Coal India has executed a non-binding memorandum of understanding (MoU) with Hindustan Urvarak & Rasayan (HURL) to explore the development of a coal gasification-based urea production facility at Sindri, Jharkhand. According to the latest filing to BSE, the MoU was executed on September 29, 2026, with the collaboration specifically focusing on syngas-based urea production through coal gasification technology. This strategic partnership aims to leverage Coal India's coal mining expertise with HURL's chemical processing capabilities for fertilizer production, representing a significant stride in Coal India's long-term diversification roadmap beyond traditional coal extraction into value-added chemical and fertilizer production.
Under the MoU, the initial focus will be on examining the project's technical, commercial and execution modalities, as confirmed in the BSE filing. The collaboration will facilitate preparation of a preliminary feasibility report (PFR) for evaluating project viability. This structured approach ensures comprehensive evaluation before proceeding with detailed project planning, with the focus on syngas production from coal gasification for urea manufacturing. The project aligns with Coal India's larger diversification strategy, moving towards industrial diversification and capturing higher-margin chemical value chains while leveraging HURL's established downstream fertilizer manufacturing expertise.
The development assumes significant importance in the context of the Centre's push to promote coal gasification and reduce dependence on imported natural gas and other feedstocks for fertilizer production. As reported by Business Standard, coal gasification is considered a cleaner option compared to burning coal, enabling the use of coal's chemical properties. The National Coal Gasification Mission has set an ambitious target of achieving 100 million tonnes of coal gasification capacity by 2030, with Coal India accounting for over 80% of domestic coal production. Syngas produced from coal gasification is usable in producing synthetic natural gas (SNG), energy fuel (methanol & ethanol), ammonia for fertilizers, and petrochemicals, helping move towards self-sufficiency under Atmanirbhar Bharat Abhiyaan. India's fertilizer industry is heavily dependent on natural gas imports for urea production, making coal gasification a strategic domestic alternative utilizing India's abundant coal reserves.
Coal India operates as India's largest coal producer and a Maharatna public sector undertaking, primarily engaged in coal mining and production. According to Business Standard, the Government of India holds a 61.13% stake in the company as of June 2026. On a consolidated basis, the company reported net profit of ₹8,852.11 crore in Q1 June 2026, representing a 0.63% increase over the previous year, while net sales rose 7.77% to ₹46,254.80 crore compared to Q1 June 2025. Coal India's equity stake in HURL was restructured to 30.10% from 33.33% previously, with the joint venture contributing a maiden dividend of ₹500.24 crore (₹404.37 crore interim and ₹95.87 crore final) to Coal India in fiscal year 2025-26, compared to zero dividend income in previous years.
The announcement was made during market hours on September 29, 2026, as reported by Business Standard. Following the MoU announcement, Coal India's scrip rose 0.72% to close at ₹424.65 on the BSE, reflecting positive market sentiment towards the strategic partnership and potential expansion into new business verticals focused on cleaner coal utilization and fertilizer self-sufficiency. The MoU is non-binding and in early feasibility stages, meaning immediate financial impact is limited, but Coal India's robust dividend yield and strong cash flows from core operations support long-term capital allocation plans. Successful implementation of the Sindri coal gasification project would strengthen Coal India's non-regulated sector linkages and provide a captive domestic channel for low-grade coal utilization while reducing the country's dependence on imported urea.
