The announcement was made by Union Coal and Mines Minister G Kishan Reddy at an event attended by Prime Minister Narendra Modi and President Droupadi Murmu.
The project marks a significant step towards strengthening India’s energy security and boosting industrial growth.
It is being seen as a major shift in India’s coal strategy, moving away from traditional power generation toward higher-value industrial use.
Project is expected to boost cleaner fuel applications, strengthen domestic energy security, and open new avenues for coal-based industrial production.
The proposed coal gasification project will convert coal into synthesis gas (syngas), which can further be used to manufacture fertilizers, chemicals, and synthetic fuels.
The government said the initiative is expected to:
- Improve domestic fertilizer output
- Cut reliance on imported raw materials
- Expand chemical and allied industries
- Increase value addition from India’s coal resources
The government expects the large-scale investment to create significant employment opportunities in the region, especially across industrial and allied sectors.
Union Minister G Kishan Reddy said the project will support local job creation while also strengthening economic activity in coal-rich areas like Jharsuguda.
In a wider push, the Centre has also earmarked ₹46,000 crore to promote coal gasification projects across the country.
Officials said the move is part of a long-term strategy to:
- Reduce dependence on coal for power generation alone
- Improve efficiency in coal usage
- Cut import reliance in fertilizers and chemical inputs
The government is positioning coal gasification as a cleaner and more value-added way of utilising India’s domestic coal reserves.
Coal gasification is a process that converts coal into synthesis gas (syngas), a mixture of hydrogen, carbon monoxide, and other gases. This syngas can be used to produce:
- Fertilizers
- Chemicals
- Synthetic fuels
- Industrial raw materials
Experts consider it a key technology for unlocking the full value of India’s coal reserves while enabling industrial diversification.
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