Bolivia’s New State Gold Trader Eyes $1 Billion in Purchases This Year.

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.

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%.

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.

Source: FINANCE.YAHOO