Govt to exploit unviable coal mines to make urea, says Gadkari

Says this will produce cheaper urea and cut down on huge Rs 55,000-crore annual subsidy on the fertiliser

Government will soon exploit economically unviable coal mines for gasification to produce cheaper urea to cut down on huge Rs 55,000-crore annual subsidy on the fertiliser, Union Minister Nitin Gadkari said on Saturday.

"We cannot extract coal from 40 per cent coal mines in the country, which are not economically viable. The idea is to use these for coal gasification by which we can get urea at a cost of only Rs 8,000 to Rs 10,000 per tonne," the road transport and highways minister said at Economic Times Global Business Summit here.

Four of the 30 chemical and fertiliser factories in India produce urea from naphtha, the cost of which comes to around Rs 40,000 per tonne, he said.

The remaining 26 use gas, cost of which comes to $15 to 20 per mmBtu and hence, the urea produced is very costly.

"We are giving subsidy of Rs 55,000 crore every year for the chemical fertiliser. Coal gasification will reduce the cost of fertiliser. I am pursuing this matter with chemical and fertiliser ministry and we are sitting in this regard to reduce the cost of the fertiliser by 50 per cent, and to save the subsidy of Rs 55,000 crore," Gadkari said.

He said the government is importing urea from China which is making it through coal gasification.

The minister said as far as the international scenario is concerned, efforts were on to set up a urea factory at Chabahar where the government is setting up a port.

"We are making a port at Chabahar in Iran where the gas price is less than $1. If we get gas then we can make urea there and bring it to the country as the distance between Chabahar and Kandla port is less than that between Delhi and Mumbai," he said.

For agriculture growth and development of rural economy it is very important to reduce the price of urea, he said.

He had said earlier: "We are trying to procure gas at a very economical rate. In 2013, they had offered it at the rate of 82 cents, less than a dollar. We make urea from naphtha. We are trying to set up a urea plant in Iran," Gadkari said.

India has pledged to invest about $85 million in developing the strategic port located off Iran's south-eastern coast, which would provide India a sea-land access route to Afghanistan bypassing Pakistan.

The minister had visited Tehran in May, and both the nations had inked a pact to develop Chabahar port.

Discussions are on for concluding the memorandum of understanding (MoU) agreements between India and Iran, which include possibility of India taking over the development and operation of Phase-II of Chabahar port.