Jindal to invest $280 mn in Bolivia iron ore project

Jindal Steel and Power will invest USD 280 million this year to start work on an iron ore and steel project in Bolivia that has been plagued by delays, the company's managing director said on Monday.

Relations between Jindal and Bolivia's leftist government have been strained at times, with Bolivian officials accusing the company of dragging its feet on promised investments, but Managing Director Naveen Jindal said the USD 2.1 billion project was on track.

"The investment plan establishes an investment of USD280 million in the first year (2011)," he told Reuters, adding that the plan also envisioned the first shipment of 1 million tonnes of iron ore from the site near the Brazilian border.

Government officials have said the start of construction on the project means the poor, Andean country should start producing steel for the first time in 2014.

Under a 40 year contract, Jindal has the right to mine about half the El Mutun site -- believed to contain one of the world's largest reserves of iron ore, though said to be of medium-grade quality.

The investment plan lays out total spending of USD 2.1 billion over an eight-year period.