India has taken a significant step towards strengthening its energy security and expanding the utility of its coal reserves, with the Ministry of Coal signing Coal Mine/Block Production and Development Agreements (CMDPAs) for four coal mines with embedded Underground Coal Gasification (UCG) provisions.
The agreements, inked on 28 April 2026 under the 14th round of commercial coal mining auctions, mark the first time that UCG provisions have been integrated into commercial coal mining contracts in India.
Reliance Industries Limited secured the Recherla and Chintalpudi Sector A1 coal mines, while Axis Energy Ventures India Private Limited won the Dip Extension of Belpahar and Tangardihi East coal mines. These mines are located across Andhra Pradesh and Odisha, with two fully explored and two partially explored blocks.
Underground Coal Gasification is a technology that converts coal into synthetic gas directly within the coal seam, eliminating the need for conventional mining in certain conditions. This enables extraction of energy from deep or otherwise unviable coal reserves that are difficult to access through traditional methods.
By embedding UCG provisions into these agreements, the government has created a pathway for operators to adopt advanced and more efficient methods of coal utilisation alongside conventional mining techniques. The approach is also expected to expand India’s exploitable energy base.
The syngas produced through UCG has multiple industrial applications. It can be used as a feedstock for manufacturing urea and ammonia, reducing dependence on imported fertilisers. It can also substitute imported natural gas and naphtha in the production of methanol, dimethyl ether (DME), and synthetic fuels, supporting domestic chemical and petrochemical industries.
With the signing of these four agreements, the total number of CMDPAs under commercial coal mining auctions has reached 138 mines, covering a peak rated capacity of 331.544 million tonnes per annum.
These projects are projected to generate annual revenues of approximately ₹42,980 crore and attract capital investments of around ₹48,231 crore. They are also expected to create direct and indirect employment opportunities for about 4,34,175 people.
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