Jindals to set up $2.1 bn mining, steel unit in Bolivia
Jindal Steel will ink a pact with Bolivia for a $2.1-billion steel unit in the country.Updated:
Corporate India's overseas foray for setting up large units in the steel space has added another feather with Jindal Steel and Power signing a pact with Bolivia for a $2.1-billion steel unit in the country.
The unit has been proposed in El Multan, which the company says, has one of the world's largest iron ore reserves estimated at 40 billion tonnes of medium-grade quality. The location is in the country's southeast near the Brazilian border.
"A definitive contract would be signed with the Bolivian government within 45 days," Jindal Steel, a part of the Rs.20 billion ($435 million) organisation, said in a statement on Friday.
"Bolivia, a major natural gas producer, has agred to sell Jindal natural gas at $3.91 per million British thermal unit for steel making, which represents 70 percent of the project's power needs," the statement added.
In addition, Jindals will only pay $1.955 per million British thermal unit for the gas for power generation, which will represent 30 percent of the need.
The Indian steel major had set its eyes on the proposed project in June 2006 and had then emerged as the sole company that met the qualifying criteria set by the Bolivian government to exploit 50 per cent of El Multan reserves, officials said.
Jindals will be investing the amount over eight years in creating the integrated steel unit that will have a capacity to manufacture 1.7 million tonnes of long products and 6 million tonnes of reduced, sponge iron.
The unit will also have a capacity to produce 10 million tonnes of pellets. A supporting infrastructure for producing 450 megawatt of electricity would also be created, officials said.
"The project will allow Bolivia to develop a steel-making industry for the first time and is the biggest investment in a single project in Bolivian history," the company statement said.