China-Funded Steel Plant Significantly Boosts Bolivia’s Economic Recovery

The newly inaugurated China-funded steel plant in Puerto Suarez, Bolivia, aims to meet half of the country’s steel demand, generating jobs and boosting economic recovery. The plant will produce 200,000 metric tons of steel annually, aiding in the reduction of import reliance and enhancing export capabilities. Additionally, further collaboration with China is anticipated in future projects, promising substantial economic benefits for Bolivia.

A newly inaugurated steel plant in Puerto Suarez, Bolivia, has been financed primarily by the Export-Import Bank of China and is projected to fulfill fifty percent of the nation’s steel demand, facilitating economic recovery and industrial advancement in Bolivia. The Mutun plant, which has an investment value of $546 million, is set to begin operations under the management of Sinosteel Engineering and Technology, a subsidiary of the Chinese state-owned Sinosteel Corporation.

This significant project promises to generate approximately 1,000 jobs in Bolivia during its first operational year, providing a positive economic impact amid challenges such as dwindling foreign currency reserves, fuel shortages, high inflation, and decreasing natural gas reserves. As stated by Omar Portillo, an academic from the Higher University of San Andres, the plant will enhance domestic steel production, reduce reliance on imports, and expand potential export markets.

The plant will produce 200,000 metric tons of steel each year, primarily in the form of rebar and wire mesh, valued at $260 million, and will process 66,000 tons of raw materials monthly sourced from the Cerro Mutun iron ore deposit, among the largest globally. The initiative, undertaken after a lengthy delay due to a prior contract termination with an Indian company, reflects a renewal of hope for Bolivia’s iron industry, which has been inactive for years. Portillo highlighted the critical role of Chinese investment in revitalizing this project and its positive ramifications for the Bolivian economy.

Furthermore, the Bolivian government is exploring plans for an additional steel plant, potentially in collaboration with China, to boost iron and steel exports, which are estimated at $23.51 million for the year 2023. China’s involvement in Bolivia’s mining and industrial sectors is significant, with exports to China totaling $1.21 billion in 2023, mainly comprising precious metals and various ores.

Experts believe that throughout the years, Bolivia’s trade relations with China are likely to deepen, providing Bolivian food products enhanced access to the Chinese market and facilitating substantial investments in the lithium industry. Juan Jose Bedregal, an economist from the Higher University of San Andres, noted that these relationships feed into a broader vision of establishing a multipolar world within the BRICS framework, further benefiting Bolivia’s economic prospects.

Indeed, apart from trading endeavors, Chinese investments have bolstered Bolivia’s construction sector over the past ten years, with many Chinese companies winning contracts for road construction projects. As Portillo noted, the new steel plant will significantly contribute to Bolivia’s economy, as will the China-backed Chancay Port in Peru. To further leverage its economic position, he suggested that Bolivia should enhance its supply diversification and establish an “integration route” with Chancay Port to streamline trade operations with China, which could be instrumental in boosting the nation’s export capacity.

The inauguration of the new steel plant in Puerto Suarez, Bolivia, backed by Chinese investment, signifies a pivotal move towards economic recovery and industrial enhancement for the country. The project, expected to create jobs and reduce the dependency on steel imports, may also lead to increased exports and partnerships with China. With ongoing efforts to strengthen trade relations and diversify fuel supply sources, Bolivia stands to benefit substantially from these developments.

Original Source: www.chinadaily.com.cn