JSPL signs $ 2.1 bn agreement with Bolivian govt

New Delhi, Mar 2: Jindal Steel and Power Ltd (JSPL), a part of Rs20,000 crore Jindal Group, today inked an agreement with the Boliviangovernment to invest 2.1 billion dollars in mining and steel making atthe EI Muton iron ore mines.

JSPL plans to invest the sum over the next eight years in creatingan integrated steel plant, which would be capable of producing 1.7million tonnes per annum (MTPA) of long steel products and will alsohave a six MTPA capacity DRI (Direct Reduced Iron) and a 10 MTPA pelletplant.

The company will also set up supporting infrastructure for the proposed plant including a 450 MW power plant.

EI Mutun is believed to contain an estimated 40 billion tonnes of iron ore of medium-grade quality.

Bolivian President EVO Morales and JSPL's senior management teamled by Mr Vikrant Gujral, Vice Chairman and Chief Executive Officer andMr Sushil Maroo, Director-Finance agreed on the tax rate and naturalgas prices for the iron and steel project.

A definitive contract will be signed with the government within 45 days.

Bolivia, a major natural gas producer, has agreed to sell Jindalnatural gas at 3.91 per million dollars BTUs (British Thermal Units)for steel making, which represents 70 per cent of the project's powerneeds.

Jindal will pay 1.955 dollars per BTU for gas for power generation, which accounts for 30 per cent of its power needs.

In June 2006, JSPL emerged as the only company, which met thequalifying criteria set by the Bolivian government to exploit 50 percent of the EI Mutun reserve, which was followed by negotiations withthe Bolivian government on various clauses.

UNI >