Indian Steel Firms Get Afghanistan Iron Ore Blocks

[Maulik]

India tastes a big slice of Afghan pie

New Delhi, Nov. 28: The Hamid Karzai government today awarded an Indian consortium mining rights to develop three of the four blocks of Afghanistan’s huge Hajigak iron ore deposits, signalling a greater role for Delhi in the war-torn country.

Till now, India has mainly focused its aid to Afghanistan in developing smaller infrastructure projects like culverts and roads.

Sources said the contract awarded to the Afghan Iron and Steel Consortium (AFISCO), led by state-run steel maker SAIL, had the potential to become the landlocked country’s single-biggest foreign investment project.

In a statement, Afghanistan’s ministry of mines said the development of the blocks was “expected to bring billions of dollars in mining investment and thousands of new jobs to Afghanistan”.

The statement said the companies had also “pledged substantial support for railway, power, and other infrastructure development within the country, as well as major support for education and training programmes”.

The Hajigak blocks, in the mountainous Bamyan province 130km west of Kabul, are one of Asia’s largest iron ore deposits that are yet to be mined. According to a 1960 estimate, the blocks hold an estimated 1.8 billion tonnes of iron ore.

The contract came within a month after Delhi and Kabul signed a strategic partnership agreement on Indian investments in the Afghan mining sector. According to the announcement, the consortium has been awarded the rights to blocks B, C, and D, with block A going to Canadian firm Kilo Gold Company.

Sources said the Indian consortium — which also includes the National Mineral Development Corporation, Monnet Ispat and Energy Limited, Rashtriya Ispat Nigam Limited, JSW Steel Limited, Jindal Steel Power Limited and JSW Ispat Steel Limited — could invest $6 billion in the mines, construct a steel plant and a railway network.

The development, unlikely to be welcomed in Islamabad which resents closer Delhi-Kabul ties, signals a much greater role for India in Afghanistan in the years to come, particularly after the scheduled departure of Nato forces by 2014.

However, it would also mean more Indians will have to be sent to Afghanistan at a time violence in the region has peaked.

Over the past couple of years, Delhi had looked to scale down its investments in Afghanistan because of terror attacks that targeted Indian interests. India has already pledged $2 billion in Afghan infrastructure and development projects, including erecting a new parliament building.


India tastes a big slice of Afghan pie

[Maulik]

NEW DELHI -- A consortium of Indian steel companies, led by the Steel Authority of India Ltd., has received rights to mine three of four iron ore blocks put up for bidding, Afghanistan's Ministry of Mines said late Monday.

The consortium--which also includes NMDC Ltd., Monnet Ispat and Energy Ltd., Rashtriya Ispat Nigam Ltd., JSW Steel Ltd., Jindal Steel Power Ltd. and JSW Ispat Steel Ltd.--received mining rights for the Hajigak iron ore deposits, situated in the mountainous Bamyan province, 130 kilometers west of Kabul.

Canada's Kilo Gold Company won the right to mine the fourth block.

The ministry said: "As per defined procedures, Afghanistan will launch the contract negotiation with the winning bidders to finalize the contract details."


India Steel Firms Get Three Afghanistan Iron Ore Blocks - WSJ.com

[Maulik]

New Delhi: In a strategically significant development, Afghanistan today awarded mining rights for three Hajigak blocks located at the central Bamyan province to an Indian consortium led by state-run Steel Authority of India (SAIL).

"The Afghan Iron and Steel Consortium (AFISCO) which comprises SAIL, NMDC, Monnet Ispat & Energy, RINL, JSW Steel, Jindal Steel & Power, JSW Ispat has been awarded three blocks...," the Afgan Ministry of Mines announced.

The Hajigak resources contain an estimated 1.8 billion tonnes of iron ore.

"This is a historical moment in our economy, not just bringing huge investment, but also an important step in developing our vast mineral resources which is the key to the sustainability of economic growth in the country," Afgan Mines Minister Wahidullah Shahrani said in a statement.

The Afghan government had invited bids to award development rights for four mines in Hajigak earlier this year and the last date for submission of bids was September 4.

The fourth block has been given to a Canadian firm, Kilo Gold Company.

The Indian consortium had proposed setting up mines and a steel plant in the war-torn country.

"AIFSCO brings a tremendous array of expertise, technical, financial and physical resources; mining and steel production experience developed over more than 100 years in India and internationally," the statement said.

SAIL Chairman C S Verma said he is yet to receive an official intimation from the Afghan government. "The Hajigak Iron Ore deposits consist of four blocks - A, B, C and D. The estimated iron ore reserves is approximately 484, 930 and 357 million tonnes in A, B and C blocks respectively while D block has small reserves," he said.

Source: Steel Authority of India bags mining rights for 3 Afghan mines

[Maulik]

Afghanistan Awards Indian Group Hajigak Iron-Ore Mine Rights

Nov. 28 (Bloomberg) -- President Hamid Karzai’s government offered India a new strategic role in Afghanistan by awarding mining rights for the country’s biggest iron deposit to a group of Indian state-run and private companies.

Karzai and his cabinet awarded three of four blocks at the Hajigak ore deposit to seven companies that bid with support from India’s government, and offered the final block to Canada’s Kilo Goldmines Ltd., Ministry of Mines policy director Abdul Jalil Jumriany said by phone. Ministry spokesman Jawed Omar confirmed the decision.

India’s government backed the group, led by state-owned Steel Authority of India Ltd. and NMDC Ltd., to widen the country’s strategic presence in Afghanistan, which Prime Minister Manmohan Singh has said is essential for Indian security. By adding a multi-billion dollar mining project to its aid programs, India will join China as one of Afghanistan’s main foreign investors, an elevation of its role that analysts say is likely to upset its main rival, Pakistan.

Hajigak, a series of rugged mountain ridges 100 kilometers (60 miles) west of Kabul, holds an estimated 1.8 billion metric tons of ore and is the biggest mining project on offer in a country that the U.S. government estimated last year holds $1 trillion in untapped minerals. Afghan Mines Minister Wahidullah Shahrani will visit London Dec. 6 to promote four copper and gold deposits that are among the next tenders the government will offer, Omar said.

‘Huge Investment’

The Hajigak deal will bring “huge investment” and also will be “an important step in developing our vast mineral resources which is the key to the sustainability of economic growth in the country,” Shahrani said in a statement issued by his office.

The Indian group that will mine Hajigak includes state- owned Rashtriya Ispat Nigam Ltd., and private-sector companies JSW Steel Ltd., Jindal Steel & Power Ltd., Monnet Ispat Ltd. and JSW Ispat Steel Ltd.

Monnet Ispat Managing Director Sandeep Jajodia said his company had not received official word of the Hajigak award. “By taking such a quick decision, the Afghan government has given a strong message that it wants to welcome development and investment,” he said in a phone interview.

For India, the Afghan decision “will pave the path for more such formations bidding jointly for overseas assets,” he said. “It is something that China has done for years,” and “this success clearly shows that Indian companies can join hands to tackle China’s might,” Jajodia said.

Aynak Copper

The Indian group’s bid includes an offer to build a power plant and invest $1 billion in a railroad to export the ore, Jumriany said in a phone interview in Kabul. India has said it is exploring a rail line from Hajigak to the Iranian port of Chabahar.

Those plans would place the Hajigak project alongside the Aynak copper mine, being developed by the state-owned Metallurgical Corporation of China, as one of Afghanistan’s two largest investments.

India’s role in Afghanistan so far has included $1 billion in aid since 2002, mainly devoted to construction work and development projects. An expanded Indian presence is likely to upset rival Pakistan, according to analysts such as Bashir Ahmed, a senior fellow and retired army brigadier at the Institute of Regional Studies in Islamabad.

Singh and Karzai signed a strategic partnership agreement last month that officials of their governments say will allow for Indian training of Afghan troops. India has vowed to maintain and expand India’s role in Afghanistan as the U.S. seeks to end its main military presence there by 2014.

The government will soon open negotiations with Kilo and the Indian group to finalize contracts, Jumriany said. Unsuccessful bidders included India’s Corporate Ispat Alloys Ltd. and Iran’s Gol-e-Gohar Iron Ore Co. and Behin Sanate Diba Co.

Afghanistan Awards Indian Group Hajigak Iron-Ore Mining Rights - Businessweek