Bolivia’s new government plans to create a gold bank with public and private capital to ensure sustainable mining and marketing practices, Finance Minister José Gabriel Espinoza said.
The administration of centrist President Rodrigo Paz, who took office this month following two decades of socialist rule, plans to continue state buying of locally mined gold but with different mechanisms from those in place since 2023, Espinoza said in an interview.
The new gold bank would help improve oversight, he said, without offering details on how it would operate.
“We’re going to create the gold bank, and what we need to do is set mechanisms that ensure traceability, development of the gold sector and respect for environmental standards,” Espinoza said.
Bolivia initiated a central bank gold purchasing program in mid-2023, raising billions of dollars to help pay back international bondholders amid a hard currency crisis exacerbated by fuel subsidies. But the buying program has lacked transparency and has helped fuel an unruly gold rush characterized by environmentally harmful practices and opaque trading.
Informal and illegal gold mining and trafficking in South America is surging along with bullion prices, which are up more than 50% this year due to central bank purchases and as investors seek havens from mounting government debt.
Through August of this year, Bolivia’s central bank had bought 28.5 metric tons of locally produced gold and monetized 48 tons. But it also sold gold in advance and still must deliver 6.7 tons next year. It paid producers in local currency, indirectly fueling inflation and encouraging smuggling.
The program’s sole purpose was “to feed dollars to a monetary-management system that was absolutely pernicious,” Espinoza said. Gold bought by the bank “very likely does not meet environmental standards, child labor standards, for example, and obviously it would not meet any of the traceability standards established today.”
Without offering details, Espinoza said the new administration intends to keep buying gold but would “reorder” its instruments, ensure environmental compliance, remove gold as a payment method in illegal sectors, and offer cooperative miners better labor conditions by promoting formalization.
“We will intervene there, but this will be coordinated with the central bank, which also has its own ideas,” he said.
(By Sergio Mendoza)