NEW DELHI: Coal India and Bharat Heavy Electricals Ltd (BHEL) on Wednesday announced the signing of a joint venture agreement for setting up of an ammonium nitrate plant as a part of its coal gasification project.
The joint venture will initiate the ‘coal to chemicals’ business by first setting up a 2,000 tonnes per day ammonium nitrate plant and will use Pressurized Fluidized Bed Gasification technology developed by BHEL, the company said in an exchange filing.
Coal India will own 51% stake in the joint venture with BHEL acquiring the remaining 49%. The JV will be registered in Odisha, and incorporated as a “private limited” company with an initial paid-up share capital of Rs 1 lakh.
Both the companies would have the right to nominate three directors each on the board of the joint venture company, as per the filing.
CIL will further have to ensure offtake of 75% of rated annual capacity of the project in the Pre-Feasibility Report. The annual production is slated at 6.60 lakh tonnes which requires 1.3 million tonnes of coal. The coal will be supplied by CIL.
The Union Cabinet had earlier approved two joint venture projects for coal gasification between Coal India and GAIL and Coal India and BHEL, both to be operationalised by 2028-29. The coal-to-ammonium nitrate project in Odisha has an estimated project cost of Rs. 11,782.05 crore.
“Gasification is the highest priority area for the ministry of coal. In next two to three years there will be sufficient coal”, said Amrit Lal Meena, secretary, ministry of coal.
India finds underground coal gasification important as it would help extract plentiful coal reserves that are deep, scattered and covered by forests. The syngas technology is for converting non-mineable coal/lignite into combustible gases through in situ gasification of the material.
Ammonium nitrate is a major ingredient in manufacturing of bulk explosives which CIL uses in large quantities in its open-cast mining operations, a major source of its coal production. The upcoming plant as backward integration would help in securing the raw material, reducing import dependency of ammonium nitrate, the government said.