Jindal Steel & Power Ltd and Bolivia said they will evenly split the earnings from an iron mine in the South American country’s eastern jungles.
Bolivian Planning Minister Carlos Villegas told a news conference announcing the preliminary accord with Jindal that the Mutun mine, on Bolivia’s border with Brazil, could earn $400 million annually after three years of development.
In June Bolivia awarded Jindal the development rights to the Mutun mine.
President Evo Morales will sign a final contract with Jindal next month in the border city of Puerto Suarez, where residents have waited more than three decades for the long-proposed mining project to become a reality.
According to the agreement, Jindal will use the iron ore to produce steel and other metal products at plants to be built in Bolivia.
Villegas called the Jindal agreement a “historic act” in the industrialization of Bolivia, which despite its rich mineral resources remains South America’s poorest nation.
Jindal Vice President Vikrant Gujral said that his company planned to invest more than $1 billion in Bolivia over the next eight years, including projects to improve the health, education, and water system for residents living near the mines.
Jindal’s contract will require the company to maintain its Bolivian operations for 40 years, Villegas said.
Jindal had first filed a claim on the Mutun deposit with Bolivia in June, a month after Morales nationalized his country’s oil and gas reserves. The deposit is estimated to contain some 40 billion metric tons of iron and 10 billion metric tons of manganese. (AP)