In a significant move to advance India’s coal gasification roadmap, Bharat Coal Gasification and Chemicals Limited (BCGCL) and Mahanadi Coalfields Limited (MCL) signed a landmark land leasing agreement for the upcoming Coal-to-Ammonium Nitrate Project at Lakhanpur in Odisha.
India’s First Indigenous Coal Gasification Project
The project is designed as a 2,000 tons per day (TPD) ammonium nitrate facility and represents a major milestone for India’s energy and chemical sectors. Notably, it will be the first coal gasification project in the country to deploy indigenously developed gasification technology by Bharat Heavy Electricals Limited (BHEL). By adopting domestic technology, the project supports the government’s push toward Atmanirbhar Bharat (self-reliant India) while reducing dependence on imported technologies in critical industrial sectors.
Project to Be Developed on 350 Acres in Lakhanpur
The project will be developed on approximately 350 acres of land under the possession of MCL. Its implementation has been enabled through recent policy reforms by the ministry of coal, which allow the use of Coal Bearing Area (CBA) land for coal gasification projects. These reforms are expected to unlock new opportunities for diversifying the coal sector, enabling the conversion of coal into value-added chemicals and industrial products.
Government Support and Project Investment
To promote coal gasification initiatives across the country, the ministry of coal has extended financial support of ₹1,350 crore to the project under its dedicated incentive scheme. The Lakhanpur coal-to-ammonium nitrate project is expected to involve an investment of around ₹25,000 crore, making it one of the most significant coal gasification initiatives in India. The government has also approved a broader ₹8,500 crore outlay to promote coal gasification projects nationwide, with seven projects already finalized, including three where foundation ceremonies have been completed.
Coal Gasification Seen as a Strategic Game-Changer
Union minister G. Kishan Reddy emphasized that coal gasification will play a transformative role in India’s energy and industrial sectors. He highlighted that India possesses abundant coal reserves, and therefore it is crucial to utilize this resource beyond conventional applications such as power generation. Coal gasification can help reduce import dependency on chemicals and fertilizers while conserving valuable foreign exchange. The minister stressed upon the importance of adopting advanced global technologies while simultaneously strengthening indigenous capabilities.
Boost for India’s Industrial and Energy Transformation
The signing of the land lease agreement is expected to significantly accelerate the implementation of the Lakhanpur coal-to-ammonium nitrate project. By combining policy reforms, indigenous technology, and large-scale investment, the project reflects India’s growing commitment to
self-reliance, industrial innovation, and efficient utilization of coal resources. In the long term, initiatives such as this are expected to strengthen India’s energy security, chemical manufacturing capacity, and overall economic resilience.
