China confirms investment in Bolivia’s Mutún iron ore complex

The Chinese government confirmed it will grant a credit line to help Bolivia complete its Mutún iron and steel complex, the Bolivia government said, adding that China will ask Eximbank to evaluate the project to be developed by China’s Sinosteel.

 

Bolivia’s mining minister, Cesar Navarro, said the country sent to China all documents related to the tender and the contract for the project. Eximbank is expected to perform a technical, financial and environmental evaluation of the project.

 

“China confirmed it will grant a credit to Bolivia and it confirmed Eximbank has a positive perspective about Sinosteel,” Navarro said.
 
The Bolivian government inked a “final” contract with China’s Sinosteel in March this year, to develop Bolivia’s Mutún iron and steel complex after months of postponements.

 

According to the Bolivian government, the $422.6 million project will be financed by both the Chinese and the Bolivian government. About 85 percent of the project will be financed by Eximbank, while the other 15 percent will be financed by Bolivia.

 

Navarro said construction should begin in 2017 and should last about 30 months. The plant will produce 250,000 mt/year of sponge iron.

 

ESM expects to meet up to 60 percent of the country’s demand for steel. The Mutún iron and steel complex project includes concentration, pelletizing and direct reduction plants, which would be attached to a rolling mill. The rolling mill would be able to produce 150,000 mt of non­flat finished steel.

 

Once the plant is ready to start up, Bolivia could save up to $230 million per year, as it won’t need to import finished steel from Brazil and Peru.

 

Navarro said Empresa Siderurgica del Mutún (ESM), Bolivia’s state-run producer running the Mutún complex, has already secured a contract to supply iron ore for three years, 2016, 2017 and 2018.

 

ESM should sell some 90,000 mt of iron ore to mills in Brazil and Argentina.