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Bolivia’s new state gold trading firm plans to quadruple purchases this year as a way of boosting reserves of the high-flying metal for the nation’s struggling central bank.
Known as Epcoro, the company has already bought a ton of gold this year from small-scale Bolivian producers, compared with a total of 2.4 tons last year, chief executive officer Pablo Cesar Perez said.
“We have a projection to sell around 10 tons to the central bank this year,” Perez said in an interview in La Paz. That’s worth about $1 billion at today’s global prices, which are near record highs on fears of persistently high inflation.
Epcoro was created a year ago in response to a crisis at the government-controlled central bank, which has all but depleted its cash and gold reserves as it struggles to bankroll fuel subsidies. Earlier this week, the government said it could no longer afford fuel subsidies for all, cutting support for miners and farmers.
In Bolivia, a lack of investment in once booming gas fields led to slumping production and a dollar shortage, with banks now limited on how much they can convert. That’s squeezing importers and exporters alike, while leading to long lines to buy fuel. Inflation is running at a multi-decade high 13%.
Epcoro must find producers willing to sell gold in the country’s depreciating local currency, the boliviano. That task is made possible by miners’ struggle to find buyers who can pay in dollars.
Surprisingly, Bolivia’s gold exports plummeted 72% last year to about $687 million even as metal prices rose, according to official data. A good amount of that supply has shifted to Epcoro, although Perez declined to give exact figures.
There’s a difference between the international gold price in dollars and what Epcoro pays in bolivianos, Perez said, without elaborating. He said Epcoro appeals to miners because it pays cash upfront.
Perez has defended the origin of the gold, saying it meets all legal requirements. Opposition lawmakers have alleged that the central bank may be helping to launder gold extracted illegally from the Bolivian Amazon by buying metal from Epcoro.
To be sure, selling the country’s gold is one way to generate the hard currency that the central bank needs. At the end of last year, the bank had just $1.98 billion in international reserves, of which 96% was gold. About 13% of all gold purchased by the central bank from mid-2023 through 2024 was supplied by Epcoro, Perez said.
He acknowledged the firm isn’t yet fulfilling its intended role of being the main gold supplier to the central bank. “But we will be able to demonstrate that we are contributing to adding value to our gold.”
(By Sergio Mendoza and Marcelo Rochabrun)