Epcoro, Bolivia’s state gold trader, aims to purchase $1 billion in gold this year to support the central bank amidst rising inflation. After acquiring one ton of gold from local producers, Epcoro seeks to enhance the national gold reserves while addressing economic challenges including a decline in dollar availability and increased inflation rates. Despite difficulties, CEO Pablo Cesar Perez remains optimistic about the firm’s contribution to Bolivia’s gold supply.
Bolivia’s state gold trading firm, Epcoro, has ambitious plans to purchase up to $1 billion in gold this year, significantly increasing its acquisitions compared to previous years. Under the leadership of Chief Executive Officer Pablo Cesar Perez, Epcoro procured a ton of gold from small-scale producers in Bolivia, compared to a total of 2.4 tons acquired last year. “We have a projection to sell around 10 tons to the central bank this year,” stated Perez during an interview in La Paz, highlighting the initiative’s aim to bolster the nation’s gold reserves amid rising inflation concerns.
Established to address a crisis at Bolivia’s central bank, which is facing severe depletion of cash and gold reserves, Epcoro’s creation follows the government’s announcement of reduced fuel subsidies affecting miners and farmers. In addition to these challenges, a decline in investments in gas fields has resulted in decreased production and a shortage of dollars in the economy, resulting in extended queues for fuel purchases. The inflation rate in Bolivia is currently at a multi-decade high of 13%.
Epcoro’s strategy involves sourcing gold from producers willing to transact in the local currency, the boliviano, which may be challenging for miners seeking buyers that can pay in dollars. Despite rising gold prices, Bolivia’s gold exports dropped by 72% last year to approximately $687 million. A portion of these exports is now being allocated to Epcoro, although Perez has refrained from sharing specific figures.
There exists a discrepancy between international gold prices and what Epcoro compensates in bolivianos. However, miners are drawn to Epcoro’s offer of immediate cash payments. Perez asserts the compliance of their gold sourcing with legal standards, despite opposition claims alleging potential connections to illegally mined gold from the Bolivian Amazon. Selling gold assists in generating the essential hard currency for the central bank, which had $1.98 billion in reserves at the end of last year, with a staggering 96% represented by gold. Notably, about 13% of the gold purchased by the central bank between mid-2023 and 2024 originated from Epcoro, even though Perez acknowledged that Epcoro has not yet fully realized its role as the primary supplier of gold to the central bank. “But we will be able to demonstrate that we are contributing to adding value to our gold,” he affirmed.
Epcoro’s establishment represents a strategic response to Bolivia’s current economic challenges, seeking to enhance the national gold reserves while addressing the needs of local miners. With ambitious targets set for gold purchases and sales to the central bank, Epcoro plays a vital role in stabilizing the financial landscape against the backdrop of heightened inflation and diminished reserves. As it seeks to assert its influence in the gold market, Epcoro faces challenges that it must navigate to fulfill its objectives effectively.
Original Source: www.mining.com
