September 06, 2008

Bolivian Congress approves JSPL El Mutun deal - Report

Reuters reported that Bolivia's Congress on Friday ratified a contract that will allow Jindal Steel and Power Limited to exploit El Mutun iron ore deposit and produce steel in eastern Bolivia.

The chamber of deputies said in a statement that "Tonight, the National Congress passed two law bills through which we ratify the contract signed between the State and the Indian company Jindal Steel & Power Limited.”

The first bill ratifies the contract with JSPL, while the second creates a state run mining company that will tie up in a joint venture with JSPL.

The Bolivian government called for a joint meeting of both chambers of Congress on Friday in order to garner enough support to ratify the deal, after the opposition controlled Senate refused to endorse the contract as it had been signed with JSPL.

The 40 year contract gives JSPL the right to mine approximately half the area of El Mutun, estimated to contain iron-ore reserves of more than 40 billion tonnes, near the border with Brazil, in a project worth USD 2.1 billion. As part of the project, JSPL has promised to develop an integrated steel plant with an annual capacity of 1.7 million tonnes, which would start up by 2010.