The Hindu Business Line : Jindal Steel inks pact with Bolivian Govt

Jindal Steel and Power Ltd (JSPL), along with its subsidiary Jindal Steel Bolivia (JSB), has signed a contract with the Bolivian Government for the development of the El Mutun iron ore mine in the biggest investment deal by an Indian company in South America.

Speaking to newspersons on Thursday, Mr Naveen Jindal, Executive Vice-Chairman and Managing Director of JSPL, said: “The company has signed a pact with Bolivia to develop a 20-billion-tonne iron ore mine and set up a two-million-tonne steel plant, which is likely to be commissioned by 2010.”

JSPL is looking at investing $2.1 billion over the next five years in developing the project, he added.

The company bagged the contract to develop the El Mutun mine last year after outbidding various international competitors, including Arcelor Mittal.

(El Mutun is considered to be the world’s largest iron ore mine, with reserves of 40 billion tonnes.)

The signing of a final agreement was, however, delayed due to differences between JSPL and the Bolivian Government on a few issues.

“Most of the issues have been worked out and now it has to be passed by their Parliament. We expect to start construction activities in 3-4 months,” Mr Jindal added.

The proposed integrated steel plant would have a 10-million-tonne pellet plant and a six-million-tonne sponge iron plant (DRI), and also produce TMT bars, wire rods and some flat products.

“We are also looking at putting up a 450-MW gas-fired power plant, for which the Bolivian Government has assured the supply of gas at a low rate,” Mr Jindal said.

Asked if ore would be shipped to India for commercial sale or for captive use, he ruled out such a possibility.

Of the reserves, Bolivia has allowed JSPL to export up to 10 million tonnes.

The first consignment of 4-5 million tonnes is expected in the first year of operations.

“The investment would be made in a debt-equity ratio of 60:40. Talks are on with various international banks and financial institutions to secure loans. Even a couple of Bolivian banks have expressed interest in funding the project.”

Raigarh project

Meanwhile, in India the company expects to commission by September the first part of the 1,000-MW power project coming up at Raigarh.

“We will be commissioning 250 MW initially; the fourth phase would be ready by June next year,” he said.

“Plans are also in place to expand the capacity to produce 10,000 MW by 2015, which would require a total investment of Rs 40,000 crore.”

More Stories on : Alliances & Joint Ventures | Minerals | Steel

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