Afghanistan's mining ministry has shortlisted the number of foreign investors interested to explore its iron ore rich Hajigak mine, and it is likely the mine will go to an Indian firm.

Afghanistan's minister of mines Wahidullah Shahrani said Steel Authority of India Ltd. (SAIL) and mineral giant NMDC Ltd. were leading the pack of overseas companies from Canada, US and Iran, the Mineweb reported. A third Indian company, Ispat Alloys, was also included in the shortlist.

SAIL and NMDC are part of India's government-led initiatives to boost its participation in Afghanistan, where India has pledged some $2 billion investments for the country.

A consortium led by SAIL had bid for all the four Hajigak mining blocks. The Karzai local government has reportedly implied giving preference to companies that could set up a steel plant to improve the value of the Hajigak iron ore project.

The iron ore rich Hajigak mine, located in Bamyan Province, contains the best known and largest iron oxide deposit in Afghanistan. The deposit itself extends over 32 kilometers. It covers 16 separate zones, up to 5 kilometers in length, 380 meters wide and extending 550 meters down.

The mine could give up to $6 billion to the government's coffers.

SAIL is India's largest steel producing company, while NMDC Ltd. is India's largest iron ore miner. Both are state-owned.

India opts to acquire mining companies overseas as creating new mines within the country are harder to develop and sustain given regulatory risks and struggles involving land acquisitions, displacement of locals and environmental clearances.

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