The Government is considering the demand of SAIL-led consortium for state funding of their $10.8-billion investment plan in Afghanistan for setting up of steel and power plants, mining of iron ore and development of associated infrastructure.
“We are looking at their demand, we will try to support them. At present, the government does not have any such policy to support, so it would be just an ad hoc kind of thing and will be more of specific support,” Additional Secretary in Steel Ministry S Machendranathan told reporters on the sidelines of a conference organised by Steel Guru.
Last November, a seven-member consortium led by SAIL had won mining rights for three iron ore blocks at Hajigak in Afghanistan. The three blocks have estimated 1.28 billion tonnes reserves of high-grade magnetite iron ore.
After winning the bid, SAIL Chairman C S Verma had said the consortium plans to set up a 6.12 million tonnes per annum (MTPA) steel plant, subject to Afghan government making available linkages for coking coal and limestone, an 800 MW power plant and build necessary infrastructure for $10.8 billion. The money is to be spent over a period of 10 years after signing the final contracts.
Citing security risks, difficulties involved in evacuation, long gestation and multi-faceted nature of project and associated infrastructure, the consortium had requested the government for providing loan or aid for the project.
However, Mr Machendranathan said the government funding for the project would require Cabinet approval and the consortium has been asked to provide the specifics of their demand.
Last week, Afghanistan’s Mines Minister Wahidullah Shahrani had said that final contracts for the projects in Hajigak, including the blocks won by SAIL-led consortium, are likely to be signed by May.
Asked for a timeline for the government decision, Mr Machendranathan said, “We will have to look at it. We were actually looking at signing the MoU (with the Afghan government) first. Now that it has been signed, this process will start.”
According to the investment plan, the consortium will spend over $1.3 billion to build 200 km each of rail, road and transmission lines to connect the mines to the proposed steel plant. Besides, an investment of $7.8 billion has been earmarked for setting up of the steel plant, while the coal-fired power plant would cost $1 billion.