Indian steelmaker Jindal Steel & Power Ltd.’s Bolivian subsidiary won a $22.5 million arbitration judgment against state-owned mining company Empresa Siderurgica del Mutun, a lawyer representing Jindal said.
The International Chamber of Commerce in Paris ruled on Aug. 6 that ESM took money that Jindal Steel Bolivia had placed as guarantees for the El Mutun iron-ore mining project, according to a Jindal statement issued today and confirmed by Jonathan C. Hamilton, a partner and head of Latin American arbitration with law firm White & Case LLP.
“Actions by Bolivia and its entities undermined the El Mutun project and forced the termination of the project contract,” according to the statement.
Indira Das, a spokeswoman for New Delhi-based Jindal, didn’t immediately respond to an e-mail and phone message outside of normal business hours.
Jindal, which signed a contract in 2007 to develop 20 billion tons of iron-ore reserves at El Mutun, had planned to build a 1.7 million ton per year steel plant in addition to a sponge-iron factory, a pellet unit and a power project, the company said in 2012.
Jindal withdrew from the project because of a lack of funds and not because of government pressure, Mining Minister Mario Virreira said at the time. The government seized the company’s guarantee for failing to meet its contract, he said.
“The result vindicates Jindal’s efforts to develop the El Mutun project, and confirms an unfortunate pattern of dubious treatment of investors in Bolivia,” Hamilton said in a separate e-mailed statement today.