Jindal and Bolivian Government Set Terms for Mutún Development
India’s Jindal Steel and Power Ltd.
announced on March 2, 2007, that it
had reached a preliminary agreement
with the Bolivian government on terms
for Jindal’s planned $2.1-billion investment
in mining and steel-making facilities
at the huge Mutún iron ore deposits
in eastern Bolivia. A definitive contract
was scheduled for signing within 45
days. The announcement followed several
weeks of reports that Jindal and the
government were at odds over taxes that
would be imposed on the project and the
price Jindal would pay for natural gas.
Jindal reported that Bolivia has agreed
to sell Jindal natural gas at $3.91/million
Btu for gas used in steel making, representing
70% of the project’s power needs,
and $1.955/million Btu for gas used to
generate electricity.
Jindal plans to invest $2.1 billion over
the next eight years to create an integrated
steel plant capable of producing 1.7 million
mt/y of long steel products at the
Mutún deposits. The project will also have
capacity to produce 6 million mt/y of direct
reduced iron and 10 million mt/y of iron
ore pellets. Jindal will also be responsible
for establishing supporting infrastructure,
including a 450-MW power plant.