(Minews) - Marking the first major investment by India in Iran, state-run SAIL has proposed to set up a nearly 2-million-tonne integrated steel plant in the country at an estimated cost of Rs 10,000 crore.
For the greenfield venture, the steel manufacturer has asked the Iranian government to provide 500 hectares of land near the country’s Bandar Abbas port and another 500 hectares of contiguous land for future expansions.
The proposal had come up for discussion during a meeting between steel minister Narendra Singh Tomar and Iranian envoy Gholamreza Ansari late last month.
To make the project a viable one, SAIL has sought captive access to iron ore, limestone and dolomite from Iran. Allaying apprehensions on availability of raw material resources, Ansari said that his country has iron ore reserves worth 2.5 billion tonnes and is keen to explore natural resources jointly with India.
“SAIL has suggested that natural gas should be made available at the proposed plant boundary along with necessary rail and road linkages to ferry steel making inputs to the plant,” according to a steel ministry note. The proposal by SAIL, in the form of a concept note, suggests that a corridor should be set up for laying of pipeline for de-salination plant. The ministry is keen that a joint working group should be set up comprising the PSU and an Iranian nodal agency to explore feasibility in this regard.
Iran has also expressed its readiness in offering a site near its Chabahar port, which can also be used to transport iron ore if a consortium led by SAIL explores iron ore from the Hajigak mines in Afghanistan. The consortium, Afghan Iron and Steel Company (AFISCO) — led by SAIL — has bagged the bids for exploring three iron ore deposits in Hajigak in 2011, which has an estimated reserve of 1.8 billion tonnes of high grade ore.
SAIL, along with STC, had bagged an export contract of 1,00,000 tonne of rails to Iran Railways in October last year. Iran has been conveyed that the first shipment of 20,000 tonne of rails will be delivered by July and the balance will be undertaken every two months of equal amount of rails.
“But the credit line to cover rail exports transaction, which is under finalisation, needs to be expedited by Iran. There is a need to create a mechanism so that private buyers of Iran can import materials through government agencies like STC in India,” according to the note.
Currently state-run UCO Bank facilitates transactions with Iran, which are only oil related. But Iran wants India to allow opening of accounts in different banks for better non-oil trade between the two countries, according to a government official. Since February 2013, when the US disallowed payment channels to Iran as part of its economic sanctions against the Persian Gulf nation, India has been paying 45 per cent of its Iran oil import bill in rupees through the bank.
