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Journalism of Courage
Bolivian President Evo Morales on Friday signed into law a contract for Jindal Steel and Power to develop a large iron ore deposit and make steel in a $2.1 billion project. The law’s approval had been delayed by weeks of squabbling between the ruling party and the rightist opposition.
Calling the project “a victory by the people”, Morales said that the project represents the biggest single foreign investment in the poor South American country. He said work on the project would be able to start once legal formalities had been completed.
The 40-year contract gives Jindal the right to mine approximately half the area of El Mutun, which lies near the border with Brazil. The site is estimated to contain iron ore reserves of more than 40 billion tonnes, though they are said to be of medium-grade quality. In comparison, proven reserves in ore-rich Carajas in Brazil’s northern state of Para total 1.5 billion tonnes.
As part of the project, Jindal has vowed to develop an integrated steel plant with an annual capacity of 1.5 million tonnes, which would start up by 2010.
Jindal and Bolivia will share the profits generated by the project, which officials have said would guarantee about $200 million per year in taxes and profits for the impoverished Bolivian state.
