A discovery worth gold. El Salvador, often at the center of debates thanks to its positions on Bitcoin, has just added a spectacular string to its bow. President Nayib Bukele announced overnight the discovery of $3 trillion in untapped gold. This revelation, relayed on its social networks, places the small Central American country in the global spotlight. With gold reserves estimated at nearly 17% of the world's total supply, this discovery could be a game-changer.
Bukele said only 4% of the national territory had been explored so far, already revealing 50 million ounces of gold. According to his estimates, this wealth represents 8,800% of the country's current GDP. A colossal windfall that could finance numerous infrastructure projects, create thousands of jobs and stimulate the local economy.
- El Salvador has discovered $3 trillion in untapped gold, representing 17% of the world's total supply.
- Only 4% of the territory has been explored, already revealing 50 million ounces of gold.
Towards an economic revolution… and a legislative standoff?
Let’s go back a few years and understand the context of this discovery. In 2017, El Salvador became the first country in the world to ban metal mining. This law, passed after eleven years of heated debate, aimed to protect the country's natural resources and respond to pressure from local communities.
The reasons are numerous. El Salvador, already experiencing a chronic shortage of drinking water, feared contamination caused by toxic chemicals used in mining, such as cyanide. Past ecological disasters, such as the contamination of the Lempa River, had demonstrated the disastrous impact of mining activities on ecosystems.
Furthermore, rural communities, often the first victims of mining activities, strongly opposed extraction projects, fearing for their health and their land. These tensions culminated in the assassinations of environmental activists, such as that of Marcelo Rivera, in 2009.
Experts believed that the long-term environmental and social costs would far outweigh the immediate economic benefits. Many saw mining as leverage for multinational corporations, but not for the Salvadoran people.
Gold: An absurd ban
For Bukele, this ban has become an obstacle to economic development. He called her“absurd”recalling that El Salvador is the only country in the world to enforce a total ban of this type.
“GOD HAS PLACED A GIANT TREASURE UNDER OUR FEET: El Salvador potentially has the highest density of gold deposits per km² in the world. Located in the Pacific Ring of Fire, one of the richest areas in mineral resources thanks to its volcanic activity… (…)
We are the ONLY country in the world to completely ban mining, a practice no other country enforces. Absurd ! This God-given wealth can be responsibly harnessed to bring unprecedented economic and social development to our people. »
Source: Nayib Bukele on X
This tweet, which is not that old, allowed Bukele to support his vision, the president has already invited international experts to study the potential for extracting El Salvador's natural resources, beyond gold.
Bitcoin and gold: El Salvador at the crossroads of wealth
It is therefore in a sense no surprise that Nayib Bukele yesterday announced the discovery of 3,000 billion dollars of gold as well as other strategic materials such as gallium, tantalum and tin, essential for high-tech industries .
In El Salvador, Bitcoin and gold are king
The identified reserves represent nearly 4 times the current gross domestic product (GDP) from El Salvador, according to Bukele. These natural resources could exceed 8,800% you PIB of the country if they are exploited to their full potential. The president did not fail to emphasize that only 4% of these deposits have been explored so farhinting at even greater potential.
This announcement comes as El Salvador seeks to diversify its economy. Bukele, who has made Bitcoin adoption a priority, could use these resources to finance infrastructure projects, generate jobs and spur local development…. or to buy bitcoin!
While El Salvador has already made history by adopting Bitcoin as legal tender, this new gold discovery could strengthen its hybrid economic strategy.
Bitcoin, rarer than gold?
The discovery of these vast gold reserves highlights a paradox: while gold, a symbol of tangible wealth, is potentially abundant in El Salvador, Bitcoin is based on an immutable scarcity, limited to 21 million units by its code. This dichotomy raises an essential question: how to reconcile these two economic assets, which embody diametrically opposed visions of finance and economic sovereignty?
On the one hand, gold could provide welcome stability, called for by the IMF, supporting large-scale infrastructure and employment projects. On the other hand, Bitcoin, with its decentralized and resolutely modern nature, continues to attract the attention of investors and innovators. However, the challenge lies in the balance: how to exploit these resources without sacrificing digital ambitions or giving in to international pressure, notably from the IMF again, which could demand a compromise on Bitcoin policy in exchange for essential financing for the country emerging?
We will not have the answer to this question today. One thing is certain, however: with gold in its pockets and Bitcoin in its wallet, El Salvador now seems to hold all the cards. To be continued.
