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Caribbean-Latin America | |||
Bolivia lands $2bn iron deal with Jindal Steel | |||
2007-07-20 | |||
Bolivia has secured the largest pledge of foreign investment in its history, after the country signed a $2.1bn deal with Jindal Steel and Power, an Indian steel company, to exploit a huge iron ore deposit. The agreement marks the first big investment by an Indian company in South America, a region whose mineral, oil and gas deposits have attracted interest from Chinese and Russian companies in recent years. It is hoped that the deal, signed on Wednesday night, could lead to other Indian investment in the region.
In May 2006 he caught the world’s attention when he announced his government would nationalise Bolivia’s gas sector, the second largest in the region. “Just imagine: from this Mother Earth more natural resources continue to appear after 500 years of looting,” said Mr Morales after announcing the deal. “Together we are obligated to take advantage of these natural resources for the good of the region and the nation.”
The governmentÂ’s scepticism about the interests of foreign investors complicated talks with Jindal, which has been negotiating for more than 18 months to complete the deal. Every few months, Mr MoralesÂ’s administration announced a new deadline to complete the talks, but those were routinely missed.
Under the terms of the deal, the Indian company will undertake to invest $2.1bn (€1.5bn, £1bn) in the project during the first eight years of the 40-year deal. The government is hoping at least 4,000 jobs will be created and expects to receive annual revenues of $200m, although Jindal claims up to 21,000 jobs could be created including workers not employed directly at the facility. The agreement may soothe tensions between the government and business leaders in the south-east, a region generally hostile to Mr Morales. It should also help to modernise Bolivia’s woefully antiquated mining sector. | |||
Posted by:lotp |