After Tata exit,JSW and Monnet Ispat join Hajigak consortium

At a meeting convened by SAIL Chairman C S Verma on Tuesday,the top brass of JSW,NMDC,RINL and Monnet confirmed their participation in the consortium to bid for the mines,which have an estimated 1.8 billion tonne of ore reserves.

According to the bidding terms,SAIL will hold 18 per cent in the consortium,RINL and NMDC 17 per cent each,while JSW Steel and JSPL would hold 16 per cent each,and JSW Ispat and Monnet Ispat 8 per cent each. The deadline for submitting the bid is September 3 and the contract is expected to be awarded by December.

The consortium is expected to invest nearly Rs 700 crore for exploration,and huge investments would be needed to build evacuation infrastructure and setting up a unit for value addition.

There are differences,however,within the grouping on setting up a steel plant in that country.

NMDC is against setting up a steel plant. The firm is concerned about the high costs involved and has indicated an imminent pull out given the presence of several low-cost integrated steel producers in neighbouring countries such as Kazakhstan,Ukraine and Russia. It is also worried that a steel plant would block its capital.

Earlier,steel-major Essar had firmly declined to join the grouping as it found little merit in establishing a steel plant in Afghanistan.

The Afghan government has indicated that those keen on value-addition would be preferred over others.

There are also concerns on evacuating the mined ore and its transportation. The consortium is evaluating the possibilities of the produce being shipped through Bandar Abbas in Iran or Karachi in Pakistan,for which a rail network would have to be established.

The annual investment is estimated to be to the tune of Rs 22.5 crore over a contracted exploration period will be 30 years. Foreign Secretary Ranjan Mathai had recently convened a meeting to ascertain the issues pertaining to the mines.