Jindal committed to $2.1 bln Bolivian project

By Diego Ore

LA PAZ, March 23 – India’s Jindal Steel and Power <JNSP.BO> is committed to investing $2.1 billion in Bolivia, the head of the company’s unit in the Andean country said on Tuesday.

Arvind Sharma said that relations with the Bolivian government had improved “after certain confusions” about the contract.

“We had a discussion with the government and we reached an agreement … everything is OK right now,” Sharma told Reuters.

Bolivian mining minister Jose Pimentel accused Jindal last week of not fulfilling its contract with the Bolivian state and of wanting to change the terms of the deal signed in 2007.

The 40-year contract gives Jindal the right to mine about half the El Mutun site, which is believed to contain one of the world’s largest iron ore reserves.

The site in eastern Bolivia, near the border with Brazil, has estimated iron ore reserves of more than 40 billion tonnes, though they are said to be of medium-grade quality.

Under the deal, investments had been due to start in late 2008 but that was rescheduled to the second half of 2009 due to administrative delays.

“We’re going to invest $1.5 billion by 2015,” Sharma said.

As part of the project, Jindal had vowed to develop an integrated steel plant with an annual capacity of 1.7 million tonnes.

“The production of steel will be by 2014 (and will be exported) to markets like India, China, South America, and the U.S.,” said Sharma.

The mining executive said that Jindal has so far invested $20 million to start mining at El Mutun and a further $40 million in other projects in the landlocked Andean country.

The project will allow Bolivia to develop a steel-making industry for the first time and is the biggest investment in a single project in Bolivian history.

Source: Reuters

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