JSPL signs $ 2.1 bln agreement with Bolivian govt

New Delhi, Mar 2 (UNI) Jindal Steel and Power Ltd (JSPL), a part of Rs 20,000 crore Jindal Group, today inked an agreement with the Bolivian government to invest 2.1 billion dollars in mining and steel making at the EI Muton iron ore mines.

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

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 team led by Mr Vikrant Gujral, Vice Chairman and Chief Executive Officer and Mr Sushil Maroo, Director-Finance agreed on the tax rate and natural gas 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 Jindal natural gas at 3.91 per million dollars BTUs (British Thermal Units) for steel making, which represents 70 per cent of the project's power needs.

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 the qualifying criteria set by the Bolivian government to exploit 50 per cent of the EI Mutun reserve, which was followed by negotiations with the Bolivian government on various clauses.

UNI