Afghanistan has conveyed to the SAIL-led consortium that it did not have any objections to the $10.8 billion iron ore and steel plant project being developed in phases.
The Afghan Iron and Steel Consortium (AIFSCO), which consists of state-owned SAIL, RINL and NMDC, is holding a combined 56 per cent stake. The balance is held by private players such as JSW, JSPL and Monnet Ispat & Energy. “We have concluded negotiations over the entire deal. During negotiations, SAIL has assured us that it will deliver on its commitment but that would be done in phases,’’ Afghanistan’s Mines Minister Wahidullah Shahrani told reporters here.
Investment
After winning bid for three iron ore mines at Hajigak in war-torn Afghanistan in November, 2011, AIFSCO had said it would invest $10.8 billion to set up a 6.1 million tonnes per annum (mtpa) steel plant in two equal phases along with an 800 MW power plant, besides creating necessary infrastructure.
However, later it scaled down its plans and decided to set up a steel plant of 1.25 mtpa and a 120 MW captive power plant with $2.9 billion investment. “Eventually, investment will be between $10 billion and $11 billion. It will be done in phases. Steel plant will be developed, based on our negotiation, in different phases, but eventually it will be of 7 mtpa size. But, for that they need to conduct the feasibility study. The final agreement with Afghanistan will be signed in a few weeks as the draft contract has been prepared,” he said.
Mr. Shahrani said the local government would also allow the SAIL-led consortium to market its products in the neighbouring region. Afghanistan’s annual steel demand now stands at 1-1.5 mtpa.
However, the demand would go up while rebuilding the war-torn nation.
Published - August 22, 2013 07:00 pm IST
