The SAIL-led consortium, which has bagged rights for three iron ore mines in Hajigak in Afghanistan, will spend about $11 billion on infrastructure creation, mining and setting up a 6-million tonne steel plant and a 1,000-MW thermal power plant.
Establishment of the steel plant, which will be situated about 200 km away from the three Hajigak mines, would depend on the availability of inputs such as coking coal and limestone, which were to be ensured by the Afghan Government, Steel Authority of India Chairman C. S. Verma said here.
“Now, if we consider everything is in place like we get the coking coal and limestone mines, then the total investment in the entire project would be $11 billion, which would be spent over ten years,'' he added. There were enough reserves for coking coal and limestone in Afghanistan, he added.
The immediate plan for the consortium is to carry out a geological study of the mines over three years at an investment of $75 million. The cumulative reserves of the three mines are estimated at around 1.28 billion tonnes.
Given the restrictions imposed on Indian financial institutions with respect to providing funds to a venture in Afghanistan, a country that falls in the negative list, the consortium has already written to the government seeking sovereign funds. “We need some funds from the government. Afghanistan falls in the negative list and no financial institutions will take the exposure. It will be difficult for the consortium members to put in such an amount on their own from their reserves. So we need government assistance and aid,'' Mr. Verma said. He said the steel plant would be built in two equal phases of three million tonnes each. All the seven consortium members — SAIL, JSW Steel, NMDC, JSW Steel, JSW Ispat, Jindal Steel and Power and Monnet Ispat and Energy — will make a contribution proportionate to their stake in the venture towards the $75 million investment for detailed exploration of the mines.
The members would meet within a week to deliberate on the future course of action and the first round of talks with the Afghan Government would start within a month.
The project is expected to provide direct employment to 8,000 people and 40,000 people indirectly. The consortium would also set up a 200-km long railroad, connecting the mines and the proposed steel plant, he said.
