For third time, Bolivia nixes Jindal Steel and Power’s mine plan

The Bolivian government has rejected Jindal Steel and Power’s (JSPL’s) revised investment plan in the country for the third time. This puts the Naveen Jindal-led company’s $2.1 billion proposal under cloud.

JSPL had entered into a 40-year contract in late 2007 to mine about half the El Mutun site near the Brazil border. The site is believed to have the world’s largest iron ore reserves (over 40 billion tonne).

Under the original plan, JSPL was to invest $300 million for the first five years and $200 million for the next three. It was also supposed to build a 10 million tonne per annum (mtpa) pellet plant, a 6 mtpa sponge iron plant, 1.7 mtpa steel plant and a 450 mw power plant.

“Unfortunately, Jindal hasn’t fulfilled its commitments,” Bolivia’s mining minister Jose Pimentel told local radio, adding that the company had proposed modifying the contract so as to reduce the quantity and quality of steel production. “They’ve proposed changing some terms of the contract (and) we’ve rejected that proposal,” Pimentel said.

Sushil Maroo, director (finance), JSPL, did not comment for the story.

Bolivia has twice rejected JSPL’s demands for alterations in the JV deal. In its previously revised bid, Jindal has said that it wants to scale down its investments in the first five years to $812 million as against $1.5 billion.