Showing posts with label Jindal Steel and Power. Show all posts
Showing posts with label Jindal Steel and Power. Show all posts

Monday, July 16, 2012

Jindal Steel sets Aug 10 deadline for Bolivian govt to resolve issues

Jindal Steel and Power has set an August 10 deadline for Bolivian government to resolve the issues related to its $ 2.1 billion venture in Bolivia, or it will pull out of the Latin American country.

“If they (Bolivian government) resolve those issues to our satisfaction, we will stay. Otherwise we will get out of there. By August 10, we will decide for sure,” the JSPL Chairman and Managing Director, Mr Naveen Jindal, told PTI in an interview.

Jindal’s contract, signed in 2007, was considered as the largest foreign direct investment for Bolivia and consisted of 40-years mining rights of El-Mutun mines, one of the largest untapped iron ore mines in the world, and setting up of iron and steel plants in the country.

In June, the Indian steel major had sent a termination notice to the Bolivian government, while alleging that contractual obligations related to gas supplies for the venture had not been met.

The notice sought to terminate the contract in a month, if the issues were not resolved. The deadline had ended on July 8.

However, Mr Jindal said that JSPL officials are still in discussions with the Bolivian government to revive the project.

He, however, made it clear that revival of the project would depend on gas allocation and scaling down the project capacity.

“What they are giving us is one-fourth of the (required) gas and are saying that you don’t scale down the capacity, we will give you gas later. Is it possible? How can we plan our investment on such assurances?

“Cost of gas there is USD 8/mBtu (million British thermal unit), while in US it is USD 2-2.5/mBtu. Okay, we will pay higher prices but how can we plan bigger without the gas being committed? We have to scale down (the capacity),” he said.

According to the contract, JSPL’s $2.1 billion project requires gas supply of 10 million standard cubic metres per day (MSCMD).

However, the Bolivian government is willing to commit only 2.5 MSCMD gas from 2014 due to non-availability of gas in the country, the company had said earlier.

The mining and steel project consists of setting up of a 10 million tonnes per annum iron ore pellet plant, six MTPA DRI (direct-reduced iron) plant and 1.7 MTPA steel plant, besides mining of El—Mutum mines for 40 years.

So far, the Naveen Jindal—led firm has invested $90 million in the venture and made investment commitments exceeding $600 million till March 2012 for purchase of technology, machinery, equipment and advances to vendors.

Source: Thehindubusinessline.com

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.

Friday, May 11, 2012

20-billion-tonne iron ore mine in Bolivia in jeopardy

Malaysian News Agency Bernama.com reports that a huge iron ore mine in Bolivia may be doomed as a result of conflicts between the proponent and the Bolivian government.
 
The plan by India’s Jindal Steel & Power to mine the 20-billion tonne deposit has run into trouble after the Bolivian government asked the company for another $18 million in bank guarantees for not meeting contractual obligations. A similar amount was demanded in 2010 for not meeting commitments.
 
Bernama.com reports a source close to the development saying the project may now be unsalvageable:
 
“The writing is on the wall. It is hard to see how we can make this relationship work from here,” said a company official close to the negotiations.
 
The mine would be the largest foreign investment in Bolivia under President Evo Morales.
 
Wall Street Journal (sub required) reported yesterday that Jindal is scouting around for iron-ore and coking coal projects. The company expects to spend up to $6 billion over the next four years in order to achieve a five-fold increase in steel production, according to WSJ.
 
Clearances for new mines in India often take years and steel companies need to look far ahead to plan their supplies.