Prime Minister Narendra Modi virtually laid the foundation stone for a ₹25,016-crore coal gasification project at Lakhanpur in Jharsuguda district, Odisha, on Saturday (June 20), marking a significant milestone in India's energy security strategy. The project represents the first commercial-scale coal-to-ammonium nitrate facility in India and is being developed by Bharat Coal Gasification and Chemicals Limited (BCGCL), a joint venture between Coal India Limited (CIL) and Bharat Heavy Electricals Limited (BHEL). Union Coal and Mines Minister G Kishan Reddy attended the meeting by physically remaining present at the project site, emphasizing the historic significance of this initiative. The facility will produce 2,000 tonnes per day of ammonium nitrate using indigenously developed coal gasification technology from BHEL, demonstrating India's growing capability in advanced coal utilisation technologies.
Union Minister for Coal and Mines G Kishan Reddy announced that more than 35 companies will be starting coal gasification activities in India within two months, as reported by Business Standard. The Centre is providing substantial incentives of ₹46,000 crore for coal gasification activities to encourage companies bringing technology to India to address the technology gap. The minister stated that the government is encouraging companies bringing technology to India to solve the technology gap for this purpose. This accelerated timeline reflects the government's priority in shifting towards coal gasification as a strategic approach to energy security and import substitution.
The project will be established on 350 acres of land under Mahanadi Coalfields Limited (MCL)'s possession, with a land-leasing agreement signed in April between BCGCL and Coal India subsidiary Mahanadi Coalfields Limited (MCL). MCL will meet the coal requirement for this project, supplying 0.79 Mty (Million Tonnes per Year) of washed coal and 1.19 Mty of reject from its Ib Valley washery, as reported by the coal ministry. The facility has received Single Window Clearance from the High-Level Clearance Authority (HLCA) of the Odisha government and has been granted financial incentives of ₹1,350 crore by the Ministry of Coal. The project is targeted for commissioning by September 2029 and is expected to serve as a model for future coal-to-chemicals projects across the country.
This project is aimed to produce approximately 0.66 million tonnes per annum (MTPA) of technical grade ammonium nitrate through coal gasification and represents one of India's pioneering commercial-scale initiatives utilising domestically developed pressurised fluidised bed gasification (PFBG) technology for chemical production, according to official statements. BCGCL is a joint venture company formed between Coal India Limited (CIL) and Bharat Heavy Electricals Limited (BHEL), with CIL holding 51 per cent equity and BHEL holding 49 per cent equity. The project aligns with the Centre's National Coal Gasification Mission and is expected to emerge as a flagship project demonstrating India's capability in converting coal into high-value chemical products through indigenous technology.
The coal gasification promotion initiative is expected to catalyse investments of ₹2.5-3 lakh crore and create around 50,000 direct and indirect employment opportunities across 25 projects in coal-bearing regions, according to the ministry. The ammonia produced through this project will support fertiliser manufacturing, benefiting farmers and strengthening India's agricultural self-reliance through the efficient utilisation of domestic coal resources, as highlighted by Union Minister G Kishan Reddy. India currently imports end-use and intermediate chemical products worth ₹2.7 lakh crore annually, and domestic production through coal gasification could help save foreign exchange, reduce import dependence and create new industrial value chains across fertilisers, steel, chemicals, transport and clean energy sectors. The government expects the scheme to gasify 100 million tonnes of coal by 2030.
India possesses the world's fifth-largest coal reserves, exceeding 400 billion tonnes, and is the world's second-largest producer and consumer of coal, with Coal India Ltd being the largest coal-producing company globally, according to The Hindu BusinessLine. Electricity is generated from coal in about 73 per cent of thermal power projects in the country, as highlighted by the minister. The minister emphasized that the Gevra mine in Chhattisgarh ranks among the world's largest coal mines, providing India with the resources needed to transform its industrial landscape through advanced coal utilisation technologies. India's 70 per cent electricity demand is met through coal, which contributes nearly 55 per cent of the country's energy mix, as reported by The Hindu BusinessLine. The government is firmly committed to achieving the net-zero target by 2070 through cleaner and more efficient utilisation of domestic coal resources.
