New Delhi: The Ministry of Coal said on Tuesday it has signed Coal Mine/Block Production and Development Agreements (CMDPAs) with successful bidders for four coal mines, marking the first instance of commercial coal blocks being auctioned with provisions for underground coal gasification (UCG).
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Describing the move as a “historic step,” the ministry said it “marks the first-ever tranche of commercial coal mines in India to carry embedded provisions for Underground Coal Gasification (UCG)” and signals “a transformative leap in how India envisions and unlocks the full value of its vast coal reserves.”
The agreements were executed under the 14th round of commercial coal mining auctions. Reliance Industries Limited (RIL) secured the Recherla and Chintalpudi Sector A1 mines, while Axis Energy Ventures India Private Limited won the Dip Extension of Belpahar and Tangardihi East coal mines.
The four mines are located across Andhra Pradesh and Odisha, with two categorised as partially explored and two as fully explored.
The ministry said UCG “represents a revolutionary approach to coal utilisation” that converts coal into synthetic gas within the seam, eliminating the need for conventional mining.
It added that the technology “unlocks energy from deep, thin, or otherwise unworkable coal seams that traditional extraction methods cannot economically access,” thereby expanding India’s usable resource base.
By embedding UCG provisions in CMDPAs, the government said it has “future-proofed these mines,” allowing operators to pursue cleaner and more efficient energy production alongside conventional mining.
The ministry said the integration of UCG aligns with efforts to enhance domestic value addition and reduce import dependence. “The syngas produced through UCG can serve as a domestic feedstock for the manufacturing of urea and ammonia, significantly reducing India’s dependence on imported fertilisers and strengthening food security,” it said.
It added that in the chemicals and petrochemicals sector, UCG-derived syngas can replace imported natural gas and naphtha, enabling domestic production of methanol, dimethyl ether (DME), and synthetic fuels.
With these four agreements, the total number of CMDPAs signed under commercial coal auctions has reached 138 mines. These mines have a combined peak rated capacity of 331.544 million tonnes per annum (MTPA), and are expected to generate annual revenues of about Rs 42,980 crore, attract investments of Rs 48,231 crore, and create employment for around 4,34,175 people, said the Coal Ministry.
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The ministry said it remains committed to boosting domestic coal production and long-term energy security through “transparent, investor-friendly auction processes,” while also “embracing frontier technologies like UCG to position India at the forefront of the global energy landscape.”