A landmark land leasing agreement was signed between Bharat Coal Gasification and Chemicals Limited (BCGCL) and Mahanadi Coalfields Limited (MCL) for the upcoming Coal to Ammonium Nitrate Project at Lakhanpur in Jharsuguda district of Odisha. This agreement represents a significant advancement in India’s coal gasification roadmap and was formalized in New Delhi, attended by Union Minister of Coal and Mines G Kishan Reddy.
The project aims to establish a Coal to 2000 TPD Ammonium Nitrate facility, marking a historic milestone as India’s first coal gasification initiative utilizing domestically developed gasification technology from Bharat Heavy Electricals Limited (BHEL). This reflects a notable shift towards indigenous innovation and technological progress, reducing reliance on imported technologies in the energy and chemical sectors.
Covering approximately 350 acres of land owned by MCL, the project has been facilitated by recent progressive policy reforms from the Ministry of Coal. These reforms allow the use of Coal Bearing Area (CBA) land for coal gasification projects, creating new opportunities for the value-added use of India’s abundant coal resources and enhancing sector diversification.
The Ministry of Coal has committed financial support of ₹1,350 crore under its dedicated incentives scheme to promote coal gasification. The project is already gaining momentum, with major Lump Sum Turnkey (LSTK) packages awarded to BHEL for LSTK-1 and LSTK-2, while LSTK-3 and LSTK-4 have been awarded to Larsen & Toubro. Concurrently, site development activities, including boundary wall construction and tree enumeration, are progressing on schedule.
During the signing ceremony, Union Minister G. Kishan Reddy highlighted the government’s initiatives to transform the coal sector in alignment with the Prime Minister’s vision of Atmanirbhar Bharat. He emphasized India’s rich coal reserves and the necessity to leverage this resource through large-scale coal gasification adoption.
Reddy announced that the Cabinet has approved an outlay of ₹8500 crore to promote coal gasification, with seven projects already finalized, including three that have completed bhoomi pujan. He described the land lease agreement between MCL and BCGCL, involving an investment of approximately ₹25,000 crore, as a significant advancement and the first indigenous project of BCGCL, demonstrating the sector’s growing momentum.
The Minister asserted that coal gasification could revolutionize the industry by significantly reducing import dependency and conserving foreign exchange. He stressed the importance of adopting the best global technologies while bolstering domestic capabilities and assured full government support. He called for a coordinated effort among various ministries and urged industry participants and stakeholders to engage actively, aiming for the project’s expedited implementation.
Vikram Dev Dutt, Secretary of the Ministry of Coal, described the signing of the land lease agreement as a pivotal moment for advancing coal gasification in India. He emphasized the need to fast-track efforts toward self-reliance and enhance domestic capabilities.
Dutt confirmed that all essential enablers, including statutory clearances, Letters of Award (LOAs), and tender processes, are in place and at advanced stages, ensuring the project is well-positioned for timely execution. He characterized it as a potential model for indigenous development with a competitive cost structure and urged all stakeholders to take ownership, escalate issues promptly, and ensure effective coordination among public sector undertakings for successful project implementation.
The Minister also launched the official website of BCGCL, enhancing transparency and stakeholder engagement by providing a central hub for project updates and tenders.
The signing of this lease agreement is expected to significantly expedite project execution and ensure timely completion. The Coal to Ammonium Nitrate Project at Lakhanpur represents a crucial industrial initiative reflecting India’s advancements in technology, policy reforms, and commitment to self-reliance, contributing to long-term industrial growth and economic resilience. In the current global context, characterized by shifting geopolitical dynamics and supply chain uncertainties, such initiatives are vital for strengthening domestic capabilities. The project aligns with the vision of Viksit Bharat, emphasizing innovation, resource efficiency, and sustainable industrial development, reinforcing India’s commitment to reducing import dependence and enhancing the value of its natural resources.
