New Delhi: In a major boost to India’s energy security, industrial self-reliance, and import substitution efforts, 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, 2026.
The project, with an investment of ₹25,016 crore, marks a significant milestone in India’s coal gasification roadmap and is expected to strengthen domestic manufacturing capabilities through advanced utilization of indigenous coal resources.
The coal-to-ammonium nitrate project represents a key step in India’s broader strategy to leverage its vast coal reserves for the production of high-value industrial and chemical products.
Coal gasification is increasingly emerging as a critical pillar in the country’s efforts to enhance energy security, reduce dependence on imported feedstocks, and support downstream industrial development.
Coal gasification converts coal into synthesis gas (syngas), which can be used to manufacture a range of value-added products including methanol, urea, ammonium nitrate, synthetic natural gas, and other chemical feedstocks.
The process has the potential to drive industrial growth, reduce import dependency on critical raw materials, and strengthen India’s energy and economic resilience.
India is currently the world’s second-largest producer and consumer of coal, while Coal India Limited (CIL) remains the largest coal-producing company globally.
The country possesses the world’s fifth-largest coal reserves, estimated at over 400 billion tonnes. The Government believes that strategic deployment of coal gasification technologies can transform the industrial landscape while maximizing value from domestic resources.
Recognizing the potential of this sector, the Government of India has approved incentive schemes with a cumulative outlay of up to ₹46,000 crore to promote Surface Coal and Lignite Gasification Projects nationwide.
These initiatives aim to accelerate the establishment of coal gasification facilities, encourage the utilization of domestic coal for industrial and chemical outputs, and reduce reliance on imports of natural gas, methanol, ammonia, and other essential feedstocks.
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India currently imports end-use and intermediate chemical products worth nearly ₹2.7 lakh crore annually. The Government views coal gasification as a strategic opportunity to lower import dependence, generate significant foreign exchange savings, strengthen domestic manufacturing, and support long-term economic self-reliance.
The coal gasification promotion initiative is expected to attract investments ranging between ₹2.5 lakh crore and ₹3 lakh crore and generate approximately 50,000 direct and indirect employment opportunities across 25 projects located in coal-bearing regions.
The Lakhanpur coal-to-ammonium nitrate project stands out as a landmark development in this national initiative.
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 facility will produce 2,000 tonnes per day of ammonium nitrate using indigenously developed coal gasification technology created by BHEL.
The project is expected to demonstrate the commercial viability of large-scale coal-to-ammonium nitrate production in India and pave the way for future investments in the sector.
In April 2026, a land-leasing agreement was signed between BCGCL and Mahanadi Coalfields Limited (MCL), a subsidiary of Coal India Limited.
The project will be established on approximately 350 acres of land under MCL possession. It has already secured the required clearances, and construction activities are expected to commence following the foundation stone ceremony.
The Ministry of Coal has facilitated the use of coal-bearing area land for such projects and is extending financial support of ₹1,350 crore under its incentive scheme.
This support is intended to accelerate the development of strategic coal gasification infrastructure and encourage wider adoption of indigenous technologies.
Officials believe the Lakhanpur coal-to-ammonium nitrate project will serve as a model for future coal gasification ventures across the country.
It is expected to contribute significantly to India’s vision of becoming a self-reliant manufacturing and industrial powerhouse while promoting cleaner coal utilization technologies.
The foundation stone laying ceremony for the Lakhanpur project underscores the Government’s commitment to maximizing value from domestic coal resources, promoting clean coal technologies, reducing import dependence, and building a resilient industrial ecosystem aligned with the vision of Aatmanirbhar Bharat.
