India Signs First Commercial Coal Mine Deals with UCG Provisions

In a major push towards strengthening India’s energy security and technological advancement, the Ministry of Coal has signed Coal Mine and Block Production and Development Agreements with successful bidders for four coal mines. This marks the first time that commercial coal mines in India have been allocated with built-in provisions for Underground Coal Gasification, signalling a new direction in how the country plans to utilise its coal resources more efficiently.The agreements were signed under the 14th round of commercial coal mining auctions. Reliance Industries Limited secured the Recherla and Chintalpudi Sector A1 mines, while Axis Energy Ventures India Private Limited acquired the Dip Extension of Belpahar and Tangardihi East coal mines. These mines are located across Andhra Pradesh and Odisha, with two being partially explored and the other two fully explored.Underground Coal Gasification is an advanced method of coal utilisation that converts coal into synthetic gas directly within the seam, removing the need for traditional mining in certain conditions. This approach makes it possible to tap into coal reserves that are too deep, thin, or otherwise uneconomical to mine using conventional techniques, thereby expanding the usable energy base. By including UCG provisions in these agreements, the Ministry of Coal has enabled operators to explore cleaner and more efficient energy production methods alongside standard mining practices.The inclusion of UCG also highlights India’s intent to enhance value addition within the coal sector. The synthetic gas produced through this process can be used as a domestic feedstock for manufacturing urea and ammonia, helping reduce reliance on imported fertilisers and supporting food security. It can also serve as a substitute for imported natural gas and naphtha in the chemicals and petrochemicals industry, enabling the production of methanol, dimethyl ether, and synthetic fuels within the country.With the signing of these four agreements, the total number of Coal Mine and Block Production and Development Agreements under commercial coal auctions has reached 138, covering a peak rated capacity of 331.544 MTPA. These projects are expected to generate annual revenues of approximately Rs 42,980 crores, attract capital investment of around Rs 48,231 crores, and create direct and indirect employment for nearly 4,34,175 people.The Ministry of Coal continues to focus on increasing domestic production, ensuring long term energy security, and supporting economic growth through transparent and investor friendly policies, while adopting advanced technologies such as Underground Coal Gasification to strengthen India’s position in the global energy sector.



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