With a loan from China, Bolivia, which is short on foreign exchange, opened a steel facility Monday that it hopes will lessen its dependency on metal imports.
In order to increase its economic and political influence in South America, the Export-Import Bank of China contributed significantly to the $546 million construction of the Mutun megaproject at Puerto Suarez, close to Bolivia’s border with Brazil.
“The fundamental objective is that all of us Bolivians can benefit from a natural resource that has remained dormant for many years,” President Luis Arce said at the event.
According to Jorge Alvarado of the Bolivian public corporation that will run the facility, the plant is expected to generate close to 200,000 tons of steel annually, which will enable us “to replace about 50 percent of imports” and avoid “a currency outflow of over $250 million” annually.
Since 2023, the South American nation has been stuck in a deep economic rut after spending a large portion of its foreign reserves on fuel, which it then distributes domestically at subsidized prices.
The project was backed by China as part of its “Belt and Road Initiative”—a key component of President Xi Jinping’s plan to increase his nation’s influence internationally.
Latin America has emerged as a key battleground in US President Donald Trump’s confrontation with China, and countries in the region are coming under increasing pressure from Washington to pick a side.
The site is believed to hold more than 40 billion tons of iron ore, making it one of the largest deposits in the world, according to Bolivian government estimates.
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