategically

Progressive activists have to place Trump’s imposition of the notorious Monroe Doctrine — now the Donroe Doctrine — at the forefront of all solidarity work. The pro-Venezuela and pro-Cuba solidarity movements have shown that the most committed activists are those who to varying degrees sympathize with those governments not the ones who demonize them.

It’s easy to say that Rodríguez, her brother Jorge, Cabello and the other top Chavista leaders should simply say no to Trump and walk away rather than negotiate in such an unequal relationship. That’s what some on the left advocate. But is abandoning power or inviting military retaliation at this moment an option?

Juan Carlos Monedero, a former leader of Spain’s Podemos party and advisor to Chávez, told me: “The Chavista leadership under Delcy should consider abandoning power since the relationship with Washington is just too asymmetrical. The Sandinistas did that in 1990 and then returned.”

Relinquishing power, however, would mean turning it over to the extreme right led by María Corina Machado, who has many powerful supporters in Washington. If you go back to the 48 hours during the 2002 coup when the right-wing opposition unleashed repression against the Chavistas — with dozens killed — or if you examine Machado’s vindictive rhetoric over the years you will know what is in store for the Chavistas and the social movements if she reaches power: repression Pinochet style. In addition, her slogan “popular capitalism” — which she borrowed from Margaret Thatcher and Pinochet — underscores the extreme neoliberal policies that she embraces. The burden is on those on the left who demonize Rodríguez to explain what realistic strategy they advocate.

Moreover, a Machado government would add to the growing number of far-right, pro-Trump governments belonging to the “Shield of the Americas,” an alliance committed to militarization under the banner of combating drugs, but with the real aim of driving China from the region. At the founding summit of the Shield in Doral, Florida in March, Trump reportedly phoned Machado, put the call on speaker, and told her “Everybody loves you here.”

Chávez, Maduro and Rodríguez have drawn inspiration from the example of China. During one of her many official visits to China in 2025, Vice-President Rodríguez praised the Chinese economic model as “an example of dignity, resilience and economic growth.” A guiding principle of China’s foreign policy, dating from Mao’s death in 1976, was Deng Xiaoping’s dictum “hide your strength, bide your time.” The phrase basically means that when the correlation of forces is unfavorable, don’t antagonize or alarm your enemy. This is precisely what Rodríguez is doing. Objective conditions in Venezuela — the result of a veritable war waged from Washington — and subjective conditions – the resultant erosion of enthusiasm even among the Chavistas — are highly unfavorable. The strategy may invite criticism given the obvious differences between Communist China and capitalist Venezuela, but it is hardly far-fetched — and even less so counterrevolutionary.

Rodríguez’s pragmatic strategy is in line with the general mood of the country — cutting across the political spectrum. Venezuelans as a whole are exhausted from the devastating effects of Washington’s war on Venezuela which played a central role in driving the average workers’ income down by roughly 80 percent since the mid-2010s. The call by Machado’s followers grouped in the Vente Venezuela party for mass protests against Rodríguez has not materialized.

Agree to disagree

One searches history in vain for a close parallel to what is unfolding in Venezuela. Consider: an imperial power kidnaps a country’s president, then reaches agreements and establishes friendly relations with his vice-president who remains committed to the ideals of the movement they both represent. For Rodríguez, the uniqueness presents a formidable challenge.

The Left must also recognize that, more than is usually the case, crucial pieces of the puzzle remain unclear. Most important, nothing is known about the negotiations between the Rodríguez government and the Trump administration. Time reports that “Rubio and Rodríguez are in nearly daily contact through phone calls and WhatsApp messages,” but without revealing the details. The key question is just how far Rodríguez can go in defending Venezuelan interests without triggering a turnaround on the part of the all-too-erratic Trump. At what point will Trump go from his transactional, pragmatic mode to his anti-Communist mode and promote regime change in Venezuela?

Critics of the Rodríguez government are right to warn that alliances with sectors of the bourgeoisie, as represented by Alejandro Betancourt, could open a Pandora’s box which ends up corrupting the broader project of change. But drawing clear lines between friends and foes from within may have to wait for better times, when real options are on the table.

Meanwhile, the solidarity movement needs to remain united, even with diametrically opposed viewpoints on the Rodríguez government. The starting point has to be an acknowledgment of the uniqueness of the moment and of how much remains unknown. Most important, the movement needs to stay focused on combating the atrocities committed by Washington: the liberation of Maduro and Flores, the lifting of all sanctions and the return of billions of dollars of Venezuelan assets seized abroad at the behest of Washington. There should be no doubt that the blame for Venezuela’s dire situation both before and after January 3 lies squarely with Washington.

Steve Ellner is a retired professor of the Universidad de Oriente in Venezuela where he lived for over 40 years and is currently Associate Managing Editor of Latin American Perspectives. He is the author and editor of over a dozen books on Latin American politics and history. In 2018 he spoke in over twenty cities in the U.S. and Canada as part of a Venezuelan solidarity tour.

The Trump–Rodríguez pact and Venezuela’s neocolonial subordination

By Emiliano Teran Mantovani
Published
A pedestrian walks past a mural featuring oil wells in Caracas, Venezuela on August 29, 2026, a day after US President Donald Trump announced a deal giving the United States a stake in Venezuela’s oil reserves

First published at Observatorio de Ecología Política de Venezuela.

On August 28, a massive Oil Agreement between the government of Donald Trump and Delcy Rodríguez’s interim government was announced, described by the U.S. president as the “largest in history.” Trump stated that the United States was taking control of a significant portion of Venezuela’s oil reserves “at no cost to the American taxpayer,” and that U.S. reserves would be doubled and more.1

Such announcements contrast sharply with the absence of detailed information, beyond a few Fact Sheets, speeches, and social-media posts. But this gap and arbitrariness have already become the norm in Venezuela over the past ten years: both in the way the country was governed under Maduro and, currently, under U.S. tutelage following the military intervention of January 3. Curious authoritarian continuities.

It is also curious because these opaque arrangements are based specifically on the exploitation of approximately 65 billion barrels of proven oil reserves,2 equivalent to one-fifth of the country’s reserves. There is no precedent for an agreement of this kind in the century-long history of Venezuela’s oil industry.

The White House Fact Sheet of August 313 refers to 100-year concessions for 17 oil fields, although Delcy Rodríguez referred to a 25-year term for the agreement between the two countries. These 17 fields are among the best and are located in the country’s most producing regions: several projects in Lake Maracaibo, others in northern Zulia state, and others in the Orinoco Oil Belt4 (OOB). Although most have existing production and installed capacity, a few are projects that have yet to be developed.

And there is much more: beyond merely being an agreement between governments, what we have is a binational framework of energy guidelines that will be executed and operationalized by a Venezuelan company that was not only virtually unknown until this agreement — having been founded in 2024 — but whose founders and current CEO, Alejandro Betancourt, have been involved in corruption schemes that have had an enormous impact on Venezuela. The company is North American Blue Energy Partners (NABEP),5 headquartered in Barbados, which would suddenly become the second-largest private company in the world in terms of reserves. Betancourt was president of Derwick Associates, notorious for its involvement in one of the largest corruption cases linked to Venezuela’s electricity crisis,6 which contributed to leave the national system in ruins, with the humanitarian, social and economic consequences that are well known.

Alejandro Betancourt has faced investigations in Venezuela as well as in the United States, Spain and Switzerland over alleged corruption and money-laundering offenses; and he was arrested twice in the United Kingdom in 2025 pursuant to extradition requests from Spain and Switzerland.7 Thus, once again, we must emphasize the continuities of corruption and authoritarianism under the Delcy–Trump tutelary interim government. We came from years of opacity in the management of Venezuela’s oil industry under the Maduro regime, when brokers, unknown private oil operators, and shell companies proliferated — also as a mechanism for circumventing international sanctions. In this context, Betancourt was already operating alongside Harry Sargeant III, obtaining contracts for various activities in Venezuela’s oil industry, until the founding of NABEP and the signing of agreements between it and PDVSA and CVP in 2024. When the White House Fact Sheet refers to NABEP as a “proven private operator with a track record”, it is referring to how the company expanded its total production to 200,000 barrels per day (Lake Maracaibo and OOB),8 becoming Venezuela’s second-largest private producer after Chevron. In these continuities, Alex Saab left but Alejandro Betancourt reappears.

It is highly emblematic and representative of this new/old formula of looting and impunity that an entity such as NABEP should be the one to execute such an extractive agreement. On the Venezuelan side, it perpetuates an oligarchic model of concealment, arbitrariness and crony capitalism that can intensify extractivism and allow the ruling power structure to persist over time. NABEP thus functions as a hinge between transnational chains of massive wealth appropriation at Venezuela’s expense.

In the side of the United States, it should be noted that its government can veto the appointment of members of NABEP’s board of directors; the majority of these members must be U.S. citizens; while agreements and disputes are governed by U.S. law and are subject to the jurisdiction of U.S. courts. Furthermore, NABEP transfers 35% of its stake in its parent company to the Office of Strategic Capital of the U.S. Department of War. This is highly significant, as it reveals the military logic underlying access to resources, expressed in the so-called “Donroe Doctrine”, where agreements are negotiated while cannon fire is aimed; our resources are incorporated into the Strategic Petroleum Reserve classification, viewed as a national-security matter that must be guaranteed by the military sector; and Venezuelan crude oil increasingly fuels the highly active U.S. global war machine.

Additionally, NABEP grants the U.S. State Department the right to purchase 20% of the production from all current and future fields operated by NABEP. The key feature: this 20% is guaranteed, and it can be purchased at cost. For the remaining 80% of production, the State Department has a “Right of First Refusal” to purchase it on a priority basis, which, according to the United States, guarantees a source of energy in the Western Hemisphere in emergency situations.

Finally, the Fact Sheet openly and explicitly states that the agreement expels the United States’ international adversaries from the hemisphere, directly referring to China — which operated approximately five fields included in the agreement9 — as well as Russia and Cuba.

Thus, in practical terms, NABEP is clearly an instrument of territorial and national recolonization, and of the geopolitical competition.

A neocolonial pact and the reshaping of Venezuela

How can such a dreadful binational energy agreement establish, thereby violating the current Constitution and trampling not only on the tradition of oil nationalism built up over decades, but even on the 215-year history of the Venezuelan Republic? How can such an outrageous arrangement actually be taking shape?

A substantial part of the answers lies in our recent history. First, the Maduro government handled the economic crisis — which had already begun to take root during the Chávez administration — in a disastrous manner. We already know the result: the collapse of an entire country, intensified by international sanctions. At the same time, Maduro’s determination to remain in power at all costs meant not only installing a new type of dictatorship in the country, but also dismantling democracy, institutions, regular channels of political mediation, the legal economy, and political and economic alternatives in order to achieve that objective. All of this left a country extremely vulnerable and fragmented in the face of the 2026 U.S. military intervention.

Second, this imperialist intervention, which represents a watershed in Venezuela’s contemporary history, has been abolishing the country’s sovereignty — or, rather, whatever remained of it. The Trump government is the one issuing the orders; and the Rodríguez government functions more as a national administrator, the most ideal and compliant one the United States could have today, while also guaranteeing territorial governability — unlike what María Corina Machado might be able to offer.

From Washington have come orders for the profound reform of the Organic Hydrocarbons Law, the new Mining Law, the new agreements to restore the national electricity system, the announcement of a restructuring process for external public debt, post-earthquakes reconstruction, and the decision as to when elections and democracy will take place. Washington also controls the country’s oil revenues and dictates how and when they are spent. It’s that simple.

The new Oil Agreement is the product of the convergence, or rather, the pact between this “brutalist” (to use Achille Mbembe’s term10) form of imperialism promoted by Trump, based on the Donroe Doctrine, and an authoritarian and corrupt regime that has chosen to mortgage the country for decades to come in order to retain its power and ensure its security. Thus, two forms of authoritarianism — each with its own functional mechanisms of power and wealth appropriation — are combined under a single framework of North American tutelage.

The new Oil Agreement is the result of this process of political decomposition that has been unfolding in Venezuela for years; and it is the crowning achievement of the capitulation and dismantling of oil nationalism, which had already begun under Maduro and is now being fully unleashed through U.S. intervention. The “Productive Participation Contracts” (CPPs) and the “Chevron Model” in the country had already begun years earlier, when Joe Biden was president of the United States. The CPPs grant private companies control over everything, which is unconstitutional. The integration of the CPPs into the oil business structure was key to the conception and subsequent drafting of this year’s reform of the Hydrocarbons Law. Within the framework of the CPPs and this reform, NABEP or other company can, in fact, carry out any operational activity throughout the value chain, exercise de facto control over territories, obtain recalculations of royalties and taxes, and manage revenues even through bank accounts outside the country. To put it in the technical terms provided by the amended law: to undertake the “comprehensive management”11 of the business.

It is these precedents and the evidence we are witnessing that can help answer the recurring questions: Who will control the oil industry and its revenues? Or how will Venezuela benefit? A purely normative or legal interpretation of this one-sided agreement is not even sufficient when what is prevailing in the course of events is the exercise of arbitrary power through neocolonial subordination — in its purest, most naked form — linked to domestic authoritarianism. Nor are analyses based on partisan political expectations sufficient — a segment of the population, for example, had expectations of democracy and “progress” under Trump, which have evidently been deflating. Even less useful are interpretations based on superficial political promises of “growth” and “economic recovery”. Consider that, if those promised US$200 billion in royalties and taxes over 25 years (approximately US$8 billion annually) were ever realized, they might represent barely one-fifth of average annual oil-fiscal revenues during the 2005–2009 period. And we don’t even know how or on what they will be spent (for example, we may be forced to pay off the restructured foreign debt under who knows what conditions), or which groups will benefit.

Questions such as these must instead be contrasted with the clear evidence of how the country’s looting is being reorganized, under different structures and modalities. Of how an imperial/oligarchic-national pact is dismantling the historic Republic in order to reshape the country, where a new neo-colonial state emerges to facilitate the massive appropriation of cheap natural resources, territories, rents and surpluses and, eventually, cheap labor as well. It may be useful to review similar cases, such as Iraq after the 2003 invasion and the reshaping of that country’s petro-state.12

In this framework, democracy and rights have no place. The aforementioned U.S. Fact Sheet is clear: “Private-sector led growth in production, output, and investment in Venezuela is a key precondition to driving continued reform and democratic transition following the incredible success of Operation Absolute Resolve”. First and foremost, guarantee energy appropriation; everything else comes afterward. Despite the rhetoric of U.S. officials about a ‘transition to democracy’, Trump insisted on September 2 what he has said on various occasions: “Venezuela is not yet ready for elections.”13 Democracy, the separation of powers, the independence of the state, and compliance with the Constitution have no place here because they are obstacles to the energy and economic objectives.

Ultimately, this means that Venezuelans themselves have no place. They hardly matter. Their decisions, expressed, for example, in the July 28, 2024 elections, do not matter. Neither do their social and labor rights. And the environment is even less relevant, an area that has been rendered completely invisible in this conflict. It is impossible to imagine what environmental governance under the Oil Agreement will look like; what spills and accidents will mean amid the agony of the rule of law and the frightening track record of U.S. corporations around the world. Much less is there any thought given to the fact that those 11 billion barrels of oil will be burned in 25 years with such impunity, while the climate crisis worsens, and Venezuela (like the rest of Latin America) is only weeks away from facing the so-called “Super Niño,” an unprecedented one.

In short, the emergence of this mega Oil Agreement finally confirms the situation for those who had doubts. It links the geopolitical ambitions outlined in the November 2025 National Security document and the “Pax Silica” initiative, with the announcement in the August 31, 2026 Fact Sheet stating that “This agreement guarantees our energy dominance for the next century”. The agreement is also a product of this new and extraordinarily conflictive geopolitical context surrounding strategic resources, supply chains, and spheres of influence; and it is determined by highly regressive political forces that seek to dismantle democracy as a political model, while the global civilizational crisis continues to intensify.

Looking back at Trump’s famous meeting with the major oil companies to discuss Venezuela on January 9 of this year, it becomes clearer what the strategy was to allay their concerns and guarantee “long-term investments”: to entrench and secure the mortgaging of an entire country for decades to come. Only in this way could that guarantee of stable, reliable, and cheap energy eventually become a reality in times of “emergencies” and geopolitical confrontation.

A sovereign and popular alternative

Recognizing the enormous challenges before us, and as a contribution to a collective discussion, I outline seven aspects for addressing our current situation:

  1. The oil agreement has generated a very broad and diverse range of critical voices that have responded with indignation and rejection. Economists and scholars from different political tendencies, former ministers from governments preceding Chávez, critical sectors of Chavismo, some groups of the opposition and María Corina Machado, left-wing groups and trade-unions, social and human-rights organizations, among others. It is crucial to find spaces where these voices can come together, seeking to form a national front that, through statements, campaigns and actions, opposes this agreement in the name of respect for the Constitution. It is acknowledged that these actors differ among themselves, and that not all reject the agreement for the same reasons, but the severity of the situation demands a broad, diverse, and massive response.
  2. The agreement is sustained basically by the imperial force and power of the United States, combined with the authoritarian regime that still prevails in Venezuela. But it is built on shaky ground because of its unconstitutional nature, the fact that decisions are being made under an illegitimate government, its numerous irregularities and lack of transparency, the fact that it is being carried out by a company whose executives face serious allegations of corruption, and because it significantly harms the country’s interests. Moreover, several Democratic senators and some former U.S. officials have also raised questions about the agreement, while many of the major oil companies have expressed doubts about it and about Betancourt’s bizarre involvement.14 There is also the question of what will happen to the Trump administration if an electoral debacle occurs in November’s midterm elections.
  3. Based on these premises, actions emphasizing the illegitimacy and illegality of the agreement are decisive. Such actions could serve as the basis for political and legal proceedings that might succeed if more favorable conditions and circumstances were to emerge in the country (such as the reactivation of democracy and concrete capacities for political and civic accountability). It must be said that this is not necessarily something that can happen in the short term.
  4. Insist on the return to an electoral path as soon as possible, which could also help create better conditions for popular mobilization and for realizing the demands for democracy and rights held by Venezuelan society. It is crucial that the new National Electoral Council be based on consensus and recognized by the country in order to ensure that the elections are valid.
  5. Such demands will not be possible without social mobilization and pressure from society. It is acknowledged that the population’s material conditions are extremely precarious and that mechanisms of state censorship remain in place. But, by contrast, there is enormous social unrest and deep weariness with the predominant political-party actors, which translates into a strong desire for change and, above all, for the recovery of minimum living conditions.15 In addition, the widespread expressions of solidarity that emerged during and after the earthquakes reveal an enormously positive popular spirit that requires support for its organization and coordination.
  6. From a medium- and long-term perspective, Venezuela needs to build an alternative political opposition, beyond the current leaderships, including María Corina Machado. Although Machado is still the leader with the greatest support today and unites a significant portion of the population, her economic program does not differ from the current Chavista government’s subservient approach, nor does her political subordination to the Trump administration. Those of us who do not follow this approach recognize the urgent need to build this alternative opposition that defends historic popular demands—such as support for the most disadvantaged classes, public health and education, sovereignty over the national economy, social inclusion and participation, among others—, as well as environmental demands, emphasizing the serious ecological problems afflicting us and the urgency of addressing the climate crisis.
  7. There is also a cultural dispute that must be addressed. This involves reinforcing the ideals of democracy, which have been severely undermined under the Maduro regime and by U.S. intervention. We must propose alternative perspectives on the reconstruction of Venezuela that recognize the importance of the economy, but also emphasize that our country is much more than oil, GDP growth, and macroeconomic indicators. Venezuela is also its local and regional economies—which helped sustain much of the country when the national economy collapsed—; its territories and ecosystems, which sustain society; its social fabric, communities, and diverse cultural identities, which nourish not only collective memory but also Venezuelan identity; and ultimately, the dignity of the people that has shaped the country’s history, filled with struggles for justice and freedom. This can also foster other understandings of sovereignty, beyond viewing it solely through the centrality of the state, to understand it in terms of the will, participation action and autonomy of the population. “Recovering Venezuela” must be situated within a horizon in which the well-being and sustenance of life for the great majority can be expanded as central objectives.

Emiliano Teran Mantovani is a sociologist and researcher at the Central University of Venezuela, with a PhD in Environmental Science and Technology from the Autonomous University of Barcelona. He is a founding member of the Venezuelan Observatory of Political Ecology.

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