The Western Coalfields Limited (WCL), a public sector mining company, has reopened bids for the establishment of an ammonium nitrate plant through surface coal gasification at its Juna Kunada mine in Chandrapur district's Majri area.

With an estimated initial capital investment of Rs 7,500 crore, this project aims to be one of the pioneering plants producing ammonium nitrate through synas. Ammonium nitrate is a crucial raw material for explosives, particularly in the mining industry. The deadline for bid submissions is October 31.

The first round of bidding took place over six months ago but did not yield any proposals, likely due to the complexity of the technology involved and the substantial investment required, according to sources.

"There are limited players in the sector, mainly foreign companies," noted a source within WCL.

The plant will operate under a built, operate, and own (BOO) arrangement. In this model, the private entity will receive coal from WCL and, in return, will be responsible for selling the ammonium nitrate back to the company. WCL, in turn, intends to supply it to other industries that utilize ammonium nitrate as an input.

The Indian Oil Corporation (IOC) is already producing explosives using ammonium nitrate near the Umred mining area of WCL. There is also an exploration of the possibility of supplying ammonium nitrate from the Majri unit to IOC. However, officials emphasize that the establishment of the plant is still in the early stages.

Syngas, which can be produced from coal gasification, serves as a feedstock for various products. Other subsidiaries of Coal India Limited, such as Mahanadi Coalfields Limited in Sambalpur, Odisha, and Eastern Coalfields Limited in Dishegarh, West Bengal, are also working on similar projects. These projects are expected to produce urea and ethanol from syngas, respectively, according to sources.