The members of the SAIL-led group Afghan Iron and Steel Consortium, will soon form a joint venture company to carry out iron ore mining and build an integrated steel plant in Afghanistan. However, a deadline for this was not specified.
The consortium was awarded the large Hajigak iron ore reserve, in the Bamiyan province, by the Hamid Karzai Government in in 2011.
Apart from the Indian steel major, the other consortium members are Vizag Steel, NMDC, JSW, JSW Ispat, Jindal Steel and Power Ltd and Monnet Ispat.
“We are on the verge of documenting the JV agreement. Except for one or two minor clauses, most of the issues were settled during the most recent round of discussion (between consortium members). The joint venture should happen soon, maybe in the next round of discussions,” Chandra Shekhar Verma, the SAIL Chairman, said here on Saturday.
Asked about the schedule for the consortium’s next meeting, he said, “It will happen very shortly.”
Verma was in the city in connection with the eastern region meeting of Standing Conference of Public Enterprises (SCOPE).
Phase-I funding
According to Verma, once the joint venture is formed, the consortium members will undertake the first phase of the work programme, including exploration of the mining assets and preparation of a project development strategy.
The first phase will cost $75 million, approximately Rs 428 crore at the current exchange rate, and will be funded by the seven partners. Funding options for the subsequent phases will be decided once the project plan is ready, Verma said.
With US troops scheduled to retreat from Afghanistan in phases by early 2014, the global financing community is apprehensive about the safety of investments in the troubled country.
Responding to queries regarding financial support from the Indian Government, the SAIL Chairman said: “We are yet to decide on the funding pattern for future phases. If Afghanistan remains on the negative list for banks, then it is a separate issue, But we will approach (the Government) at an appropriate time.”