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CIL, GAIL, RCF in pact for Talcher coal project

BS Reporter  |  Kolkata 

Mining major (CIL), Gas Authority of India (GAIL) and Rashtriya Chemicals and Fertilizers (RCF) will come together to establish a project for producing urea and ammonium nitrate at Tachler, Orissa.

CIL has earmarked about 5.5 million tonnes of raw coal for the scheme, which once washed will come down to approximately 3.7 million tonnes of coal with less than 30 per cent ash content. Subsequently, GAIL is to gasify the fuel to produce urea and ammonium nitrate.

“The exact investment figures have not been fixed as the technology that will be utilised to produce urea and ammonium nitrate is still being studied. But an estimated few thousand crores are likely to be spent,” CIL chairman said.

Bhattacharyya, who was speaking at an event organised by the Merchants' Chamber of Commerce, explained that the ownership pattern of the proposed joint venture was likely to be 33 per cent each for the three firms involved. However, he did not give a time line for the execution of the venture.

“The joint venture (JV) has been mandated to produce a sizable amount of urea as well as 20-30 per cent of the annual ammonium nitrate requirement of CIL,” he added.

Presently, the coal miner spends up to Rs 1,500 crore annually for procuring about 3.5 lakh tonnes of explosives, in which ammonium nitrate is a major constituent. Consequently, this project is likely to allow CIL to makes significant savings on the explosives front.

Moreover, the JV is expected to revive the Talcher unit of the Fertilizer Corporation of India (FCI), as the project is expected to undertaken there.

Apart from easy access to coal, the Talcher unit has other infrastructural advantages including a coal-gasification plant, a heavy water plant and an urea plant already in place.

First Published: Thu, March 25 2010. 00:16 IST