India has taken a major step in its coal gasification roadmap with a land leasing agreement for the upcoming Coal to Ammonium Nitrate Project at Lakhanpur in Odisha. The project is being developed by Bharat Coal Gasification and Chemicals Limited (BCGCL) with Mahanadi Coalfields Limited (MCL). It is India’s first coal gasification project to use indigenously developed gasification technology by Bharat Heavy Electricals Limited (BHEL).
Project Overview
- The project is planned as a Coal to 2000 TPD Ammonium Nitrate facility.
- It will be set up over about 350 acres of land under MCL’s possession.
- The project cost is estimated at around ₹25,000 crore.
- It is expected to support domestic production of ammonium nitrate, a key industrial input.
Policy and Financial Support
- The project has been enabled by recent policy reforms of the Ministry of Coal.
- These reforms allow the use of Coal Bearing Area land for coal gasification projects.
- The Ministry of Coal has extended financial support of ₹1,350 crore under its incentive scheme.
- The Cabinet has also approved an outlay of ₹8,500 crore to promote coal gasification.
Implementation Status
- Major LSTK packages have already been awarded.
- LSTK-1 and LSTK-2 have been awarded to BHEL.
- LSTK-3 and LSTK-4 have been awarded to Larsen & Toubro.
- Site development work, including boundary wall construction and tree enumeration, is underway.
Significance for India
- The project is seen as a milestone in Atmanirbhar Bharat in the coal sector.
- It aims to reduce import dependence and conserve foreign exchange.
- It reflects a shift towards value-added use of domestic coal resources.
- The project also supports industrial diversification, technological self-reliance, and long-term economic resilience.