Bolivia to open bids for world’s biggest iron ore deposit

La Paz, Bolivia.

The Bolivian government said Sunday it is preparing a new tender for its Mutún iron ore deposit — believed to contain some of the world’s largest reserves of iron ore—and the related steel manufacturing facility, after India’s Jindal Steel and Power Limited (JSPL) abandoned the endeavour over a year ago.

Mining Minister Mario Virreira told news agency EFE (in Spanish) he is tuning up details to put up to 50% of the project up for grabs, in hopes to fulfill the original target of start producing steel by 2014.

It is estimated that Mutún, located near the border with Brazil, is home to 20 billion tonnes of iron ore. To put in perspective, all of India’s iron ore deposits add up to 28.5 billion tonnes.

The project had been on hold since 2007, when the Indian steelmaker was awarded a 40-year contract to mine about half the deposit. It also agreed to set up a plant to process 10 million metric tons of iron-ore a year and build a steel factory, the first one in the Andean country, with an annual capacity of 1.7 million tons.

In Bolivia, President Evo Morales initially showcased the deal as an example of how his government and multinational companies could work as equal partners. But eventually, the endeavour got bogged down by delays and disputes between the government and the company, which ended in Jindal terminating the contract with Bolivia in July last year.

Mutún would be the Andean nation’s first integrated steel facility and its largest foreign investment.

The Bolivian government plans to invest $3 to $4 million in building a highway and port in the border with Brazil, taking the ore through waterways that end up connecting the land-locked country to the Atlantic.

Last June, Bolivia sued Chile in the Hague before the International Court of Justice as Morales argues the southern neighbour have reneged on agreements to give Bolivia access to ports further south on Chile’s long Pacific coastline.

Despite pending decision, Bolivians still have preferential access to Chile’s northern ports, and export their goods through them.

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