On the eve of President Kovind’s visit to Bolivia later this week, Luis Kinn, CEO, Kinn Industrial Grupo, dealing in hydrocarbon, gold, and real estate development, shares his views saying the visit can be the beginning of an era of cooperation and good reciprocal business.
Accompanied by a high level official delegation President Ram Nath Kovind left on a three nation state visit to Croatia, Bolivia and to Chile.
This is the first time ever that a high level visit is taking place to Bolivia which is indicative of India’s growing interest in the region. As Bolivia embarks on industrialization of its resources, India is a willing partner for know-how, technology and skills. The bilateral trade grew by 205% to reach $ 772 million for FY 2017-18. Bolivia’s Lithium and our needs for eMobility and eStorage provide natural synergies.
On the eve of President Kovind’s visit to his country later this week, Luis Kinn, CEO, Kinn Industrial Group, dealing in hydrocarbon, gold, and real estate development, shares his views with Huma Siddiqui. Following are excerpts:
How important is this visit?
Regardless that India and Bolivia are very far from each other, this visit can be the beginning of an era of cooperation and good reciprocal business. The strengths of one are complemented by the weaknesses of the other. India has 135 times more people than Bolivia, but only three times more territory. Bolivia is one of the richest countries in the world in terms of natural resources. With Indian technology and investment, those resources can be exploited and industrialized in Bolivia, so that they could be transported to India and satisfy part of food and other products that India imports.
That is already happening between Bolivia and some Asian countries like Vietnam, based in the solid and stable Bolivian economy, with one of the highest GPD increase in South America in the last 10 years.
Are there any incentives to attract foreign investments?
In Bolivia there is a law that promotes foreign investment, in win-win conditions. And surely, under a strategic alliance with India, specific incentives can be negotiated to compensate for the great distance between both countries, as it implies higher transport costs. Although when President Evo Morales rose to power, 12 years ago, there were profound changes that affected some big companies, very few left Bolivia, because the profitability terms in these new conditions are still attractive and very stable.
In the hydrocarbon sector- any possibility of gas exploration in your country with Indian companies?
So far, only 10% of the areas with hydrocarbon potential have been explored in Bolivia. What remains to be discovered in hydrocarbons is still very large, and with great geological possibilities. At this moment there are about 50 free areas for exploration, and eventual production, in Bolivia, and they are open to negotiation. Since gas and petroleum are commodities, Indian companies can produce them in Bolivia, and by commercial mechanisms such as the swap, they can be enabled in India economically.
Something that is just being researched is the unconventional hydrocarbon potential: in the area of the so-called Bolivian Chaco there could exist gas reserves of the size of the largest in the world; and in the northern Bolivian zone, in the so-called Madre de Dios Basin, the existence of unconventional oil has already been demonstrated. For all these reasons, in Bolivia operate many of the largest oil companies in the world, such as Shell, Gazprom, Total, Repsol, etc. They are producing and also exploring. Opportunities for Indian oil companies are wide and open in this sector.
What is the reality of gold, lithium and iron? Is the market really open for Indian companies?
First the lithium: Bolivia has the largest lithium reserve in the world. Last year a long-term, large-volume contract was signed with a German company. Another contract was also signed with a Chinese company, but of smaller scope. And the Government of Bolivia, aware of the large amount of this resource, wants to sign more contracts that allow it to generate greater added value, especially if they includes lithium batteries production.
As for gold, Bolivia is still in the infancy of that exploitation. The majority of gold production comes from secondary deposits, where the quantities are smaller but are easier to exploit. The potential of gold in primary deposits, of much larger dimensions, to be exploited by subterranean galleries, has barely begun. In the Precambrian area of Bolivia (the eastern part of Santa Cruz) we have similar potential to that of South Africa and Australia, but it is has only reached, in some cases, at a depth of 200 m, while in those countries it is already exploited more than of 2000 m underground. There is a lot to do still and much more gold to explore and produce.
On the Iron side, we have another great strength: the largest reserve in the world, in the Mutun Iron deposit, on the border with Brazil.
What about the defence and security area—any possibilities for Indian companies to participate in tenders?
Bolivia needs to improve and modernize its security, defense, surveillance, and search and rescue equipment. In this context, and given the better economic conditions in the country, for example, the Government announced three months ago its intention and budget to buy 25 helicopters and other aircrafts. And surely that will be the future policy in that sense, but without neglecting the pressing needs of the population.