Indian steel company takes over operations at CVG

An excavator moves soil toward a dump truck at the open pit mining site of Venezuelan iron ore producer CVG Ferrominera Orinoco on Cerro Bolivar outside Ciudad Pier, Venezuela, Thursday, July 9, 2015. Photographer: Meredith Kohut/Bloomberg

Jindal Steel and Power Limited of India has taken over operations of Venezuela’s largest iron ore complexIt is the first for a private company in the South American country’s heavy industry in more than a decade, just months after reaching an agreement with the administration of Nicolás Maduro.

Fabiola Zerpa

Jindal officials CVG carrying out inspections at Ferrominera Orinoco iron ore plantsAccording to two people familiar with the process, who asked not to be identified because the information is not public.

company, Controlled by state group Corporation Venezolana de Guayana.has five plants that produce iron ore pellets and briquettes that serve as raw materials for steelmaking.

Jindal aims to export 600,000 metric tons of raw materials per month by the end of the year, according to one of the people, and invest an initial $800,000 to upgrade existing equipment.

Terms of the deal are unclear as neither the Venezuelan government nor New Delhi-based Jindal have confirmed the agreement.

Venezuela’s information ministry and Jindal did not respond to repeated requests for comment.,

Venezuela’s partnership with Jindal is a change from Chavismo’s long-standing reluctance to involve private companies in its poor and tightly controlled mining industry.

In the mid-2000s, the late President Hugo Chávez reversed the privatization process initiated by previous governments for state-owned gold, steel, and cement companies.

The measure led to the exit of companies including Ternium SA from Luxembourg, Holcim AG from Switzerland, Cemex SAB from Mexico and Crystallex International Corp from Canada. After 18 years, Maduro is now looking to reestablish foreign partnerships.

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