Bolivia and Jindal postpone contract http://in.today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2006-09-25T231213Z_01_NOOTR_RTRJONC_0_India-269244-1.xml&archived=False
Mon Sep 25, 2006
LA PAZ, Bolivia (Reuters) - The signing of a joint-venture contract between Bolivia and India's Jindal Steel and Power Ltd. for the development of El Mutun, a site believed to contain one of the world's biggest iron-ore deposits, has been postponed for a month, Bolivia said late on Sunday.
In mid-August the two parties agreed to sign the contract within a month, but the signing was postponed because the Indian company has been asked to create a local subsidiary in Bolivia.
State news agency ABI said that process would take some 30 days, citing a government source.
Jindal said it will initially invest over $2 billion to mine iron ore and produce steel -- the biggest investment in a single project in Bolivian history and a boost for leftist President Evo Morales, whose nationalization of the energy sector has suffered delays due to technical and financial difficulties.
Earlier this year, the government changed the conditions of the El Mutun bidding to allow the country to develop a steel-making industry for the first time in an effort to create jobs and supply the country's domestic needs.
Bolivia, the poorest country in South America, will receive some $200 million a year in profits and taxes as part of the 40-year concession. The 60-sq-km El Mutun site, which lies in the Santa Cruz region, near the Brazilian border, is estimated to contain iron-ore reserves of more than 40 billion tonnes, though they are considered of medium-grade quality.
© Reuters 2006. All Rights Reserved.