India’s largest steelmaker Steel Authority of India Ltd (SAIL) on Wednesday said an investment to the tune of $11 billion (Rs 56,100 crore) would be made in Afghanistan towards setting up a 6 million tonne per annum steel plant, a 1,000 megawatt thermal power plant and to develop infrastructure like roads and railway network to facilitate the two facilities.
The investment would be made over the next 10 years by the consortium led by SAIL that won mining rights for 3 out of 4 blocks of iron ore at Hajigak. There are 7 companies in the consortium with public sector firms SAIL, National Mineral Development Corporation and Rashtriya Ispat Nigam Ltd holding a majority 56% stake while Jindal South West, Jindal Steel and Power Ltd, JSW Ispat and Monnet Ispat & Energy account for the remaining stake.
This is the largest overseas investment being made by a consortium of Indian companies in the metals and mining sector. The steel plant would be situated 200 kilometer away from the Hajigak mining area and is dependent on availability of other raw material like coking coal and limestone as promised by the Afghanisatan government.
“If we consider everything is in place like we get the coking coal and limestone mines, then the total investment in the entire project would be $11 billion, which would be spent over a period of 10 years,” said CS Verma, chairman, SAIL.
“The immediate plan is to carry out a geological study of the mines over a three-year period at an investment of $75 million (Rs 383 crore), Verma said.
The consortium has also sought sovereign funds from the government as there are restrictions on Indian financial institutions with respect to providing funds to a project in Afghanistan.