New Delhi: A landmark land leasing agreement was signed between Bharat Coal Gasification and Chemicals Limited (BCGCL) and Mahanadi Coalfields Limited (MCL) on Wednesday for a coal-to-ammonium nitrate project at Lakhanpur in Odisha, marking a key step in advancing India’s coal gasification roadmap.
The agreement was signed in the presence of Union Minister for Coal and Mines G. Kishan Reddy, who said the project aligns with the government’s push towards self-reliance and technological advancement in the energy and chemical sectors.
Officials said the project will have a capacity of 2,000 tonnes per day of ammonium nitrate and will be India’s first coal gasification initiative to deploy indigenous technology developed by Bharat Heavy Electricals Limited.
Spread over around 350 acres under MCL, the project has been enabled by recent policy reforms that allow the use of coal-bearing area land for gasification projects. Authorities said these reforms aim to promote value-added utilisation of domestic coal resources and diversify the sector, the Ministry of Coal said in a release.
The Ministry of Coal has extended financial support of Rs 1,350 crore under its incentive scheme to promote coal gasification. Officials said major turnkey packages have been awarded to BHEL and Larsen & Toubro, while site development works are progressing.
Addressing the event, Minister Reddy said the government is taking focused steps to transform the coal sector in line with the vision of Atmanirbhar Bharat. He noted that India has abundant coal reserves and stressed the need to utilise them beyond conventional use through large-scale gasification.
He said the Cabinet has approved an outlay of Rs 8,500 crore to promote coal gasification and added that several projects have already been finalised. He described the Lakhanpur project, with an estimated investment of Rs 25,000 crore, as a significant step and the first indigenous project of BCGCL.
The minister further said coal gasification has the potential to reduce import dependence and conserve foreign exchange. He added that the government will support the adoption of advanced technologies while strengthening domestic capabilities and called for the timely implementation of the project.
Coal Secretary Vikram Dev Dutt said the agreement marks a major milestone and stressed the need to accelerate efforts towards self-reliance in the current global scenario. He noted that key clearances and processes are at advanced stages and urged stakeholders to ensure coordination for timely execution.
On the occasion, the minister also launched the official website of BCGCL to improve transparency and provide updates on project progress and tenders.
Officials said the project is expected to accelerate industrial growth and strengthen domestic capabilities amid global supply uncertainties. They added that the initiative supports India’s broader goal of reducing import dependence and building a resilient and future-ready economy.
