Coal India and AMNS India to assess coal gasification and CCUS project at Paradip
Coal India and ArcelorMittal Nippon Steel India have signed a non-binding MoU to study the use of synthetic gas at AMNS India’s Paradip pellet plant. The proposed coal gasification facility would be developed by Coal India and coupled with carbon capture, utilisation and storage.
Companies begin feasibility assessment
Coal India Ltd and ArcelorMittal Nippon Steel India Pvt Ltd have signed a non-binding memorandum of understanding to explore the use of synthetic gas from a proposed coal gasification facility at or adjacent to AMNS India’s pellet plant in Paradip.
The agreement was executed on 12 August 2026, Zee Business reported, citing Coal India’s stock exchange filing. Coal India would develop the proposed facility and couple it with carbon capture, utilisation and storage, or CCUS.
The initial work will assess the project’s technical and commercial viability as well as possible implementation arrangements. The companies will also facilitate the preparation of a Preliminary Feasibility Report. Neither party has committed to building the facility, and the initiative remains at the feasibility stage.
Syn-gas could provide an industrial feedstock
Coal gasification converts coal into synthetic gas, commonly called syn-gas. The resulting gas can serve as feedstock for chemicals, fuels and other industrial products. The MoU will examine its utilisation at AMNS India’s Paradip pellet operation, although the filing did not disclose the planned capacity, investment, construction schedule or expected syn-gas volumes.
The proposed addition of CCUS gives the study an emissions-management component. The source material does not specify the amount of carbon dioxide that could be captured, how the carbon would be used or stored, or the project’s anticipated effect on emissions. These issues, together with costs and technical integration, will therefore be important parts of any viability assessment.
For Coal India, the study fits its efforts to diversify the use of domestic coal through gasification. The company supplies more than 80% of India’s coal output and is the country’s largest supplier to thermal power plants. Coal accounts for roughly 70% of Indian electricity generation, making the fuel central to the country’s energy system even as heavy industry examines technologies intended to manage emissions.
Coal India balances demand and higher costs
The proposed project comes as Coal India faces lower production but continued customer demand. Its coal production declined 7.5% year on year to 169.63 million tonnes in Q1 FY27, from 183.32 million tonnes. Offtake nevertheless increased 3.5% to 197.86 million tonnes from 190.96 million tonnes, with demand particularly strong from the power sector.
Coal India reported attributable consolidated net profit of Rs 8,852 crore for the June quarter, 0.63% above Rs 8,797 crore a year earlier. Revenue increased 8% to Rs 46,255 crore, but EBITDA fell 4% to Rs 12,069 crore. The EBITDA margin narrowed to 26.09% from 29.33% as the costs of explosives, industrial diesel and other mining inputs rose.
Expenses increased 27% to Rs 3,260 crore. Explosives costs rose by an incremental Rs 244 crore, while oil and lubricant costs increased by Rs 435 crore and machinery and timber expenses by Rs 19 crore. Against that cost background, the Paradip proposal must still demonstrate both technical performance and commercial viability before the companies consider implementation.