Indian state-owned steelmaker Steel Authority of India Limited (SAIL) has proposed setting up a 2 million mt per year greenfield steel mill in Iran, entailing an investment of around $1.6 billion, a senior government official told SteelOrbis on Tuesday, January 20.
The proposal for the SAIL investment in Iran was first discussed during talks between Indian steel minister Narendra Singh Tomar and Iranian officials held in December last year, the official said.
As a follow-up of the talks, SAIL communicated with the Iranian government seeking 500 acres of land for the steel mill and another contiguous 500 acres for subsequent expansion at a future date.
The Indian steel major has also suggested that the land to be provided by the Iranian government should be close to an Iranian port since the proposed plant could be based on imported iron ore. The possibilities of securing raw material linkages for iron ore and limestone from confirmed resources within Iran will also be explored by SAIL.
Though no decision has been taken yet, SAIL has also been considering linking the Iranian steel mill to imports from iron ore assets in neighboring Afghanistan.
In 2011, Afghan Iron and Steel Company (Afisco) a consortium of Indian companies led by SAIL, had won the rights to explore and mine the Hajigak iron ore reserves in Afghanistan with estimated resource of around 1.8 billion mt. However, commercial contract for the mining project has been delayed owing to differences on commercial terms of the contract and legal framework.