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An Indian government backed group will invest $7.8 Billion on three blocks of Hajigak iron mine in Afghanistan, Bloomberg reported.

A consortium of seven Indian steel companies led by Steel Authorities of India (SAIL) bagged the development rights to invest on blocks B, C and D at Bamya's Hajigak iron deposit.

The A block has been given to a Canadian company called Kilo Gold Company, the report said.

Hajigak has four blocks, A, B, C and D, which has 1.8 billion tonnes of iron. The mine lies across Hindu Kush mountains between Bamyan and Wardak provinces.

The group plans to spend $11 billion to mine the Hajigak deposit west of Kabul, build a steel mill, a power plant and transport links.

President Hamid Karzai's cabinet last month awarded the Afghan Iron & Steel Consortium the rights to mine three out of four blocks of Hajigak, a series of rugged mountain ridges 100 kilometers west of Kabul.

The group has separately proposed building a 900-kilometer railway line from Bamiyan in Afghanistan to Zahedan in Iran at a cost of $4.3 billion. The railway line will help ship ore from Hajigak back to India via Iran.