ESM unable to export iron ore for Warranty Eurogroup due to lack of infrastructure

- Tuesday, September 13, 2011

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Bolivia's state steel company ESM has been unable to export 100,000t of iron ore from its El Mutún deposit in Santa Cruz department, ESM board member José Padilla told BNamericas.

In August, ESM signed a contract with Spanish company Warranty Eurogroup to export ore to China and the agreement was to become a pilot test for exports from El Mutún. However, the ore is still at the mine due to the lack of transport infrastructure.

"So far it hasn't been possible to export ore and it keeps on building up," Padilla said, adding that El Mutún currently has more than 300,000t of iron ore ready to be exported.

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"The construction and design of the port will have to be tendered again and, in the meantime, the navy is building a rather precarious port that doesn't meet the required conditions," Padilla said.

The road between the deposit and Puerto Busch port, from which part of the ore could be exported, was severely damaged by the heavy rains that affected the area a few months ago and will need to be repaired, according to Padilla.

In June, Padilla said that iron ore from El Mutún would be exported via the Gravetal port on the border with Brazil since the infrastructure surrounding Puerto Busch port was still not ready.

"However, it has not been possible to use that route due to the low level of navigability on the Paraguay river," Padilla said.

Infrastructure - such as highways, railroads and ports - is still a delicate topic in the development of the project since four tender processes have been launched, but no contracts have been awarded due to the bidders' lack of experience, Padilla said at the time.

El Mutún is located in a 65km2 area of Santa Cruz's Germán Busch province and has 40Bt in reserves grading 50% iron ore.

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