Iron ore weakness to continue into 2025 and beyond, says Fitch Solutions’ BMI
Looking beyond 2024-2025, BMI analysts maintained their view that iron ore prices will likely follow a multi-year downtrend.
Two employees of India’s Jindal Steel and Power were arrested on Friday and equipment confiscated in Bolivia, after the company abandoned its $2.1 billion El-Mutun iron ore project five days ago.
The Bolivian government accuses Jindal of not having fulfilled its contract obligations, which included a $600 million investment by 2012. Jindal, on the other hand, argues it had to drop the contract because the project was three years behind schedule and lacked legal securities to carry on.
In a statement quoted by local newspaper La Razón, the Indian steelmaker said its six arrested employees were released hours later, but that they are still in Bolivia and that the company was making attempts to fly them back to India.
Jindal also said that Evo Morales Administration’s decision “shows that the Bolivian government is taking recourse to criminal proceedings and its intent is to victimize [our] company and its employees.”
The company called on the government to ensure the safety and security of all its employees and assets that legally belong to Jindal.
Last Monday, the steelmaker said it was scrapping El Motum project, in the region of Porto Suarez, as the Bolivian government was unable to supply the 10 million standard cubic metres per day (MSCMD) of natural gas it had agreed to in 2007.
The Bolivian government was willing to commit only 2.5 MSCMD of gas beginning in 2014, reported La Razón.
Morales initially market the project as an example of how his government and transnational groups were able to work as equal partners. Once differences between Jindal and the government worsened, however, Bolivia cashed $36 million of bank guarantees given by the Indian steelmaker. The guarantee issue is now with the International Court of Arbitration.
The El Mutun has an estimated 40 billion tons of several mineral deposits, being iron ore the most significant.
Read more on Bolivia’s decision to allow foreign companies access >>
And more on why governments taking over mines has become every company’s worst nightmare >> >>
