By Monica Machicao
LA PAZ (Reuters) – A China-funded steel plant in Bolivia first planned half a century ago is set to start production this month with enough output to cover half the country’s needs, according to Bolivian officials.
The $546-million Mutun plant was largely funded by the Export-Import Bank of China, and will be operated by China’s Sinosteel Engineering and Technology for its first year.
Following an official inauguration on February 24, the plant in eastern Bolivia near the Brazilian border is expected to initially produce 200,000 metric tons of steel a year, principally rebar and wire mesh, worth $260 million.
Bolivia typically imports steel from Peru and Brazil.
“We are entering an era of industrialization,” Mining Minister Alejandro Santos Laura told a press conference on Wednesday afternoon.
The project was delayed numerous times since it was first proposed about 50 years ago, including by a series of disputes between the government and the company initially contracted to build the plant, India’s Jindal Steel & Power Ltd.
President Luis Arce’s government has been battling to revive the Andean country’s economy amid a slump in gas exports that has drained the central bank’s foreign currency reserves and put pressure on the local currency.
The Mutun plant will process 66,000 tons of raw materials a month using iron ore from Cerro Mutun, a deposit that Bolivian officials say holds one of the world’s biggest iron ore reserves, with 40 billion tons.
Bolivian officials will look at the possibility of constructing a second plant once domestic needs are met, Santos Laura said. He did not provide a timeline.
“When we pass 100% … we are going to build another plant, much better than the current one,” Santos Laura said. “We will have no choice but to export the surplus abroad.”
The plant is expected to initially create 700 jobs and later reach 1,000, he noted.
(Reporting by Monica Machicao, Writing by Daina Beth Solomon; Editing by Rod Nickel)
