MCL, BCGCL sign land agreement for coal gasification project

Bhubaneswar: Mahanadi Coalfields Limited and Bharat Coal Gasification and Chemicals Limited have signed a land lease agreement for a 2,000-tonnes per day coal-to-ammonium nitrate project at Lakhanpur in Jharsuguda district, marking a significant step in India’s coal gasification roadmap.

The agreement was signed in New Delhi on Wednesday in the presence of Union coal and mines minister G Kishan Reddy. According to an MCL statement issued on Thursday, the project will be India’s first coal gasification venture to use indigenous technology developed by Bharat Heavy Electricals Limited. The use of homegrown technology is expected to reduce dependence on imported systems in the energy and chemical sectors.





The project will come up on 350 acres and has received support of Rs 1,350 crore. Officials said it is a major step towards Atmanirbhar Bharat and will strengthen India’s coal-based chemical value chain.

Official sources said recent reforms allow land in coal-bearing areas to be used for coal gasification projects, enabling coal resources to be converted into value-added products and supporting diversification of the sector.

Work on the project has already gathered pace. Two major contracts have been awarded to BHEL and two others to Larsen & Toubro. Site development activities, including construction of the boundary wall and tree enumeration, are progressing simultaneously to keep the project on schedule, the MCL statement said.

Reddy stressed the need to move beyond the conventional use of coal through large-scale adoption of coal gasification. The Centre has approved an outlay of Rs 8,500 crore to promote coal gasification. Seven projects have already been finalised, including three where groundbreaking ceremonies have been completed, he added.

Describing the Lakhanpur project as a key industrial initiative, MCL said it reflects India’s progress in technology and policy reforms while advancing self-reliance and contributing to long-term industrial growth and economic resilience.