KOLKATA (miningweekly.com) – The lack of assured supplies of high-grade coal has stalled a coal gasification project, a critical link to the revival of a defunct fertiliser plant in the eastern Indian province of Odisha.

Indian major Coal India Limited (CIL) has been unable to commit to supplies of high-grade coal with ash content of less than 30% to its joint venture (JV) partner, logistics and infrastructure major GAIL India Limited, an official engaged in the revival of the fertiliser plant said.

The CIL-GAIL JV had been mandated to set up the coal gasification project and supply feedstock critical to the $1.3-billion revival of the defunct fertiliser plant.

A second JV between Rashtriya Chemicals and Fertilisers Limited (RCFL) and CIL had been entrusted by the government to revive the urea- and ammonia-producing plant in Odisha, shuttered since 2000 owing to shortages of naphtha or natural gas supplies.

Despite several rounds of negotiations between the partners, CIL had been unable to commit to supplying low ash grade coal on the grounds that the bulk of its production was of coal with high ash content of around 45% and small-scale production of low ash content coal and washed coal was already committed to other buyers.

GAIL maintained that without assured supplies of low ash content coal, the JV was not able to tie up with a technology provider for construction of the gasification plant, the official said.

“A solution to the supply of high grade coal has been elusive over the past several months. But talks between partners will have to continue since without the required grade of coal the gasification plant would not be feasible,” the official said, declining to give any timeframe for overcoming the shortage.

At present, CIL operated 17 coal washeries of which 11 were for coking coal and the rest for non-coking coal, giving it total production of only 39.4-million tonnes a year of washed coal.

In September 2013, Fertilizer Corporation of India Limited, the owners of the defunct fertilizer plant signed up with CIL, GAIL and RCFL to revive the unit. The project envisaged production of 1.2-million tonnes a year of urea and had been scheduled for completion in three years.