New Delhi: Prime Minister Narendra Modi will lay the foundation stone for a Rs.25,016 crore Coal gasification project at Lakhanpur in Odisha’s Jharsuguda district on June 20, 2026. The project marks India’s first commercial-scale coal-to-ammonium nitrate facility. It aims to strengthen energy security and industrial self-reliance.
Bharat Coal Gasification and Chemicals Limited will build the project at Lakhanpur. Bharat Heavy Electricals Limited and Coal India Limited jointly formed the company for this purpose.
Coal gasification converts coal into synthesis gas. Industries use this gas to manufacture ammonium nitrate, methanol, urea and synthetic natural gas. Therefore, the government views the technology as a key tool for reducing import dependence.
India holds more than 400 billion tonnes of coal reserves. It is also the world’s second-largest producer and consumer of coal. As a result, policymakers see strong potential for greater domestic value addition.
The Lakhanpur facility will produce 2,000 tonnes of ammonium nitrate each day. In addition, the Union Ministry of Coal has provided Rs.1,350 crore under its incentive scheme.
Coal gasification project to drive industrial expansion
The government approved incentive schemes worth up to Rs.46,000 crore to promote coal and lignite gasification projects. These schemes encourage domestic production of critical industrial feedstocks and chemical products.
Furthermore, India imports chemical products worth nearly Rs.2.7 lakh crore every year. Officials expect the new projects to reduce these imports and save valuable foreign exchange.
The broader initiative could attract investments of Rs.2.5 lakh crore to Rs.3 lakh crore. It could also generate around 50,000 direct and indirect jobs across coal-bearing regions.
Bharat Coal Gasification and Chemicals Limited signed a land-leasing agreement with Mahanadi Coalfields Limited in April. The company plans to begin work soon after the foundation ceremony.
The government said the project would serve as a model for future ventures. It will also support Aatmanirbhar Bharat through domestic manufacturing and clean coal technologies.
