In a landmark move aimed at boosting India’s energy security and industrial self-reliance, Prime Minister Narendra Modi will lay the foundation stone of the country’s first commercial-scale coal-to-ammonium nitrate project at Lakhanpur in Odisha’s Jharsuguda district on June 20.
The ambitious ₹25,016-crore project is being seen as a major milestone in India’s coal gasification mission and a strategic step toward reducing dependence on imported industrial feedstocks.
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India’s First Commercial Coal-to-Ammonium Nitrate Facility
The Lakhanpur project will be the first in India to commercially convert coal into ammonium nitrate at scale, using advanced coal gasification technology.
It 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 plant is designed to produce 2,000 tonnes of ammonium nitrate per day using indigenously developed gasification technology by BHEL.
Strategic Push for Coal Gasification
Coal gasification has emerged as a key pillar of India’s energy and industrial strategy. The process converts coal into synthesis gas (syngas), which can be used to manufacture high-value products such as methanol, urea, ammonium nitrate, synthetic natural gas and other chemical feedstocks.
The technology is expected to help India maximize value from its vast domestic coal reserves while reducing dependence on imported raw materials.
India currently imports end-use and intermediate chemical products worth nearly ₹2.7 lakh crore annually.
Massive Investment and Employment Potential
The Government of India has approved incentive schemes worth up to ₹46,000 crore to promote surface coal and lignite gasification projects across the country.
Officials estimate the broader coal gasification initiative could attract investments between ₹2.5 lakh crore and ₹3 lakh crore across nearly 25 projects in coal-bearing regions.
The initiative is also expected to create around 50,000 direct and indirect jobs.
Lakhanpur Project Gets Clearances, Work to Begin Soon
A land-leasing agreement for the Lakhanpur project was signed in April between BCGCL and Mahanadi Coalfields Limited (MCL), a subsidiary of Coal India.
The project will be set up over approximately 350 acres of MCL land and has already received the necessary approvals.
The Union Ministry of Coal is extending financial support of ₹1,350 crore under its coal gasification incentive scheme.
Construction work is expected to begin immediately after the foundation ceremony.
Key Step Towards Aatmanirbhar Bharat
Officials say the Lakhanpur plant will serve as a model for future coal gasification ventures and strengthen India’s long-term industrial ecosystem.
The project aligns with the Centre’s broader vision of Aatmanirbhar Bharat and Viksit Bharat by promoting clean coal technologies, import substitution and strategic manufacturing.
With India possessing the world’s fifth-largest coal reserves, the initiative is expected to unlock significant economic value while enhancing national energy and chemical security.
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