Efforts are also on to secure the Hajigak reserves at government-to-government level

Sharp differences have cropped up between companies in the 15-member consortium, especially the leading PSUs NMDC and Steel Authority of India Limited (SAIL), over bidding for iron ore mining licences at Hajigak mines in Afghanistan.

In order not to allow the ‘reported differences' to overshadow the larger agenda of Indian companies making strong investments in Afghanistan, the consortium will be meeting here on June 13 to sort out the issues facing them and work out modalities for bidding and as to who would be the leader of the consortium.

SAIL Chairman C. S. Verma has been actively pushing for making investments in iron ore mining in Afghanistan and has even favoured setting up of a steel plant there provided the Government of Afghanistan provides the necessary infrastructure required for such a facility. Recently, differences cropped up between two leading PSUs — NMDC and SAIL — over consortium leadership, with the former not favouring setting up of a steel plant in Afghanistan.

On its part, SAIL is of the view that a steel plant in the war-torn country would be an important milestone in further firming relations between the two nations and has pitched for setting up a three million tonnes per annum plant while drawing iron ore from the Hajigak mines. NMDC officials continued to be pessimistic about the steel plant but said the June 13 meeting would certainly help in narrowing down differences and firming up issues.

Recently, a team of NMDC had visited the iron ore deposits and recommended against setting up of a steel plant due to high costs and presence of low-cost producers in neighbouring countries like Russia, Kazakhstan and Ukraine. “So far, it looks like there will be two consortia, led by SAIL and NMDC, bidding for the mines. Efforts are also on to secure the reserves at government-to-government level,” a senior NMDC official said.

The Hajigak deposits, located in mountainous Bamiyan province, 130 km West of Kabul, are among the biggest untapped such reserves in the world. It has estimated reserves of about 1.8 billion tonnes of high quality magnetite with 62-63 per cent iron (Fe) content. According to Afghanistan Government's estimates, the project will require investments of about $3 billion over 30 years and the government would allow entire output from the mines to be exported. The government has kept a deadline of August 3 to submit the bids.

Besides SAIL and NMDC, companies like Tata Steel, JSW, Jindal Steel and Power, Bhushan Steel, Monnet Ispat, Rashtriya Ispat Nigam are among the 15 Indian companies short-listed by the Afghanistan Government.

It has already indicated its preference for companies which would offer development plans from mining of iron ore to vertically integrated processes, including making of steel.