Gold prices are higher on Monday morning. The price of gold is trading at $2688.25, up $27.95. The price of silver is trading at $32.01, up 17 cents.
President Nayib Bukele of El Salvador has recently announced the discovery of significant gold deposits in the country, potentially worth up to $3 trillion. According to Bukele, El Salvador may have one of the highest density gold deposits per square kilometer globally, concentrated in the Pacific Ring of Fire area known for its volcanic activity and mineral wealth. Studies conducted on just 4% of the identified gold-rich area revealed 50 million ounces of gold, valued at approximately $131.5 billion, representing 380% of the nation’s current GDP.
However, El Salvador currently has a ban on metallic mining, implemented in 2017 to protect the country’s limited water resources from potential pollution. This law strictly prohibits exploration, extraction, and processing of metallic minerals, including gold[1]. Bukele has expressed frustration over this existing legal framework, arguing that it prevents El Salvador from tapping into its valuable natural resources and the potential economic benefits they could bring.
The president’s proposal to lift the mining ban and exploit these gold reserves has met with significant opposition from various sectors, including the Catholic Church, environmental groups, and civil society organizations. Critics argue that mining activities could lead to environmental damage, water contamination, and health issues for local communities. Despite this opposition, Bukele’s political party holds a majority in Congress, making it likely that a formal initiative to lift the ban would face little resistance. The president has suggested implementing “modern and sustainable” mining practices that would prioritize environmental care, but environmentalists remain skeptical about the possibility of truly “green” mining.
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