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Coal India Ltd to diversify: looks to coalbed methane

World Coal,

One of the world’s largest producers of coal, Coal India Ltd (CIL), is seeking to gain shareholder approval to modify its memorandum of association (MoA) in order to get the company producing fertilisers and chemicals using coalbed methane (CBM).

The company petitioned the Bombay Stock Exchange (BSE) to allow the amendment, saying it would allow CIL ““To produce, process, store, distribute, sell, import, export or otherwise deal in gas and other by-products arising from the coal gasification process in India and abroad and use products or by-products of gasification process of to produce ammonium nitrate, fertilisers and associated products, and for this purpose, to install, operate and manage all necessary plants, mines, establishments and works, in India and abroad.”

In 2009, the Ministry of Chemicals and Fertlizers oversaw the creation of a consortium between Gail Ltd, Rashtriya Chemicals and Fertlizers Ltd, and CIL. The companies signed an agreement to set up a surface coal gasification plant for chemicals and fertilisers at Talcher. In August 2013, the government of India proposed two joint ventures (JV) for operating the proposed project.

Expansion into the fertilisers and chemicals business

If passed by the BSE, and by company shareholders, the amendment to the MoA will allow CIL to set up and operate coal-gasification plants in India, as well as in locations abroad.

The proposal has been recently approved by CIL board. A postal ballot will take place to seek shareholders’ nod on the issue. The ballot will ask shareholders to vote on whether CIL should indeed pursue joint ventures – one for coal gasification and gas purification with GAIL and the other for setting up a downstream fertiliser-cum-ammonium nitrate unit.

The company said that Rashtriya Chemicals & Fertilizers had signed a memorandum of understanding (MoU) with GAIL to co-operate and explore the potential use of by-products from the surface coalbed methane project in the fertiliser industry. GAIL approached CIL with a proposal to work together in the project development part for surface coal-gasification in coal-bearing states in India, including in and around Talcher in Odisha.

The possibility of a new urea-ammonium nitrate project is also on the cards at the non-operational fertiliser plant of FCI at Talcher. CIL has mooted the idea of reviving the Talcher unit. 

Written by Sam Dodson

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