Bolivia picks China's Sinosteel to lead Mutun iron exploration project

Chinese company Sinosteel has won the bid for the El Mutun iron ore exploration project, during which it will build a processing plant, Bolivia's Minister of Mining, Cesar Navarro, said Tuesday.

"We must choose a company with experience and a strong financial backing. This makes Sinosteel qualified," he told a press conference in the city of Santa Cruz.

Another Chinese company, Henan Complant Mechanical, has also reached the final round of licensing. However, it lost to Sinosteel during the vote from the board of Empresa Siderurgica del Mutun (ESM), the state company overseeing the bid.

The El Mutun iron ore exploration project has been halted since 2012 when Indian company Jindal failed to re-activate production there.

Sinosteel's winning bid, accepted by ESM, proposed to develop the projects for 450 million U.S. dollars. Henan Complant Mechanical's bid was lower at 419 million U.S. dollars.

According to Navarro, Sinosteel will build a pelleting and direct reduction plant and a steelworks with a continuous casting mill.

The objective is to produce 150,000 tons of rolled steel a year within the next decade. This would cover 60 percent of Bolivia's domestic demand, which currently imports all its rolled steel from the likes of Brazil and Peru.

Navarro predicted Bolivia will save over 230 million U.S. dollars a year once this project is fully up and running. Endit