Bolivia has called on Jindal Steel and Power Limited to honour its pledge to invest $2.1 billion in an iron ore joint venture project in the country.
Bolivia has called on Jindal Steel and Power Limited to honour its pledge to invest $2.1 billion in an iron ore joint venture project in the country.
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"We see that there's a delay in the investments. We trust that Jindal will understand that it has to respect its commitments. We're demanding fulfillment of those commitments," Vice President Alvaro Garcia Linera told reporters on Tuesday.
The Bolivian government and the Indian company signed a joint-venture agreement in 2007.
As per the agreement, Jindal would invest $300 million annually for five years and $200 million annually over the next three years. It would invest $2.1 billion in a span of eight years.
The project will be implemented in the country's eastern Santa Cruz province.
The pact stipulates that Jindal and the Bolivian government develop the El Mutun iron ore reserve in a 50-50 partnership.
The contract came into effect in May this year and Bolivian authorities plan to evaluate the firm's compliance with its investment obligations beginning that same month of 2011.
Bolivia's mining director Freddy Beltran has said if Jindal fail to make the investments stipulated under the contract by that time, the Bolivian government could enforce an $18 million performance bond and cancel the contract for non-compliance.
However, the company's director in Bolivia, Arvind Sharma, told the state-run ABI news agency that the company had faced some technical problems related to electricity supplies, which caused a small delay in the approval of the investment plan.
He said the joint venture's board of directors would meet in January to set a timetable for the company's first exports and also to consider a new version of the investment plan, which the government has already rejected twice.
El Mutun is located in the Puerto Suarez town, near the border with Brazil, and contains mainly iron and magnesium deposits of about 40 billion tonnes.
Jindal began the project this year with two mineral processors with a 400-tonne-per-hour capacity, and is awaiting approval of its investment and development plans so it can export the iron ore.
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