Bolivia, Jindal Finalize El Mutún Deal

Bolivia and Indian company Jindal Steel have finalized an agreement to develop the El Mutún mine, which contain Latin America’s largest iron ore deposits. Last year, the Indian company was awarded the 40-year concession to develop the deposits by the newly elected government of Evo Morales in return for a commitment to invest $2.3 billion in the project over 10 years. However, problems agreeing terms – in particular with regard to the price to be paid by Jindal for the supply of natural gas – meant delays in closing the deal. The final agreement sees the Indian firm paying two rates for gas – one rate for gas used to produce iron and another for the gas used to run a thermoelectric facility at the mine. Bolivia’s government says the final prices are 80% higher than those originally proposed by Jindal and say the state stands to make a profit of around $300 million a year from the mine once operational, which could be in three to five years’ time.