Coal India to launch JV with GAIL, RCF

Coal India (CIL) will enter into a joint venture with GAIL India and Rastriya Chemicals and Fertilisers (RCF) to set up a plant at Talcher in Orissa to produce urea and ammonia nitrate using coal gassification, CIL Chairman Partha S Bhattacharyya today said.

"An MoU was signed by the three companies to set up the project although details are yet to be chalked out," he told reporters during an interactive session on "coal industry's growth-challenges" at Merchants'Chamber of Commerce here.

He said 3.7 million tonnes (MT) of washed coal would be used for gassification. This would generate enough gas to produce urea and ammonia nitrate. The total quantity of coal earmarked for the project was 5.5 MT.

On the structure of the JV, he said that each company was likely to have 33 per cent equity in the project and the investments might run into few thousand crores of rupees. "But it has not yet been crystallised," he said.

Bhattacharyya said that the project would produce urea and 20-30 per cent ammonia nitrate required for making explosives.

Coal India's total annual spending on procuring explosives run into Rs 1,500 crore.

He said that the project was scheduled to come up on a land belonging to Fertilizer Corporation of India (FCIL) at Talcher.

The FCIL unit started commercial production of urea and ammonia nitrate in November 1980 but production was suspended from April 1, 1999 due to its economic non-viability.