Bolivian President Evo Morales said that once established, the country's first steelmaker will save the country around $600 million/year by limiting steel imports.
"Transforming our iron ore into steel will prevent the import of finished [steel] products, saving between $500 million to $600 million per year, plus preventing the exit of US dollars from Bolivia," Morales said Tuesday during a news conference in Cochabamba.
Morales said the plant will meet around 60% of domestic needs and produce 400,000 mt/year of iron ore concentrate, 350,000 mt/year of rebar and 100,000 mt/year of sponge iron destined for the export market.
The time frame of the plant's construction and start of operations is not settled, but expected to take at least two years.
The minister of mining and metallurgy, Cesar Navarro, will travel to China this week to finalize the funding for the installation of the first steelmaking industry in Bolivia, to be located in the department of Santa Cruz, near the giant 40 billion mt Mutun iron ore reserve.
Bolivia confirmed in late September that China will invest $405 million to help establish Bolivia's first integrated steel complex. Bolivia and China firmed up the partnership in which China will fund $10 billion in Bolivian projects, including naval infrastructure, railways and the Mutun steelworks.
Moreover, the government unveiled that four Chinese companies also submitted proposals for the construction of the Motacusito-Mutun-Puerto Busch railway through the Paraguay-Parana waterway, which is vital for future exports of iron ore and steel products.
The Chinese companies participating in the rail project include China CAMC Engineering, with a $695.2 million investment proposal; China Railway Seventh Group, with $472.4 million; China Railway International Group, with $729.7 million; and China Tiesiju Civil Engineering Group, with no investment disclosed. Bolivian state-owned iron ore mining company Empresa Siderurgica del Mutun will own the 50% of the partnership and controls the Mutun iron ore deposit, which produces ore at a rate of 1 million mt/year, and has said it plans to double production once the 50:50 joint venture partner is named.
The process of finding a partner for 50% ownership of the iron ore and steelmaking complex has been delayed since mid-2013, when a former partner, the Indian company Jindal Steel & Power, said the move was unlawful.
