Mumbai, Oct. 8: A government official of Bolivia has threatened to end the contract with Jindal Steel & Power Ltd over its alleged failure to meet investment commitments in a huge iron ore mine.

Quoting energy minister Jose Luis Gutierrez, AP reported today that Jindal deceived Bolivia in failing to honour its end of the biggest mining investment during President Evo Morales’ nearly six-year tenure.

Jindal’s spokesman in Bolivia offered no comment.

Morales’ Leftist government has struggled to secure serious foreign investment in mining and natural gas.

In 2007, Jindals signed a contract which entails a $2.1 billion investment over eight years to mine and smelt 40 billion tonnes of iron at Mutun on Bolivia’s border with Brazil.

In July this year, the company had announced its subsidiary, Jindal Steel Bolivia (JSB), started dispatching iron ore from its El-Mutun mines in Puerto Aguirre, a river port in Bolivia.

JSB had then said that the iron ore would be transported to different destinations, including China, West Asia, European and South American countries.

The company also has plans to export up to 10 million tonnes of products such as concentrate, pellets and steel upon completion of the project.

Jindal Steel Bolivia had secured the development rights of 20 billion tonnes of iron ore of El Mutun mines, one of the world’s single biggest iron-ore deposits, in 2007.

The 40-year contract gave the company the right to mine the reserves.

The company plans to set up an integrated 1.7-million-tonne steel plant, a 6-million-tonne sponge iron and 10-million-tonne iron ore pellet plant in Bolivia at an investment of $2.1 billion. This is the largest investment by an Indian company in South America and also the largest investment by a foreign company on a single project in Bolivia.

The subsidiary has reportedly been allotted land for setting up the integrated steel plant, sponge iron unit, the iron ore pellet plant apart from a 450MW power plant.

According to the company, it has also appointed an engineering consultant for the project.