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Bolivia-India iron mine deal in jeopardy

Associated Press Published: May 5, 2012

LA PAZ, Bolivia (AP) — Bolivia's biggest mining investment under President Evo Morales is in peril as his government accuses India's Jindal Steel of failing to meet terms of a contract under which it was to have invested $2 billion for iron ore extraction.

Both sides claim breach of contract.

Bolivia fined Jindal $18 million Friday for allegedly failing to keep an investment schedule.

Jindal on Saturday issued a statement accusing Bolivia of failing to honor an agreement to guarantee natural gas shipments for the Mutun mine and a planned smelter.

Mining Minister Mario Virreira said last week it would be best if Jindal quits the project near the Brazilian border so the country can find another investor.

Jindal signed an investment agreement in 2007 but never launched the project.