New Delhi: In a significant push towards self-reliance in the energy and chemical sectors, Bharat Coal Gasification and Chemicals Limited (BCGCL) and Mahanadi Coalfields Limited (MCL) have signed a land leasing agreement for India’s pioneering Coal to Ammonium Nitrate project at Lakhanpur in Odisha.
The agreement was signed in New Delhi on Wednesday in the presence of Union Minister of Coal and Mines G Kishan Reddy.
According to an official release, the project, over around 350 acres of MCL land, has been envisaged as a 2000 tonnes per day (TPD) ammonium nitrate facility using indigenously developed coal gasification technology from Bharat Heavy Electricals Limited (BHEL). The initiative marks a historic milestone as India’s first coal gasification project to rely on domestic technology.
It further stated that the project was made possible through recent policy reforms by the Ministry of Coal that allow the use of Coal Bearing Area land for gasification projects, opening new avenues for value-added use of the country’s vast coal reserves.
The Ministry has also extended Rs 1,350 crore in financial support under its dedicated incentive scheme for coal gasification. The construction has gained momentum with major Lump Sum Turnkey (LSTK) contracts awarded to BHEL for packages 1 and 2, and to Larsen & Toubro for packages 3 and 4. Site development activitie
s, including boundary wall construction and tree enumeration, are progressing on schedule, it added.
Minister Highlights Atmanirbhar Push
Addressing the signing ceremony, Reddy stressed the project’s alignment with Prime Minister Narendra Modi’s vision of Atmanirbhar Bharat. “India is blessed with abundant coal reserves. We must now go beyond traditional uses and adopt large-scale coal gasification,” the Minister said.
He noted that the Cabinet has approved an outlay of Rs 8,500 crore to promote the sector, with seven projects already finalised, including three where ground-breaking ceremonies have been held.
Describing the Rs 25,000 crore investment as a major step forward, Reddy called the BCGCL-MCL agreement the first indigenous project for BCGCL. He described coal gasification as a potential game-changer that could sharply cut import dependence and save foreign exchange. The Minister assured full government support while urging faster implementation to meet or beat project timelines.
Focus on Indigenous Capabilities
Secretary, Ministry of Coal, Vikram Dev Dutt termed the land lease agreement a “landmark milestone” for advancing coal gasification in India. He highlighted that key enablers, including statutory clearances, Letters of Award, and tenders, are already in advanced stages, positioning the project for timely execution.
Dutt urged all stakeholders to demonstrate strong ownership and coordination to ensure the project becomes a successful model of indigenous development with competitive costs.
On the occasion, Minister Reddy also inaugurated the official website of BCGCL, aimed at improving transparency and stakeholder engagement by providing project updates and tender information in one place.