Prime Minister to Lay Foundation Stone of India’s First Commercial-Scale Coal-to-Ammonium Nitrate Project in Odisha

India's first commercial-scale Coal-to-Ammonium Nitrate plant was launched at Lakhanpur in Jharsuguda district, Odisha, with an estimated project outlay of ₹...

What Happened

India's first commercial-scale Coal-to-Ammonium Nitrate plant was launched at Lakhanpur in Jharsuguda district, Odisha, with an estimated project outlay of ₹25,016 crore.
The project is being developed by Bharat Coal Gasification and Chemicals Limited (BCGCL), a joint venture between Coal India Limited (51%) and Bharat Heavy Electricals Limited (BHEL) (49%), with Mahanadi Coalfields Limited (MCL) leasing approximately 350 acres of land.
The plant will use BHEL's indigenously developed Pressurised Fluidised Bed Gasification (PFBG) technology to convert high-ash Indian coal into syngas, which is then processed into ammonium nitrate at a capacity of 2,000 tonnes per day (TPD).
The facility is a flagship initiative under the National Coal Gasification Mission, which targets gasification of 100 million tonnes (MT) of coal by 2030. The Cabinet has approved ₹8,500 crore as incentive support for coal gasification promotion.

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Coal Gasification Technology: PFBG

Gasification is a thermo-chemical process that converts carbon-containing material (coal, biomass) into syngas — primarily a mixture of hydrogen (H₂) and carbon monoxide (CO) — through partial oxidation with steam and oxygen at high temperature and pressure. Unlike combustion, which burns the feedstock, gasification keeps the reaction sub-stoichiometric (below the oxygen level needed for full combustion), producing a usable fuel gas rather than flue gases.

BHEL's Pressurised Fluidised Bed Gasification (PFBG) technology is designed specifically for Indian coal, which has high ash content (30–45%), a characteristic that causes blockages and efficiency losses in conventional fixed-bed gasifiers designed for low-ash coal. PFBG fluidises the coal particles in a pressurised reactor, allowing uniform reaction and easier handling of high-ash residue.

Syngas constituents: H₂, CO, CO₂, and smaller amounts of methane and water vapour
Downstream process: Syngas is cleaned, shifted (water-gas shift reaction converts CO + H₂O → CO₂ + H₂), then combined with nitrogen (from air separation) to produce ammonia (Haber-Bosch process), which is further reacted with nitric acid to make Ammonium Nitrate (AN)
LSTK-1 and LSTK-2 contracts: awarded to BHEL; LSTK-3 and LSTK-4: awarded to Larsen & Toubro
Atmanirbhar Bharat dimension: First commercial deployment of India-developed gasification technology, avoiding royalty payments and technology dependence on foreign licensors

Connection to this news: The Lakhanpur plant is the first project to deploy this indigenous PFBG technology at commercial scale — a proof-of-concept that could unlock replication across India's vast non-coking coal belt.

Ammonium Nitrate: Strategic Importance

Ammonium Nitrate (NH₄NO₃) is a dual-use chemical with two major applications: as an industrial explosive (in the form of ANFO — Ammonium Nitrate Fuel Oil) critical to mining, quarrying, and infrastructure construction; and as a nitrogen-rich fertilizer. India currently imports approximately 600,000 tonnes per year of ammonium nitrate, primarily to supply Coal India subsidiaries and other mining operators, making it a strategic import dependency.

India's mining sector (coal, iron ore, limestone) is a primary consumer of ANFO-type explosives
AN is regulated under the Explosives Act, 1884 and the Ammonium Nitrate Rules, 2012 due to its dual-use nature
The Beirut port explosion (2020) involving ~2,750 tonnes of AN underscored the need for domestic regulated production rather than imported bulk storage
Domestic production reduces foreign exchange outgo and insulates mining operations from global supply chain disruptions

Connection to this news: The Lakhanpur plant, at 2,000 TPD capacity (~730,000 tonnes/year), is sized to more than offset India's current annual ammonium nitrate import requirement — making it a transformative import-substitution project.

National Coal Gasification Mission and India's Coal Resources

India holds the world's fourth-largest coal reserves (estimated at ~361 billion tonnes), but most are non-coking, high-ash varieties unsuitable for direct steelmaking and inefficient for conventional power generation via older technologies. The National Coal Gasification Mission (NCGM), launched in 2022, aims to convert 100 MT of coal into syngas annually by 2030, unlocking the feedstock value of coal without direct combustion, thereby reducing emissions intensity per unit of output.

NCGM is backed by ₹8,500 crore Cabinet-approved incentive support
Seven projects finalised under the mission so far; three have commenced foundation work
MCL (Mahanadi Coalfields, a Coal India subsidiary) operates in Odisha's coal-bearing districts: Jharsuguda, Talcher, Ib Valley coalfields
Odisha's position as a coal-producing state makes it geographically optimal — feedstock sourced proximally reduces logistics cost
Coal Bearing Areas (Acquisition and Development) Act amendments now permit CBA land to be used for gasification, removing a key legal barrier

Connection to this news: The Lakhanpur project directly operationalises the NCGM's commercial-scale ambition and demonstrates that coal-state geography, indigenous technology, and policy support can converge for import substitution.

Key Facts & Data

Project cost: ₹25,016 crore (total initiative); BCGCL equity project cost ~₹11,782 crore
Capacity: 2,000 TPD ammonium nitrate (~730,000 tonnes/year)
Location: Lakhanpur, Jharsuguda district, Odisha — proximity to MCL's operating coalfields
Technology: Pressurised Fluidised Bed Gasification (PFBG) — indigenously developed by BHEL
JV structure: Coal India Ltd (51%) + BHEL (49%) = BCGCL
Land lessor: Mahanadi Coalfields Limited (MCL), ~350 acres
EPC contractors: BHEL (LSTK-1 & 2), Larsen & Toubro (LSTK-3 & 4)
Government incentive: ₹1,350 crore in direct financial assistance + ₹8,500 crore total NCGM Cabinet outlay
India's annual AN import: ~600,000 tonnes/year; this plant will more than substitute that volume
NCGM target: 100 MT coal gasification by 2030; 7 projects finalised, 3 underway
India's coal reserves: 4th largest globally (~361 billion tonnes); predominantly non-coking, high-ash