Coal India, Rashtriya Chemicals, GAIL in coal-gas deal

Coal India, GAIL and Rashtriya Chemicals & Fertilisers (RCF) are in the process of forming a gasification joint venture, which will produce ammonium nitrate and urea from a coal washery unit at Talcher in Orissa soon.Partha S Bhattacharya, chairman Coal India, said, “We have entered into an understanding, but are yet to form a formal JV. The investment size may be in the region of over Rs 2000 crore. All three partners may have 33.3% or so stake”.Coal India will earmark 5.5 million tonnes of coal, which would be washed. “With 30% of the ash content being removed, this would result in production of 3.7 million tonnes of gasified coal. The gasification will be done by Gail”.The project is part of the revival programme of the factory of Fertiliser Corporation of India at Talcher.“The project will help us by supplying sizeable quantities of urea and ammonium nitrate,” Bhattacharya said. While the urea will be used by RCF, the ammonium nitrate will be used by Coal India to make explosives. Coal India spends almost Rs 1,500 crore annually on explosives. “This year we have made some savings and may spend about Rs 1,300 crore. The total quantity of explosives needed is around 3.5 lakh tonnes. We meet 20% of our needs from Indian Oil Corporation while the rest is through tenders,” Bhattacharya added.As part of its strategy to increase coal availability in the country, Coal India is looking to import 4-5 million tonnes this year. “We are ready to import coal but we are waiting for a confirmation from the end user. We would like to import for NTPC and are waiting for the company to communicate with us on the issue,” the Coal India chairman said.He expects that, to close the demand supply gap, the country may import 150-200 million tonnes of coal in the next 4-5 years.“A strategic fit is being created. As part of our endeavour to enter into tie-ups overseas, we have received 10 major proposals from 5 companies, which have been cleared by the board for due diligence. Once this is done we will see how much coal can be imported by us. Even in Mozambique, we have already formed a subsidiary company and exploration will start shortly”, Bhattacharya added.