Bolivia, Jindal sign El Mutun iron-ore deal

La Paz, July 19: Jindal Steel and Power Ltd. of India signed a contract on Wednesday to develop the vast El Mutun iron-ore deposit in Bolivia, investing some La Paz, July 19: Jindal Steel and Power Ltd. of India signed a contract on Wednesday to develop the vast El Mutun iron-ore deposit in Bolivia, investing some $2.1 billion in the South American nation.

The project, which represents the biggest single foreign investment in Bolivian history, involves mining iron ore and making steel at the site in the southeast of the country, believed to hold one of the world's largest iron ore deposits.

Bolivia's leftist government named the Indian firm the winner of the bidding to develop El Mutun more than a year ago, but final agreement had been delayed due to prolonged wrangling over the details of the project.

''Today's an important day for the region and for the nation, after many days of work and many years of waiting,'' President Evo Morales said at a ceremony to mark the signing of the deal in the eastern city of Santa Cruz.

Bolivia's mining minister said recently the deal would give Jindal rights to exploit half the 60-sq-km site for 40 years.

El Mutun, which lies near the Brazilian border, is estimated to contain iron-ore reserves of more than 40 billion tonnes, though they are said to be of medium-grade quality.

In comparison, proven reserves in ore-rich Carajas in Brazil's northern state of Para total 1.5 billion tonnes.

El Mutun's mineral riches, which also include magnesium and limestone, have been known for more than a century, but its inaccessibility and concerns over fuel supplies have stymied earlier attempts to develop it.

The project will use natural gas, and the price of the fuel to be supplied to the steelmaking operation was one of numerous issues that held up the deal.

Bolivia, which has South America's second-biggest natural gas reserves after Venezuela, has guaranteed to supply El Mutun with at least 8 million cubic meters per day.

Jindal and a state-run company will roughly share the profits generated by the project, which officials have said should guarantee the state an average of at least $200 million per year in taxes and profits.

Bolivia's first steelmaking operation, the El Mutun project is expected to generate some 4,600 jobs and produce 1.5 million tonnes of steel products per year as well as iron concentrates.

Reuters .1 billion in the South American nation.

The project, which represents the biggest single foreign investment in Bolivian history, involves mining iron ore and making steel at the site in the southeast of the country, believed to hold one of the world's largest iron ore deposits.

Bolivia's leftist government named the Indian firm the winner of the bidding to develop El Mutun more than a year ago, but final agreement had been delayed due to prolonged wrangling over the details of the project.

''Today's an important day for the region and for the nation, after many days of work and many years of waiting,'' President Evo Morales said at a ceremony to mark the signing of the deal in the eastern city of Santa Cruz.

Bolivia's mining minister said recently the deal would give Jindal rights to exploit half the 60-sq-km site for 40 years.

El Mutun, which lies near the Brazilian border, is estimated to contain iron-ore reserves of more than 40 billion tonnes, though they are said to be of medium-grade quality.

In comparison, proven reserves in ore-rich Carajas in Brazil's northern state of Para total 1.5 billion tonnes.

El Mutun's mineral riches, which also include magnesium and limestone, have been known for more than a century, but its inaccessibility and concerns over fuel supplies have stymied earlier attempts to develop it.

The project will use natural gas, and the price of the fuel to be supplied to the steelmaking operation was one of numerous issues that held up the deal.

Bolivia, which has South America's second-biggest natural gas reserves after Venezuela, has guaranteed to supply El Mutun with at least 8 million cubic meters per day.

Jindal and a state-run company will roughly share the profits generated by the project, which officials have said should guarantee the state an average of at least 0 million per year in taxes and profits.

Bolivia's first steelmaking operation, the El Mutun project is expected to generate some 4,600 jobs and produce 1.5 million tonnes of steel products per year as well as iron concentrates.

Reuters >