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The Bolivian government said Sunday it is preparing a new tender for its Mutún iron ore deposit — believed to contain some of the world’s largest reserves of iron ore—and the related steel manufacturing facility, after India’s Jindal Steel and Power Limited (JSPL) abandoned the endeavour over a year ago.
Mining Minister Mario Virreira told news agency EFE (in Spanish) he is tuning up details to put up to 50% of the project up for grabs, in hopes to fulfill the original target of start producing steel by 2014.
It is estimated that Mutún, located near the border with Brazil, is home to 20 billion tonnes of iron ore. To put in perspective, all of India’s iron ore deposits add up to 28.5 billion tonnes.
The project had been on hold since 2007, when the Indian steelmaker was awarded a 40-year contract to mine about half the deposit. It also agreed to set up a plant to process 10 million metric tons of iron-ore a year and build a steel factory, the first one in the Andean country, with an annual capacity of 1.7 million tons.
In Bolivia, President Evo Morales initially showcased the deal as an example of how his government and multinational companies could work as equal partners. But eventually, the endeavour got bogged down by delays and disputes between the government and the company, which ended in Jindal terminating the contract with Bolivia in July last year.
Mutún would be the Andean nation’s first integrated steel facility and its largest foreign investment.
The Bolivian government plans to invest $3 to $4 million in building a highway and port in the border with Brazil, taking the ore through waterways that end up connecting the land-locked country to the Atlantic.
Last June, Bolivia sued Chile in the Hague before the International Court of Justice as Morales argues the southern neighbour have reneged on agreements to give Bolivia access to ports further south on Chile’s long Pacific coastline.
Despite pending decision, Bolivians still have preferential access to Chile’s northern ports, and export their goods through them.
8 Comments
trevormarr
This would be open pit mining correct? Canada needs to wake up and see that the World is full of great opportunities… the Canadian Oilsands is a great opportunity that we can do responsibly and we all win! Mines, SAGD, Refineries, Pipelines, Marine Terminals… if Bolivia can do it, so are we!!!
BeenThereDoneThat
With it’s history of theft of foreign owned assets Bolivia will struggle to attract the necessary international investment to advance such projects. All Latin American countries with populist socialist governments are similary challenged including Ecuador, Argentina and uber-socialist Venezuela. Countries that embrace capitalism such as Colombia and Chile will reap the benefits at the expense of their kleptocratic neighbors.
shoes
Be very difficult to get an investment of this size with the govt owning 50% thus bogging any decision making down in bureaucracy. And worse yet, nobody should believe that “governments” anywhere in the world are capable of mining properly. It is a full time job.
Jesse DeSouza
It will not happen because there is a huge surplus of Steel production around the world. In case of production only to supply iron ore, the cost os transportation plus untrustworthness of Bolivian government will make the project unfeasible.
vcs
bolivia will not get a single bid, including chinese
LAXMI NARAYAN
As mentioned in your report, Jindals were forced to call off the agreement! Any investor should find out for themselves, the reasons behind Jindals walking out after spending millions of dollars. It makes no sense to invest in a country with leaders like Morales- who has no morals.
moralist1
Morales and his leftist government “screwed” Jindal and many other Western mining companies. Now they want to find some other “suckers” to be fleeced. Interesting.
Sky_Dog
If anyone bids a single dollar, he is nuts. After Morales stole South American Silver their property, Bolivia is a big No-Go for the next 100 years.