A China-funded steel plant in Puerto Suarez, Bolivia, inaugurated on February 24, is anticipated to meet half of the nation’s steel demand, stimulate economic recovery, and create jobs. The project aims to reduce steel imports and expand exports, leveraging Bolivia’s resources and strategic location. The Bolivian government is also considering a second plant to further enhance trade relations with China and bolster the economy.
A new steel plant funded primarily by the Export-Import Bank of China, located in Puerto Suarez, Bolivia, is set to fulfill half of the nation’s steel demand while aiding economic recovery and advancing industrial development. The Mutun plant, with an investment of $546 million and inaugurated on February 24, will be operated by Sinosteel Engineering and Technology, a subsidiary of the state-owned Sinosteel Corporation. During its inaugural year, the plant is projected to generate approximately 1,000 jobs, providing much-needed support as Bolivia faces challenges including low foreign currency reserves, fuel shortages, spiraling inflation, and dwindling natural gas supplies.
The establishment of this plant aims to decrease Bolivia’s reliance on steel imports while simultaneously expanding its export market. Omar Portillo, an expert from the Higher University of San Andres, noted that “the steel exports will be fundamental or strategic because Bolivia can reach northeastern Brazil at competitive prices.” The plant is designed to manufacture 200,000 metric tons of steel annually, mainly focused on rebar and wire mesh, with a projected value of $260 million. It will also process 66,000 tons of raw materials monthly extracted from the Cerro Mutun deposit, noted for its vast reserves of iron ore.
Originally stalled for nearly five decades due to issues with its initial contractor, Jindal Steel Bolivia, the project has come to fruition due to Chinese investments and was finalized under the leadership of President Luis Arce. Portillo emphasized the importance of the investment, stating that “the Jindal Steel dispute was a big problem because it delayed the iron industry in Bolivia for around 10 years.”
With the success of the current plant, Bolivia’s government is exploring the possibility of developing a second steel plant, potentially in collaboration with China. This initiative is expected to significantly enhance Bolivia’s iron and steel exports, which totaled $23.51 million in 2023. Moreover, China continues to play a pivotal role in Bolivia’s mining and industrial sectors, with bilateral exports reaching $1.21 billion in 2023, emphasizing the trading relationship centered on precious metals and ores.
Economist Juan Jose Bedregal indicated that the enhancement of trade relations could extend beyond steel, anticipating improved access for Bolivian food products to Chinese markets and increased investments in lithium by major Chinese firms. He elaborated on China’s influence, contributing to the BRICS initiative, in which Bolivia joined as an associate member. Over the last decade, China has significantly contributed to Bolivia’s construction sector, with various contracts awarded to Chinese firms for road construction.
Portillo asserted that the steel plant’s establishment would benefit Bolivia’s economy similarly to the China-supported Chancay Port project in Peru, urging the need for Bolivia to diversify its fuel supply sources. He suggested the creation of an “integration route” to enhance trade efficiency, promoting proximity to the Chancay Port as a strategic move facilitated by positive relations with China.
The writer is a freelance journalist for China Daily.
In summary, the inauguration of the China-funded steel plant in Bolivia represents a significant milestone for the nation’s industrial development and economic recovery. With ambitions to expand exports and attract further investments, Bolivia is poised to leverage its partnership with China for broader trade and economic opportunities. The project not only addresses immediate economic issues but also reinforces Bolivia’s strategic position in the global market, particularly within the context of the BRICS alliance.
Original Source: www.chinadaily.com.cn
