New Delhi, April 2: In a major step towards advancing India’s coal gasification roadmap, a land leasing agreement was signed between Mahanadi Coalfields Limited (MCL) and Bharat Coal Gasification and Chemicals Limited (BCGCL) for the upcoming coal to ammonium nitrate project at Lakhanpur in Odisha.
The signing ceremony was held in New Delhi in the presence of the Union Minister of Coal and Mines G Kishan Reddy.
The project, envisaged as a coal to 2000 TPD ammonium nitrate facility, marks a historic breakthrough as India’s first coal gasification project to deploy indigenously developed gasification technology by Bharat Heavy Electricals Limited (BHEL). It reflects a decisive shift towards indigenous innovation, technological advancement, and reduced dependence on imported technologies in the energy and chemical sectors.
Spread over approximately 350 acres of land under the possession of MCL, the project has been enabled through recent progressive policy reforms of the Ministry of Coal. These reforms enable the utilisation of Coal Bearing Area (CBA) land for coal gasification projects, unlocking new pathways for value-added utilisation of India’s abundant coal resources and strengthening the sector’s diversification.
Reinforcing its commitment to promoting coal gasification, the Ministry of Coal has extended financial support of ₹1,350 crore under its dedicated financial incentives scheme. The project is already witnessing strong momentum on the ground, with major LSTK (Lump Sum Turnkey) packages, LSTK-1 and LSTK-2, having been awarded to BHEL, while LSTK-3 and LSTK-4 have been awarded to Larsen & Toubro. Simultaneously, site development works, including boundary wall construction and tree enumeration, are progressing in parallel, ensuring adherence to timelines.
Addressing the gathering at the signing ceremony of the land lease agreement, G. Kishan Reddy emphasised that, in line with the Prime Minister’s vision of Atmanirbhar Bharat, the government is driving focused initiatives to transform the coal sector.
Highlighting that India is endowed with abundant coal reserves, he underscored the imperative to harness this resource beyond conventional use through large-scale adoption of coal gasification.
He informed that the Cabinet has approved an outlay of ₹8500 crore to promote coal gasification, with 7 projects already finalized, including 3 where bhoomi pujan has been completed. Describing the land lease agreement between MCL and BCGCL, with an investment of about ₹25,000 crore, as a significant step forward, he noted that it marks the first indigenous project of BCGCL and reflects the growing momentum in this sector.
The signing of this lease agreement is expected to significantly accelerate project execution and ensure timely completion within the stipulated schedule. The coal to ammonium nitrate project at Lakhanpur is an important industrial initiative that reflects India’s progress in technology, policy reforms, and efforts towards achieving self-reliance, while contributing to the nation’s long-term industrial growth and economic resilience.
