Axis Energy Secures Allocation for Underground Coal Gasification Projects in Odisha

Axis Energy has signed an Allocation Order for the underground gasification of two coal mines in Odisha. It was declared the Successful Bidder for two coal blocks, namely Tangardihi East Coal Mine and Dip Extension of Belpahar Coal Mine, both located in the Sundargarh and Jharsuguda districts of Odisha, and has executed the Coal Block Development and Production Agreement on 28th April 2026.

These mines were auctioned under the 14th Tranche of Commercial Coal Mine e-auction conducted by the Ministry of Coal. Reliance Industries Limited and Axis Energy were allotted two mines each in Andhra Pradesh and Odisha, respectively. This tranche marked the first mines to be allocated for exploring underground gasification, in line with the National Coal Gasification Mission's objective of 100 MT of coal gasification by 2030.

The issuance of Allocation Orders marks the completion of the coal block allocation process and enables the Company to proceed with the grant of the applicable Mining Lease/Prospecting Licence by the State Government.

Underground Coal Gasification (UCG) is an in-situ process that converts deep-seated coal, which is not viable for conventional mining, into synthesis gas (syngas) without physically extracting the coal. The Tangardihi East coal block, located within IB Valley, is spread across ~6,500 acres and is estimated to contain ~4,500 million tonnes of G-13 grade coal. The Dip Extension of Belpahar block, covering ~4,300 acres, holds an estimated ~2,500 million tonnes of G-10 grade coal.

UCG can unlock Odisha’s deep, otherwise unusable coal resources—over 7,000 million tonnes across these two blocks alone—and convert them into a source of energy. The projects are expected to entail an initial investment of over Rs. 30,000 crore to establish the viability of underground gasification. Under the terms of the Allocation, the bidders have the flexibility to utilise the coal blocks for conventional coal mining, coal gasification—including both surface and underground gasification—as well as coal liquefaction and export. This flexibility is aimed at encouraging investment and advancing technology in coal gasification, which remains at a nascent stage in India.

RIL has also recently announced an investment of over Rs. 2.7 lakh crore in UCG projects in the state of Andhra Pradesh.

UCG will help reduce India's dependence on crude imports, which expose the economy to price volatility, and strengthen Indian energy security by insulating it from currency and supply shocks on account of global geopolitical and maritime disruptions in West Asia and Eastern European regions.