Scaling down the original plan by around 75%, members of the SAIL-led consortium have now decided to set up a mini steel plant of 1.25 million tonne in Afghanistan with $2.9 billion investment.
The decision to cut the original project down from $10.8 billion was taken at a two-day meeting, held on May 23-24 between the consortium members and the project consultants, a source said.
As per latest plan, the seven-member consortium of Indian steel makers -- Afghan Iron and Steel Consortium (AIFSCO) -- proposes to set up a steel plant of 1.25 million tonne per annum (mtpa) along with a 120 MW captive power plant. Other necessary infrastructure would also be put in place, he added.
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After winning bid to mine 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 mtpa steel plant in two equal phases along with a 800 MW power plant, besides creating necessary infrastructure.
"In the meeting of consortium members with consultants on May 23-24, a project of a 1.25 mtpa steel plant along with 120 MW power plant with other infrastructure, with approximately $2.9 billion capital cost, was drawn up," the source said.
"Detailed report of the consultant shall be put up in the next meeting of the Coordination Committee of Secretaries, headed by Cabinet Secretary," he added.
AIFSCO's appeal to the government for some concessional fund for creating infrastructure for the project would also be discussed in the proposed meeting with the Cabinet Secretary Ajit Kumar Seth.
SAIL Chairman C S Verma had recently said AIFSCO would make an immediate investment of $75 million for geological and exploration study of the mines. This would be met internally by the consortium members in the same proportion of their partnership.
The consortium has public sector firms SAIL, RINL and NMDC holding a combined 56% stake. The rest is held by private players such as JSW, JSPL and Monnet Ispat & Energy among others.