Malaysian News Agency Bernama.com reports that a huge iron ore mine in Bolivia may be doomed as a result of conflicts between the proponent and the Bolivian government.
The plan by India’s Jindal Steel & Power to mine the 20-billion tonne deposit has run into trouble after the Bolivian government asked the company for another $18 million in bank guarantees for not meeting contractual obligations. A similar amount was demanded in 2010 for not meeting commitments.
Bernama.com reports a source close to the development saying the project may now be unsalvageable:
“The writing is on the wall. It is hard to see how we can make this relationship work from here,” said a company official close to the negotiations.
The mine would be the largest foreign investment in Bolivia under President Evo Morales.
Wall Street Journal (sub required) reported yesterday that Jindal is scouting around for iron-ore and coking coal projects. The company expects to spend up to $6 billion over the next four years in order to achieve a five-fold increase in steel production, according to WSJ.
Clearances for new mines in India often take years and steel companies need to look far ahead to plan their supplies.
Photo of Copacabana, Bolivia is by Shutterstock.
