Bhubaneswar/Jharsuguda: Mahanadi Coalfields Limited (MCL) and Bharat Coal Gasification and Chemicals Limited (BCGCL) have signed a significant land leasing agreement for a Coal-to-Ammonium Nitrate project at Lakhanpur in Jharsuguda district. The ambitious project, designed as a 2000 tonnes-per-day (TPD) Ammonium Nitrate facility, marks a historic milestone as India’s first coal gasification initiative to deploy indigenously developed technology by Bharat Heavy Electricals Limited (BHEL).
This development underscores a major push toward self-reliance, innovation, and reduced dependence on imported technologies in the energy and chemical sectors. Spread across approximately 350 acres of land under MCL, the project has been made possible through progressive policy reforms introduced by the Ministry of Coal.
These reforms allow the utilisation of Coal Bearing Area (CBA) land for coal gasification projects, opening new avenues for value-added use of India’s abundant coal reserves and supporting sectoral diversification. To further promote coal gasification, the ministry has extended financial assistance of Rs 1,350 crore under its dedicated incentive scheme. The project is already gaining momentum, with major Lump Sum Turnkey (LSTK) contracts awarded— LSTK-1 and LSTK-2 to BHEL, and LSTK-3 and LSTK-4 to Larsen & Toubro. Concurrently, site development activities such as boundary wall construction and tree enumeration are progressing to ensure timely execution.
The agreement was signed in New Delhi in the presence of Union Minister for Coal and Mines, G. Kishan Reddy. He highlighted that, in line with the Prime Minister’s vision of Atmanirbhar Bharat, the government is actively transforming the coal sector through focused initiatives. Emphasising India’s vast coal reserves, Reddy stressed the importance of expanding its use beyond traditional applications through large-scale coal gasification.
The Union Minister also noted that the Cabinet has approved an outlay of Rs 8,500 crore to promote coal gasification, with seven projects already finalised, including three where foundation work has commenced. He described the Rs 25,000 crore investment in the MCL– BCGCL agreement as a major step forward, marking BCGCL’s first indigenous project and reflecting growing momentum in the sector. The signing of the lease agreement is expected to accelerate project implementation and ensure completion within the planned timeline.
The Coal-to-Ammonium Nitrate project at Lakhanpur stands as a significant industrial initiative, showcasing India’s progress in technology, policy reform, and self-reliance, while contributing to long-term industrial growth and economic resilience.
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