India’s six major steel companies are likely to invest USD 1.5 billion on Afghan’s Iron ore mines.
SAIL led, Afghan Iron and Steel Consortium will possibly cut down its initial expected expenditure of USD 11 billion for the Hajigak project to about USD 1.5 billion. The mountains located in the 100 km west of Kabul have around 1.8 billion MT of iron ore reserves.
The possibility of increased violence in Afghan after the US troops planned withdrawal is scaring the Indian companies away, who are looking for new sources for the raw material supply. The curbed mining in the states of India has resulted in raw material imports for the steel behemoths for their needs. According to the experts, unless the assurance of complete safety is guaranteed by the province of Afghanistan, investing even USD 100 million is a risk.
The SAIL led consortium includes RINL, NMDC Limited, JSW Steel Limited, Jindal Steel and Power Limited and Monnet Ispat and Energy Limited. The final contract with the Afghan Government is not yet signed says, Mr C S Verma, Chairman at SAIL.
The group is now planning to build a 1.5 MnT capacity pa steel plant to fulfil the domestic needs of Afghanistan. The current capacity of plant is about one-fourth of the earlier planned project. The plan made earlier was to build an 800 MW power plant and a 900 km railway line from Bamiyan (Afghanistan), where Hajigak is located to Zahedan, Iran, the nearest port. The group had also requested Indian Government for USD 7.8 billion interest-free loans for partnership with Afghanistan, which is still pending.
According to the experts, India’s investment in Afghanistan will be one of the greatest steps towards economic development of the country.