Category: Regions

The contract to develop Latin America’s largest iron ore deposits – Bolivia’s El Mutún – has been awarded to Indian company Jindal Steel and Power. The government says the deal marks the launch of the country’s iron and steel industry. Jindal has promised to invest $2.3 billion in the project over the next 10 years, the largest foreign investment yet secured by the new government led by Evo Morales. The company will not only extract iron ore but also produce iron and steel. Bolivia, rich in mineral and energy resources, has to date largely exported raw materials rather than processing them. The deal is likely to earn President Morales much political capital, after the government changed the terms of the original tender to ensure more job creation. The changes in the terms were to include a steel production operation and guarantee the site be fueled by natural gas. The project will include the extension of a gas pipeline and investment in local infrastructure to accommodate the terms. Jindal was the only company to remain in the bidding process after Netherlands-based Mittal Steel failed to make the final cut and Argentine Siderar withdrew from the process.

Ecuador’s Supreme Electoral Court has ruled that former president Lucio Gutiérrez will not be able to stand in the presidential elections due to take place in October, despite the apparent intervention of a local judge in the province of Napo. Gutiérrez, who returned from exile last October is adamant he will run for president in this October’s presidential elections. Last month, the Supreme Electoral Court voted to ban the ex-president from public office for two years because of campaign contribution irregularities in 2002. Gutiérrez was ousted from office by Congress last April.

Venezuela and Ecuador have signed an oil cooperation agreement at the end of a visit to Ecuador by Venezuela’s president, Hugo Chávez. Although, Ecuador has been quick to emphasis that Chávez’s visit was a technical, not a political one, the agreement is likely to cause ripples in relations with the US. Ecuador, Latin America’s second-largest oil producer has little refining capacity, relying instead on imports of petroleum-based products. The agreement allows for the refining of up to 100,000 barrels of Ecuador’s crude oil a day in Venezuela, a process that the government says will save the country $300 million a day. Some say the agreement to process the crude, which will reportedly come from the oil fields seized last month from Occidental Petroleum (Oxy) of the US, is merely a precursor to allowing Venezuelan state-owned PDVSA run the fields.