Indian cos bidding for Afghan iron ore to meet next week

The 15 companies shortlisted by the Afghanistan government for grant of iron ore mining licences at Hajigak mines are likely to meet on June 13 to decide the modalities for bidding and the consortium leader.

Recently, differences have cropped up between two leading PSUs--NMDC and SAIL-- over consortium leadership, with the former not favouring setting up of a steel plant in Afghanistan.

On the other hand, Steel Authority of India (SAIL) wants an integrated steel mill to come up in the war ravaged nation by setting up a three million tonne per annum plant, while drawing iron ore from the Hajigak mines.

"We are meeting on June 13 to discuss the issue, but given a choice, we will not prefer setting up a steel plant there," an NMDC official said.

Recently a team of NMDC had visited the iron ore deposits and recommended against setting up a steel plant due to high costs and presence of low cost producers in neighbouring countries like Russia, Kazakhstan and Ukraine, the official said.

The official added, "so far, it looks like there will be two consortia, led by SAIL and NMDC, bidding for the mines. Efforts are also on to secure the reserves at government to government level."

The Hajigak deposits, located in mountainous Bamiyan province, 130 km west of Kabul, are among the biggest untapped such reserves in the world.

It has an estimated reserves of about 1.8 billion tonne of high quality magnetite with 62-63% iron content.

According to Afghanistan government's estimates, the project will require investments of about $3 billion over 30 years and the government would allow entire output from the mines to be exported.

The government has kept a deadline of August 3 to submit the bids.

Besides SAIL and NMDC, companies like Tata Steel, JSW, Jindal Steel and Power, Bhushan Steel, Monnet Ispat, Rashtriya Ispat Nigam Ltd are among the 15 Indian companies shortlisted by the Afghan government.

The local government has already hinted preference for companies which would offer development plans from mining of iron ore to vertically integrated processes, including making of steel.