New Delhi, Feb 28 (IANS): Public sector giants Coal India Limited (CIL) and Bharat Heavy Electricals Limited (BHEL) on Wednesday signed a joint venture (JV) agreement for setting up an ammonium nitrate plant based on surface coal gasification technology, the Coal Ministry announced on Wednesday.

The plant to come up in Odisha's Lakhanpur area of Mahanadi Coalfields Limited, will initially produce 2,000 tonnes of ammonium nitrate per day.

The annual production is slated at 6.60 lakh tonnes which requires 1.3 million tonnes (mts) of coal.

The coal will be supplied by CIL.

BHEL will bring to the table indigenously developed pressurised fluidised bed gasification (PFBG) technology for this purpose.

The synergy and partnership of the two corporate giants is a big step towards National Coal Gasification Mission which facilitates utilisation of chemical properties of coal, the Coal Ministry said.

Ammonium nitrate is a major ingredient in manufacturing bulk explosives which CIL uses in large quantities in its open-cast mining operations, a major source of its coal production.

The upcoming plant's backward integration would help in securing the raw material, reducing import dependence of ammonium nitrate and promoting Atmanirbhar Bharat Abhiyaan.

Coal Secretary Amrit Lal Meena said that with the commitment of CIL and BHEL, this project will be a role model.

"Gasification is the highest priority area for the ministry of coal. In the next two to three years there will be sufficient coal. All the possible support required from the government is in place including financial support for viable gap funding."

Debasish Nanda, Director (Business Development) CIL and Jai Prakash Srivastava, Director (Engineering, R&D) BHEL signed the joint venture agreement on behalf of respective promoter companies.

CIL will pursue alternative uses of coal for environment friendly ventures like coal gasification in future after fulfilling the requirement of the power sector. SCG is a promising technology that converts coal into valuable Syn gas.

On further processing, this produces synthetic natural gas that can be used as alternative natural gas.

Additionally, it can be used as feedstock for downstream chemicals production which are currently being imported and for power generation as well.

Projects and Development India Limited, a Mini Ratna design engineering and consultancy company has been assigned the work for preparing a detailed feasibility report of the plant.

Physical possession of the land is under progress and will be completed by September 2024 after which construction activities will follow.