The Hindu Business Line : Jindal Steel's Bolivian plans likely to be delayed

Jindal Steel & Power Ltd's plan to acquire the El Mutun iron ore mines in Bolivia, announced in May last year, has not been able to make any headway till now, according to sources.

This is because the company has not been able to finalise the details of the contract with the Bolivian Government till now.

In June the company had announced that the contract was expected to be signed in July.

The company had also announced that it would be going in for foreign currency bonds and floating a subsidiary in the South American country to carry out the operations there.

The El Mutun mine is said to be the world's single largest iron ore mine containing probable reserves of 40 billion tonnes. Jindal Steel had obtained mining rights for half of it through global bidding.

The company's plans had faced several uncertainties due to the policy changes as the Bolivian Government nationalised the petrol and gas sector.

Iron ore is currently a controlled sector in Bolivia.

When contacted, company officials said: "The plans have not yet been finalised though most of the details of the contracts had been worked out with Bolivian officials."

Mr Sushil Maroo, Director, told Business Line: "Only certain small portions are left to be finalised and they are being discussed." However, he refused to elaborate.

A team of company officials visited Bolivia last month and another senior team will be leaving shortly to give a final shape to the contract, Mr Maroo said.

"We expect to finalise the contract by February or March."

Jindal Steel's Bolivian plans include setting up a 1.7 million tonnes integrated steel plant for long products.

It will also set up a six million tonnes per annum sponge iron plant and a pellet plant with 10 million tonnes annual capacity. It also intends to set up 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 account for around 15-20 per cent while the rest would be used for the sponge iron and steel plants, officials said.

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