Bolivia’s state gold trading firm, Epcoro, aims to purchase $1 billion in gold this year, boosting central bank reserves and appealing to local miners. CEO Pablo Cesar Perez announced a projected sale of 10 tons to the central bank, amidst a backdrop of economic challenges including high inflation and dwindling dollar reserves. Epcoro seeks to stabilize gold supply while addressing legal concerns surrounding the gold’s source.
Bolivia’s newly established state gold trading firm, Epcoro, aims to significantly increase its purchases of gold this year, projecting a total of $1 billion in acquisitions to bolster the struggling national reserves. CEO Pablo Cesar Perez reported that the firm has already procured one ton of gold from small-scale local producers in 2023, a marked increase from 2.4 tons purchased last year.
Epcoro intends to sell approximately 10 tons to the central bank in 2023, taking advantage of high global gold prices due to ongoing inflationary concerns. The firm was founded last year amidst a crisis at the government-managed central bank, which has seen its reserves diminish as it attempts to support fuel subsidies. Recent government announcements indicate a reduction in subsidies for miners and farmers, reflecting fiscal pressures.
The Bolivian economy has faced significant challenges, including stagnant investment in gas fields leading to production declines and a dollar shortage impacting banks’ currency conversion capabilities. Inflation currently stands at a high 13%, exacerbating these economic difficulties. Notably, there remains a gap between international gold prices and the local rates at which Epcoro buys gold, yet the firm provides cash upfront, making it appealing to producers.
Despite fluctuations in gold exports, which fell by 72% last year to $687 million amid rising metal prices, Epcoro appears to be absorbing some of this supply. However, Perez refrained from providing specific figures regarding gold acquisitions. Concerns have emerged over the legality of gold origins, as some opposition lawmakers allege potential laundering of illegally mined gold through Epcoro transactions.
While selling gold presents an opportunity for the central bank to acquire necessary hard currency, it is acknowledged that Epcoro does not currently fulfill its intended role as the principal gold supplier. Nonetheless, Perez expressed confidence in the firm’s ability to contribute to the national gold market effectively in the future.
Epcoro, Bolivia’s new state gold trader, is positioned to address the central bank’s declining reserves by planning significant gold purchases this year, despite facing challenges such as economic inflation and accusations regarding gold origins. With the potential to become a vital supplier to the central bank, Epcoro emphasizes its commitment to legal transactions and rapid cash payments, thus enhancing its appeal to local miners. Overall, the firm’s development reflects efforts to stabilize the national economy through gold trading.
Original Source: www.mining.com
