by Cassandra Willyard Thursday, January 5, 2012
In the heart of Bolivia’s tropics lies a mountain known as El Mutún. The mountain doesn’t look exceptional, but beneath its lush cover of vegetation lie 40 billion tons of iron ore — the world’s largest deposit. Although El Mutún’s riches have been known for more than 150 years, its remoteness and inaccessibility kept it safe from development — until now.
Last year Bolivia sold the rights to half of El Mutún’s riches to India’s Jindal Steel & Power. In April, the Bolivian government granted Jindal an environmental permit, the first of many that will be required to begin development. The company plans to invest $2.1 billion over the next eight years to build a steel plant and a 450-megawatt power plant. The project could create 6,000 much-needed jobs in the region. But residents of the nearby town of Puerto Suarez have their doubts. This is not the first time a foreign company has tried to tap the mountain’s riches. Two years ago, Brazilian steelmaker EBX built several large ore-processing ovens before the Bolivian government expelled the company for failure to obtain the proper permits. And even Jindal’s original contract was rescinded in 2006.
Even if the project does move forward, there is no guarantee that Bolivia can sustain it. The country agreed to sell Jindal the natural gas it will need, but gas supplies are exceedingly tight in South America. Bolivia already struggles to meet its obligations to Brazil and Argentina.
Still, according to the online news source Tribuna Latina, Bolivian President Evo Morales was upbeat at an official ceremony in Puerto Suarez last July. “After months of work and many years of waiting we completed the signing of the contract,” he said. “Mission accomplished.”
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