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50 million ounces of gold await the country to reverse the law that prohibits metal Mining.
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Bukele’s Bitcoin strategy is already giving strong signs that it is working.
The president of El Salvador, Nayib Bukele, is determined to continue diversifying the national treasury after he revealed, in March of this year, the address of a bitcoin (BTC) wallet in which more than 6,000 coins belonging to the Central American nation. And while he consolidates his bet on the pioneering digital currency, he also explores the gold deposit that the Salvadoran territory has, which he classifies as “a gigantic treasure under our feet.”
The wealth that the subsoil of the Central American nation has is such that “could transform El Salvador,” how he held it Bukele in his message. This is 50 million ounces of gold, which at current value would represent more than 130 billion dollars, equivalent to 380% of the country’s Gross Domestic Product (GDP). However, the total potential of the deposit could rise to more than $3 billion, which if realized would raise the nation’s economic prospects by approximately 8,800%.
The ruler is already making plans with the mining exploitation of that deposit, located in the rich and mineralized area known as the Pacific Ring of Fire, a set of tectonic plates, where most of the seismic and volcanic activity on the planet occurs. And for this reason, it is an area rich in mineral resources. Only a small portion of land in this extensive area belongs to El Salvador.
Bukele believes that, with the exploitation of the area that corresponds to Salvadoran territory, his government would have the possibility of creating thousands of jobs, financing infrastructure and promoting the development of local economies. All of this supported by sustainable mining methods that protect the environment. However, Gold mining is widely rejected by the inhabitants of El Salvadorso much so that it was even banned in March 2017, considering it “a threat to the development and well-being of families.”
El Salvador is currently the only country in the world that prohibits metal mining, a fact that Bukele considers “absurd” as he makes plans to eliminate the restriction that prevents the Central American country from taking advantage of part of the potential of its natural resources to boost development. economic and social of the country.
Bukele pointed out that studies carried out in only 4% of the gold districts of El Salvador estimate a potential of 50 million ounces of the precious metal. Source: X/nayibbukele.
El Salvador’s giant gold deposit was recently mentioned in the VanEck investment company’s report, and it is stated there that Bukele described these untapped reserves as “the largest per capita and per square mile in the world”although there are no studies that prove it.
In his document, Mateo Sigel, Head of Digital Asset Research at VanEck, states having held a meeting with Bukele, in which the president expressed his intention to reverse the law that prohibits metal mining.
“The president extended an invitation to VanEck gold geologists to investigate the deposits, signaling his administration’s willingness to collaborate with global experts to unlock this resource. If successful, gold mining could contribute to El Salvador’s economic transformation, adding another layer to the country’s diversification efforts.
Mateo Sigel, author of the most recent VanEck report on El Salvador.
Bitcoin and gold, Bukele’s bets to improve the economy of El Salvador
A huge gold deposit represents another layer of diversification for El Salvador’s national reserves, but it is only a possibility, given the ban on metal mining, of which little is known about the progress to reverse it.
However, a publication The Dial reports a figure lower than that published by Bukele, pointing out that according to previous estimates there are 1.5 million ounces of gold under the Salvadoran soil. They calculate a hypothetical profit of more than three billion dollars for any company that extracts that material, and therefore, they project that the “enrichment for El Salvador would not be anywhere near three billion dollars. Additionally, there is what environmentalists point out: “the costs of mining would be enormous and potentially catastrophic.”
“The mines require large volumes of water to operate, and El Salvador does not have enough drinking water for the needs of its population,” as Andrés McKinley, a water and mining specialist at the Central American University of San Salvador, told The Dial.
Gold mining, according to McKinley, represents a serious threat to the environment and local communities. The extraction of this precious metal competes directly with human needs by depleting essential water resources. Furthermore, the use of toxic chemicals such as cyanide in extraction processes significantly increases contamination risks.
A spill, even a small one, could have devastating consequences for aquatic ecosystems and human health. Another problem associated with this activity is acid drainage, a process that contaminates soil and groundwater with dangerous substances, making it impossible to use it for human consumption, agriculture or fishing.
Some users warn that gold is a confiscable asset, while bitcoin is not as long as the private keys to the digital wallets are kept. Source: X/OptimusPrime.
Without so much ecological damage, El Salvador has the alternative of continuing accumulating bitcoina strategy with which he has already achieved profits of more than 300%. Additionally, there is Bitcoin mining, with which we already has mined almost 500 bitcoins since 2021.
Furthermore, Bukele would be studying the possibility of «rent a volcano to mine Bitcoin in El Salvador». His idea comes from another of the riches of the Central American country, such as the potential of its geothermal energy. It is due to the fact that being in the Ring of Fire, El Salvador has privileged access to the high subsoil temperatures necessary to generate geothermal energy.
In fact, El Salvador has already implemented a geothermal energy law for Bitcoin mining. And in light of this, it is noteworthy that the country currently has one of the most favorable regulations and friendly to the bitcoin ecosystem. What he means by this is that has an advanced path to continue promoting its development with bitcoinan asset that although it is now used by only 8% of the population, seems to have more acceptance in El Salvador than gold mining.
Meanwhile, the world’s gaze will continue to focus on the strategies that Bukele uses to boost the economy of El Salvador, where metal mining is a controversial issue that evokes development opportunities, but also serious environmental concerns. , a strategy with bitcoin that is already beginning to pay off strong signs that it is working.
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