June 22, 2026 - India has begun work on a major coal gasification project in Odisha aimed at producing ammonium nitrate from domestic coal resources. On 20 June 2026, President Droupadi Murmu and Prime Minister Narendra Modi virtually laid the foundation stone for the Bharat Coal Gasification and Chemicals Limited (BCGCL) facility in Lakhanpur, Jharsuguda district. The initiative is intended to strengthen energy security, promote indigenous industrial technology and expand the value-added use of the country’s coal reserves.

According to an official announcement from the Government of India, the project aligns with national efforts to advance coal gasification technologies and convert coal into higher-value chemical products. It also supports broader policy initiatives led by the Ministry of Coal to modernise the sector and improve resource efficiency.

Joint Venture Between Coal India and BHEL

BCGCL is a joint venture between Coal India Limited (CIL) and Bharat Heavy Electricals Limited (BHEL). CIL holds a 51% stake, while BHEL owns the remaining 49%. The project will be developed on approximately 350 acres of coal-bearing land provided by Mahanadi Coalfields Limited (MCL), a subsidiary of Coal India, located in Lakhanpur in Odisha’s Jharsuguda district.

MCL will also supply the coal required for the facility, including 0.79 million tonnes per year of washed coal and 1.19 million tonnes per year of coal rejects from its Ib Valley washery. These inputs will support the gasification process used to produce chemical feedstock.

Advancing Indigenous Coal Gasification Technology

The plant is designed to produce around 0.66 million tonnes per year of technical-grade ammonium nitrate through coal gasification. It will deploy domestically developed Pressurised Fluidised Bed Gasification (PFBG) technology, representing one of India’s leading commercial efforts to apply indigenous gasification systems at scale.

The project forms part of the government’s National Coal Gasification Mission, which seeks to expand the use of coal in chemical manufacturing and reduce dependence on imported feedstocks. Previous policy initiatives, including efforts to promote coal and lignite gasification projects, have aimed to encourage investment and technological development in this area.

Investment, Approvals and Project Timeline

The facility is expected to involve an investment of more than INR 25,000 crore. It has received single-window clearance from the Odisha government’s High-Level Clearance Authority and financial support of INR 1,350 crore from the Ministry of Coal to accelerate the commercialisation of domestic gasification technology.

All major statutory and environmental approvals have been secured, financing has been arranged, and turnkey execution packages have been awarded. The project is scheduled to become operational by September 2029.

Regional Development and Industrial Impact

Officials expect the project to support economic activity in the Jharsuguda region by creating employment opportunities, encouraging skills development and stimulating ancillary industries. The initiative also reflects wider government efforts to modernise the coal sector, including digital initiatives such as a smart dashboard designed to transform coal supply chain management.

By demonstrating the viability of converting domestic coal resources into high-value chemical products, the BCGCL facility is intended to serve as a reference project for future coal-to-chemicals developments across India.