New Delhi: In a major step to advance coal gasification, Bharat Coal Gasification and Chemicals Ltd (BCGCL) and Mahanadi Coalfields Ltd (MCL) have signed a land leasing agreement for a coal-to-ammonium nitrate project in Lakhanpur, Odisha. The Coal Ministry said the project “marks a historic breakthrough as India’s first coal gasification project to deploy indigenously developed gasification technology by Bharat Heavy Electricals Limited (BHEL).”
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The facility is planned as a 2,000 tonnes per day ammonium nitrate plant and will be developed over about 350 acres of land under MCL.
Coal and Mines Minister G Kishan Reddy described the agreement as part of India’s push towards self-reliance. “Strengthening India’s journey towards Atmanirbhar Bharat… a landmark land leasing agreement was signed between BCGCL & MCL… for the Coal to Ammonium Nitrate Project in Lakhanpur, Odisha,” he said in a post on X.
He added, “This marks a major boost to coal gasification, with the added advantage of technology developed by Bharat Heavy Electricals Limited (BHEL).” Highlighting the scale, the minister said the “Rs 25,000 crore investment… will reduce import dependence and enhance value addition to our coal resources.”
The ministry said the project has been enabled by reforms allowing the use of Coal Bearing Area land for gasification projects, opening up new avenues for value-added use of domestic coal.
It added that financial support of Rs 1,350 crore has been extended under the government’s coal gasification incentive scheme, while key engineering and construction packages have already been awarded.
Reddy noted that the Cabinet has approved an outlay of Rs 8,500 crore to promote coal gasification, with multiple projects already under implementation.
Coal gasification converts coal into chemicals and fuels such as ammonium nitrate, reducing dependence on imported feedstock used in sectors like fertilisers and explosives.
The ministry said the project “reflects a decisive shift towards indigenous innovation… and reduced dependence on imported technologies,” while also strengthening diversification of the coal sector.
Secretary, Coal, Vikram Dev Dutt called the agreement “a landmark milestone in advancing coal gasification in the country,” adding that the project could serve as a model for indigenous development.
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The ministry said groundwork activities, including site development, are already in progress, with multiple contracts awarded and clearances at advanced stages.
On the sidelines of the event, the minister also launched BCGCL’s official website, which he said will “enhance transparency, accessibility, and stakeholder engagement.”