UPSC Prelims Practice Questions — Prime Minister to Lay Foundation Stone of India’s First Commercial-Scale Coal-to-Ammonium Nitrate Project in Odisha

Q1. With reference to coal gasification routes being deployed in India, consider the following statements: 1. In Surface Coal Gasification (SCG), mined coal is reacted with oxidants in above-ground reactors to produce syngas, whereas Underground Coal Gasification (UCG) converts deep, otherwise unmineable coal seams into syngas in-situ. 2. The Coal-to-Ammonium Nitrate project at Lakhanpur (Odisha) is based on Underground Coal Gasification technology developed indigenously by BHEL. 3. Syngas obtained through either route can serve as a feedstock for the synthesis of ammonia and methanol. Which of the statements given above is/are correct?

1. In Surface Coal Gasification (SCG), mined coal is reacted with oxidants in above-ground reactors to produce syngas, whereas Underground Coal Gasification (UCG) converts deep, otherwise unmineable coal seams into syngas in-situ.
2. The Coal-to-Ammonium Nitrate project at Lakhanpur (Odisha) is based on Underground Coal Gasification technology developed indigenously by BHEL.
3. Syngas obtained through either route can serve as a feedstock for the synthesis of ammonia and methanol.

• A. 1 only
• B. 1 and 3 only
• C. 2 and 3 only
• D. 1, 2 and 3

Q2. With reference to the Rs 8,500 crore Financial Incentive Scheme for promoting Coal/Lignite Gasification Projects, consider the following: 1. Category I, with an outlay of Rs 4,050 crore, is reserved exclusively for Government PSUs. 2. Category II is open only to the private sector and excludes Government PSUs. 3. Category III, with an outlay of Rs 600 crore, supports demonstration projects and small-scale plants with a lump-sum grant capped at Rs 100 crore per project. 4. The scheme is administered by the Ministry of Coal, Government of India. Which of the above is/are correctly identified?

1. Category I, with an outlay of Rs 4,050 crore, is reserved exclusively for Government PSUs.
2. Category II is open only to the private sector and excludes Government PSUs.
3. Category III, with an outlay of Rs 600 crore, supports demonstration projects and small-scale plants with a lump-sum grant capped at Rs 100 crore per project.
4. The scheme is administered by the Ministry of Coal, Government of India.

• A. 1 and 3 only
• B. 2 and 4 only
• C. 1, 3 and 4 only
• D. 1, 2, 3 and 4

Q3. With reference to the Scheme for Promotion of Surface Coal/Lignite Gasification Projects approved by the Union Cabinet in 2025 (outlay Rs 37,500 crore) as compared with the earlier 2023 Financial Incentive Scheme (outlay Rs 8,500 crore), consider the following statements: 1. The 2025 scheme targets gasification of about 75 million tonnes of coal/lignite, whereas the National Coal Gasification Mission carries a separate 2030 target of 100 million tonnes. 2. The 2025 scheme provides financial incentive at a maximum of 20% of the cost of Plant and Machinery, in contrast to the 15%-of-capex ceiling that applied to grants under the earlier Rs 8,500 crore scheme. 3. Under the 2025 scheme, the incentive for any single project is capped at Rs 1,350 crore, identical to the per-project ceiling that applied under Category I of the earlier scheme. Which of the statements given above is/are correct?

1. The 2025 scheme targets gasification of about 75 million tonnes of coal/lignite, whereas the National Coal Gasification Mission carries a separate 2030 target of 100 million tonnes.
2. The 2025 scheme provides financial incentive at a maximum of 20% of the cost of Plant and Machinery, in contrast to the 15%-of-capex ceiling that applied to grants under the earlier Rs 8,500 crore scheme.
3. Under the 2025 scheme, the incentive for any single project is capped at Rs 1,350 crore, identical to the per-project ceiling that applied under Category I of the earlier scheme.

• A. 1 only
• B. 1 and 2 only
• C. 2 and 3 only
• D. 1, 2 and 3

Q4. With reference to Bharat Coal Gasification & Chemicals Limited (BCGCL), the special purpose vehicle implementing India's first commercial-scale coal-to-ammonium nitrate project at Lakhanpur, which one of the following entities is the largest equity shareholder?

• A. Coal India Limited
• B. Bharat Heavy Electricals Limited
• C. Mahanadi Coalfields Limited
• D. NTPC Limited

Q5. For the execution of BCGCL's coal-to-ammonium nitrate project at Lakhanpur, how many Lump Sum Turn Key (LSTK) packages have been awarded in total to the project contractors (BHEL and Larsen & Toubro combined)?

• A. Two
• B. Three
• C. Four
• D. Six

Q6. The Ammonium Nitrate Rules, 2012, which govern the manufacture, possession, sale, import and transport of ammonium nitrate in India, were notified under which one of the following Acts?

• A. Explosives Act, 1884
• B. Petroleum Act, 1934
• C. Environment (Protection) Act, 1986
• D. Essential Commodities Act, 1955

Q7. Which one of the following is the nodal regulatory agency for licensing the manufacture, possession, sale, transport, import and export of ammonium nitrate in India?

• A. Petroleum and Explosives Safety Organisation (PESO) under the Department for Promotion of Industry and Internal Trade
• B. Directorate General of Foreign Trade under the Department of Commerce
• C. Directorate General of Mines Safety under the Ministry of Labour and Employment
• D. Central Industrial Security Force under the Ministry of Home Affairs

Q8. In whose command area is India's first commercial-scale Coal-to-Ammonium Nitrate plant (Lakhanpur, Jharsuguda) being set up — i.e., which subsidiary of Coal India Limited hosts the project site?

• A. Mahanadi Coalfields Limited (MCL)
• B. South Eastern Coalfields Limited (SECL)
• C. Northern Coalfields Limited (NCL)
• D. Bharat Coking Coal Limited (BCCL)

Q9. Mahanadi Coalfields Limited, the host of the Lakhanpur Coal-to-Ammonium Nitrate project, is designated a 'Miniratna Category-I' CPSE. Which one of the following statements most precisely defines this status as laid down by the Department of Public Enterprises?

• A. A Central PSE that has made profits continuously for the last three years, has earned a pre-tax profit of Rs 30 crore or more in at least one of those years, and has a positive net worth
• B. A Central PSE that has been listed on a recognised stock exchange with at least 25% public shareholding and a market capitalisation above Rs 1,000 crore
• C. A Central PSE that is a wholly-owned subsidiary of a Maharatna company and is engaged in a strategic/core sector identified by NITI Aayog
• D. A Central PSE with an average annual turnover exceeding Rs 25,000 crore and average annual net profit exceeding Rs 5,000 crore during the last three years

Q10. The Cabinet-approved Coal-to-Synthetic Natural Gas (SNG) project, being implemented by a joint venture of Coal India Limited and GAIL (India) Limited at the Sonepur Bazari area of Eastern Coalfields Limited, is designed to produce Synthetic Natural Gas at approximately what installed capacity?

• A. 0.66 MMSCMD
• B. 1.83 MMSCMD
• C. 6.60 MMSCMD
• D. 13.05 MMSCMD

Q11. With reference to the two coal gasification joint-venture projects whose equity investment by Coal India Limited was approved by the Union Cabinet in 2023 — the Coal-to-SNG project (CIL-GAIL) and the Coal-to-Ammonium Nitrate project (CIL-BHEL) — consider the following statements: 1. The Coal-to-SNG project is sited in the Eastern Coalfields Limited command area in West Bengal, while the Coal-to-Ammonium Nitrate project is sited in the Mahanadi Coalfields Limited command area in Odisha. 2. The Cabinet approval permitted Coal India Limited to take equity in these joint ventures beyond its prescribed 30% equity-investment ceiling. 3. The Coal-to-SNG project uses Underground Coal Gasification (UCG), whereas the Coal-to-Ammonium Nitrate project uses Surface Coal Gasification (SCG). Which of the statements given above is/are correct?

1. The Coal-to-SNG project is sited in the Eastern Coalfields Limited command area in West Bengal, while the Coal-to-Ammonium Nitrate project is sited in the Mahanadi Coalfields Limited command area in Odisha.
2. The Cabinet approval permitted Coal India Limited to take equity in these joint ventures beyond its prescribed 30% equity-investment ceiling.
3. The Coal-to-SNG project uses Underground Coal Gasification (UCG), whereas the Coal-to-Ammonium Nitrate project uses Surface Coal Gasification (SCG).

• A. 1 and 2 only
• B. 2 and 3 only
• C. 1 and 3 only
• D. 1, 2 and 3

Q12. The conferment of 'Maharatna' status on a Central Public Sector Enterprise, such as Coal India Limited, primarily means which one of the following?

• A. The enterprise is exempted from audit by the Comptroller and Auditor General of India.
• B. The Board of Directors is delegated enhanced financial powers to make equity investments to establish subsidiaries/JVs without any monetary ceiling.
• C. The Board of Directors is delegated enhanced financial powers to make equity investments up to a prescribed limit per project (a percentage of net worth) without prior approval of the Central Government.
• D. The enterprise is reconstituted as a statutory corporation by a special Act of Parliament with sovereign guarantee on its borrowings.

Q13. In the context of India's first commercial-scale Coal-to-Ammonium Nitrate project at Lakhanpur, the term 'Surface Coal Gasification (SCG)' refers to which one of the following processes?

• A. In-situ conversion of unmined coal seams into combustible gas by injecting oxidants through boreholes drilled from the surface
• B. Conversion of mined coal into synthesis gas in above-ground reactors by reacting it with controlled amounts of oxygen and steam
• C. Direct hydrogenation of pulverised coal slurry to produce liquid hydrocarbon fuels equivalent to diesel and naphtha
• D. Pyrolysis of coal in the absence of air to yield metallurgical coke, coal tar and coal gas as by-products

Q14. Under the Ministry of Coal's Financial Incentive Scheme for promoting Coal/Lignite Gasification Projects (original outlay Rs 8,500 crore), in how many distinct categories is the incentive support structured?

• A. Two
• B. Three
• C. Four
• D. Five