JIndal on its way out and Bolivia left with uncertainty over this extremely important activity for our economic development. http://www.moneycontrol.com reports:
Jindal warns it may scrap $2 bln Bolivia project
India’s Jindal Steel & Power (JSPL) said on Saturday it was making plans to scrap a $2.1 billion steel project in Bolivia, saying the Bolivian government had not met contract terms that include supply of natural gas for the project.
The steel and power producer said it had served its “intent to terminate the contract” and the Bolivian government had 30 days to resolve the issues.
“In case government of Bolivia comes out clean and informs as to how much gas it can actually supply and agrees to reconfigure plant capacity and investment and amend the contract JSPL can consider staying back,” a Jindal Steel statement said.
Jindal Steel had signed a pact with the Bolivian government in 2007 to invest $2.1 billion in iron ore mining and steelmaking. The company said it was the single largest foreign investment in the country.
According to the contract, Bolivia was to sign an agreement to supply 10 million cubic metres per day of natural gas, Jindal Steel said, adding the pact had not yet been signed.
Also, the Bolivian government has so far not provided all the land required for the project, the company statement said.
(Reporting by Sumeet Chatterjee; editing by Andrew Roche)
Bolivia’s turn, per report from La Razón / W. Chipana/I. Condori/M. Pérez / La Paz/Santa Cruz, excerpts follow:
The Mutún iron and steel company (ESM) reported that will ask Jindal Steel Bolivia (JSB) compensation of $600 million dollars, should they decide to terminate the contract for the production of steel. However, the option is open to negotiation with the Indian company.
The President of the ESM, Ricardo Cardona, said that if the audit to be carried out would establish breach of investment of the JSB, it must pay this amount should they want to go, and the Bolivian State will grant a letter of recommendation.
“Sure, if Jindal wants to go from Bolivia, contractually already owes $600 million dollars and they should pay us to ensure that we give them a letter of recommendation for their company (…)” “The contract says, that they should already have invested $600 million, and if they have not done so, then that is the money they owe to the Bolivian State,” he said.
On Friday, the Minister of mining, Mario Virreira, noted that before the exit of the Indian company there will be a bid for another company to replace [Jindal]. The process would require six months and, according to the authority, there is interest on the part of Australia, Brazil and United Kingdom companies to invest in the country in the field of steel.
Causes according to the JSB, there is a lack of willingness of the Government to initiate the development of infrastructure in the Mutún and there are “arrogant and illegal actions” in the execution of their ballots of warranty by $36 million dollars, which has led to international arbitration at the International Court in Paris.
The Indian company expects that within 30 days, according to the signed contract with the ESM on July 18, 2007, “to reach any agreement with the Government or proceed to the resolution of the same”