LA PAZ, April 24 (Reuters) - India’s Jindal Steel and Power will start mining iron ore next month at Bolivia’s El Mutun site, where it plans to invest $2.1 billion, the company said on Friday.
After meeting with President Evo Morales, Jindal Executive Vice President Vikrant Gujral said the company was ready to start production at the vast reserve, which lies near the border with Brazil.
“Next month we’ll start producing raw material. I’ve invited the president to go to El Mutun because we want him to be there when the mineral crusher starts working,” Gujral told reporters.
He did not specify how much the crusher will produce and said full production would not start until 2012.
A 40-year contract signed in late 2007 gives Jindal (JNSP.BO) the right to mine approximately half the area of El Mutun, which has estimated 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.
Gujral said that as soon as the government gives Jindal rights over the land the company will begin investing some $300 million a year over the next three years.
The government said earlier this week that it would soon grant Jindal rights over the land it has requested.
As part of the project, Jindal has vowed to develop an integrated steel plant with an annual capacity of 1.7 million tonnes, which would start up by 2010.
Jindal and Bolivia will share the profits generated by the project, which officials have said would amount to $200 million per year in taxes and profits for the Bolivian state. (Reporting by Carlos Quiroga; Writing by Eduardo Garcia; Editing by Christian Wiessner)