In Bolivia, a new industry dawns in the threatened Pantanal wetlands, May 24, 2024

In the middle of the Bolivian portion of the Pantanal wetlands lies one of the largest iron ore deposits in the world: the Mutún. …The idea of building a steel plant in the area was conceived sixty years ago, Jorge Alvarado Rivas, the current president of the state-owned Empresa Siderúrgica del Mutún (ESM), told Dialogue Earth. But only in 2006 did a bidding process come to fruition. After a year of negotiations, the Indian firm Jindal Steel and Power Ltd was awarded the 40-year contract to exploit and convert the iron into steel, …. The company promised to invest USD 2.1 billion in the project, but subsequently withdrew from the country in 2012, citing repeated fines imposed by the government …for alleged breach of contract. …

…When Jindal withdrew, it claimed the reason for not fulfilling its contract was the lack of water and natural gas supplies needed to start up the industry. Attempting to avert a similar outcome, the Bolivian government guaranteed the provision of both resources when a new contract was signed with ESM in 2016, this time with the Chinese state-owned Sinosteel Corporation.

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Under the terms of its contract, Sinosteel must carry out the design for the industrial plant, build it, start it up and operate it for a year, after which the Bolivian company will take over, Rivas says, adding that a team of Bolivian professionals are being trained in China to run the facility.

To complete construction and begin operations, USD 546 million will be guaranteed from three sources, he says: about USD 400 million from the China Eximbank …and USD 80 million from Bolivia’s sovereign wealth fund Finpro …, along with USD 70 million from the national treasury.

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Water supply for the plant’s operations will come from an aqueduct that is being built to transport water from the Paraguay River to the Mutún plant. The system will pass through Otuquis National Park, a protected area in the Pantanal of high conservation importance due to its rich biodiversity.

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[B]iologist Juan Carlos Urgel has been entering the Otuquis National Park to conduct documentation and studies. This protected area is located a few kilometres from Mutún and, although Alvarado says there will be no environmental impact in the protected area on the diversion of the flow of the Paraguay River, Urgel says he has observed the opposite.

In Otuquis, Urgel claims that a dirt road has been carved out, and in the Mutún area, bodies of water have been diverted, “which were wetlands and have now dried up”, he says.

In July last year, following similar complaints, a commission made up of members of parliament and representatives of the Santa Cruz government and the municipality of Puerto Suárez carried out an inspection of the industrial complex’s facilities. The 24-page document prepared by the commission after its inspection, to which Dialogue Earth had access, states that Sinosteel subcontracted other Chinese companies and confirmed that iron ore was already being exploited through the open-pit method. One of these subcontracted firms “would be in charge of operating the washing plant [for the ore] and would use water from the San Juan river”, the report noted, and that water for the factory’s construction and other activities is being pumped from a local stream.

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…Ana María Tomichá, an Indigenous woman who lives in the Motacusito Nuevo community, located in the vicinity of Otuquis, notes that very few local people have been hired, “because they call for people with experience, and many here do not have a CV.”...

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Dialogue Earth approached Sinosteel representatives for comment on the commission’s report, but at the time of publication, no response had been received.