The $546 million Mutun steel plant, funded by China, aims to satisfy half of Bolivia’s steel demand while fostering economic recovery. It will create about 1,000 jobs, reduce import dependency, and significantly increase exports. The project finally commenced after previous setbacks due to delays and now supports further collaborations with China in various sectors, including lithium extraction.
A new mega steel plant in Puerto Suarez, Bolivia, funded by the Export-Import Bank of China, is set to address half of Bolivia’s steel demand while aiding economic recovery and industrial advancement. The $546 million Mutun plant, operational since February 24, is managed by Sinosteel Engineering and Technology, a Chinese state-owned subsidiary.
This plant is projected to create approximately 1,000 jobs for Bolivians, offering a boost as the country deals with challenges like low foreign currency reserves and inflation. By reducing reliance on steel imports, it will also enhance Bolivia’s steel export capacity. Omar Portillo from the Higher University of San Andres noted, “The steel exports will be fundamental or strategic because Bolivia can reach northeastern Brazil at competitive prices.”
Producing 200,000 metric tons of steel annually, primarily rebar and wire mesh, the plant will process 66,000 tons of raw materials monthly from the Cerro Mutun deposit, one of the largest iron ore reserves globally. The ambitious project faced past delays, particularly with Jindal Steel Bolivia, until revitalized by Chinese investments under President Luis Arce’s administration.
Bolivia’s ambitions extend to a second steel plant that may involve additional partnerships with China. This initial facility is expected to greatly increase Bolivia’s iron and steel exports, which were valued at $23.51 million in 2023. Currently, China is Bolivia’s primary trading partner in mining and industry, with Bolivian exports to China hitting $1.21 billion in precious metals and ores last year.
“China’s role in Bolivian trade is expected to expand with greater access for Bolivian food products to the Chinese market,” stated economist Juan Jose Bedregal. He also highlighted China’s influence in Bolivia’s lithium industry amidst a growing global presence of BRICS countries. This aligns with Bolivia’s partnership as an associate member of BRICS since January 1.
In addition to trade, China has significantly invested in Bolivia’s construction sector, with many contracts awarded for road construction projects. Portillo asserted that the steel plant and the upcoming Chancay Port in Peru will bolster Bolivia’s economy. He emphasized the need for Bolivia to diversify its fuel supply and improve trade logistics through better access to ports like Chancay. “To increase exports, Bolivia has to increase its proximity to this port, and the good relationship with the Chinese government can greatly facilitate this operation,” he concluded.
The inauguration of Bolivia’s Mutun steel plant, funded by Chinese investment, is poised to significantly impact the country’s economy by creating jobs, reducing steel imports, and boosting exports. China’s strategic role in both trade and construction in Bolivia, complemented by its partnership in developing lithium resources, positions Bolivia favorably within the evolving BRICS framework. Overall, this collaboration could pave the way for enhanced economic stability and growth in Bolivia.
Original Source: www.chinadaily.com.cn
