After almost three years of niggling arguments with Eva Morales, Bolivia’s President, Naveen Jindal finally convinces Bolivia to sign on the dotted line for a possibly mammoth global coup of a deal; B&E analyses the critical road blocks and opportunities going forward
When Bolivian President Eva Morales picked the pen and signed over 3000 acres to Jindal Steel and Power Ltd (JSPL) – a Rs.110 billion company, a unit of the Rs.700 billion O. P. Jindal Group – it was a considerably large step in the last mile effort for industrialist and Parliamentarian Naveen Jindal to finalise one of the most critical global. For records, JSPL is investing Rs.100 billion in setting up a steel and power plant in Bolivia. Bolivian President Evo Morales signed legal documents granting JSPL the required land for a number of their projects, including that for steel, DRE, iron-ore pelletisation et al, a few days back.
That JSPL has become globally notable of late is actually not know to many in India. The Boston Consulting Group listed JSPL in its list of ‘Global top ten value creators of 2010.’ As per BCG’s global “Threading the needle: value creation in low growth economy” report based on Total Shareholder Return, JSPL is the world’s second largest value creating company. Last year, Forbes also included JSPL in its Fab 50 listings. But the Bolivia deal has been hanging since 2007, when – after announcing that JSPL will invest $2.1 billion over eight years for developing the world’s largest iron and steel mines in El Mutun, which has reserves to the tune of 10 billion tonnes – things went into a limbo as the government, after handing over the initial 1000 acres, refused to hand over the remaining requested land to JSPL. In a quid pro quo, JSPL did not advance the investments into Bolivia... till the Bolivian government gave an ultimatum last year to JSPL to either take it or leave it.
It is to be borne in mind that the investment made by Jindals in Bolivia is the largest of its kind. After last month’s final agreement, the Jindals have started the required operations for developing plants in El Mutun and Santa Cruz district. It is expected that both these projects will ready for operation by the next three to four years. On the other hand, though the Bolivian government has granted the additional 3,000 acres for the project to take off, the company still requires 5,000 acres of land to set up the complete infrastructure of the steel plant, including a power plant in the vicinity. Chattisgarh in-charge of JSPL, Pradeeep Tandon, commented to B&E, “Prior to this, we got the rights from Latin America for iron-ore mining for 40 years as well as setting up facilities to produce 1.7 million tonnes of steel, 6 million tonnes of sponge-iron and 10 million tonnes of high quality plates.” Navin Jindal, Executive Vice Chairman, JSPL, also commented on the earlier rankings, “It reiterates the confidence that our investors have in us and it further inspires us to keep growing like this.”
When Bolivian President Eva Morales picked the pen and signed over 3000 acres to Jindal Steel and Power Ltd (JSPL) – a Rs.110 billion company, a unit of the Rs.700 billion O. P. Jindal Group – it was a considerably large step in the last mile effort for industrialist and Parliamentarian Naveen Jindal to finalise one of the most critical global. For records, JSPL is investing Rs.100 billion in setting up a steel and power plant in Bolivia. Bolivian President Evo Morales signed legal documents granting JSPL the required land for a number of their projects, including that for steel, DRE, iron-ore pelletisation et al, a few days back.
That JSPL has become globally notable of late is actually not know to many in India. The Boston Consulting Group listed JSPL in its list of ‘Global top ten value creators of 2010.’ As per BCG’s global “Threading the needle: value creation in low growth economy” report based on Total Shareholder Return, JSPL is the world’s second largest value creating company. Last year, Forbes also included JSPL in its Fab 50 listings. But the Bolivia deal has been hanging since 2007, when – after announcing that JSPL will invest $2.1 billion over eight years for developing the world’s largest iron and steel mines in El Mutun, which has reserves to the tune of 10 billion tonnes – things went into a limbo as the government, after handing over the initial 1000 acres, refused to hand over the remaining requested land to JSPL. In a quid pro quo, JSPL did not advance the investments into Bolivia... till the Bolivian government gave an ultimatum last year to JSPL to either take it or leave it.
It is to be borne in mind that the investment made by Jindals in Bolivia is the largest of its kind. After last month’s final agreement, the Jindals have started the required operations for developing plants in El Mutun and Santa Cruz district. It is expected that both these projects will ready for operation by the next three to four years. On the other hand, though the Bolivian government has granted the additional 3,000 acres for the project to take off, the company still requires 5,000 acres of land to set up the complete infrastructure of the steel plant, including a power plant in the vicinity. Chattisgarh in-charge of JSPL, Pradeeep Tandon, commented to B&E, “Prior to this, we got the rights from Latin America for iron-ore mining for 40 years as well as setting up facilities to produce 1.7 million tonnes of steel, 6 million tonnes of sponge-iron and 10 million tonnes of high quality plates.” Navin Jindal, Executive Vice Chairman, JSPL, also commented on the earlier rankings, “It reiterates the confidence that our investors have in us and it further inspires us to keep growing like this.”
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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