Bolivian state-owned miner Empresa Siderurgica Nacional (ESM), holder of the giant Mutun iron ore deposits, has experienced difficulty selling the raw material, due to its low, 48% iron content, market sources said Tuesday.
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In addition, the company has said it lacks the port infrastructure for shipping.
A Spanish group had intended to buy 150,000 mt of Mutun's ore this month to export to China, but had called off negotiations with the Bolivian company after it became clear that the iron content of the ore was low, and that the selling price of $135/mt CFR did not include freight, sources said. Bolivia would have had to use Argentina's Ibicuy port to complete the transaction.
Bolivia's government said Monday it is studying the possibility of using the Ibicuy port, as no shipping solution currently exists for Mutun's output. Bolivia's Busch port, in Santa Cruz, does not accommodate large carriers.
"Agreements [with the Argentinian government] could enable ESM to use the [Ibicuy] port facilities and mobilize some 500,000 mt/year of iron ore," said the Bolivian government.
ESM produces ore at a rate of 1 million mt/year and plans to double production once a 50-50 joint venture partner is named. The miner currently exports ore to China and occasionally Paraguay. Located in Santa Cruz, German Busch province, Mutun contains some 40 billion mt of iron ore deposits.