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Ammonium nitrate
What it is
The oxidiser at the heart of commercial explosives - mixed with fuel oil it becomes ANFO, the bulk blasting agent used in mining. It is also a controlled substance under explosives regulation because of its misuse potential
India has historically imported a share of its requirement, and domestic capacity has been expanding
Impact on industries
- The dominant input cost, commodity-priced and partly dollar-denominated, so margins compress when prices or the rupee move against the manufacturer
- Backward integration into ammonium nitrate is the key differentiator - an integrated explosives maker converts a volatile purchase into an internal transfer
- Regulatory control on manufacture, storage and movement restricts entry, so the licence itself is a barrier
- Coal India has moved to produce part of its own requirement, which shifts the customer relationship for suppliers who also sell to it