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A deal by the Bolivian central bank, announced yesterday, raised £435 million in exchange for a 5.4 ton delivery of gold in a year’s time, further highlighting the country’s increasing reliance on its precious metals exports. However, increasing concerns over criminal activity around gold mines in Central America, compounded by the recent arrest on fraud allegations of the head of a prominent commodities firm, is threatening the region’s growing gold export sector.

Gold is one of Bolivia’s biggest industries, making up 22% of its total exports in 2024. A steady rise in global gold prices, which have more than tripled in the last decade, has been fueling a literal gold rush in much of metals-rich Latin America, with Colombia’s gold exports growing by 39% in 2025 and Peru’s by 46%. Gold prices have risen even more in the past year, growing by almost 50% in 2025 as investors turn to the safe haven asset in the face of global uncertainty.

The Bolivian government, facing a struggling economy and an unpopular president who lost reelection last month, is increasingly looking to the commodity to keep finances afloat. The country’s central bank has made over £2 billion in the last two years by buying precious metals from small local producers and selling it on the international market in exchange for much-needed US dollars, a Bloomberg report has found. 

The most recent move by the central bank involved a futures contract that raised £435 million to raise foreign reserves in a legally ambiguous operation that one of Bolivia’s presidential candidates has said is against the country’s law. Bolivian law mandates the central bank to maintain a set quantity of gold reserves, which some argue would be breached by the futures contract. 

Bolivia’s left-wing governing party, which has been in power for over 20 years, lost its majority in the August elections; a runoff race to elect the country’s president will be held next month, but neither candidate is from the current ruling party. This means that ultimately the contract will need to be honored by a government other than the one who has signed it, who may not think the deal is even valid. 

This could destabilise gold prices around the world and throw an already fragile economy into turmoil – Bolivia has the worst dollar-debt credit rating of all Latin American countries and fast-rising double-digit inflation rates. 

Besides the legality of the deal, environmental and social concerns around gold mining are making the booming industry increasingly controversial in Central America. The rising gold prices have encouraged gangs to enter the gold trade in several countries in the region, leading to violent incidents at mines. In April, an altercation between rival miners caused an explosion in Bolivia that left five dead, including a toddler. 

Illegal mining operations run by gangs are becoming increasingly common and making up a growing proportion of the region’s gold revenues; a lack of oversight often results in unsafe measures, exploitative contracts, and skyrocketing violence in towns surrounding the mines. A recent report by the US Environmental Investigations Agency found that the Jalisco New Generation Cartel, one of the world’s most powerful criminal organisations, is making billions of dollars a year operating mines and trafficking mercury, an illegal substance some miners use to purify gold. 

The impact of gold mining on the environment is also leading to large-scale pollution, also permitted lax regulations that are seldom enforced. The use of mercury, highly toxic to both humans and nature, to separate gold from its impurities is polluting water sources; the use of heavy machinery is destroying Bolivia’s native rainforests, which cover nearly half of the country. The founder and CEO of a commodities trading company that financed Colombia’s metals exports was arrested in the US last week on charges of fraud and embezzlement, compounding the regional instability around mines and precious metals exports.