Gold Reserve Ltd has welcomed the preliminary approval of a new mining law in Venezuela, describing it as a positive step towards modernising the country’s mining sector and attracting foreign investment.

The Bermudian-based company said Venezuela’s National Assembly has approved the draft legislation in its first reading, with a second discussion required before it can be enacted.

The proposed law is designed to overhaul the country’s mining framework and reopen the sector to private and international operators. It includes provisions allowing foreign companies to hold concessions, grants exploration and production rights for up to 30 years — extendable to 60 — and introduces access to international arbitration for dispute resolution.

Other measures include a flat 4 per cent royalty on key minerals such as gold and diamonds, as well as explicit permission to sell output both domestically and overseas.

Gold Reserve said it has reviewed the draft law and submitted confidential comments to Venezuelan authorities as part of the consultation process.

Paul Rivett, vice-chairman of the company, said: “We thank Venezuela for putting forward a progressive new mining law and we appreciate the willingness to receive comments on this draft legislation.

“Constructive consultation will help to ensure that the final legislation supports the long-term development of Venezuela’s mineral resources.”

The reforms come as Venezuela seeks to attract international capital back into its mining industry after years of nationalisation, sanctions and disputes with foreign investors.

Gold Reserve has previously signalled plans to return to Venezuela, where its flagship Brisas gold project was expropriated more than a decade ago.