Prime Minister Shri Narendra Modi will lay the foundation stone for India's first commercial-scale coal-to-ammonium nitrate project on June 20, 2026, in Lakhanpur, Jharsuguda district, Odisha. The Rs 25,016 crore project represents a major step in India's energy security strategy and import substitution efforts, utilizing the country's fifth-largest global coal reserves of over 400 billion tonnes.
Project Details and Technology
The project 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). It will employ indigenously developed coal gasification technology from BHEL to produce 2,000 tonnes per day of ammonium nitrate. The facility will be located on approximately 350 acres of land under Mahanadi Coalfields Limited (MCL) possession, with a land-leasing agreement signed between BCGCL and MCL in April. The project has received all required clearances and work will commence after the foundation ceremony.
Government Support and Incentives
The Union Ministry of Coal has enabled the use of coal-bearing area land for such projects and is providing Rs 1,350 crore in direct support under its incentive scheme. This is part of a broader government initiative that has approved incentive schemes with a cumulative outlay of up to Rs 46,000 crore to promote Surface Coal and Lignite Gasification Projects across India. The initiative aims to accelerate the establishment of coal gasification projects nationwide and encourage domestic coal utilization for strategic industrial and chemical outputs.
Economic Impact and Strategic Importance
Coal gasification converts coal into synthesis gas (syngas), which can produce value-added products including methanol, urea, ammonium nitrate, synthetic natural gas, and other chemical feedstocks. This technology addresses India's significant import dependency, as the country currently imports end-use and intermediate chemical products worth approximately Rs 2.7 lakh crore annually. The coal gasification promotion initiative is expected to catalyze investments of Rs 2.5 to 3 lakh crore and create approximately 50,000 direct and indirect employment opportunities across 25 projects in coal-bearing regions.
The Lakhanpur project serves as a model for future coal gasification ventures and supports India's vision of becoming a self-reliant manufacturing and industrial powerhouse under the Aatmanirbhar Bharat initiative. It demonstrates the government's commitment to promoting clean coal technologies and maximizing value from domestic resources while building a resilient industrial ecosystem.