A Rs 25,016-crore coal gasification plant in Odisha will replace 0.66 million tonnes of imported ammonium nitrate annually, saving USD 360 million in foreign exchange by 2030.
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A Rs 25,016-crore coal gasification plant in Odisha will produce enough ammonium nitrate to cover roughly 35% of India's demand by 2030, industry officials said after the project's inauguration by President Droupadi Murmu and Prime Minister Narendra Modi.
The facility uses indigenous technology to convert locally mined coal into synthesis gas, which is then processed into ammonium nitrate. Officials pegged the annual import savings at USD 360 million, replacing 0.66 million tonnes of foreign supply.
Ammonium nitrate is a critical input for mining explosives and nitrogen fertilizers. Roughly 60% of India's consumption goes to the mining sector, where companies have historically stockpiled against global price swings and supply disruptions. A domestic source of that scale would stabilize input costs for miners and reduce their exposure to spot-market volatility, executives said.
The Odisha location keeps raw material transport costs low, given the state's coal reserves. Construction is expected to generate thousands of local jobs, though officials did not give a specific headcount.
Full commercial production is targeted for 2030. A second phase that would double capacity is under study but has not been formally approved, according to officials, who did not offer a timeline for a decision.
India's ammonium nitrate imports have fluctuated sharply with global prices and domestic production hiccups. In tight supply years, domestic buyers have paid premiums to secure cargoes. The Odisha project would provide a buffer against those episodes, assuming it stays on schedule.
Coal gasification remains capital-intensive and has struggled at scale in some markets because of cost overruns and technical hurdles, several industry participants cautioned. The Indian government has backed the project with policy support, including a production-linked incentive scheme for coal gasification.
The plant's output would also feed India's defense sector, where ammonium nitrate is used in certain explosives, aligning with the government's push for self-reliance in strategic materials, officials said.
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