Coal India (CIL) on Friday informed BSE that its shareholders ?by an overwhelming majority? have approved amendment to the main object clause of memorandum of association (MoA). CIL has sought amendment in the memorandum of association to enter ammonia nitrate and urea manufacturing using gasified coal.
The company on June 4 had sought shareholders’ consent via postal ballot to amend the main object clause of memorandum of association and the company on Friday informed BSE that 99.54% of the members approved the resolution of amending the object clause.
The coal behemoth has firmed up plans to set up a R10,000-crore joint venture with GAIL India, Rashtriya Chemicals & Fertilizers (RCF) and The Fertilizer Corporation of India (FCIL) to set up a urea and ammonium nitrate chemicals complex, which will run on gasified coal.
A CIL official said the company has already appointed Projects and Development India Ltd (PDIL) to conduct a feasibility study on the chemical complex. The plan is to use around 6-7 million tonnes of coal from Talcher coalfields in Odisha and manufacture 3 lakh tonnes of urea annually and 300-400 tonnes of ammonium nitrate per day.
While GAIL will be responsible for technology sourcing for coal gasification from global suppliers, FCIL and RCF will use the gasified coal to manufacture ammonia nitrate and urea. ?There would be two joint ventures ? the first with GAIL for coal-gasification and second with FCIL and RCF for manufacturing ammonium nitrate and urea. CIL is likely to hold a majority stake in the second JV,? the CIL official said.
Ammonium nitrate is crucial for CIL as it is required to make explosives for cracking the mines. The ammonium nitrate supply became an issue after a ban on bulk import since April last year. India imported 342,265 tonnes of raw ammonium nitrate in 2011-12 and about 350,000 tonnes in 2012-13. CIL buys R1,500 crore explosives annually but there were problems in procurement last year after CCI imposed a fine on nine companies for forming a cartel to supply explosives to CIL. Following this, CIL chose to form a JV with the Indian Oil Corporation to become a manufacturer of explosives to meet its own requirement.
