SAIL-led group hopes to dig into Afghan mines

A consortium of leading Indian steel and iron ore producers, led by Steel Authority of India (SAIL), today said it was hopeful of getting selected as the preferred bidder for Afghanistan's Hajigak iron ore deposits.

Bids for the 1.8 billion tonne iron ore mines were opened today, but the results will be announced on October 4.

The SAIL-led consortium includes state-owned NMDC Ltd, Rashtriya Ispat Nigam Ltd, private sector companies such as JSW Steel Ltd, JSW Ispat, Jindal Steel and Power Ltd and Monnet Ispat and Energy Ltd. Tata Steel, was initially a part of the consortium and had later opted out.

Afghanistan had invited international bids for the Hajigak deposits, located near Bamiyan province, 130 km west of Kabul, in January, to boost economic growth by opening mineral sector to overseas firms. Developing the mine would require annual investment of at least $5 million (Rs 22 crore).

Indian firms see Hajigak as an opportunity to secure raw material assets abroad at the backdrop of regulatory uncertainties in developing resources back home.

“This is the first time that Indian public and private sector companies have come together to jointly bid for an iron ore asset abroad. This will pave the way for more such collaborative efforts in the future,” SAIL Chairman C S Verma said.

A release issued by the company said the steelmaker was hopeful of being selected as the preferred bidder.

The Indian consortium, in which SAIL has a 20 per cent stake, has proposed to set up a steel-making plant, the size of which would depend upon the raw material quality and investment approvals from the Indian government. The bids will be evaluated based on the companies’ credentials and the benefits accruing to the Afghanistan government.

The other bidders include Indian company Corporate Ispat Alloys Ltd, Iran’s largest iron ore company Gol-e-Gohar Iron Ore, Iran’s Behin Sanate Diba Co, ACATAC LLC of the US and Kilo Goldmines Ltd of Canada.