SAIL-led firms await Afghan law to negotiate investment plan

Negotiations are planned after the proposed new Mining Law is passed by the Afghan govt

The long-pending negotiations on SAIL-led consortium's investment for a steel mill and mine development in Afghanistan will take place only after the new Mining Law is passed by the Afghan government.

Sources in the seven-member consortium of Indian steel makers AFISCO said preparations for passing the new law by the Afghan government has been on for nearly six months now and is expected to be effected in a few months.

"Inter-Ministerial Committee of Government of Afghanistan proposed to re-commence negotiations with AFISCO under terms of revised proposal indicated by consortium. The negotiations are planned after the proposed new Mining Law is passed by the Government of Afghanistan," said a source.

After winning bids for three iron ore mines at Hajigak in the war-torn Afghanistan in November 2011, AFISCO had said that it would invest $10.8 billion to set up a 6.2 mtpa steel plant in two equal phases along with a 800 MW power plant, besides creating the necessary infrastructure.

Subsequently, it scaled down the plan and said will initially invest only up to Rs 7,000 crore (about $1.14 billion) for setting up a steel plant with an annual capacity of up to 1.5 mtpa along with the infrastructure.

Scaling down the size of the investment and the steel mill warrants further negotiations and the two parties have been trying to seal that for a long time.

Apart from SAIL, the other consortium members are RINL, NMDC, JSW, JSW Ispat, Jindal Steel and Power Ltd and Monnet Ispat.