El Salvador’s President Nayib Bukele revealed untapped gold reserves worth over $3 trillion, proposing responsible mining to boost the economy.
Salvadoran President Nayib Bukele has emphasized the potential of El Salvador’s untapped gold reserves, estimating their value to exceed $3 trillion if they are completely explored.
Last week, Bukele emphasized the potential for responsible mining to transform the economy of the nation in a post on the social media platform X. He anticipates that the proceeds will be used to finance essential initiatives, such as infrastructure improvements, job creation, and overall economic growth.
Bukele has suggested that the 2017 prohibition on metallic mining in the country be repealed, citing the restriction as a deterrent to the optimal utilization of the country’s extensive natural resources.
The Salvadoran president cited studies that indicated that only 4% of the nation’s mining areas have been explored, revealing an estimated 50 million ounces of gold valued at $131 billion—equivalent to approximately 380% of El Salvador’s GDP.
He is of the opinion that the reserves’ value could be increased to over $3 trillion, or 8,800% of GDP, through comprehensive exploration. He stated:
We’ve also found gallium, tantalum, tin, and many other materials needed for the 4th and 5th industrial revolution.
He attributed the country’s mineral abundance to its location within the Pacific Ring of Fire, which is renowned for its wealthy deposits and volcanic activity.
The discovery is praised by proponents as transformative, but critics caution against the potential environmental degradation. Bukele emphasized the potential for sustainable mining to achieve a balance between environmental protection and economic benefits.
However, there are those who query whether El Salvador actually possesses such substantial gold reserves.
A cryptocurrency-focused dimension is added to the gold discovery by El Salvador’s distinctive posture as the first country to adopt bitcoin as legal tender. Pierre Rochard, Riot Platforms’ vice president of research, observed:
El Salvador discovered $trillions of gold deposits that when mined will massively dilute the above-ground supply of gold. This can’t happen with bitcoin because the code is open source.
Bukele echoed this sentiment, stating: “We’ll dilute that thing like there’s no tomorrow.”
Max Keiser, a prominent bitcoin advocate, proposed monetizing the gold reserves to invest in bitcoin, aligning with Bukele’s vision. He suggested selling convertible preferred shares to fund large-scale bitcoin purchases, arguing that the cryptocurrency’s growing dominance over gold makes it a more valuable long-term asset.
He shared on X: “El Salvador should monetize this $3 trillion in gold by selling a series of 0% convertible preferreds (a la Saylor) and buy as much bitcoin as possible under $200,000.As bitcoin continues to demonetize gold at a rapid pace, the actual value of the gold is really closer to 1/10th of current estimates, but still, $300 billion in bitcoin now is better than a wasting asset like gold in the future.”
