Coal India Limited (CIL) has taken a significant step towards diversifying its operations by formalising its coal gasification and coal-to-chemical plans. This marks a major development in a sector that has seen inter-ministerial debates for decades. CIL has partnered with Bharat Heavy Electricals Limited (BHEL) to establish Bharat Coal Gasification and Chemicals Limited (BCGCL), with the aim of producing approximately 660,000 tonnes of ammonium nitrate annually from its coal mines.
The total project cost is estimated at around Rs 11,782 crore, with Rs 1,350 crore allocated for the preparation of a detailed feasibility report (DFR). In May 2024, CIL and BHEL established BCGCL as a joint venture, with CIL holding a 51% stake and BHEL holding 49%. The chairman and managing director of CIL, in a recent interaction, stated that the joint venture aims to engage in coal gasification to produce syn-gas, ammonia, and nitric acid as intermediate products, with ammonium nitrate (AN) as the end product. These products will be utilised in CIL’s mining and production chain, with surplus products sold in the open market.
“AN is a major ingredient in manufacturing bulk explosives, which CIL uses in large quantities in its open-cast mining operations. The plant will be located in the Lakhanpur area of Mahanadi Coalfields (MCL), Odisha, producing 2,000 tonnes of AN per day, amounting to an annual production of 660,000 tonnes. The required 1.3 million tonnes of coal will be supplied by CIL from MCL,” said an official. The Vasundhara coal mine of MCL is one of the identified mines for the project. Approximately 350 acres of land in the Lakhanpur area under the MCL zone in Jharsuguda district have been earmarked for the project.
The project will be executed in four stages, with BHEL receiving the tender for coal gasification, air separation unit (ASU), ash handling plant (AHP), steam generation plant (SGP), coal handling plant (CHP), and cooling towers on a nomination basis. Additionally, BCGCL has floated a second tender for the ‘coal to ammonium nitrate’ project, which will be executed on a lump sum turnkey (LSTK) basis. Further stages of the project will be executed through additional tenders, covering purification of raw gas, production of carbon monoxide, synthesis of ammonia, and storage of liquid nitrogen. The final stage will focus on the production of nitric acid and ammonium nitrate.
CIL also has another joint venture with Gail for setting up a coal-to-SNG project at the Sonepur Bazari area of Eastern Coalfields (ECL) in the Burdwan district of West Bengal. This project underscores CIL’s strategic shift towards integrating coal gasification technologies, aiming to enhance value creation from its coal reserves while contributing to India’s sustainable industrial growth.
