Jindal Steel & Power Ltd. (532286.BY) has given the Bolivian government more time to resolve issues holding back the Indian company's iron-ore mining and steelmaking project, after its earlier deadline to pull out of the South American country expired Sunday.
On Monday, a Jindal Steel executive said the company will exit the project if the issues aren't resolved until Aug. 10.
The executive, who didn't wish to be named, said Jindal Steel wants to scale down its investment to $1.0 billion from its earlier commitment of $2.1 billion, since Bolivia has gone back on the amount of natural gas it has promised to supply to run the proposed steel and iron-ore processing plants.
So far, the Bolivian government hasn't accepted Jindal Steel's proposal to reduce the planned investment.
The project has been hanging fire since 2007 when the company, a major Indian steelmaker, entered into an agreement with the Bolivian government to develop the El Mutun mines.
It had also agreed to set up a plant to process iron ore and build a steel factory with an annual capacity of 1.7 million metric tons.
However, Bolivia said it can't provide the 10 million standard cubic meters a day of natural gas that was originally agreed upon to run the plants.
It offered 2.5 MMSCMD instead. Jindal Steel has tried to renegotiate the contract, asking that it be allowed to reduce its investment commitment and build smaller steel and iron-ore processing plants.
The company issued a termination notice for the project in June, as the government and the company failed to make any headway.
The deadline under the notice ended Sunday. The company's move to acquire mines in Bolivia is in line with its peers, who have acquired iron-ore and coking-coal blocks overseas and continue to hunt for more such assets, as getting a lease to mine in India is next to impossible, with hard to get environmental clearances and mines often tied up in litigations.
foxbusiness.com
On Monday, a Jindal Steel executive said the company will exit the project if the issues aren't resolved until Aug. 10.
The executive, who didn't wish to be named, said Jindal Steel wants to scale down its investment to $1.0 billion from its earlier commitment of $2.1 billion, since Bolivia has gone back on the amount of natural gas it has promised to supply to run the proposed steel and iron-ore processing plants.
So far, the Bolivian government hasn't accepted Jindal Steel's proposal to reduce the planned investment.
The project has been hanging fire since 2007 when the company, a major Indian steelmaker, entered into an agreement with the Bolivian government to develop the El Mutun mines.
It had also agreed to set up a plant to process iron ore and build a steel factory with an annual capacity of 1.7 million metric tons.
However, Bolivia said it can't provide the 10 million standard cubic meters a day of natural gas that was originally agreed upon to run the plants.
It offered 2.5 MMSCMD instead. Jindal Steel has tried to renegotiate the contract, asking that it be allowed to reduce its investment commitment and build smaller steel and iron-ore processing plants.
The company issued a termination notice for the project in June, as the government and the company failed to make any headway.
The deadline under the notice ended Sunday. The company's move to acquire mines in Bolivia is in line with its peers, who have acquired iron-ore and coking-coal blocks overseas and continue to hunt for more such assets, as getting a lease to mine in India is next to impossible, with hard to get environmental clearances and mines often tied up in litigations.
foxbusiness.com
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