Economic Times reported that Coal India Ltd plans to take over Indian Oil Corporation's explosives division and expand its capacity to meet the requirements of the mining giant.

Mr S Narsing Rao chairman of CIL said “The explosive division originally belonged to IBP. IBP was merged with IOC and its importance in the overall schemes of things diminished. However, explosives are an essential input for us and we intend to take over the company lock, stock and barrel, invest in it and increase its capacity. At present the explosives division of IOC meets about 20% to 25% of our requirements.”

The IOC explosive division has seven bulk plants and three satellite plants. Its total capacity is about 71,000 tonnes per year and some its units are located at Singrauli, Dhanbad, Talcher, Rajmahal.

CIL's move comes just after Competition Commission of India imposed a penalty of INR 60 crore on 10 private explosives manufacturers following a CIL complaint that they had formed a cartel. It was found by CCI that Gulf Oil Corporation Ltd, Ideal Industrial Explosives Ltd, Solar Industries India Ltd, Blastec India Pvt Ltd and Indian Explosives Ltd among others had formed the cartel in supplying explosives to Coal India.

CIL spends about 1,500 crore annually in purchasing explosives and the project is expected to result in significant savings for explosives procurement. It will also ensure smooth supply in case of any disruption from private players.

Source - Economic Times

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