India Pioneers Underground Coal Gasification in Landmark Mine Agreements

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In a landmark milestone for India’s energy transition and self‑reliance, the Ministry of Coal has executed Coal Mine/Block Production and Development Agreements (CMDPAs) with successful bidders for four coal mines under the 14th round of commercial coal auctions. For the first time, these agreements carry embedded provisions for Underground Coal Gasification (UCG), signaling a transformative leap in how India envisions and unlocks the full value of its coal reserves.

Historic First in Commercial Coal Mining

• Reliance Industries Limited secured the Recherla and Chintalpudi Sector A1 mines in Andhra Pradesh.
• Axis Energy Ventures India Pvt. Ltd. won the Dip Extension of Belpahar and Tangardihi East mines in Odisha.
• Two mines are fully explored, while two remain partially explored, reflecting India’s push to diversify its coal resource base.

UCG – A Revolutionary Technology

Underground Coal Gasification (UCG) has been tested and deployed in several countries, with notable projects in Uzbekistan, South Africa, Australia, China, India, Russia, and Poland. These nations have either run pilot plants or integrated UCG into their energy strategies due to their large, deep coal reserves.  

• Underground Coal Gasification converts coal into synthetic gas directly within the seam, eliminating the need for conventional mining.
• Enables utilisation of deep, thin, or otherwise unworkable coal seams.
• Expands India’s exploitable energy resource base.
• Supports cleaner and more efficient energy production alongside traditional extraction.

Strategic Value Addition to Coal Economy

• Syngas from UCG can serve as domestic feedstock for fertiliser production, reducing dependence on imported urea and ammonia.
• Strengthens food security by supporting domestic agriculture inputs.
• In chemicals and petrochemicals, syngas can replace imported natural gas and naphtha.
• Enables domestic production of methanol, dimethyl ether (DME), and synthetic fuels.

Scale of India’s Commercial Coal Auctions

• With these four CMDPAs, India has now signed agreements for 138 mines.
• Collectively, they represent a peak rated capacity of 331.544 MTPA.
• Projected annual revenues: ₹42,980 crores.
• Expected capital investments: ₹48,231 crores.
• Employment generation: 4,34,175 direct and indirect jobs.

Energy Security and Global Positioning

India has future‑proofed its coal sector by embedding UCG provisions into CMDPAs, ensuring long‑term energy security while embracing frontier technologies. This positions India at the forefront of the global energy landscape, balancing domestic production with innovation in clean coal utilisation.

Underground Coal Gasification (UCG) Explained

Definition
Underground Coal Gasification (UCG) is an in‑situ process that converts coal directly into synthetic gas (syngas) within the seam itself, eliminating the need for conventional mining.

What is Underground Coal Gasification?

• Coal seams are accessed by drilling wells.
• Oxygen and steam are injected to ignite and gasify the coal underground.
• Syngas (carbon monoxide, hydrogen, methane, carbon dioxide, water vapor) is extracted through production wells.
• Syngas can be used for power generation, chemical feedstocks, fertiliser production, and synthetic fuels.

Advantages of UCG

• Accesses deep, thin, or unworkable coal seams.
• Reduces surface disturbance compared to open‑cast mining.
• Eliminates coal transport and surface gasification steps.
• Supports cleaner and more efficient energy production.

Applications of UCG

• Power generation – syngas fuels turbines or combined cycle plants.
• Fertiliser feedstock – hydrogen and ammonia precursors reduce import dependence.
• Chemical industry – enables domestic methanol, DME, and synthetic fuel production.
• Hydrogen production – alternative source for industrial hydrogen and fuel cells.

Historical Context

• Concept proposed in 1868 by Sir William Siemens.
• Developed further by Russian chemist Dmitri Mendeleyev.
• Early experiments conducted in the Soviet Union (1928–1939).
• Modern pilot projects tested in Uzbekistan, South Africa, and Australia.

Challenges & Risks

• Technical complexity – requires advanced drilling, ignition, and monitoring systems.
• Environmental risks – groundwater contamination, subsidence, uncontrolled gas migration.
• Regulatory hurdles – strict oversight needed for safety and environmental concerns.