Coal India (CIL) and Bharat Heavy Electricals (BHEL) have signed a joint venture (JV) agreement to establish an ammonium nitrate plant as a part of its coal gasification project.

The JV will initiate the coal-to-chemicals business by first setting up a 2,000 tpa ammonium nitrate plant and will use pressurised fluidised bed gasification technology developed by BHEL. The upcoming plant as backward integration would help in securing the raw material, reducing import dependency on ammonium nitrate.

In this JV, Coal India will own a 51 percent stake and BHEL acquiring the remaining 49 percent. The coal-to-ammonium nitrate project in Odisha has an estimated cost of Rs 11,782.05 crore. CIL will further have to ensure an offtake of 75 percent of the rated annual capacity of the project in the pre-feasibility report (PFR). The annual production is slated at 6.60 lakh tonne, which requires 1.3 million tonne of coal. Further, the coal will be supplied by CIL.

Earlier, the Union Cabinet had approved two joint venture projects for coal gasification between Coal India & Gas Authority Of India (GAIL) and Coal India & BHEL, both to be operationalised by 2028-29. CIL uses ammonium nitrate in its open-cast mining operations, a major source of its coal production.