BCGCL and MCL sign landmark land leasing agreement for Coal to Ammonium Nitrate Project
1st April 2026
In a major step towards advancing India`s coal gasification roadmap, a landmark land leasing agreement was signed between Bharat Coal Gasification and Chemicals Limited (BCGCL) and Mahanadi Coalfields Limited (MCL) for the upcoming Coal to Ammonium Nitrate Project at Lakhanpur, Odisha
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 Rs 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
Union Minister of Coal & Mines has highlighted that India is endowed with abundant coal reserves, and 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 Rs 8,500 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 Rs 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 Minister asserted that coal gasification will be a game-changer, with the potential to significantly reduce import dependency and conserve valuable foreign exchange. He emphasised the need to adopt the best global technologies while simultaneously strengthening indigenous capabilities, assuring full Government support. Emphasising a whole-of-government approach, he highlighted the coordinated role of Ministries including MoEF&CC, Ministry of Heavy Industries, and Ministry of Commerce, and urged industry, investors, and stakeholders to actively participate
Read: