The government is willing to part finance domestic companies in their global bid for the Hajigak iron ore mine in Afghanistan given the strategic importance of the war-torn country for India. It has suggested that the Indian companies form a single consortium led by state-owned National Mineral Development Corporation (NMDC) to jointly bid for the mine.
During a high-level meeting chaired by steel secretary PK Mishra on Wednesday to discuss the contours of the bid, senior officials from the ministry of external affairs (MEA) said the government can dip into the R5,850 crore corpus set aside for executing developmental projects in Afghanistan. They said about ?15%? could be earmarked specifically to help fund acquisition of the Hajigak mine that is located in the country?s Bamiyan province, 150 km west of Kabul. The mine has reserves estimated at 1.8 billion tonne of iron ore. In reply to the Afghan government?s open tender, 15 companies including navratna and maharatna PSUs have so far confirmed their Expressions of Interest (EoI). The Afghan government is now conducting due diligence and is expected to complete the process by August 3 this year, sources in the mines ministry told The Indian Express.
Indian and Afghan governments are working jointly to ensure some business outcomes during the likely visit of Prime Minister Manmohan Singh to Kabul in the coming months.
MEA officials have told the mines ministry that the Asian Development Bank was also keen to finance the bid, while the World Bank and the Islamic Development Bank could also be approached for funding the bid. ?In addition the government is also examining whether it could extend a credit line. Given the strategic importance of Afghanistan for India, the government could consider this favourably provided the Indian industry comes up with a viable vehicle for it,? sources said The Chinese have already firmly established their footprint in Afghanistan as they have built a railway line from Kabul to Torkham on the Pakistan border for evacuating copper from the Aynak mines. To allay the apprehensions on the security situation in Afghanistan, MEA brass told the meeting that Bamiyan is dominated by Shias and Hazaras, who are averse to the Talibans and ?as such the area is comparatively secure, despite the blasting of the Bamiyan Buddha shrine?.
Indian envoy to Kabul G Mukhopadhyay has written to mines secretary S Vijay Kumar recently saying the issue of evacuation of the extracted mineral needs to be given due consideration as it could be a herculean task to transport it to the Wagah border. In case Indian firms decide to use the Chinese rail network, the proposed consortium will have to construct a railroad to link Hajigak to Kabul-Torkham line.
?One problem would be to ascertain Pakistan?s willingness to cooperate with Afghanistan and India in facilitating constructions of the rail line for transit of the mined iron ore,? Mukhopadhyay said. The government is likely to ask CII and Federation of Indian Mineral Industries to jointly commission a techno-economic feasibility study to determine the scale of investment, security risks, potential markets and diplomatic challenges associated with the project. ?Based on the study, MEA and the Department of Economic Affairs will have to take the lead on the diplomatic front,? the sources said.