Friday, July 13, 2012

Jindal Steel, Bolivian government resume talks to revise deadlines for project milestones

Talks between Naveen Jindal's Jindal Steel Bolivia and the Bolivian government continued on Wednesday, with the latter offering to revise deadlines for project milestones.

The $ 2.1 billion mining and steel project, the largest foreign investment into the country, has been threatened by a fallout between the two parties over commitments.

Jindal won rights to the El Mutun iron ore mines in 2007. It was to develop the mines and build a downstream steel plant, on guaranteed energy supplies from the state.

Bolivia's state gas company Yacimientos PetrolAferos Fiscales Bolivianos (YPFB) is now willing to promise only 2.5 million per day as against Jindal's initial requirement of 4.5 mcmd (million cubic metres of gas per day) leading up to

Declining to comment on the specifics, a senior company official who didn't want to be named, only confirmed, ""Discussions were on yesterday (Wednesday) but no resolution has been reached at this stage.""

Jindal Steel Bolivia has asked for the government to accordingly scale down project which includes a pellet and DRI plant as per the actual gas availability. Bolivia with 50mcmd daily gas output is South America's largest producer with export commitments to Brazil and Argentina.

According to reports from La Paz, quoting the country's mines minister, Minister of Mining, Mario Virreira, the Bolivian government is willing to reconsider timeline and commitments, but not scale down original plan for the El Mutun mines.

On June 8, JSB had notified the government of its intention to terminate the contract if energy guarantees on the part of the state could not be met. The notice called for a termination of the contract in thirty days.