The Hindu : Front Page : Jindal Steel lands major contract in Bolivia

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Saturday, Jun 03, 2006

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Front Page

Jindal Steel lands major contract in Bolivia

Amit Baruah

`Biggest project ever awarded to an Indian firm'

NEW DELHI: Jindal Steel and Power Ltd. has landed a massive $2.3 billion iron and steel project in Bolivia, the Indian Embassy in Peru, which is accredited to Bolivia, said in a press statement.

"This is the biggest project ever awarded to an Indian company in Latin America,'' the statement said about the Mutun iron and steel project, located in the eastern Bolivian town of Puerto Suarez, next to the border with Brazil.

According to the Embassy, the area contains the largest deposit of iron ore in the world — stretching 150 kilometres in length and 900 metres in height. Competitors for the project had included companies from Brazil, Argentina, China and Mittal Steel, Netherlands.

The award of the contract to Jindal Steel comes a month after Bolivian President Evo Morales announced the nationalisation of his country's oil and gas sector on May 1. According to R. Visvanathan, Joint Secretary (Latin Americas) in the External Affairs Ministry, this had not prevented Bolivia from giving such a major contract to an Indian company.

Mr. Visvanathan told this correspondent: "The Indian business and policy makers should not get carried away by the propaganda of vested interests on this issue [of nationalisation]. They should see it in perspective and from the point of view of India's economic and commercial interests and especially in the context of our strategic energy security.''

"The reassertion of control over energy resources by Latin American governments opens a window of opportunity for entry of Indian business. In the past, the energy sector of Latin America was in the stranglehold of western companies,'' he pointed out.

The Joint Secretary felt that Indian companies had major opportunities in a situation where countries like Bolivia were moving away from their traditional dependence on Western companies. Mr. Visvanathan also revealed that ONGC Videsh Ltd. (OVL) had bagged a $430 million stake in a Brazilian oil field and was engaged in discussing an investment of another $1 billion in a Venezuelan oil field. OVL had also taken a 30 per cent stake in a consortium for oil and gas exploration in Cuba, he added.

Already, India's exports to Latin America touched $3.2 billion during January-December 2005. Of this, India's exports to Brazil stood at $1.2 billion and Mexico were $900 million.

Mr. Visvanathan added that India's exports to Latin America were expected to double in the next three years.

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