Naveen Jindal group firm takes control of Venezuelan iron-ore unit

Visco Orinoco, an entity related to industrialist Naveen Jindal, has taken control of Venezuela’s largest iron-ore facility owned by CVG Ferrominera Orinoco.

The company, which expects to commence operations “immediately”, expects to export 600,000 metric tonnes of iron ore from the facility by the end of this calendar year. It will also make “substantial” investments in the facility, sources close to the development said, but did not divulge details.

In an email response, a JSPL spokesperson said Naveen Jindal does not own any company by the name of Visco Orinoco, but did not provide any other details.

Jindal is the chairman of Jindal Steel and Power (JPSL), which operates steel and power plants in Raigarh, Chhattisgarh, and Jharkhand and Odisha. Visco Orinoco has no relation with JSPL, and is a separate entity owned by the group.

In October 2023, Visco Orinoco had entered into an agreement with the Venezuelan government to run the facility, marking the foray by an international firm into the South American nation industry that is closely held by domestic firms.

CVG Ferrominera Orinoco has an installed capacity to produce 25,000 tonnes of iron ore per annum and reserves of 4.2 million tonnes. The plants have been working below capacity due to lack of proper investment for the past many years, while a power crisis that hit the nation in 2009 had also forced it to cut down production.

Its output has fallen to 5.7 million tonnes in 2017 from over 15.6 million metric tonnes in 2001, according to the industry figures.

CVG Ferrominera Orinoco is controlled by Venezuelan conglomerate Corporación Venezolana de Guayana and operates five plants that produce iron-ore pellets and briquettes.

Venezuelan president Nicolás Maduro is looking at foreign partnerships and investments, after the country saw exits of multinational companies such as Holcim, Ternium and Crystallex International Corp among others. Since 2000, the number of private companies in the sector has fallen from 1,200 to 70.