State-run SAIL-led consortium is likely to make an initial investment of Rs 375 crore for detailed exploration of three iron ore mines bagged at Hajigak in Afghanistan.
"The consortium will have to first establish the reserves through a detailed exploration. Around Rs 375 crore investment is needed for that. The decision on putting up a steel plant will be taken only after satisfactory outcome of the detailed exploration," sources in the know said.
A consortium of seven Indian steel makers, both public and private, led by Steel Authority of India (SAIL) bagged the development rights to mine in three iron ore blocks - B, C and D - at Hajigak in the Central Bamiyan province of Afghanistan.
"The Hajigak iron ore deposits consists of four blocks – A, B, C & D. The estimated iron ore reserves is approx. 484, 930 and 357 million tonnes in A, B & C blocks respectively while D block has small reserves," SAIL said in a statement.
The fourth block has been given to a Canadian firm, Kilo Gold Company. Hajigak mines, located across the Hindu Kush Mountains, between Bamyan and Maidan Wardak provinces, are known for its rich source of iron ore.
The source said that though the consortium members do not raise any doubt on the authenticity of the estimates, as per the industry practice, they will carry out the detailed exploration themselves before putting in more funds on mines.
"After gauging the estimated reserves, consortium members will decide on putting up a steel plant in Afghanistan. But, nothing has been finalised on it as yet, simply because that is not possible until one is sure about reserves," he said.
"The setting up of the steel plant will also depend upon the outcome of the techno-feasibility study on the proposed plant," he added.
However, at the same time, he said that the members were keen on setting up a steel plant in Afghanistan as the country is in need of huge quantity of steel for sprucing up its beleagured infrastructure.
Apart from SAIL, NMDC, Rashtriya Ispat Nigam, JSW Steel, Jindal Steel & Power, JSW Ispat and Monnet Ispat are the members of the consortium.