JSPL could lose EL Mutun iron ore development rights in Bolivia

Jindal Steel & Power (JSPL) is in danger of losing its 50 per cent interest in EL Mutun iron ore deposit in Bolivia, for not honouring its contractual obligations.

Bolivian EL Mutun Iron Ore
The Bolivian government could cancel JSPL's development rights for 20 billion tonnes of EL Mutun iron ore deposits and enforce an $18-million performance bond for having failed to make the necessary investments stipulated under the contract signed in 2007.

Bolivia's mining director Freddy Beltran had said on 31 December that if JSPL fails to honour its pledge to invest $2.1 billion in the EL Mutun iron ore joint venture project under the time stipulated in the contract, the Bolivian government would not hesitate to scrap the contract.

After the Bolivian government twice rejected JSPL's revised investment plan, it gave the Indian company an ultimatum in early February to come up with a viable investment plan by April or face the cancellation of the contract.

Top executives of JSPL arrived yesterday in the Bolivian capital La Paz, to hold talks with the Bolivian ministry of mining and metallurgy (MMM) to sort out the problems in developing the EL Mutun iron ore joint venture project as well as the Indian steel maker's commitment to build a steel plant in Bolivia's Santa Cruz Department.

A ministry official yesterday told reporters at La Paz that several issues regarding the project would be decided in this meeting, but refused to elaborate further.