June 10, 2012
India’s Jindal Steel & Power (JSPL) said on Saturday it was making plans to scrap a $2.1 billion steel project in Bolivia, saying the Bolivian government had not met contract terms that include supply of natural gas for the project.
The steel and power producer said it had served its “intent to terminate the contract” and the Bolivian government had 30 days to resolve the issues.
“In case government of Bolivia comes out clean and informs as to how much gas it can actually supply and agrees to reconfigure plant capacity and investment and amend the contract JSPL can consider staying back,” a Jindal Steel statement said.
Jindal Steel had signed a pact with the Bolivian government in 2007 to invest $2.1 billion in iron ore mining and steelmaking. The company said it was the single largest foreign investment in the country.
According to the contract, Bolivia was to sign an agreement to supply 10 million cubic metres per day of natural gas, Jindal Steel said, adding the pact had not yet been signed.
Also, the Bolivian government has so far not provided all the land required for the project, the company statement said.