According to a recent news report, the sharp increase in import of ammonium nitrate (AN) from Russia has hit domestic fertilizer companies which are in the process of ramping up AN capacity with investment of over Rs. 4,000 crore.
- The mining industry has also raised concern on dependence on imports for sourcing ammonium nitrate.
- Ammonium nitrate is key for conducting blast before start of mining ores such as coal, iron ore and limestone.
- India has an installed capacity of 10.96 lakh tonnes per annum and an additional 10.19 lakh tonnes per annum capacity is being set up by large fertilizer companies.
- Earlier, Coal India signed a joint venture with BHEL to set up ammonium nitrate plant with an investment of Rs. 11,782 crore in Odisha.
- There is a price gap between domestic and imported supply of ammonium nitrate from countries which have access to low-cost subsidised natural gas, a key raw material for producing ammonium nitrate.
- The government recently increased customs duty on import of AN to 10 per cent from 7.5 per cent.
About Ammonium nitrate
- Pure ammonium nitrate (NH4NO3) is a white, water-soluble, crystalline substance with a melting point of 170°C.
- The substance is classified as an oxidising agent. It is one of the base ingredients used in the manufacture of commercial explosives.
- Due to this reason Ammonium Nitrate has been declared as an explosives and defined in Rule 2(b) of the Ammonium Nitrate Rules, 2012.
- Ammonium Nitrate is not an explosive by itself. However, it is one of the ingredients used for manufacture of explosives. It is classified as an oxidizer (5.1) as per UN classification for Dangerous Goods.
