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Development of Hajigak site to happen in phases

in Afghan Business

Development of Hajigak site to happen in phases

minister shahraniLed by the state-owned Steel Authority of India Ltd (SAIL), the Afghan Iron and Steel Consortium (AIFSCO) has concluded negotiations with Afghan Mines Minister Wahidullah Shahrani on fulfilling its commitment of developing the Hajigak site in phases.

After winning bid for 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 million tonnes per annum (mtpa) steel plant in two equal phases along with an 800 MW power plant, besides creating necessary infrastructure.

However, later it scaled down its plans and decided to set up a steel plant of 1.25 mtpa and a 120 MW captive power plant with $2.9 billion investment.

“Eventually, investment will be between $10 billion and $11 billion. It will be done in phases. Steel plant will be developed, based on our negotiation, in different phases, but eventually it will be of 7 mtpa size. But, for that they need to conduct the feasibility study. The final agreement with Afghanistan will be signed in a few weeks as the draft contract has been prepared,” The Hindu quotes Minister Shahrani.

The source further adds that Mr. Shahrani said the local government would also allow the SAIL-led consortium to market its products in the neighboring region. Afghanistan’s annual steel demand now stands at 1-1.5 mtpa.

However, the demand would go up while rebuilding the war-torn nation.

Besides SAIL, other members of the consortium include state-owned NMDC and RINL and private sector steel players — JSW, JSW Ispat, Jindal Steel and Power, and Monnet Ispat and Energy. SAIL has the maximum 20 per cent stake in the venture, while NMDC and RINL hold 18 per cent each. Private players JSW Steel and JSPL hold 16 per cent each, while JSW Ispat and Monnet have 8 per cent and 4 per cent stakes respectively.

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