China state firms eye Bolivia's El Mutún

Chinese state companies Sinosteel Equipment & Engineering and Henan Complant Mechanical & Electrical Equipment Group presented bids for Bolivia's troubled El Mutún iron and steel project, a senior government official said Monday.

Both companies made the final presentation of their proposals to an evaluation committee in Santa Cruz department before a winning bid is to be awarded, mining minister César Navarro said in a broadcast press conference. The committee will take a week to study the proposals and set a date for the bid round.

The ministry estimates El Mutún – with an estimated 40Bt in reserves – could produce 150,000t/y laminated steel and 80,000t/y sponge iron for export and take 24-30 months to build. The project would enable the country to halt steel imports from Brazil and Peru, saving US$230mn/y, according to the ministry.

The project has faced repeated delays and legal issues under the administration of President Evo Morales. The government closed down state mining company ESM in September for lack of funding after iron ore prices plunged.

Former El Mutún operator Jindal Steel & Power, which pulled out of Bolivia in 2012 after acquiring rights in 2007 to develop the deposit, initiated arbitration last year for US$100mn in damages arising out of the contract termination.

Private investment has dwindled in Bolivia since President Morales, who was sworn in for a third consecutive mandate in January, seized mining operations from companies including Glencore, South American Silver and Jindal since first taking office in 2006.

Bolivia, which is home to mines operated by Pan American Silver, Sumitomo, Coeur Mining, Orvana Minerals and Franklin Mining, produced 19,287t tin, 407,332t zinc, 82,131t lead, 7,549t copper and 41.2Moz silver in 2013, the most recent available period from the mining ministry.