Coal India (CIL) along with GAIL and Rashtriya Chemicals and Fertilizers (RCF) will put up a project for producing urea and ammonium nitrate at Talcher in Orissa.
The company has provided for about 5.5 million tonnes of raw coal for the scheme, which will reduce to about 3.7 MT with less than 30 per cent ash content after it is washed. Subsequently the fuel would be gasified to produce urea and ammonium nitrate.
CIL chairman Partha S Bhattacharyya said the exact investment figures had not been fixed, as the technology for the production of urea and ammonium nitrate was under study. He added that an estimated few thousand crores would likely be spent. Bhattacharyya was speaking at an event organised by the Merchants Chamber of Commerce.
He said the proposed joint venture would be owned 33-per cent by each of the three companies involved. However, he did not give a time frame 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,'' Bhattacharyya added.
Currently, the coal miner spends up to Rs1,500 crore annually on procurement of about 350,000 tonnes of explosives, of which ammonium nitrate forms a major constituent. Thus, the project would yield significant amounts in savings on explosives.