Jindal Steel and Power has signed a contract with the Bolivian government to develop the El Mutun iron ore mine in the Latin American country, Naveen Jindal, managing director of the company, said in New Delhi on Thursday.
The Jindals are investing $2.1 billion in Bolivia to set up an integrated steel unit, which will have a capacity to produce 1.7 million tonnes of long products and six million tonnes of reduced sponge iron.
The unit will also have a 10 million tonnes per annum pellet plant and a 450 MW power plant.
The El Mutun mine is considered to be the world's largest iron ore mine having a reserve of 40 billion tonnes. The Indian company has been allowed to develop half of the mine's capacity, Jindal, who is also an MP, told a press conference in New Delhi.
"This contract now has to be formally passed by the Bolivian parliament and by three-four months we expect to start construction activity," he said. "We will start selling iron ore concentrate - around 10,000 million tonnes per annum - from the first year."
Jindal said the Bolivian government has granted 40 years of mining lease and added that the company intended to expand investment after assessing the growth.
He also said that the Bolivian government has also put a restriction and has allowed the Jindals to only export 10 million tonnes of iron ore. The company will start commercial production of steel by 2010.
"This project will open further business opportunities for Indian corporate houses in Latin America. We will be partnering with the Bolivian government and the people to contribute positively to the growth of the economies of both countries," Jindal said.