Steel Authority of India Ltd (SAIL) plans to help Mongolia develop its iron ore and coal deposits.

A memorandum of understanding (MoU) to this effect was signed between SAIL and the Mongolian Ministry of Mineral Resource and Energy on Friday.

The two entities will carry out a joint pre-feasibility study to set up mineral processing facility for iron ore and coal, both thermal and coking coal varieties. Besides, they will also explore options for a downstream steel making facility in Mongolia, SAIL said in a statement.

SAIL will select the best available technology to treat Mongolian iron ore and coal deposits based on the feasibility study.

The MoU envisages exploration of opportunities for investments to be made by SAIL either individually or in a consortium with other entities to develop mineral processing/steel manufacturing facility in Mongolia, the statement said.

SAIL is happy to be a partner in Mongolia's economic development, said the Chairman, Mr C.S. Verma. Commending the Mongolian Government for its initiatives in developing its mining sector, Mr Verma said such steps shall serve to be the crucial drivers of FDI for the country, while also meeting the mineral needs of India and other Asian economies.

Though Mongolia is rich in minerals such as iron ore, coking coal, copper and uranium, the mineral assets are under developed and the sector faces infrastructure issues, especially relating to evacuation and transportation.

Mongolia is the second such nation where SAIL plans to develop mineral resources. Recently, a consortium of Indian steel companies led by SAIL has been shortlisted by Afghanistan to develop the mineral resources in that country.

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