The Afghanistan government will sign the concession agreement in January with SAIL-led consortium, after cabinet clearance, for mining iron ore in Bamiyan province, the mines minister of the neighbouring country said.
"A delegation of SAIL will be visiting Afghanistan in mid-December and then all the remaining issues will be sorted out and the deal will be concluded. After that our cabinet will clear... and concession agreement will be signed in January 2013," Afghanistan Mines Minister Wahidullah Shahrani said.
Speaking on the sidelines of the CII-organised International Mining and Machinery Conference, Shahrani said for a project of such size delay was not unusual.
He said already 90 per cent of the issues has been sorted out and that in the next round of meeting final details will be concluded.
The AFISCO (Afghan Iron and Steel Consortium) consists of public sector companies led by SAIL, NMDC and RINL, whereas the private sector players include JSW Steel, JSW Ispat, Jindal Steel and Power Ltd and Monnet Ispat and Energy Ltd.
The consortium has won three blocks at the Hajigak iron ore mines in Afghanistan.
According to reports, the Afghan Mines Ministry had said AFISCO risked losing mining licences in the country if it failed to meet production targets or failed to commence mining within six months of the licence being granted including capping on iron ore exports to six million tonnes per annum.
Shahrani preferring not to react to the issues said the matter would be resolved in December and unless details were not concluded, it would not be proper to speak on fine details.
He, however, said though the new proposed mining laws would not affect awarding of the contract to AFISCO as India was a very strategic partner, the company would be governed under the new proposed laws.
Afghanistan is coming out with new mining laws this month to boost mining industry investment in the country, Shahrani said.
"It is a very strategic project for both the countries. It can't be seen purely from the point of view of a commercial venture. For us, commercially as well as politically it is a very important project and also it is the largest-ever investment in our country," he said.
"It is just the beginning of Indian investment in our country as as we launch the Hajigak project, it would pave the way for more Indian investment in our country," he said.
"Under the project part of the iron ore would be shipped through Chinese railway line which is being laid for their Aynak copper project. India is one of the largest exporters of iron ore to China," Shahrani said.
"We are discussing with the government of India at the highest level to develop jointly a special 600 km rail corridor that will join Central Afghanistan all the way to Iranian border," he said.
The Rail corridor will connect Herat (in west) and Bamiyan (in central Afghanistan). The Hajigak project will cover part of the rail corridor but in the longer term Afghanistan has identified a number of iron ore and also lead and zinc deposits that lay along the corridor.
Meanwhile, Shahrani said Hindustan Copper's bid for a single copper mine project in Afghanistan's Shaida will be decided in a few days.