BCGCL and MCL Sign Agreement for Coal to Ammonium Nitrate Project
On April 1, 2026, a land leasing
agreement was signed between Bharat Coal Gasification and Chemicals Limited
(BCGCL) and Mahanadi Coalfields Limited (MCL). This agreement is for establishment
of a Coal to Ammonium Nitrate project located at Lakhanpur, Odisha. The
project is designed to produce 2,000 Tonnes Per Day (TPD) of Ammonium Nitrate
and involves an financial support by MoC of approximately 1350 crore. This
initiative uses technology developed in India by Bharat Heavy Electricals Limited
(BHEL).
Project Details and Technology
1. This project is the
first coal gasification facility in India to use technology developed by BHEL.
The use of this indigenous technology is intended to reduce the requirement for
imported technical solutions in the energy and chemical sectors.
2. The project will be
located on approximately 350 acres of land currently held by MCL. Recent policy
changes by the Ministry of Coal allow for the use of Coal Bearing Area (CBA)
land for coal gasification projects. These reforms enable the use of existing
coal-bearing land for gasification purposes.
3. Financial Support and Incentives:
Financial assistance by the
Government for Coal Gasification projects:
- The Cabinet has approved ₹8,500 crore to promote
coal gasification across the country.
- The Ministry of Coal is providing ₹1,350 crore in
financial support for this specific Lakhanpur project through its
incentive scheme.
Project Status and Implementation
1. The project is moving
forward with the awarding of Lump Sum Turnkey (LSTK) packages:
BHEL:
LSTK-1 and LSTK-2 packages is awarded.
2. Work has started on the
ground in several areas:
- Boundary wall construction and tree enumeration are
currently in progress.
- The
official website of BCGCL has been launched to provide project updates and
information on tenders.
3. The project is described as an effort to increase
the value of domestic coal resources. According to the Ministry, coal
gasification has the potential to reduce the amount of foreign exchange used
for imports by increasing domestic production capabilities.
Actionable Advice (What businesses should consider):
- Stakeholders
interested in upcoming tenders should use the newly launched BCGCL website
as a central hub for information.
- Businesses
in the coal sector should review the specific updates to the Coal Bearing
Area (CBA) land use rules to understand how these reforms might apply to
other gasification projects.
- With
site development already underway and major contracts awarded, suppliers
and service providers should track the progress of LSTK packages for
potential sub-contracting opportunities.