Afghan, India sign MoU on iron and steel

Kabul: Afghanistan and India on Monday signed a Memorandum of Understanding for mutual cooperation in the area of iron and steel, paving the way for Indian companies to invest in the mineral-rich, war-torn country.

Visiting Steel Minister Beni Prasad Verma said the MoU will also encourage Indian public and private sector to invest in iron and steel sector of Afghanistan. India`s SAIL-led consortium has already won the mining rights for three iron ore blocks at Hajigak in November last year.

Afghanistan`s Mines Minister Wahidullah Shahrani said the final agreement between SAIL-led consortium and the Afghanistan government to develop the mines and to set up a steel plant is likely to be signed by May.

About the pact signed on Monday, Shahrani said, "A historic MoU was signed between Afghanistan and India for mutual cooperation in the area of iron and steel."

"The negotiations on Hajigak`s contract details, which include building of rail road, steel industry, power plant and others, would be finalised at the end of May and the final contract may be signed in May this year," he added.

The three blocks in Hajigak have estimated reserves of 1.28 billion tonnes of high-grade magnetite iron ore. Verma said the MoU shall pave the way for institution and capacity building in the Afghan iron and steel.

After winning the bid in last November, SAIL Chairman C S Verma had said the consortium plans to set up a 6.12 million tonnes per annum steel plant, subject to Afghan government making available linkages for coking coal and limestone, an 800 MW power plant and build necessary infrastructure for USD 10.8 billion.