The Hindu Business Line : Jindal Steel bags development rights for Bolivian iron ore mine

Jindal Steel and Power Ltd (JSPL) on Fridayannounced winning the development rights of 20 billion tonnes of iron ore reserves at the El Mutun Mines in Bolivia near the Brazil border. The company announced investment worth $2.3 billion over the next 10 years for mining and setting up a steel plant in the South American country.

The Company Vice-Chairman and Managing Director, Mr Naveen Jindal, told newspersons from London that the company would set up a wholly owned subsidiary in Bolivia for this purpose and a detailed contract with the Bolivian Government would be signed next month while an agreement has already been signed.

"The contract will be signed after one month, may be in July," he said and added that the company would be going in for foreign currency bonds and would be floating a subsidiary in the South American country to carry out the operations there.

El Mutun Mine is said to be the world's single largest iron ore mine containing probable reserve of 40 billion tonnes. JSPL has obtained mining rights for half of it.

The company's plans to set up a 1.7-million-tonne integrated steel plant for long products. It would also set up a 6-million-tonne per annum sponge iron plant and a pellet plant with 10 million tonnes annual capacity. The company's plan also includes supporting infrastructure including a 400-MW power plant. "Out of the total estimated investment of Rs 10,000 crore, investment in iron ore mining would be around 15-20 per cent and around 80 per cent would be in the sponge iron and steel plants," Mr Jindal said.

The Director Finance of the company, Mr Sushil Maroo, told mediapersonsfrom Bolivia that the negotiations were at the final stage. The company would also be looking at raising a substantial portion of its required resources from within Bolivia, he said.

JSPL won the mining rights after the Bolivian Government disqualified L N Mittal group last month and JSPL emerged as the sole bidder.

Mr Jindal said the company would have to give 8-9 per cent to the Bolivian Government as royalty on iron ore and concentrates and 10 per cent on pellets. There were no restrictions on exports of iron ore or steel but being a landlocked country ports are situated far away. The price of the JSPL scrip moved up from Rs 1,706.80 to Rs 1,782.15 on the NSE.

More Stories on : Minerals | Overseas Investments | Steel

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
ITC goes for integrated hotel complex in Chennai

Monsoon flows set to weaken as Bay `low' gets deferred

Baring India sells its entire stake in Mphasis to EDS

Inflation up on costlier food, energy prices

Nissan to tap Maruti facilities

Punj Lloyd acquires construction firm in Singapore for Rs 100 cr

Draft policy for sops to semiconductor sector soon

Jindal Steel bags development rights for Bolivian iron ore mine

Markets gain on buying by foreign funds

Mobile phones - your `scheduling' tool!

Resentment in Pak over `Super basmati' order