Why Sharif skipped meeting Hurriyat leaders but attended steel barons tea party


MUMBAI: On May 27, shortly after meeting with his Indian counterpart Narendra Modi, Pakistan’s Prime Minister- Nawaz Sharif attended a somewhat special tea party in New Delhi- one that hardly caught anyone’s eye in India. However, it more than led to a storm in a teacup in neighbouring Pakistan. The controversial tea party was hosted by Indian steel baron Sajjan Jindal at his residence in honour of the Pakistani premier. But on the menu was a lot more than just tea and biscuits.

The tea-party is being seen as part of a carefully orchestrated strategy by Indian steelmakers to pitch for support from the Pakistan government for a project in Afghanistan that could serve as a lifeline for steelmakers in India who are eager to secure supplies of iron ore. What is also not widely known in India is that Nawaz Sharif himself comes with something of a pedigree in the steel business. His father – Muhammad Sharif founded and established the Ittefaq Group of Industries- a multimillion dollar integrated steel producer with major operations in the Punjab Province. During the 1980s, the Ittefaq Group expanded from a single foundry to 30 businesses which produced steel, sugar, paper, and textiles.

The Economic Times reports that Imran Khan, the former cricketer and chairman of the Pakistan Tehreek-e-Insaf (PTI), on Sunday criticised Sharif for having time to spare for Jindal during his visit to India, while not finding time for leaders of the All party Hurriyat Conference, a grouping of separatist-minded Kashmiri leaders, who had sought an appointment with him.

The tea-party may have been part of a strategy by Indian steelmakers to pitch for support from the Pakistan government for a project in Afghanistan that could serve as a lifeline for steelmakers in India who are eager to secure supplies of iron ore, according to industry officials.

AFISCO or Afghan Iron and Steel Consortium, a group led by state owned SAIL along with JSW, JSPL and Monnet Ispat are keen to obtain from Pakistan, right of way, to transport iron ore by road from Hajigak iron ore deposits in the Bamian province in Afghanistan to Karachi, before it is shipped to ports in the western and southern parts of India.

Securing the right of way through Pakistan will hold the key to the commercial viability of the ore concessions in Afghanistan obtained by the Indian steelmakers. Seshagiri Rao, JSW’s joint managing director confirmed that the Indian steelmakers are keen to obtain permission to transport ore from Afghanistan across Pakistan to ports in India.

“Our interests are in Afghanistan. We have an MoU with the government of Afghanistan for mining iron ore,” Rao said. “It is still early days, but if the project is to be successful then obtaining approval for the right of way from Pakistan is critical. The alternate route for the Hajijak iron ore is to transport iron-ore to Russia, and then bring it back to India. This would make the project unviable,” another source in the know added.

Rao agreed that the Russia route to bring iron-ore would be prohibitively expensive, and therefore “unworkable.”

As per the agreement with the Afghan government, Afisco has to build a 2-million tonne steel plant in Afghanistan to be allowed the right to export iron ore from Hajijak mountains. The ferrous content of the ore is said to be in the high sixties, which is considered to be high quality.

The terms on the quantum of iron ore that can be exported is still being worked out with the Afghan government, Rao said.

Jindal Steel and Power (JSPL) headed by Naveen Jindal, the younger brother of Sajjan, and JSW both hold 16% in the Afisco consortium. Another company led by Sajjan Jindal, JSW Ispat, holds 8% in Afghan Iron & Steel Consortium or AFISCO. Their brother-in-law Sandeep Jajodia who holds 4% in the JV, controls Monnet Ispat & Energy. In all, the private steel makers control 44% of the JV, with the rest owned by SAIL.

The Indian consortium was selected as the preferred bidder for three of the four iron ore blocks in Hajigak mines that hold about 1.8 billion tonnes of iron ore.

The flak from Imran Khan for alleged proximity with Indian businessmen has gained some traction as the Sharif Group, one of the largest industrial conglomerates in the neighbouring country, has substantial interests in steel making.

The Sharif Group was established in 1939 by the late Muhammad Sharif, an entrepreneur and father of Nawaz Sharif, the prime minister of Pakistan and Shahbaz Sharif, the Chief Minister of Punjab, it started with a small steel melting unit, known as Ittefaq Foundry Ltd. which was later turned into the largest steel making unit in the private sector in Pakistan. The Group has been responsible for manufacturing and installing 24 sugar factories within the country for the Group and other clients. The group is now led by Nawaz Sharif’s nephew Hamza Sharif.

Rao of JSW however, denied that his group has any plans to set up either a power or steel plant in Pakistan.