The China-funded Mutun steel plant in Bolivia is set to meet half of the country’s steel needs, generate jobs, and enhance economic recovery. The project represents a shift away from previous delays and underscores China’s increasing role in Bolivia’s industrial sector.
A new steel plant in Puerto Suarez, Bolivia, financed largely by the Export-Import Bank of China, is anticipated to fulfill half of the national demand for steel, significantly contributing to the country’s economic recovery and industrial enhancement. Officially inaugurated on February 24, the $546 million Mutun plant will be operated by Sinosteel Engineering and Technology, a division of the state-owned Sinosteel Corporation, within its inaugural year of operations.
The Mutun plant is projected to generate approximately 1,000 jobs for Bolivians, providing optimism amidst challenges such as low foreign currency reserves, fuel shortages, high inflation, and depleting natural gas resources. Professor Omar Portillo from the Higher University of San Andres stated that the plant will decrease reliance on steel imports and broaden Bolivia’s steel export potential, particularly stating that “the steel exports will be fundamental or strategic because Bolivia can reach northeastern Brazil at competitive prices.”
Annual output from the new facility is estimated at 200,000 metric tons of steel, predominantly comprising rebar and wire mesh valued at $260 million. The plant will also process 66,000 tons of raw materials monthly from Cerro Mutun, which hosts one of the world’s largest iron ore reserves, containing approximately 40 billion tons of iron.
This venture faced numerous delays over five decades, particularly following the termination of an agreement with Jindal Steel Bolivia in 2012. However, construction resumed with Chinese funding, ultimately reaching completion under President Luis Arce’s administration. Portillo remarked, “The Jindal Steel dispute was a big problem because it delayed the iron industry in Bolivia for around 10 years.”
Looking ahead, the Bolivian government is exploring plans for a second steel plant, potentially expanding collaboration with China. The current facility is expected to substantially enhance Bolivia’s iron and steel exports, which totaled $23.51 million in 2023. China remains a pivotal trading partner, with Bolivia’s exports to China hitting $1.21 billion predominantly in precious metals, zinc, and lead ores.
The partnership is set to deepen further as Bolivian agricultural products gain improved access to the Chinese market, and as a leading Chinese consortium joins Bolivia’s lithium industry development. Economist Juan Jose Bedregal noted, “These relations, along with the growing global influence of the BRICS countries, create favorable expectations for Bolivia’s economic development.”
Bolivia and China are aligned in their vision to promote a multipolar world within the BRICS framework, a collaborative platform that Bolivia joined as an associate nation on January 1. Additionally, over the past decade, Chinese investments in Bolivia’s construction sector have surged, with numerous contracts awarded for road construction efforts. Portillo noted that the steel plant and the Chinese-supported Chancay Port in Peru are expected to bolster Bolivia’s economy. He advocated for creating an “integration route” with Chancay Port to enhance trade, stating that improving access would significantly facilitate Bolivian exports.
In summary, the new steel plant in Puerto Suarez is poised to transform Bolivia’s industrial landscape by addressing the local demand for steel, creating jobs, and expanding exports. The collaboration with China marks a significant turning point for Bolivia’s economic recovery, suggesting a promising future of increased trade ties and opportunities for further investment in various sectors.
Original Source: global.chinadaily.com.cn
