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India’s Jindal Steel & Power Ltd. has taken over operations at Venezuela’s largest iron-ore complex, the first for a private-run firm in the South American country’s heavy industry in over a decade, just months after striking a deal with the Nicolás Maduro government.
Jindal officials are carrying out inspections at iron-ore plants of CVG Ferrominera Orinoco, according to two people familiar with the process, who asked not to be named as the information isn’t public. The company, which is controlled by state-owned conglomerate Corporacion Venezolana de Guayana, has five plants that produce iron-ore pellets and briquettes that serve as raw material for steelmaking.
Jindal aims to export 600,000 metric tons of the raw material per month by the end of the year, investing an initial $800,000 to upgrade existing equipment, according to one of the people. Terms of the deal aren’t clear since neither the Venezuelan government nor New Delhi-based Jindal have confirmed the arrangement.
Venezuela’s information ministry and Jindal didn’t respond to repeated requests for comment.
Venezuela’s partnership with Jindal is a departure from the government’s longstanding reluctance to involve private firms into its tightly held, impoverished mining industry.
In the mid-2000s the late president Hugo Chavez reversed a privatization process started by previous governments for state-owned gold, steel and cement companies. The measure saw the exit of Luxembourg’s Ternium SA, Switzerland’s Holcim AG, Mexico’s Cemex SAB and Canada’s Crystallex International Corp. among others.
After 18 years, Maduro now seeks to reinstate foreign partnerships.
Ferrominera has an annual installed capacity of 25,000 tons of iron ore and proven reserves of 4.2 million tons. Its plants have been running below capacity after years of lack of investment and a power crisis that in 2009 forced the company to cut production to save energy.
The company’s output has fallen over the years, from 15.6 million metric tons in 2001 to 5.7 million tons in 2017, according to the latest figures by the Venezuela Iron and Steel Institute.
The country’s metallurgy sector has suffered setbacks due to expropriations and underinvestment to the point that it has “practically disappeared,” according to a 2023 report by the Venezuela mine engineering association. Since 2000, the number of private companies in the sector has fallen from 1,200 to 70.
(By Fabiola Zerpa)
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