The company will set up steel and pellet plants and a 450-Mw power project in the country over the next eight years.
JSPL, the Delhi-based flagship company of industrialist and parliamentarian Naveen Jindal, had won rights of development for half the 40-billion tonne (bt) reserves of the mines for 40 years in 2007. Jindal Bolivia Ltd (JBL), a subsidiary of JSPL, is executing the project. Jindal's proposed outlay in Bolivia is by far the largest announced by an Indian company in South America and would also be the highest investment by a foreign company on a single project in that nation.
“The committed investment of $600 million would be made by April 2012. It is part of the overall $2.1-billion project to be fully commissioned over the next eight years,” Vikrant Gujral, vice-chairman and head of global ventures, JSPL, told Business Standard. Apart from mining, the project also includes setting up a 1.7- million tonne per annum (mtpa) steel plant, a 6-mtpa sponge iron plant, a 10 mtpa pellet plant and a 450-megawatt power project. The steel plant is expected to commence production by end 2014.
The Bolivian government has committed itself to providing subsidised gas for the power sand steel plants.
Reacting to media reports on the Bolivian government's alleged threats to take over JSPL's reserves owing to alleged delays in development, the company clarified its reserves and its development plans in the country were intact.
More From This Section
A news report had quoted Bolivian President Evo Morales as saying that if JSPL'swork was not accelerated, the state will begin to exploit the ore. “In fact, JSPL has been shipping some quantities of iron ore even in the ongoing lean period that would end in December. The exports would pick up beginning January, when water levels in the Tamango canal go up,” he said. The ore is moved through barges on the Paraguay Parana river system.
JSPL had started dispatching iron ore from the El Mutun mines last month. "Already, 7,000 tonnes of ore has been exported under an overall 10,000 tonne order from Paraguay, bringing Bolivian ore in the global market for the first time,” Gujral said, adding the company hoped to ramp up export volumes to a million tonnes by the end of next year.
Global iron ore benchmark prices, which had been hovering at $175 a tonne until recently, have come down to $135 a tonne at present.
Apart from the Bolivian project, JSPL’s other expansion plans abroad include increasing its steel production capacity in Oman from 1 mtpa at present to 5 mtpa by 2016. It had acquired Oman’s Shadeed Iron & Steel Company last July for $500 million.
JSPL registered a 40 per cent jump in net profit at Rs 2,064 crore last financial year. Total income of the company rose 30 per cent to Rs 9,717 crore during the financial year. The company’s share price at the Bombay Stock Exchange on Friday closed at Rs 555.3, down two per cent as compared to the previous close.