PM Modi to Lay Foundation Stone of India’s First Commercial-Scale Coal-to-Ammonium Nitrate Project in Odisha Tomorrow

In a landmark move aimed at strengthening India’s energy security, promoting import substitution, and accelerating industrial self-reliance, Prime Minister Narendra Modi will lay the foundation stone of a Rs 25,016 crore coal gasification project at Lakhanpur in Odisha’s Jharsuguda district on June 20, 2026.

The project marks a historic milestone as India’s first commercial-scale coal-to-ammonium nitrate facility and is expected to play a transformative role in the country’s efforts to maximize value from its abundant coal resources while reducing dependence on imported chemical feedstocks.

Coal gasification has emerged as a key component of India’s strategy to enhance energy security and support downstream industries. The process converts coal into synthesis gas (syngas), which can be utilized to manufacture a range of value-added products including methanol, urea, ammonium nitrate, synthetic natural gas, and other industrial chemicals.

India, the world’s second-largest producer and consumer of coal, possesses the fifth-largest coal reserves globally, estimated at over 400 billion tonnes. The Government sees coal gasification as a major opportunity to leverage these reserves for industrial growth while reducing imports of critical raw materials.

Recognizing the sector’s strategic importance, the Government of India has approved incentive schemes with a cumulative outlay of up to Rs 46,000 crore for promoting surface coal and lignite gasification projects across the country. The initiative aims to accelerate investments in coal gasification infrastructure, encourage the use of domestic coal for high-value industrial applications, and strengthen India’s manufacturing ecosystem.

According to official estimates, India currently imports end-use and intermediate chemical products worth nearly Rs 2.7 lakh crore annually. Coal gasification projects are expected to significantly reduce this import dependence, generate foreign exchange savings, and enhance domestic production capabilities.

The Government expects the coal gasification promotion initiative to attract investments of Rs 2.5 lakh crore to Rs 3 lakh crore and create nearly 50,000 direct and indirect employment opportunities through around 25 projects planned across coal-bearing regions of the country.

The Lakhanpur project is being developed by Bharat Coal Gasification and Chemicals Limited (BCGCL), a joint venture between Bharat Heavy Electricals Limited (BHEL) and Coal India Limited (CIL). The facility will produce 2,000 tonnes of ammonium nitrate per day using indigenously developed coal gasification technology designed by BHEL.

In April this year, BCGCL signed a land-leasing agreement with Mahanadi Coalfields Limited (MCL), a subsidiary of Coal India Limited. The project will be established on approximately 350 acres of land under MCL possession. Necessary approvals and clearances have already been secured, and construction activities are expected to commence immediately after the foundation stone ceremony.

The Ministry of Coal has facilitated the use of coal-bearing area land for such projects and is extending financial support of Rs 1,350 crore under its coal gasification incentive scheme.

Industry experts believe the Lakhanpur project will serve as a benchmark for future coal gasification ventures in India and accelerate the development of a domestic coal-based chemicals industry. The project also aligns with the Government’s broader vision of Aatmanirbhar Bharat by promoting indigenous technology, reducing import dependence, and creating a resilient industrial ecosystem.

The foundation stone laying ceremony is expected to signal a new chapter in India’s coal sector, with greater emphasis on value addition, clean coal technologies, and sustainable industrial growth.