Coal India and BHEL join forces for ammonium nitrate plant in Odisha

Hyderabad: In a significant development for the coal and energy sectors, CPSE entities Coal India Limited (CIL) and Bharat Heavy Electricals Limited (BHEL) have officially signed a joint venture agreement (JVA) on February 28th, 2024, in Delhi. The agreement aims to establish an ammonium nitrate plant using surface coal gasification (SCG) technology.

The plant, slated to be located in the Lakhanpur area of Mahanadi Coalfields Limited, Odisha, is expected to have an initial production capacity of 2000 tons of ammonium nitrate per day. The annual production target is set at 6.60 Lakh tons, requiring 1.3 million tonnes (mts) of coal, which will be supplied by CIL. BHEL will contribute its indigenously developed pressurized fluidized bed gasification (PFBG) technology to the project.

This collaboration between two corporate giants marks a significant step towards the National Coal Gasification Mission, which aims to leverage the chemical properties of coal. Ammonium nitrate, a key ingredient in bulk explosives, is extensively used by CIL in its open-cast (OC) mining operations, a major component of its coal production. The new plant, serving as a form of backward integration, will enhance raw material security, reduce ammonium nitrate import dependence, and promote the Atmanirbhar Bharat Abhiyaan (Self-Reliant India Initiative).

During the signing ceremony, Amrit Lal Meena, Coal Secretary, expressed confidence in the project, stating that with the commitment of CIL and BHEL, this venture would serve as a role model. He emphasized that gasification is a top priority for the Ministry of Coal, predicting sufficient coal availability in the next two to three years. The government has assured full support, including financial assistance for viable gap funding.

The JVA was signed by Debasish Nanda, Director (Business Development) of CIL, and Jai Prakash Srivastava, Director (Engineering, R&D) of BHEL, representing their respective companies.

Looking ahead, CIL plans to explore alternative uses of coal for environmentally friendly ventures, such as coal gasification, after meeting the power sector's demands. SCG technology shows promise in converting coal into valuable Syn gas, which can further be processed into synthetic natural gas—a potential alternative to conventional natural gas. Additionally, it can serve as feedstock for downstream chemicals, reducing the need for imports and supporting power generation.

Projects and Development India Limited, a Miniratna design engineering and consultancy company, has been tasked with preparing a detailed feasibility report for the plant.

The process of acquiring land is underway and is expected to be completed by September 2024, after which construction will commence. The signing of the Joint Venture Agreement was attended by M. Nagaraju, Additional Secretary of the Ministry of Coal, K. Sadashiv Murthy, CMD (BHEL), Vijay Mittal, JS of the Ministry of Heavy Industries, and other senior officials from both ministries and promoting companies.