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19. June 2017

BOL - Bolivian economy grows in Q1 thanks to mining

Mining and manufacturing were the main drivers of Bolivia's GDP growth in the first quarter, a senior government official said.

At the same time, inflation reached just 0.07% in April, while the bank's international reserves are rebounding after dropping last year, central bank president Pablo Ramos said. While Ramos ratified that Bolivia's economy was on track to grow 4.7% this year, he did not provide a figure for Q1 GDP.

"The economy posted a good performance in the first quarter. Mining is doing very well right now," Ramos said in a statement. "We have all the elements that enable us to guarantee that the Bolivian economy is strong."

Bolivia's exports climbed 3% to US$1.695bn in the first quarter as mining export revenue, led by zinc, silver, lead, copper and tungsten, jumped 36% to US$522mn due to higher metals prices and the restart of state mining company Comibol's Karachipampa silver-lead smelter.

However, a strike by Chilean customs officials which has blocked Bolivian minerals shipments from ports in Chile since May 24 may have an economic impact, Ramos said. The strike is costing Bolivia US$350,000 per day in missed shipments, according to the mining ministry.

EL MUTÚN

In other mining news, state mining company ESM signed a supervision contract for the El Mutún iron and steel project with China's CISDI Engineering, the mining ministry said.

However, China development bank Eximbank has yet to approve financing for the project in Santa Cruz department, the ministry said in a statement. Bolivia awarded the US$422mn El Mutún contract last year to China's Sinosteel Equipment.

The 30-month project construction was to be 85% financed by Chinese loans and 15% by the Bolivian government. El Mutún, which holds an estimated 40Bt in reserves, could produce 150,000t/y of laminated steel and 80,000t/y of sponge iron, according to the mining ministry.

The project, which will include a pellet plant, a continuous casting steelworks and a ring-rolling mill, has faced repeated delays and legal issues under President Evo Morales' government. Bolivia is battling arbitration by previous Mutún operator Jindal Steel & Power over the cancellation of its contract in 2012.

Private investment has dwindled in Bolivia since Morales, who was sworn in for a third consecutive mandate in 2015, seized operations from miners including Jindal, Glencore and South American Silver since first taking office in 2006.

Source: bnamericas.com

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