SAIL-led group to invest Rs 1,500 cr in first phase of Hajigak exploration

Priyadarshi Siddhanta : New Delhi, Mon Feb 13 2012,


The SAIL-led consortium is planning to invest Rs 1,500 crore on its own in funding the first phase of exploration activities in the Hajigak iron ore mines in Afghanistan. The consortium, Afghan Iron and Steel Company (AFISCO), is likely to commence exploration from July this year.

It had, in last November, bagged the bid for mining three iron ore blocks located in the Bamiyan province, 130 km west of Kabul, which together hold an estimated 1.28 billion tonnes of high grade iron ore reserves. SAIL has 20 per cent stake in AFISCO, while NMDC and RINL each hold a stake of 18 per cent. JSW Steel and JSPL hold 16 per cent each, while JSW Ispat and Monnet Ispat & Energy hold 8 per cent and 4 per cent respectively.

“We have already held several rounds of discussions with the Afghan mines ministry and intend to conclude talks by March. We plan to invest Rs 1,500 crore on our own to begin the initial exploration activities in the first phase by July. We have indicated our need for financial support to the government as it is crucial for the project. But one thing must be clear that if we have to proceed ahead with the proposed steel plant, we will definitely need financial support,” the consortium chief and SAIL Chairman C S Verma told The Indian Express.

In a recent letter Verma has asked the steel ministry to apprise the Prime Minister’s Office of the need for monetary assistance. The syndicate will have to spend nearly Rs 50,000 crore for exploring the mine and developing the evacuation infrastructure. The ministry is understood to have conveyed the consortium’s fiscal constraints to the finance and external affairs ministries, but as of now there is no assurance from any quarters in this connection.

Earlier during the course of a high-level meeting, external affairs ministry officials had indicated that the government can consider dipping into 15 per cent of the Rs 5,850 crore corpus set aside for executing developmental projects in Afghanistan. The consortium’s concerns have compounded as Afghanistan is said to be in the negative list of the multilateral funding agencies. The Centre is also exploring the possibility of extending a credit line for the project, sources said.

Indian Express