Bolivia's government and state-owned Chinese company Sinosteel signed a contract Wednesday for the construction of a steel mill at the massive El Mutun iron-ore mine, a project that will involve an investment outlay of $422 million.
Bolivian President Evo Morales attended the signing ceremony in Puerto Suarez, a town on the Andean nation's border with Brazil where the mine is located.
The contract marks Bolivia's third attempt in the past 10 years to set up a steel-making facility to process the output from El Mutun. Previous efforts involving Brazilian company EBX and India's Jindal failed.
Morales said in his speech that Sinosteel must build the mill in 30 months and then remain in the country for a year to provide operational assistance to Bolivian technicians, who also are to receive training at Chinese universities.
The plant will have the capacity to process 650,000 tons of raw mineral reserve annually to obtain 250,000 tons of sponge iron and 150,000 tons of construction steel, Morales said.
Of the sponge iron that is produced, roughly 86,000 tons will be exported, the government said.
A Chinese loan will cover 85 percent of the $422 million cost of the steel mill, while the Bolivian government will provide the remaining 15 percent.
Morales' administration is aiming to achieve local production of high-quality construction steel, which would compete in the domestic market with imports from Argentina, Brazil and Peru.
The domestic construction steel market is valued at an estimated $380 million annually, according to the press.
Morales recalled the two previous failed attempts to produce steel at El Mutun, noting that EBX's project was unviable because that company wanted to use vegetable carbon instead of natural gas for a proposed foundry and that Jindal had "failed to comply" with its investment obligations. EFE
Source : foxnews.com