New Delhi: A coal-rich mine block inside a dense forest, unlocked for auction following lobbying by an association of private power industry players over-riding the environment ministry’s objection, has been awarded to Adani Group.

Coal Ministry had defied the environment ministry and vetoed its own expert body’s advice, to open up the Mara II Mahan coal block in Madhya Pradesh for mining after lobbying by the association, of which Adani is a member, The Collective reported in October last.

Though the lobby group’s pitch to the coal ministry in 2021 rode on the rumoured coal shortage, The Collective’s report had said it was poised to benefit the Adani Group, a member of the industry group.

On 12 March 2024, an Adani Group firm, Mahan Energen Limited, bagged Mara II Mahan coal block holding 995 million tonnes of coal. Its offer of 6% revenue share is the lowest among what the government fetched in the latest round of auctions.

In an email reply to detailed queries by The Reporters’ Collective, an Adani Group spokesperson said, “Your interpretation and claims on the role of Association of Power Producers (APP) members are unfounded and inappropriate.”

“The APP has over 25 members. The members have no role in the decision-making process for allocation of fuel sources. Hence, it is completely unfounded to claim that a specific block was included in the auction at the request of the APP solely for the benefit of a particular power producer,” added the spokesperson.

The Lobbying

Documents accessed by The Reporters’ Collective showed the lobby group, Association of Power Producers, had written to the Union Coal Ministry requesting to open up two new coal mines.

Ashok Khurana, the director general of the association and former bureaucrat in the Ministry of Power, emailed the then Coal Secretary in November 2021 drawing attention to the news of coal shortage. The association said the need for new mines arose since power plants at the time had only 4 days’ worth of coal supply left and the country was now staring at a blackout.

Khurana named two blocks that he thought should be included in the coal auctions, one of them was Mara II Mahan of Singrauli and the other was inside Hasdeo Arand in Chhattisgarh. 

In reality, there was enough domestic coal. The Coal Ministry said so in Parliament in December 2021. But heavy rain and a shortfall of railway rakes had created a logistical nightmare leading to depleting stocks in power plants. Yet  the Coal Ministry decided to act on the request to open up two blocks.

It in fact went a step ahead and pushed for a review of the environment ministry’s suggestions in 2018 that 15 coal blocks, which includes one of the two, should be exempt from coal mining since they fall in areas that have high biodiversity value and need to be conserved.

To pave the way for the review, the Coal Ministry tasked the country’s Central Mine Planning and Design Institute to see if portions of these 15 blocks could be carved out to allow mining without disturbing the forests. The Institute, affiliated with the Coal Ministry, is a “specialist consultant for all those in the mineral and mining sector”, according to its website.

The institute, in its presentation, informed the Coal Ministry that none of the 15 coal blocks can be opened up for mining since they were in areas covered by highly dense forests.

However, the Coal Ministry overruled its own scientific institution’s advice. It omitted key parts of the institute’s opinion in its correspondence with the Environment Ministry and misrepresented the institute’s views on the subject. It even regurgitated arguments the Association of Power Producers used in its correspondence with the Environment Ministry.

Eventually, the Coal Ministry opened up four of the 15 coal blocks that the Environment Ministry had forbidden for mining. One of these four was the Madhya Pradesh-based block the Association of Power Producers had specifically lobbied for.

However, when the block was put up for auction in the recently concluded 7th tranche of commercial coal mining auctions, it received only one bid – from the Adani Group, making the auction invalid.

In the second attempt, the block saw two bidders in the fray: Thriveni Earthmovers Pvt. Ltd and Adani Group’s Mahan Energen Limited. Adani Group, with nine commercial mines holding nearly 3000 million tonnes of coal, won.