Reliance Plans ₹2.73 Lakh Cr Investment In Underground Coal Gasification Complex In Andhra

Reliance Industries Ltd (RIL) has proposed an investment of around ₹2.73 lakh crore over 30 years to develop what could become India’s first integrated Underground Coal Gasification (UCG) complex in Andhra Pradesh’s Eluru district.

The Economic Times (ET) reported the development stating that the proposed investment, however, will depend on the commercial viability of the project following exploration activities.

RIL recently secured the Chintalapudi and Recherla coal blocks through an e-auction conducted by the Ministry of Coal.

According to the company’s proposal submitted to the Andhra Pradesh government, RIL plans to begin exploration during the current financial year.

The initial exploration and pilot stage, scheduled from the third quarter of 2026 to the fourth quarter of 2027, could involve an investment of up to ₹3,000 crore, as per ET.

If the exploration programme proves successful, the company has proposed investing ₹1.20 lakh crore during the development phase between 2028 and 2030. A further ₹1.50 lakh crore has been earmarked for the production phase from 2030 onwards, the ET report said.

At steady-state operations, the project is estimated to generate between 3,000 and 5,000 direct jobs, along with 20,000 to 35,000 indirect and induced livelihoods across the regional supply chain.

Tapping Coal Reserves Beyond Mining

UCG is an in-situ process that converts deep underground coal into synthesis gas, or syngas, without physically extracting the coal. The technology is aimed at coal deposits that are too deep or uneconomical to mine through conventional methods.

The proposed project aligns with India’s National Coal Gasification Mission, which aims to achieve 100 MT of coal gasification by 2030. The UCG could also help reduce India’s reliance on crude imports and related exposure to global supply disruptions and price volatility.

India has estimated coal resources of around 360 billion tonnes, of which nearly 160 billion tonnes are considered too deep for commercially viable conventional mining, as per ET.

The Chintalapudi block spans around 3,000 acres and has estimated reserves of 904.94 million tonnes of G-12 grade coal. The Recherla block covers about 5,500 acres and contains an estimated 2,225.67 million tonnes of G-13 grade coal.

Together, the two blocks hold about 3,130.61 million tonnes of coal reserves, with deposits located at depths exceeding 600 metres, the report said.