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(Image courtesy- Yara Pilbara Nitrates Pty Ltd)
Is extraction of a chemical/metal from effluents a manufacturing activity? And if the extracted material is hazardous or prone to criminal use, would extraction require an industrial licence? 
If Government’s decision on extraction of ammonium chloride from effluents is any indication, then extraction of all hazardous materials whose manufacturing is subject to industrial licensing should require such permit. 
This is the larger picture one would draw after looking at the case of ammonium nitrate, which is often used by terrorists including naxalities for producing improvised explosive devices (IEDs).
At its last meeting held on 26th September, the Industrial Licensing Committee (ILC) declared ammonium nitrate extraction from effluents as a manufacturing activity. It is thus subject to industrial licensing regulations.
ILC took this decision after over-ruling the legal stance taken by the Explosives Section (ES) of the Department of Industrial Policy (DIPP).  ES had contended that “manufacturing is defined as the process of converting raw materials, components or parts into finished goods. This is clear that extraction is not manufacturing and so will not be covered under Industries Development and Regulation (IDR) Act. 
ES arrived at this stand while considering the industrial licence applications of two companies that intend to extract ammonium nitrate from unspecified effluents. The companies are: Kakatiya Industries Private Limited and S.D. Enterprises. 
Keeping in view ES’s opinion, ILC secretariat had sought guidance from ILC as to “whether such applications may be closed on the files at the level of Joint Secretary (SIA).”
Industrial Advisor, DIPP, differed with ES’ viewpoint and contended that ammonium nitrate extraction is a manufacturing activity.
After deliberations, ILC accepted Industrial Advisor’s views and directed DIPP to process such applications accordingly. 
Ammonium nitrate is produced in different grades, depending on its usage as a fertilizer or as a key ingredient of explosives or as an input for manufacture of certain chemicals and other products. 
Ammonium nitrate is currently manufactured by five companies in the country. These are: Gujarat Narmada Valley Fertilizers and Chemicals (GNFC), Deepak Fertilisers and Petrochemicals Corporation Limited (DFPCL) National Fertilizers Limited (NFL), Rashtriya Chemicals and Fertilisers Limited (RCF) and DFPCL’s subsidiary Smartchem Technologies Limited.
According to Petroleum and Explosives Safety Organisation (PESO), “The Ammonium Nitrate Rules have been notified in July 2012. Since there was no regulation on ammonium nitrate before that date, no verifiable data is available regarding its production. At present the licensing process is under way. As per the applications received for manufacture of Ammonium Nitrate the total installed capacity of the five major manufacturers in India is 1054830 MT (metric tonnes per annum). The manufacturing capacity for converters is 197400 MT. The capacity for extraction of AN from sludge received from nuclear fuel complex is 11400MT.”
The use of ammonium nitrate fertilizer is allowed as a value-added product named calcium ammonium nitrate (CAN) for safety reasons. As CAN is not subsidized, NFL stopped producing this fertilizer and currently produces ammonium nitrate melt and lumps.
GNFC also stopped production of CAN last year due to difficulties in complying with explosives-related regulatory concerns right up to the farmgate. It is currently producing only ammonium nitrate melt. 
 As put by the company in its annual report for 2013-14, “Ammonium Nitrate Rules, 2012 regulating production, transport and imports of Ammonium Nitrate are effective from 11th January, 2014 and is applicable to Ammonium Nitrate Melt (AN Melt) and Calcium Ammonium Nitrate (CAN) produced by the company.”
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