OREANDA-NEWS. Venezuela's government is aggressively promoting mining investment in a bid to raise billions of dollars in fresh loans and investment capital as falling oil revenues are worsening an unprecedented economic crisis.

State-owned oil company PdV has signed more than $50bn in oil-backed loans with Beijing since around 2007, a model president Nicolas Maduro is hoping to replicate in the traditionally neglected mining sector. The government depends on oil exports for almost all of its revenue.

Energy and mines minister Eulogio del Pino invited foreign mining companies at recent presentations in China and Canada to create joint ventures with the government in Bolivar state to produce gold, coltan, copper, diamonds, iron, bauxite and other minerals.

President Maduro said on 24 February that gold mining ventures alone could generate up to $10bn in annual hard currency revenue within three to five years. Energy and mines ministry officials tell Argus that within a decade Venezuelan exports of gold, coltan, diamonds and other valuable minerals could generate combined export revenue of up to $50bn annually.

Faced with dwindling hard currency reserves and mounting foreign debt payments, Caracas also hopes to leverage its minerals resources quickly to secure more foreign credit. The Maduro government aims to use the gold and other high-value mineral reserves associated with its proposed new mining joint ventures to borrow at least $5bn in 2016, Central Bank president Nelson Merentes said this week.

Several mining joint ventures in which Canadian, Chinese and African minority partners will 45pc stakes should be incorporated before the end of March, Merentes added.

But the Maduro government's campaign to woo investors is at risk of foundering amid an escalating political confrontation with its political opponents in Caracas, who are presuring him to resign so that new elections can be held, and by rampant lawlessness in Bolivar state's mining areas.

National assembly president Henry Ramos Allup warned on 6 March that all financial and joint venture agreements initiated by the government since the 6 December 2015 legislative elections will be "automatically illegal, null and void if they are not submitted beforehand to the assembly for debate and approval as required explicitly by the constitution."

The presidential palace immediately rejected Ramos Allup's warning. But the threat that deals signed with the Maduro government might be nullified by the national assembly could persuade potential investors to postpone capital outlays until the political clash between Maduro and the legislature are resolved.

The government's efforts to attract new investors to its mining initiative also may have been hurt by the alleged killing on 4 March of 28 small gold miners by gunmen allegedly allied with government security forces.

The government blames Colombian-tied paramilitary groups with the killings and says it is investigating, but survivors of the killings tell Argus that uniformed members of the state intelligence agency, Sebin,and police officials were responsible.

National assembly deputy Americo de Grazia, who represents Bolivar for the left-leaning Causa R party, tells Argus that at least 70 mass killings involving gold and diamond miners have occurred since 2013 in the state's lawless mining areas.