China-Funded Steel Plant Enhances Bolivia’s Economic Landscape

A China-funded steel plant in Puerto Suarez, Bolivia, is set to fulfill half of the country’s steel demand, fostering economic recovery and creating about 1,000 jobs. The project significantly reduces reliance on steel imports and enhances export potential. Anticipated expansions in Bolivian-Chinese collaboration further indicate favorable economic forecasts.

The newly commissioned steel plant in Puerto Suarez, Bolivia, substantially financed by the Export-Import Bank of China, is poised to fulfill half of Bolivia’s steel demand while facilitating significant economic recovery and industrial advancement. With a cost of $546 million, the Mutun plant, inaugurated on February 24, is operated by Sinosteel Engineering and Technology, a subsidiary of the Chinese state-owned Sinosteel Corporation.

This plant is anticipated to generate approximately 1,000 jobs, thus providing a much-needed boost during a challenging economic period marked by dwindling foreign currency reserves, fuel shortages, high inflation, and dwindling natural gas supplies. As Omar Portillo, a professor at the Higher University of San Andres in La Paz, indicated, the project will decrease dependence on foreign steel imports and broaden Bolivia’s export market for steel.

The plant has the capacity to produce 200,000 metric tons of steel annually, primarily rebar and wire mesh, valued at $260 million. It will also process an estimated 66,000 tons of raw materials monthly sourced from the Cerro Mutun, which ranks among the world’s largest iron ore deposits, estimated at 40 billion tons.

The inception of the construction followed a lengthy delay due to issues with an initial Indian contractor. The Brazilian counterpart ceased operations in 2012, necessitating a long wait for the project to commence, which has now been enabled by Chinese investment and the current administration led by President Luis Arce.

In addition to the current developments, Bolivia’s government is actively pursuing plans for a second steel plant, which could involve further collaboration with Chinese companies. Currently, Bolivia’s iron and steel exports reached $23.51 million in 2023. China’s role in Bolivian trade, particularly within the mining and industrial sectors, is expected to increase as well, with Bolivian exports to China reaching $1.21 billion in the same year, mainly in precious metals, zinc, and lead ores.

Economist Juan Jose Bedregal emphasized the anticipated expansion of Bolivian access to the Chinese market for food products and the involvement of Chinese consortiums in the lithium sector. “These relations, along with the growing global influence of the BRICS countries, create favorable expectations for Bolivia’s economic development,” stated Bedregal. Bolivia has aligned with China’s vision for a multipolar world within the BRICS framework, which Bolivia joined as an associate country on January 1.

China has consistently invested in Bolivia’s construction sector over the past decade, with many Chinese firms securing contracts for road projects. The steel plant, along with the China-backed Chancay Port in Peru, is expected to enhance Bolivia’s economic status. Portillo remarked on the need for Bolivia to diversify its fuel supply sources, citing the high costs associated with import logistics.

He advocates for establishing an “integration route” with Chancay Port to primarily improve trade, noting that greater proximity to this port, facilitated by Bolivia’s positive relationship with the Chinese government, would enhance export capabilities.

In summary, the newly inaugurated steel plant in Bolivia is an essential step towards meeting domestic steel demand while fostering economic recovery amidst current challenges. With significant employment opportunities and an anticipated boost in steel exports, Bolivia is moving towards enhanced industrial capabilities. The project’s successful initiation, following extensive delays, underscores the notable role of Chinese investment in reshaping Bolivia’s economic landscape. Continued collaboration with China, particularly in further industrial ventures, presents promising prospects for Bolivia’s future economic growth.

Original Source: global.chinadaily.com.cn