Bolivia Opening Up Iron Ore Deposits

Posted by Bull Bear Trader | 5/28/2008 09:28:00 AM | | 0 comments »

As reported in an LA Times article, the country of Bolivia is opening up a 40 billion ton deposit of iron ore for mining - the world's largest concentration of iron ore at a single site. The Indian company Jindal Steel and Power has been granted a 40 year concession to mine the ore at El Mutun, extending over 23 square miles. The rush to secure iron ore has increased as the demand for steel continues to climb.

In order to run the operation, it is expected that natural gas will be used as the energy source to power the necessary machinery. Bolivia has been one of South America's poorest nation despite a number of natural resources, such as natural gas, tin, zinc, silver and gold. Nonetheless, environmental and political issues have kept the resources in the ground. High commodity prices have a way of changing perspective. It is expected that revenue from the iron ore deposits will supply about 5% of the annual revenue of the Bolivian government. In addition to India, companies from China and Europe have been bidding on projects in the area.