Bolivia is battling internal politics, poor infrastructure and a restless labor force in a drive to diversify its mining base

Apr 01, 2010 | 05:28 AM | Juan Weik

SAO PAULO, Brazil: Bolivia has been famous for its rich mineral resources since the time of Spanish colonization, but it has always been mainly dependent on a single metal: first on silver for roughly three centuries, and then on tin for much of the 20th Century.

Such dependence proved dangerous, especially when tin prices collapsed in the 1980s, impacting several Bolivian companies and thousands of miners and their families. Since then the government has been trying to stimulate the exploration and commercial production of other metals, such as zinc and lead.

The going has been tough from the outset, but with big projects under way in the country the diversification attempts look as they may finally be closing in on a reward. There are still great difficulties on the way to this El Dorado, however.

Bolivian newspapers have been reporting behind-the-scenes details of negotiations between the government and India's Jindal Steel & Power Ltd. over the El Mutun iron ore and steel project. In 2007, the Indian enterprise signed a memorandum of understanding with the government for a 50-50 joint venture worth $2.1 billion, of which $1.5 billion would be disbursed over five years—$300 million per year—followed by $600 million in the following three years.....