Bolivia Prez, senate differ on Jindal Steel plans

The plans of Jindal Steel and Power (JSPL) to develop iron ore mines and set up a steel project in Bolivia have divided the country's President and the legislature, a media report said.

Bolivian President Evo Morales has said the senate violated the nation's constitution by modifying the contract signed with Naveen Jindal-led JSPL for developing iron ore mines and build a steel plant in the El Mutun area.

"Morales said the amendments made by the senate means that it passed a different law to the one intended, which is a constitutional violation," Steel Business Briefing reported quoting Bolivian news agency ABI.

Morales said Article 59 of the constitution mandates the legislative branch to authorise and approve the contracting of companies that provide for the general income of state.

According to Bolivian rules, any natural resource contract with private firms have to be approved by Bolivian Congress to make them a law before they are implemented.

The senate, controlled by the opposition party Podemos, made 11 amendments to the contract including modifying the composition of the national wealth, the report said.

Bolivia's lower house, the economic development commission of the chamber of deputies, was due to debate the amendments proposed by the Senate, it added.

JSPL had, in June 2006, announced winning the bid to develop part of the El Mutun mines. In July 2007, the company signed a contract with the Bolivian government for developing the mines and setting up sponge iron and rolled steel projects. The company had announced an investment of $2.1 billion in the projects.