Venezuela is to stop giving licences to foreign mining firms, a part of President Hugo Chavez's plan to place natural resources under state control.
Venezuela is exerting greater control over its natural resources
The move is the latest in a series of measures limiting the role of foreign firms in Venezuela's economy, which President Chavez wants to transform.
Venezuela is setting up a state-owned mining firm as well as exerting greater ownership over other industries.
It believes state control of industry will tackle poverty and boost growth.
Critics of Venezuela's left-leaning government claim that greater centralisation will strangle investment and create few jobs.
President Chavez said on Wednesday that the government was cancelling all mining concessions and would not offer any further contracts to foreign firms.
In a televised speech, he said the move would "recuperate the national power, the sovereignty to manage our resources".
"We will not give any more concessions to transnationals," he said.
President Chavez also announced plans to significantly boost ethanol production as a means of guaranteeing gasoline supplies.
About $900m (£499m) will be spent on cultivating more sugar cane and building 15 processing plants over the next five years. The program could create about 500,000 jobs.
The Venezuelan government is clamping down on foreign-owned businesses, which it claims have taken profits out of the country and contributed to high levels of poverty.
Foreign firms have extensive mining interests in Venezuela.
US firm Hecla Mining is the country's largest gold producer while Canadian business Crystallex has a lucrative contract to build a gold mine and processing plant in Las Cristinas, home to one of the world's largest undeveloped gold deposits.
Crystallex said plans to create a new state mining company would not affect the contract, in which it plans to invest $265m.
"Our mining contract would remain intact and be administered by the new mining company," its chief executive Todd Bruce said.
Venezuela is the world's fifth largest oil producer and soaring oil prices have helped boost its economy this year.
However, unemployment remains high and the government says profits from the sale of oil and minerals must be invested in programs to improve literacy and public health.