India is set to mark a major industrial milestone as Prime Minister Narendra Modi prepares to lay the foundation stone for the country’s first commercial-scale coal-to-ammonium nitrate project in Odisha’s Jharsuguda district. The large-scale facility, valued at approximately $3.0 billion, is designed to strengthen domestic production of key industrial chemicals while significantly reducing reliance on imports.
The upcoming plant will be developed in Lakhanpur and is expected to produce around 2,000 tonnes of ammonium nitrate daily. It will use indigenously developed coal gasification technology, which converts coal into synthesis gas. This gas can then be processed into a range of valuable industrial products, including methanol, urea, synthetic natural gas, and other chemical feedstocks essential for manufacturing and energy sectors.
The project is being executed by Bharat Coal Gasification and Chemicals Limited, a joint venture between Bharat Heavy Electricals Limited and Coal India Limited. The facility will be established on roughly 350 acres of land owned by Mahanadi Coalfields Limited, a subsidiary of Coal India. A land lease agreement between the companies was finalized earlier this year, paving the way for construction to begin following the official foundation ceremony.
To support the initiative, the Coal Ministry has provided financial backing of about $0.16 billion under its coal gasification incentive program. Additionally, the government has launched broader incentive schemes totaling up to $5.5 billion to encourage coal and lignite gasification projects across the country.
Officials estimate that India currently imports chemical products worth approximately $2.7 trillion annually in value terms, highlighting the urgency of domestic production expansion. The coal gasification strategy is expected to attract investments between $2.5 trillion and $3.0 trillion and generate nearly 50,000 direct and indirect jobs across multiple projects in coal-rich regions.
Beyond reducing import dependency, the initiative is part of a larger national effort to utilize domestic coal resources for high-value industrial applications. The project is expected to strengthen India’s energy security, boost manufacturing capabilities, and position the country as a stronger player in the global chemical production value chain over the coming years.
