18 JUL, 2012, ET BUREAU
NEW DELHI: Naveen Jindal's Jindal Steel & Power on Tuesday said it has terminated its contract with the Bolivian government to invest $2.1billion in an iron ore and steel project that never took off since its inception in 2007.
In a statement on Tuesday, JSPL announced that its subsidiary, Jindal Steel Bolivia (JSB), has terminated the contract - that gave it access to 20 billion tones, or half of the El Mutun deposit, considered amongst the largest in the world - and would drag the Bolivian government to arbitration for breach of contract.
"The company took the decision after all its efforts to resolve the issues and take the project forward did not meet with success. Due to the non-fulfillment of the contractual obligations and unwillingness to fulfill the contract on the part of the government of Bolivia, JSPL has been forced to terminate the contract," a statement from the company said.
The deal breaker came after the Bolivian government failed to meet assured gas supply to the project. JSPL had won rights to develop the iron ore mine in 2007 committing to invest $ 2.1 billion in the mine and downstream steelmaking facilities: a pellet plant with an annual capacity of 10 MT, a 6 MTPA DRI and steelmaking of 1.7 MT.
On 8 June, JSB had issued a notice threatening termination giving the Bolivian government 30 days to figure out gas supply. "In view of the aforesaid breaches of the Bolivian Government and its entities, the company intends to pursue international arbitration relating to the contract," the release said.
NEW DELHI: Naveen Jindal's Jindal Steel & Power on Tuesday said it has terminated its contract with the Bolivian government to invest $2.1billion in an iron ore and steel project that never took off since its inception in 2007.
In a statement on Tuesday, JSPL announced that its subsidiary, Jindal Steel Bolivia (JSB), has terminated the contract - that gave it access to 20 billion tones, or half of the El Mutun deposit, considered amongst the largest in the world - and would drag the Bolivian government to arbitration for breach of contract.
"The company took the decision after all its efforts to resolve the issues and take the project forward did not meet with success. Due to the non-fulfillment of the contractual obligations and unwillingness to fulfill the contract on the part of the government of Bolivia, JSPL has been forced to terminate the contract," a statement from the company said.
The deal breaker came after the Bolivian government failed to meet assured gas supply to the project. JSPL had won rights to develop the iron ore mine in 2007 committing to invest $ 2.1 billion in the mine and downstream steelmaking facilities: a pellet plant with an annual capacity of 10 MT, a 6 MTPA DRI and steelmaking of 1.7 MT.
On 8 June, JSB had issued a notice threatening termination giving the Bolivian government 30 days to figure out gas supply. "In view of the aforesaid breaches of the Bolivian Government and its entities, the company intends to pursue international arbitration relating to the contract," the release said.
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