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Steelmaker's Departure Clouds Bilateral Relations |
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By José Luis Alcázar*
The
withdrawal of the Brazilian company EBX from Bolivia means that
thousands of hectares of forests are safe -- but bilateral relations
have been hurt.
TARIJA, Bolivia - The Bolivian government has
ordered the Brazilian steel company EBX to leave the country, removing
the danger that the forests of the eastern department of Santa Cruz
would be turned into charcoal. But the move has clouded relations
with Brazil and raised the ire of local residents, who defend the
foreign company as a source of employment.
EBX began construction in 2005 of two wood-burning ovens in the
small Santa Cruz town of Puerto Suárez, 1,800 km southeast of La
Paz and situated on the Brazilian border. The goal was to produce
pig iron (a raw material for manufacturing steel) from iron ore.
According to the administration of President Evo Morales, the company
began construction of the ovens without an environmental permit
and violated the Bolivian constitution, which prohibits foreigner
companies from operating within 50 km of the border.
With these arguments, the Bolivian authorities announced on Apr.
24 the ouster of EBX, and two days later its exclusion from the
bidding process for the El Mutún iron deposits, one of the most
important in the region, with reserves of up to 44 billion tons
of the metal.
This is the first expulsion of a foreign investor from the country
since Morales was sworn in as president in January.
Environmental organizations supported the withdrawal of the company,
saying that some 250,000 hectares of tree-covered lands were in
danger of deforestation.
According to the authorities, the company's significant demand for
plant-based charcoal (450,000 tons per year) would put heavy pressure
on the region's forested areas, increasing the threats to current
and potential forestry resources.
Eike Batista, owner of EBX and seen as the "energy baron" in Brazil,
denied all accusations, but announced on Apr. 25 his decision to
withdraw the company's investments in Bolivia and to dismantle within
a week the two ovens under construction.
"The don't want me in Bolivia," he said, underscoring that the country
will lose 450 million dollars in investment and the creation of
620 jobs in 282 hectares obtained in the free trade zone in Puerto
Suárez, in partnership, with a risk contract, with the Bolivian
firm Zoframaq.
"As a Bolivian, I believe that the country is losing an opportunity
to develop its steel industry in the short term," Zoframaq president
Fernando Tuma told Tierramérica.
"In 12 months the plant could be producing 800,000 tons of pig iron
and 300,000 of construction-grade steel, 200,000 of that for export
and 100,000 for replacing the imports that Bolivia buys, generating
a cash savings of 60 million dollars a year, and 280 million dollars
in exports," Tuma said.
In Brazil, lawmakers and columnists for the major newspapers have
spoken out against what they considered "mistreatment" of a firm
from their country, and said Morales is threatening Brazilian interests.
"I can't believe that President Lula and the ambassador of Brazil
defend companies that don't respect laws or the constitution," Bolivia's
President Morales said on Apr. 24. His government has also finalized
changes in legislation on fossil fuels, which could affect other
major Brazilian companies.
Meanwhile, groups of local Puerto Suárez residents, who last week
went so far as kidnapping three government ministers in protest
against EBX's departure, say they will continue their protests to
protect their source of employment.
The Civic Committee of Santa Cruz, the center of Bolivia's greatest
economic development, also announced a strike for May 4 to draw
the national government's attention to a series of demands, including
the streamlining of the bidding process for mining the Mutún iron
ore deposits.
EBX has had operations in many countries since 1983, with various
projects through its business group, which includes MPX (energy),
AMX (water resources) and MMX (steel).
In June 2005 the Brazilian company registered in Bolivia for producing
pig iron and steel, fueled by charcoal, but according to the Bolivian
government, did not identify in its project the forested areas from
which it would extract the firewood.
The company says it will only supply itself from areas authorized
with certification from the Forestry Superintendency.
But according to data provided to Tierramérica by the Subministry
of Biodiversity, Forestry Resources and Environment, the authorized
areas would meet only a small percentage of the annual demand for
charcoal in the project's first phase.
"It would affect the conversion of soils and would alter the area's
hydric system, with the consequent negative impacts on areas not
authorized for clearing, that is, deforestation, loss of habitat,
impacts on nearby fragile ecosystems, like the national parks of
San Matías and Otuquis," according to the government agency.
Spokespersons for the non-governmental Bolivian Forum on Environment
and Development (Fobomade) told Tierramérica that EBX would require
not only deforesting the entire Bolivian Pantanal (the world's largest
freshwater wetlands) and the entire province of Germán Busch, southeast
of Santa Cruz, but the entire native forest of that department,
at a rate of 12,750 hectares a year, revealing, furthermore, that
the company proposed planting the fast-growing eucalyptus tree.
The influential Bolivian analyst Carlos Valverde denounced eucalyptus
plantations, which would consume Pantanal water.
Zoframaq's Fernando Tuma denied those allegations: "EBX has already
removed the nursery it was preparing for 13 million seedlings a
year, not only of eucalyptus but all local tree species." He also
said the zones to be reforested were not in the Pantanal but in
degraded or abandoned lands.
"The supply of charcoal would come from utilization of forest waste
from more than two million certified hectares that Santa Cruz has,
and all of the waste from authorized agricultural and ranch sources,"
said Tuma.
* Luis Alcázar is a Tierramérica contributor.
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