Indian conglomerate Jindal Steel & Power said within two months it will resume development of the massive El Mutun mine, the second largest iron ore deposit in South America.

Bolivian President Evo Morales used the occasion of the National Day of Bolivia to sign a law ceding the 1,500 hectares of land that Jindal needs to develop El Mutun.

The Bolivian government and Jindal signed a 2007 agreement that allowed the Indian company to mine half of the deposit, which is believed to have 40 billion tonnes of iron ore and 10 million tonnes of magnesium. The deal was initially valued at USD 2.1 billion.

The 40 year contract called for Jindal to build a pellet plant, a sponge iron plant, a steel plant, and a power plant, along with development of the mine.

However, Jindal has only spent USD 12 million of the USD 600 million it was supposed to invest for three year, citing the failure of Bolivia to grant the 1,500 hectares of land need for its operations.

Now that Mr Morales has signed the law ceding the property, Jindal expects to complete the first phase of the investment which includes completion of the final design of the iron and steel plant. Jindal will initially invest USD 500 million over the first five years.

(Sourced from www.mineweb.com)