Indian Steel Company Set to Take Over Venezuelan State-Owned Iron Ore Complex

The Maduro government is looking toward foreign investment to reactivate the country's heavy industries.
Jindal Steel & Power will attempt to revert the downward trend in production at the iron ore complex. (Ferrominera)

Caracas, March 23, 2024 ( – India’s Jindal Steel & Power Ltd. is reportedly ramping up plans to run operations at Venezuela’s Ferrominera Orinoco.

According to Bloomberg, Jindal officials have been conducting inspections at the iron-ore plants located in Bolívar state following an agreement allegedly signed with the Nicolás Maduro government months ago.

The report adds that the Indian enterprise will put forward an initial investment of US $800,000 to improve existing equipment and that it aims to export 600,000 tons of iron ore pellets and briquettes per month by the end of the year. Pellets and briquettes are raw materials for forging steel.

Headquartered in New Delhi, Jindal Steel & Power is India’s third largest private steel producer. It is part of the OP Jindal Group, a conglomerate of several metalworks companies. Bloomberg had originally broken news of an agreement in September 2023, but the reports were denied at the time. 

For its part, Ferrominera Orinoco is part of the state-owned Venezuelan Guayana Corporation (CVG) which brings together heavy industries in the east of the country. It specializes in the extraction and processing of iron ore. Its five plants have a combined capacity of 25 million tons per year.

Venezuela contains some of the world’s most significant iron-ore deposits, estimated at 4.2 billion tons.

Much like other CVG enterprises such as Sidor (steel) and Alcasa (aluminum), Ferrominera has seen its output decrease significantly in recent years under Venezuela’s economic crisis. Issues of corruption and lack of maintenance were heavily compounded by US sanctions that cut off the Caribbean country from financial markets, hampered access to imports and drove away customers. Ferrominera’s production stood at 5.7 million tons in 2017.

The firm also runs a 320-kilometer railway network connecting several poles in Venezuela’s industrial heartland. It is unclear whether these operations would also fall under the purview of Jindal.

The Maduro government, CVG authorities and Jindal have not publicly commented on the purported agreement. 

Venezuelanalysis sources claim that the Indian steelmaker’s participation will fall under the “strategic alliance” model and it will be assumed by Visco Orinoco, a Venezuela-based Jindal subsidiary.

Strategic alliances do not require a transfer of ownership and instead function as extended-time concessions. In recent years, the Venezuelan government has increasingly looked to improve conditions for private sector investment in a bid to jumpstart the economy. Nevertheless, the threat of sanctions and overcompliance remain significant obstacles, particularly for multinational corporations.

The overtures to the business sector have drawn criticism over a lack of transparency and for providing little benefit to the Venezuelan state.

Several companies in the agricultural sector, including sugar mills, were transferred to private entrepreneurs since 2019. However, there were multiple instances of sugar-cane growers protesting that the plants were run to the ground or that factory owners disappeared with unpaid debts.

There have likewise been complaints of mass layoffs at state-owned companies placed under the control of new investors. In Maderas del Orinoco, a mixed venture with participation from a Turkey-based partner, unions protested that half the workforce has been unjustifiably dismissed while also calling for investigations against corruption.

Jindal Steel & Power’s reported arrival marks the first formal opening of Venezuela’s heavy industry to foreign partners in nearly two decades. Former President Hugo Chávez halted and reverted a number of privatization plans during his tenure.