Coal India, BHEL on radar after joint venture agreement for ammonium nitrate plant

Coal India BHEL JV project news, Coal India share price, BHEL share price: Shares of Coal India Limited (CIL) and Bharat Heavy Electricals (BHEL) were on the investors' radar on Thursday, February 29, after Coal India signed a joint venture agreement (JVA) with BHEL to undertake Coal to Chemicals business by initially setting up a Coal to 2000 TPD Ammonium Nitrate Plant using BHEL’s in-house developed PFBG (Pressurised Fluidised Bed Gasification) technology, the company informed the exchanges in a filing dated February 28.

Coal India shares rose as much as 2.1 per cent to the day's high of Rs 443.05, while BHEL's stock rose as much as 3.49 per cent  to the day's high of Rs 232.5 on BSE. Meanwhile, shares of Coal India and BHEL closed 0.92 per cent and 1.25 per cent stronger.

"To form a JV company to undertake coal-to-chemicals business by initially setting up a Coal to 2000 tons per day (TPD) Ammonium Nitrate Plant using BHEL's in-house developed PFBG (Pressurized Fluidized Bed Gasification) technology," the miner said in a statement.

In addition, Coal India on Wednesday said that it would hold a 51 per cent stake in the joint venture with Bharat Heavy Electricals Limited (BHEL) for the coal-to-chemicals project.

The CIL project involves its subsidiary Mahanadi Coalfields Limited (MCL) in the Jharsuguda district of Odisha at an estimated project cost of Rs 11,782 crore considering a debt-equity ratio of up to 70:30, the government said earlier.

The venture will kick off with the construction of a state-of-the-art Coal to Ammonium Nitrate Plant, leveraging BHEL's Pressurized Fluidized Bed Gasification (PFBG) technology.

CIL, in a pivotal role, pledges to guarantee the off-take of a minimum of 75 per cent of the production.

The company also stated that the JVC is for the development of coal to Syngas Island/gasification plant on a lump sum turnkey basis harnessing BHEL's esteemed PFBG technology, following the meticulous scrutiny and finalization after a Detailed Feasibility Report (DFR).

Meanwhile, CIL had signed an MoU with GAIL for setting up of a Coal-to-Synthetic Natural Gas) project at the Sonepur Bazari area of Eastern Coalfields Limited (ECL) in Burdwan district at an estimated project cost of Rs 13,052 crore.

(with PTI inputs)

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