EBR reported that India based state run Steel Authority of India Limited is leading a consortium to secure funds of around USD 75 million to USD 80 million for a mining and steel making project in Afghanistan.

The consortium, Afghan Iron and Steel Company comprises seven Indian mining and mineral companies.

A senior federal government official said that the government has formulated a high level government committee that would extend the funds on concessional terms to facilitate the exploration operations on the Afghan project. The committee is expected to decide the amount of loan and repayment terms by early June 2013.

Afisco has planned to invest USD 11 billion in Hajigak iron ore after securing license to develop the project. However, it turned down the project citing the difficult infrastructure and logistical environment at the location. The consortium has now decided to develop a small steel making facility of 1 million tonnes to 2 million tonnes a year.

Afisco has urged Steel Ministry for viability gap funding claiming that it was necessary in raising long term debt financing required for construction of infrastructure to evacuate raw materials like iron-ore and finished steel from the Hajigak region. Through this concessional loan, the company would be able to begin geological surveying and exploratory work of the 2 billion tonne Hajigak iron ore reserves.