April 25 (Bloomberg) -- EBX Group, a Rio de Janeiro-based natural resources and energy company, plans to move two pig-iron blast furnaces to Brazil after Bolivian President Evo Morales ordered the company to leave the country.

EBX will dismantle its equipment in Puerto Suarez, a city along Bolivia's eastern frontier with Brazil, and transport it across the border to the Brazilian state of Mato Grosso do Sul, EBX founder and chairman Eike Batista said.

Morales, who won election in December on promises to take greater control of Bolivian resources, said last week he was kicking EBX out of the country because the company was operating the plant without proper environmental licenses. Batista, 49, said EBX has not begun operations at the plant and said it has all the necessary permits.

``Morales is full of anger; we can't do business there anymore,'' Batista said in an interview at EBX headquarters in Rio de Janeiro. ``This project was always envisioned as a cross- border project so now we'll just build it all on the Brazilian side.''

EBX spent about $50 million, or a third of its planned Bolivian investment, so far and will lose about $20 million in fixed infrastructure investments as a result of the move, Batista said.

The move will also delay start up of the planned pig-iron operation by about a year. Batista had originally planned to have four blast furnaces in operation by the end of 2006 and produce as much as 800,000 metric tons of pig iron a year starting in 2007.

Kidnapping

EBX planned to export much of the pig iron, the raw iron used to make steel, from Bolivia to the U.S., where the company has already negotiated take-or-pay contracts with steelmakers, Batista said.

Batista's Bolivian company, EBX Siderurgica de Bolivia SA, had also planned to build a 400,000 ton a year steel mill to produce long-steel products such as concrete re-enforcing rod for the Bolivian and export markets, he said.

Morales, 46, decided to expel EBX from Bolivia after the dispute led to social unrest. Villagers in Puerto Suarez protested the government's decision to force EBX to halt the project until they acquired the proper permits, saying they needed the jobs the pig-iron project would create.

Bolivian Planning Minister Carlos Villegas said he and two other ministers who traveled to the town to meet with local leaders on April 18 were kidnapped and held against their will by the villagers until 4 a.m. the next day, when Morales sent in the military to rescue them.

Iron Ore Project

Batista, while saying he is sympathetic to Bolivia's efforts to gain more control over its natural resources, said he didn't understand why his project, which would have provided as many as 5,000 jobs for Bolivians, is being attacked by the government.

``These people have been robbed from for 500 years; that's a fact and I understand that,'' Batista said. ``What I don't understand is that they would attack my project, which is designed to help the Bolivians add value to products in their own country and to find better uses for forest resources.''

In expelling EBX, Morales also disqualified a bid by the company to develop a separate $1.1 billion iron ore project in Bolivia, Villegas said in an interview in Washington this weekend.

To contact the reporter on this story: Jeb Blount in Rio de Janeiro at jblount@bloomberg.net

Last Updated: April 25, 2006 16:04 EDT