India’s First Coal Gasification Project Takes Off with BCGCL-MCL Land Deal in Odisha

In a major boost to India's push for energy self-reliance and industrial transformation, a landmark land leasing agreement has been signed between Bharat Coal Gasification and Chemicals Limited (BCGCL) and Mahanadi Coalfields Limited (MCL) for a mega Coal-to-Ammonium Nitrate project at Lakhanpur, Odisha.

The agreement, signed in the presence of Union Coal and Mines Minister Shri G. Kishan Reddy, marks a critical milestone in India's coal gasification roadmap and signals a shift toward indigenous technology and value-added coal utilisation.

₹25,000 Crore Mega Project with Indigenous Technology

The upcoming project, with an estimated investment of ₹25,000 crore, will produce 2,000 tonnes per day (TPD) of Ammonium Nitrate, a key input for sectors such as mining, infrastructure, and fertilizers.

Significantly, this will be India's first coal gasification project using indigenously developed technology by BHEL (Bharat Heavy Electricals Limited)—a major step toward reducing reliance on imported technologies.

Policy Reforms Unlock Coal-Based Value Addition

The project has been enabled by recent reforms allowing the use of Coal Bearing Area (CBA) land for coal gasification projects. Spread across approximately 350 acres under MCL, the initiative demonstrates how policy innovation is unlocking new avenues for diversifying coal usage beyond traditional combustion.

To accelerate the sector, the government has also extended ₹1,350 crore in financial support under its coal gasification incentives scheme, alongside a broader ₹8,500 crore Cabinet-approved outlay to promote such projects nationwide.

Strong Execution Momentum on Ground

The project is already moving swiftly, with major engineering and construction packages awarded:

• LSTK-1 & LSTK-2: Awarded to BHEL

• LSTK-3 & LSTK-4: Awarded to Larsen & Toubro (L&T)

Simultaneously, site development works, including boundary construction and environmental assessments, are underway—ensuring adherence to timelines.

Coal Gasification: A Strategic Game-Changer

Union Minister G. Kishan Reddy emphasized that coal gasification is central to India's Atmanirbhar Bharat vision, highlighting its potential to:

• Reduce import dependency, especially for chemicals and fertilizers

• Save foreign exchange

• Enhance value addition to domestic coal reserves

He also called for fast-tracked implementation, urging stakeholders to complete the project ahead of schedule through coordinated efforts across ministries and industry.

Whole-of-Government Approach

The project reflects coordinated action across multiple ministries, including:

• Ministry of Coal

• Ministry of Environment, Forest and Climate Change (MoEF&CC)

• Ministry of Heavy Industries

• Ministry of Commerce

Coal Secretary Shri Vikram Dev Dutt described the agreement as a "landmark milestone", noting that key enablers such as statutory clearances, tenders, and approvals are already in advanced stages, positioning the project for timely execution.

Digital Push for Transparency

On the occasion, the Minister also launched the official website of BCGCL, aimed at improving transparency, stakeholder engagement, and real-time project updates.

Strengthening India's Industrial and Energy Future

The Lakhanpur project is expected to:

• Boost domestic chemical production capacity

• Strengthen industrial supply chains

• Promote sustainable and efficient use of coal resources

• Create employment and regional economic growth

In a global context marked by geopolitical uncertainties and supply chain disruptions, such initiatives are critical to building a resilient and self-reliant economy.

Towards Viksit Bharat

Aligned with the vision of Viksit Bharat, the project represents a convergence of:

• Policy reform

• Indigenous innovation

• Resource efficiency

• Sustainable industrial growth

By transforming coal from a conventional fuel into a value-added resource, India is laying the foundation for a future-ready, diversified energy and industrial ecosystem.