LA PAZ – A Chinese loan will cover 85 percent of the $405 million cost of a steel plant to process the output from the massive El Mutun iron-ore mine, Bolivian President Evo Morales said Thursday.
In a speech in the eastern province of Santa Cruz, where El Mutun is located, Morales said the agreement was the result of his meeting this week in New York with Chinese Vice Premier Zhang Gaoli on the sidelines of the UN General Assembly meeting.
Bolivia will not need any partners to process the output from El Mutun thanks to the loan agreement, which comes two years after Indian company Jindal terminated its contract for the mine.
That latter deal was signed in 2007, but Jindal ended it in 2012 when the Bolivian government began investigating the company for alleged breach of its contract terms.
Jindal blamed Bolivia for the lengthy project delays and sued La Paz in international tribunals for seizing the performance bond the company had furnished.
The Indian company won an arbitration judgment last month from the Paris-based International Chamber of Commerce that requires state-owned mining company Empresa Siderurgica del Mutun to pay Jindal $22.5 million, but Morales’ administration is appealing that ruling.
Mutun holds some 40 billion tons of different minerals, mainly iron ore, according to official estimates.
Morales, who is seeking a third term in office in Bolivia’s Oct. 12 general election, also pledged to carry out plans for a $2 billion petrochemical complex in Santa Cruz.
In another speech, he announced plans for an inter-urban train that would link Santa Cruz with the cities of Warnes and Montero and with Bulo Bulo, a town in the neighboring province of Cochabamba where South Korean company Samsung is building a petrochemical plant.