Jindal Steel and Power (JSPL) has begun mining at El Mutun iron mine in Bolivia and will export iron ore, a key input in producing steel, to neighbouring countries such as Paraguay and Argentina besides China starting October 2009. Mr Vikrant Gujral, CEO of JSPL, said that the move will have a moderate impact on the company’s overall revenues as the company will ship small quantities initially. Mr Gujral said that it will not be feasible, in the short term, to ship the raw material back to India to feed its own steel plants as freight costs are too high. JSPL secured the rights to mine El Mutun iron ore reserves in Bolivia in 2006. Although El Mutun has reserves of more than 40 billion tonnes, making it one of the world’s biggest iron ore mines, the company holds mining rights for 20 billion tonnes of reserves. The company has lined up an investment of USD 2.1 billion over 8 year period for developing the mine and setting up a steel making facility. In addition, the company will set up a 450MW power plant to support the proposed steel plant.
