Bolivia expects El Mutún settlement with Jindal in March

Bolivia's government aims to reach a settlement in March with India's Jindal Steel & Power over the cancellation of its contract for the El Mutún iron and steel project.

Jindal, which pulled out of Bolivia in 2012 after acquiring rights in 2007 to develop the deposit, initiated arbitration in 2014 for US$100mn in damages arising out of the contract termination, including the execution of US$18mn in legal guarantees by Bolivia.

"Now those who do a deal with the state must know that they're dealing with someone who knows how to defend themselves," attorney general Héctor Arce said in a broadcast press conference, according to newspaper La Razón.

"We try to depend as little as possible on international consortiums and assume a more direct defense. We do it ourselves," he was reported as saying by state news agency ABI

New Delhi-based Jindal spokesman Jagdish Patra did not immediately respond to an email seeking comment.

Bolivia last week awarded the US$455mn El Mutún contract to China's Sinosteel Equipment. El Mutún, which is in Santa Cruz department and holds an estimated 40Bt in reserves, could produce 150,000t/y rolled steel and 80,000t/y sponge iron, according to the mining ministry.

The project, which will include a pellet plant, has faced repeated delays and legal issues. The government closed down state iron mining company ESM in September for lack of funding after iron ore prices plunged.

Bolivia has faced at least 18 arbitration proceedings since 2006 as a result of expropriation of assets of companies including Jindal, Glencore, Rurelec, South American Silver, Pan American Energy, Spain's Abertis and Iberdrola and Chilean firm Quiborax. A hearing at the ICC court in Paris regarding a lawsuit filed by the Abertis-Aena consortium is scheduled for May, Arce said.

Private investment has dwindled in Bolivia since President Evo Morales, who was sworn in for a third consecutive mandate last year, seized mining, oil, electricity, water and telecommunications companies and pension funds since first taking office in 2006.