A few days back I touched upon MAS “hitting the brakes” on El Mutún project, I did not touch upon the details as they were blurry; however one of my favorite authors has recently written an excellent column about the issue [1]. And though it’s unlikely that Andrés Solíz Rada will ever leave his anti-corporate leftie rhetoric aside, his investigative caliber is still categorical.
The article argues that the process had been manipulated by certain unscrupulous persons to secure the success for the Brazilian bidder Sidersul, despite a much inferior proposal and alleged corrupt practices. The adjudication of the project to a Brazilian partner has always been controversial, given that our neighbor to the east has a powerful steel industry of its own and would eliminate a potential competitor by gaining control of the Mutún reserve. This argument sounds nationalistic, but it really isn’t when we recall recent problems here in the US regarding Brazilian steel imports [2], or we compare basic features of all the proposals.
The column also relies heavily on the ecological consequences of the project –first documented by the Bolivia NGO FOBOMADE [3] - if the partners ended up being the Brazilians. Let me explain, their proposal projects only the primary refining stages, which convert iron ore to sponge iron by reducing the mineral via coal and charcoal generated heat. This implies –according to FOBOMADE- the cutting down of 45 hectares (111 acres) of Amazonian forest daily or 165,000 hectares (407,550 acres) yearly to feed the furnaces. The product obtained would then be shipped (along with the lion share of potential revenues) to São Paulo for further processing and export. According to its critics such operation would put Bolivia in the Kyoto Protocol’s violators list.
Solíz Rada then comments on the proposal by the Chinese corporation Shandong Luneng, which according to his data offers a better deal: more refining –practically ready to export billings and steel slabs- and therefore better margins, financial backing for the construction (I’d say expansion) of the railway network to reach Peruvian ports in the Pacific and a different smelting method using natural gas. A more ecological alternative that would put to work some of our natural gas reserves and fill the gaps in the currently underused gas pipe to Brazil (located at a mere 20 kilometers) from the Mutún site.
Now, before I give credit to the MAS crowd for the pause in the process; I’d rather wait for a positive end and the selection of an adequate partner.
Cited in this post [External Links]: Shandong Luneng, Sidersul, FOBOMADE
Sources and Further Reading:
[1] Solíz Rada, Andrés. “El Bocado del Mutún” Bolpress 01.01.06
[2] Institute for International Economics, “Outlook for US- Brazilian Trade and Investment Under FTAA: Some Lessons from NAFTA”
[3] FOBOMADE, “El Pantanal Boliviano y los Proyectos de Desarrollo” [PDF]
UPDATE: President elect Evo Morales, yesterday denied any claim that his party influenced the delay of the bidding process whatsoever. I wonder if it has anything to do with his recent visit to China...Afterall, Mr. Morales has a nick for settling accords before time is due. Case in point: the "solidarity" price for natural gas with Argentina (pushed for during the Mesa government). Read this and this...
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