Sinosteel expected to break ground on Bolivian sheet metal plant in August

LA PAZ - China's Sinosteel is expected to break ground in August on a sheet metal plant in Bolivia's east Santa Cruz department, Bolivian Mining and Metallurgy Minister Cesar Navarro said Monday.

Construction will begin pending the completion of legal paperwork and the approval of a line of credit by the Import and Export Bank of China (Eximbank), Navarro said.

"We are estimating that the development of the project, which will take 30 months to complete, will begin in August," he said.

Sinosteel is expected to submit a feasibility study and the final design of the facility to Bolivia's Ministry of Planning so it can begin talks with Eximbank on the financing need.

Both the credit and the project are going to be presented to the Legislative Assembly for approval, Navarro said.

Bolivia's state-run El Mutun Steel Company last Wednesday signed the construction contract with Sinosteel, which is to design and build the sheet metal plant in a region near the country's border with Brazil.

Sinosteel will also operate the facility for a year with Bolivian personnel in training, as part of a transfer of technology agreement.

The project calls for an initial investment of $422 million, with 85 percent of the funds, or $353.7 million, provided by the Chinese credit line and 15 percent ($63.3 million) by the Bolivian government. Total investment may exceed $500 million, taking into account operational capital and other costs.

Under the contract, the plant should be completed by 2019, if construction begins in August.

Bolivia's construction sector requires some 300,000 metric tons of steel a year, said Navarro, adding the plant will have the capacity to supply half of that amount saving the country up to $240 million annually in steel imports from Brazil, Peru and Argentina.