India’s First Commercial Coal-to-Ammonium Nitrate Project to Come Up in Odisha

Prime Minister Narendra Modi will lay the foundation stone for India’s first commercial-scale coal-to-ammonium nitrate project in Odisha on June 20, marking a major milestone in the country’s efforts to strengthen energy security, reduce import dependence, and boost domestic manufacturing.

The ₹25,016-crore project , to be established at Lakhanpur in Jharsuguda district , is being developed by Bharat Coal Gasification and Chemicals Limited (BCGCL) , a joint venture between Bharat Heavy Electricals Limited (BHEL) and Coal India Limited (CIL).

Once operational, the facility will produce 2,000 tonnes of ammonium nitrate per day using indigenously developed coal gasification technology . Ammonium nitrate is a key industrial chemical widely used in mining, infrastructure, and other sectors.

The project represents a significant step in India's push to leverage its vast domestic coal reserves for the production of value-added chemicals and industrial feedstocks. Coal gasification converts coal into synthesis gas, or syngas, which can then be used to manufacture products such as methanol, urea, ammonium nitrate, synthetic natural gas, and other chemicals.

According to the government, the initiative is expected to help reduce India's reliance on imported chemical feedstocks and contribute to the country's broader goal of achieving Aatmanirbhar Bharat . India currently imports chemical products worth approximately ₹2.7 lakh crore annually , making import substitution a key policy priority.

The project will be built on around 350 acres of land under the possession of Mahanadi Coalfields Limited (MCL). It has already secured the required clearances, and construction activities are expected to commence following the foundation stone ceremony. The Union Ministry of Coal is supporting the venture with ₹1,350 crore under its coal gasification incentive scheme.

The Lakhanpur facility is also expected to serve as a model for future coal gasification projects across the country. The government has approved incentive schemes worth up to ₹46,000 crore to promote coal and lignite gasification, with an estimated investment potential of ₹2.5-3 lakh crore and the creation of nearly 50,000 direct and indirect jobs .

Officials say the Odisha project underscores India’s commitment to clean coal technologies , industrial self-reliance, and the creation of a resilient domestic manufacturing ecosystem while maximizing value from the country's abundant coal resources.