Bolivia on Wednesday signed a contract with Chinese firm Sinosteel, which is to design, build and bring online a sheet metal plant in central Bolivia.

The Chinese company will build the plant and train locals to run the plant before handing over the facility to the Bolivian side, Bolivian President Evo Morales said during the contract signing ceremony, which took place in Puerto Suarez, the town where the plant will be located.

The project is expected to cost 422 million US dollars, 85 percent of which will be funded by China, leaving the other 15 percent to be shouldered by the Bolivian government, local media ABI reported.

Also present at the ceremony were Bolivian Mining and Metallurgy Minister Cesar Navarro and China's ambassador in La Paz, Wu Yuanshan.

Navarro said he hoped the plant will help develop an entire production chain in the region.

The plant is designed to process some 650,000 tons of raw iron ore every year to produce 150,000 tons of lightweight non-flat sheet metal and 250,000 tons of sponge iron, 86,000 tons of which are destined for export.