SAIL-led consortium to visit Kabul next week

The SAIL-led consortium will visit Kabul next week to re-commence negotiations with Afghanistan government on Hajigak iron ore deposits, following the decision to truncate the size of the proposed steel plant.

The discussion at the behest of Afghanistan government, is to "re-commence negotiations under the terms of revised proposal indicated by the consortium," a Steel Ministry source said.

A new round of negotiations between the Afghan government and Afghan Iron and Steel Consortium (SAIL-led consortium), is warranted as consortium has decided to bring down the size of the steel plant to 1.5 million tonnes per annum (MTPA) from 6.1 MTPA proposed earlier, he said. 

"The head of contract negotiation team of the Ministry of Mines and Petroleum of Afghanistan has invited the consortium to continue negotiations in Kabul in the later half of current month on the mining contract," the source said.

The consortium had proposed $10.8 billion investment for the entire project that also includes a 800 MW power plant and other necessary infrastructure; but given the current size of the plant, investment would be around $1-1.2 billion.

It is expected to give in detail the means and ways of project funding in the proposed meeting and discuss terms and conditions for commencing the project.

A senior official of a member company, which is among the seven-member consortium, said there was a plan to fund the initial project through debt and equity in 70:30 ratio.

The consortium had approached the International Bank for re-construction and Development and International Finance Corporation to fund the debt part, he said.

The equity portion was proposed to be financed by members of the consortium in the ratio of their respective holdings. Apart from SAIL, the other members are RINL, NMDC, JSW, JSW Ispat, Jindal Steel and Power Ltd and Monnet Ispat.