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Bolivia to launch steel plant funded by China

According to Bolivian officials, a China-funded Bolivian steel plant that was first planned more than 50 years ago will begin production this month. The output is expected to be enough to meet half of the country's requirements.

The $546-million Mutun Plant was funded in part by the Export-Import Bank of China. It will be operated for its first full year by Sinosteel Engineering and Technology of China.

After an official opening on February 24, the plant near the Brazilian border in eastern Bolivia is expected to produce initially 200,000 metric tonnes of steel per year, primarily rebars and wire mesh worth $260 millions.

Bolivia imports most of its steel from Brazil and Peru.

At a Wednesday afternoon press conference, Mining Minister Alejandro Santos Laura said: "We have entered an industrialization era."

The project has been delayed many times since its first proposal about 50 years ago. This was due to a number of disputes between India's Jindal Steel & Power Ltd. and the Indian government.

The government of President Luis Arce has been struggling to revive the Andean nation's economy in the face of a drop in gas exports, which has depleted the reserves held by the central bank and pushed the local currency under pressure.

The Mutun plant is expected to process 66,000 tonnes of raw materials per month, using iron ore mined from Cerro Mutun. Bolivian officials claim that this deposit has one of the largest iron ore deposits in the world, at 40 billion tons.

Santos Laura stated that Bolivian officials would consider the possibility of building a second facility once the domestic demand is met. Santos Laura did not give a timeframe.

Santos Laura stated, "When we reach 100%... We will build another plant that is much better than our current one." "We'll have no other choice than to export the excess abroad."

He noted that the plant was expected to create 700 jobs initially and then 1,000 in time. (Reporting and Writing by Monica Machicao; Editing and Revision by Rod Nickel).

(source: Reuters)