MCL & BCGCL Sign Landmark Land Lease Pact for Coal-to-Ammonium Nitrate Project in Odisha
India’s First Indigenous Coal Gasification Project Gains Momentum at Lakhanpur
In a major boost to India’s coal gasification mission, Bharat Coal Gasification and Chemicals Limited (BCGCL) and Mahanadi Coalfields Limited (MCL) have signed a landmark land leasing agreement for a Coal-to-Ammonium Nitrate project at Lakhanpur in Odisha.
The agreement was formalised in New Delhi in the presence of Union Minister of Coal and Mines G. Kishan Reddy, marking a significant step towards transforming India’s coal sector through advanced technology and value-added utilisation.
India’s First Indigenous Coal Gasification Breakthrough
The upcoming project will establish a 2000 tonnes per day (TPD) Ammonium Nitrate facility, making it India’s first coal gasification project using indigenously developed technology by Bharat Heavy Electricals Limited (BHEL).
This milestone reflects a strong push towards:
- Indigenous innovation
- Reduced reliance on imported technologies
- Strengthening India’s energy and chemical ecosystem
Strategic Land Use and Policy Support
Spread across approximately 350 acres of MCL land, the project has been enabled by progressive reforms introduced by the Ministry of Coal. These reforms allow the utilisation of Coal Bearing Area (CBA) land for coal gasification projects—unlocking new opportunities for diversification in the coal sector.
The Government has also extended ₹1,350 crore financial support under its coal gasification incentive scheme, reinforcing its commitment to accelerating such projects.
Major Contracts Awarded, Work in Progress
The project is already progressing at a rapid pace:
- LSTK-1 and LSTK-2 packages awarded to Bharat Heavy Electricals Limited
- LSTK-3 and LSTK-4 packages awarded to Larsen & Toubro
Simultaneously, on-ground activities such as:
- Boundary wall construction
- Tree enumeration
are underway to ensure timely execution.
Government Vision: Coal Gasification as a Game-Changer
Addressing the gathering, G. Kishan Reddy highlighted that the initiative aligns with the Prime Minister’s vision of Atmanirbhar Bharat.
Key highlights from his address:
- Cabinet approval of ₹8,500 crore outlay for coal gasification
- 7 projects already finalised, with 3 undergoing bhoomi pujan
- Estimated investment of ₹25,000 crore in the BCGCL-MCL project
He emphasised that coal gasification has the potential to:
- Reduce import dependency
- Save foreign exchange
- Promote sustainable industrial growth
The Minister also stressed a whole-of-government approach, involving ministries such as:
- Environment, Forest and Climate Change
- Heavy Industries
- Commerce
The BCGCL-MCL agreement marks a turning point in India’s coal sector, signalling a transition from conventional coal usage to high-value chemical production. With strong policy backing, indigenous technology, and significant investment, the Lakhanpur project is poised to become a cornerstone of India’s clean coal and industrial transformation journey.
