THEBUSINESSBYTES BUREAU

NEW DELHI, APRIL 2, 2026

In a landmark move strengthening India’s industrial self-reliance agenda, Mahanadi Coalfields Limited (MCL) and Bharat Coal Gasification and Chemicals Limited (BCGCL) have signed a land leasing agreement for the country’s first indigenous Coal-to-Ammonium Nitrate project. The facility will be set up at Lakhanpur in Jharsuguda, marking a significant milestone in India’s journey towards advanced coal utilisation and import substitution.

The state-of-the-art plant will produce 2,000 tonnes per day of ammonium nitrate using indigenous technology developed by Bharat Heavy Electricals Limited (BHEL). Spread across 350 acres of MCL land, the project underscores India’s strategic push to leverage domestic resources for high-value industrial outputs, while reducing reliance on imported technologies.

The initiative has been facilitated by progressive reforms introduced by the Ministry of Coal, enabling the utilisation of Coal Bearing Area land for gasification projects. In a major boost, the ministry has extended financial support of ₹1,350 crore under its incentive scheme, reinforcing the government’s commitment to promoting coal gasification and downstream chemical industries.

Key lump-sum turnkey contracts have already been awarded, with BHEL entrusted with LSTK-1 and LSTK-2 packages, while Larsen & Toubro (L&T) will execute LSTK-3 and LSTK-4. Site development activities, including boundary wall construction and tree enumeration, are currently underway to ensure timely execution of the project.

Union Minister for Coal and Mines G. Kishan Reddy, who was present at the signing ceremony in New Delhi, emphasised that the project aligns with the Prime Minister’s vision of Atmanirbhar Bharat. He highlighted that the Cabinet has already approved ₹8,500 crore to promote coal gasification initiatives, with seven projects finalised and three progressing into the foundation stage.

With an investment commitment of ₹25,000 crore under the MCL–BCGCL partnership, the Jharsuguda project is expected to catalyse diversification within India’s coal sector, enhance domestic technological capabilities, and strengthen the country’s long-term industrial resilience and economic growth trajectory.