OREANDA-NEWS. May 20, 2011. Representatives of the 15 Indian steel & mining companies who had visited Afghanistan recently to inspect iron ore deposits at Hajigak in Afghanistan met today at Ispat Bhawan, the corporate headquarters of Steel Authority of India Ltd (SAIL) in New Delhi, at SAIL’s invitation, to deliberate upon their future course of action. These Indian companies, including SAIL, are among the 22 companies shortlisted 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. The Afghanistan government has indicated preference for companies which will offer development plans from mining of iron ore to vertically integrated processes, including making of steel.

At today’s meeting, the Indian contenders for the Hajigak deposits discussed the 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, etc. Issues such as local laws, tender terms & conditions, infrastructure development, evacuation of ore, diplomatic challenges, etc., were discussed in detail. The possibility of forming consortiums to bid for the mining licenses was also deliberated upon.

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. While the other companies are more interested in mining of ore and its evacuation, SAIL 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 Mr. C.S. Verma has already held discussions with the Afghan Minister for Mines, Mr. Wahidullah Shahrani, in this regard during the latter’s recent visit to India. The Afghan government has responded with keen interest in the proposal. “This will be an important milestone in SAIL’s journey of becoming a global player,” said Mr. Verma.

The Hajigak iron ore deposits are located in the mountainous Bamiyan province, 130 kms west of Kabul. Surveyed by Russian geologists in the 1960s and thereafter by US 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.

During the visit of the Indian companies to Hajigak, the Afghanistan government put into place stringent security measures to ensure the safety of the visitors. The Indian Ambassador Shri Gautam Mukhopadhyay and Mr. Shahrani met the Indian delegation separately and expressed their appreciation at the interest shown by them in developing Hajigak.