Bolivia: Ministry says cooperatives unable to develop El MutúnPublished by MAC on 2012-08-06
Source: Business News Americas
Following Jindal's departure from Bolivia, it seems increasingly unlikely that the country's biggest proposed iron-steel venture will proceed. See: Jindal quits Bolivia, intends pursuing international arbitration
As we commented earlier this year:
"It's highly likely that, if Bolivian civil society organisations had been left to consider whether El Mutun could be financed, and generate markets, from within Latin America, it would never have left the drawing board. At least not on the scale that eventuated.
Now, the only apparently secure contract to take output from El Mutun has been beset by delays, community protests and strikes. The only project component which would have enabled Bolivia to capture added value - a domestic steel plant - has foundered.
All in all, Mutun seems like a huge white elephant.
Some might say it's also a sore reflection on Morales' woeful abdication of the brand of socialism he was so keen to advocate on coming to power."
Cooperatives unable to develop El Mutún - ministry - Bolivia
By Harvey Beltrán
Business News Americas
31 July 2012
The mining cooperatives in Bolivia are unable to develop iron ore deposit El Mutún, a representative of the country's ministry of mining and metallurgy told BNamericas.
"There were [press] reports that distorted a proposal unions presented to the government. They aren't feasible and would be catastrophic," the representative said.
The representative also denied local media reports about the government looking into the possibility of handing over 10% of El Mutún's state-owned area - which represents 50% of the deposit - to be developed by cooperatives.
According to the representative, cooperatives develop their mining in a rustic and artisanal manner, and since El Mutún's surface ore is of the highest tenor while lower-quality ore is at the bottom of the deposit, cooperatives are only able to take the richest part of the ore due to its lack of technology to work underground.
"For this reason, the site will no longer be profitable, because any investor interested [in the remaining reservoir] would need to invest more money and make less profit," the ministry said.
El Mutún is located in a 65km2 area of Santa Cruz's Germán Busch province and has 40Bt in reserves grading 50% iron ore.
The other 50% of the site was recently left without a deal when India's Jindal Steel & Power ended the JV agreement it had with Comibol and El Mutún.