SAIL Hosts Meeting of Indian Contenders for Hajigak Deposits
05/20/2011 - Representatives of the 15 Indian steel and mining companies who recently visited Afghanistan to inspect iron ore deposits at Hajigak have met at the corporate headquarters of Steel Authority of India Ltd. to discuss major concerns and identify the issues to be discussed with the Afghan and Indian governments.
Representatives of the 15 Indian steel and mining companies who recently visited Afghanistan to inspect iron ore deposits at Hajigak have met at Ispat Bhawan, the corporate headquarters of Steel Authority of India Ltd. (SAIL) in New Delhi, to deliberate on their future course of action.
These Indian companies, including SAIL, are among the 22 companies short-listed by the Afghanistan Ministry of Mines for grant of mining licenses at Hajigak, which carries an estimated 1.8 billion tonnes of high-quality magnetite with 62-63% Fe content. SAIL says that the Afghanistan government has indicated a preference for companies that will offer development plans from mining of iron ore to vertically integrated processes, including making of steel.
At the meeting, the companies discussed major concerns and identified the issues to be discussed with the Afghan and Indian governments. Among the main concerns are security issues, inhospitable terrain, lack of infrastructure, and skilled manpower. Issues such as local laws, tender terms and conditions, infrastructure development, evacuation of ore, and diplomatic challenges were discussed in detail. The possibility of forming consortiums to bid for the mining licenses was also considered.
SAIL discussed the action plan of forming a consortium with other major players for identification of possible synergies and risk-mitigation strategy through joint bidding. SAIL says that the other companies are more interested in mining of ore and its evacuation, while it is keen to set up a steel plant in Afghanistan, subject to the condition that the host country provides infrastructural support and raw material sources.
SAIL Chairman C.S. Verma has already held discussions with the Afghan Minister for Mines, Wahidullah Shahrani, in this regard during the latter’s recent visit to India. “This will be an important milestone in SAIL’s journey of becoming a global player,” said Verma.
The Hajigak iron ore deposits are located in the mountainous Bamiyan province, 130 km west of Kabul. Surveyed by Russian geologists in the 1960s and thereafter by U.S. agencies, the deposits occur in 16 spreads. The Soviet resource/scoping studies indicate that the ore deposit spreads are amenable to open-pit mining methods.
