With investments of nearly Rs 50,000 crore taking shape across three large coal gasification projects, Coal India Limited is moving into downstream chemicals and cleaner fuels at scale, marking its biggest diversification beyond conventional coal mining as India looks to cut import dependence on industrial feedstock and natural gas.
Coal India Chairman and Managing Director B. Sairam told FE that the projects are being implemented in line with the government’s National Coal Gasification Mission, aimed at converting coal into value-added products while improving energy security.
Odisha gets 6.6 lakh TPA ammonium nitrate plant
The centrepiece of the push is a coal gasification-based ammonium nitrate plant of 6.6 lakh tonnes per annum at Lakhanpur in Odisha. The project is being developed through Bharat Coal Gasification and Chemicals Limited, a joint venture between Coal India and Bharat Heavy Electricals Limited.
“This is Coal India’s first commercial-scale downstream coal gasification initiative and is under progress,” Sairam said.
The plant is expected to be commissioned by FY30 and will involve an estimated investment of around Rs 25,000 crore. Ammonium Nitrate is a key raw material for bulk explosives used in mining and infrastructure projects and also feeds into fertiliser production. Domestic manufacturing through gasification is expected to reduce imports of industrial chemicals.
Alongside this, Coal India is pursuing two coal-to-synthetic natural gas (SNG) projects, each with a capacity of 633 million normal cubic metres per annum, aimed at supplying cleaner fuel to fertiliser units and industrial consumers.
One of the SNG projects is being planned at Bardhaman in West Bengal through a joint venture with GAIL under Coal Gas India Limited, with an estimated investment of Rs 13,000 crore.
The second SNG facility is planned at Chandrapur in Maharashtra with BPCL at a capital outlay of around Rs 12,200 crore.
Centre bets on coal gasification with incentives and PSUs
Coal gasification converts coal into syngas — a mixture of hydrogen, carbon monoxide and other gases — which can be processed into synthetic natural gas, fertilisers and industrial chemicals. The Centre has been actively promoting the technology through policy incentives and public sector participation as part of its broader clean energy transition strategy.
The move comes even as coal continues to form the backbone of India’s power generation. While renewable capacity is expanding rapidly, coal remains the baseload energy source, making diversification into value-added downstream products a strategic hedge for Coal India’s long-term revenue.
Industry analysts note that coal-to-chemicals and gas projects offer more stable long-term demand visibility compared with thermal power-linked coal sales, while also strengthening domestic manufacturing supply chains.
For Coal India, the gasification push represents a structural shift — from being primarily a fuel supplier to emerging as an integrated energy and chemicals producer.
If commissioned on schedule, the three mega facilities could anchor India’s coal-to-chemicals ecosystem over the next decade, reshaping how the country’s vast coal reserves are utilised while supporting energy security and industrial growth.