The following excerpt is from an article made by Aline Quispe and published by La Razon.
I urge you to read thinking not only on El Mutun’s future but as prevailing precedent that could create some sort of jurisprudence on future foreign capital investment to Bolivia. Investments that we are desperately looking after, in order to catch up our neighbors before the prices for our raw commodities go down…
Most of these requests show Bolivian reality:
• The legal protection of their investments, the guarantee of not having nationalization [ever] and that the problems will be solved on the basis of provisions in the contract and not through criminal proceedings.
• The marketing of steel products in the local market must be performed by the company Jindal Steel Bolivia (JSB).
• There should be no restrictions on exports of the products of the Mutún.
• Have land in Puerto Busch and have permission to build a port, jointly between JSB and the Government, to build a mega-port in Puerto Busch (located in the Germán Busch province of Santa Cruz).
• Have all the necessary logistics for the steel complex (road or rail from the site of the Mutún Puerto Busch), which should be done by the Government in a given period of time.
• The percentage of the primary and secondary mineral in exploitation (70/30) must be discussed and resolved.
• The royalty shall be calculated on the basis of the price ‘ex-mine’ [leaving the mine?], not CIF China (CIF: cost, insurance and freight in the destination).
• The price of reference for high prices, established in the mining law should be modified in the same value as determined by the contract.
• Taxes and levies on the import of equipment for the project should be deleted.
• Total delivery of lands of the area of the contract.
• Approval of the environmental license for the phase of iron and steel industry, as well as the availability of water for the complex.
• The project schedule should be linked to the fulfilment of obligations by the Government.
• Migration facilities for the entry of foreign workers to the country.
[so, what do we have here is a wish list that Jindal wants to negotiate to stay in country, probably Jindal knows that current Bolivian government needs them badly, for their political prestige and the humongous pressure this government might get from Puerto Suarez and Santa Cruz civic committees. The following portion of La Razon’s article is sort of the reply of the government, again see both players bargaining in a local market… which frightens me the most, as this important project should be handled more professionally and in accordance with international standard, we do not want to cheat on the foreign investors, and we also don’t want to be scammed by them either]
Government will only negotiate with JSB auditing
Of the three conditions that put Jindal Steel Bolivia (JSB) to stay in the country, the Government stated that it will only negotiate the aforementioned audit; an audit to be carried out on the investments of the company, reported the Deputy Minister of mining, Freddy Beltrán.
Beltran noted that the Executive can discuss with the company that request, which would mean “do an audit in conjunction”, or if this is not realized, “explain why it would not be done immediately”.
On April 11, the Directorate of Legal Affairs of the Ministry of mining said that the steel company of the Mutún (ESM) hired Delta Consult SMS Bolivia to audit investments of JSB. On May 25, the Prosecutor’s Office noted that the audit report indicated that JSB made an investment of $12 million dollars. The firm yesterday ratified that did made the committed investments and that they are certified.
On the request of Jindal that adjournment of the proceedings against its executives, Beltrán ratified it is a decision that “does not depend on the Executive”. He said that for the Government, the executed ballots of JSB are a closed topic because, if they have not done so, the ESM or the Ministry of mining authorities would face criminal proceedings for economic damages to the State.
The more I read this article, I believe Jindal wants to set up the grounds for their litigation in an international court [they certainly do not expect to get all those points accepted, it is just to delay the inevitable] and the government wants to save face… also in preparation for an international litigation and to respond to Santa Cruz and the whole country for this failed attempt.
Whatever the outcome, at least this government must use this wish list [with a deadline that the Bolivian government must respond, today] and turned into a checklist for future investors. I’m sure whoever comes to Bolivia, for this or any other project, that they will make sure not to repeat Jindal’s mistakes.