MercoPress. South Atlantic News Agency

Bolivia raids the offices of India’s Jindal alleging “breach of contract”

President Evo Morales claims Jindal did not invest funds promised

Bolivian prosecutors with the support from police and military forces on Friday raided the offices of India’s Jindal in La Paz as part of an investigation for an alleged “breach of contract” following the company’s confirmation it was abandoning the huge iron-ore mining project of El Mutún.

Prosecutor Marco Antonio Rodriguez said that with the support from police he raided the offices in La Paz and similar operations took place in the city of Santa Cruz and Puerto Suarez, where the iron deposits are located close to the Brazilian border.

In Puerto Suarez the raid involved police and military forces and a member from the accounting department was arrested for allegedly trying to rescue documents in a van.

In La Paz two computers and all documents found were confiscated for the investigation. However a reliable source from Jindal said that the most important information was in Santa Cruz and Puerto Suarez.

Prosecutor Rodriguez said that in Bolivian law there is no crime that describes the “breach of investment”, as would be the case, but there is “the breach of contract” and anticipated he would summon the top officials from Jindal.

The Bolivian government accuses Jindal of not having invested the 600 million dollars promised by 2012. Back in 2007 India’s Jindal and President Evo Morales signed a several billions contract for the exploitation of half of the El Mutun mineral deposits estimated at over 40 billion tons, mainly iron ore.

This week Jindal announced it was dropping the contract with Bolivia because the project was three years behind schedule and lacked legal securities to continue nor was the guarantee of the necessary energy for a steel mill next to the mine, as had been originally agreed.

“Because of anti-investors’ attitudes and non cooperation towards foreign investors from Bolivia, Jindal Steel Bolivia had no other alternative but to rescind the contract of shared risks”, said the company in a release earlier in the week following months of negotiations.

The Indian company had further requested guarantees from President Morales that he would not nationalize Jindal Steel Bolivia given the recent experience with Switzerland’s Glencore and the suspension of the mining concession awarded to the Canadian company South American Silver.

Jindal announced it will demand Bolivia for the losses incurred and the Bolivian authorities have promised a similar legal action. The Bolivian Mining Ministry said Jindal is leaving because it did not accept its petition to investigate the company’s investments and refused to return the 36 million dollars fine imposed because of breach of contract.

The President Morales administration announced the whole project would again be put out to tender for which “there are interested parties from Korea, China and Italy”.