China-Funded Steel Plant Significantly Boosts Bolivia’s Economic Landscape
Bolivia has inaugurated a $546 million steel plant in Puerto Suarez, financed by China, to meet half of its steel demand. Expected to create 1,000 jobs, the plant will not only reduce reliance on steel imports but also boost exports, particularly to Brazil. Plans are underway for a second plant, reinforcing the strategic partnership with China, which remains Bolivia’s major trading partner.
A newly inaugurated mega steel plant in Puerto Suarez, Bolivia, financed by the Export-Import Bank of China, promises to fulfill half of the country’s steel demand while catalyzing economic recovery and industrial development. The $546 million Mutun plant, managed by Sinosteel Engineering and Technology, is anticipated to generate approximately 1,000 jobs amidst local challenges such as low foreign currency reserves and high inflation.
The project aims to minimize Bolivia’s reliance on foreign steel imports and enhance its export market, as expressed by Omar Portillo, a professor at the Higher University of San Andres. He noted, “The steel exports will be fundamental or strategic because Bolivia can reach northeastern Brazil at competitive prices.”
Annually, the new plant will produce 200,000 metric tons of steel, particularly rebar and wire mesh valued at $260 million, utilizing raw materials from the Cerro Mutun iron ore deposit, one of the largest globally. The plant’s development faced significant delays due to past contractual issues with Indian contractor Jindal Steel Bolivia, but it finally commenced, thanks to Chinese investment under President Luis Arce’s administration.
There are plans for an additional steel facility in Bolivia, with potential further collaboration with China, while the current plant is set to enhance iron and steel exports, which were valued at $23.51 million in 2023. China serves as Bolivia’s principal trading partner in the mining and industrial sectors, with bilateral exports reaching $1.21 billion in 2023, predominantly in precious metals and ores.
China’s economic engagement with Bolivia is expected to broaden, granting better access for Bolivian agricultural products and increasing Chinese involvement in lithium industry development, as noted by economist Juan Jose Bedregal. He also highlighted, “Bolivia shares with China a vision of building a multipolar world within the BRICS framework.”
In addition to the steel plant, Chinese investments in Bolivia’s construction sector have flourished, with various Chinese firms acquiring contracts for road construction. Portillo emphasized the significance of the steel venture and China’s backing of the Chancay Port in Peru for the Bolivian economy, advocating for a strategic integration route to improve trade logistics.
The inauguration of the steel plant in Bolivia presents a promising step towards economic recovery and development, driven by significant Chinese investment. With job creation, reduced dependency on imports, and expansions in exports, this project is poised to reshape Bolivia’s industrial landscape. Moreover, strengthening trade relations with China may enhance Bolivia’s economic prospects further, as it seeks to integrate more closely with Chinese markets and infrastructure projects.
Original Source: www.chinadaily.com.cn
