New Delhi: The Union Coal Ministry defied the Environment Ministry to open up the country’s densest forest areas for mining after lobbying by an industry group of the top private power sector companies, reveal records accessed by The Reporters' Collective.

The Association of Power Producers wrote to the coal ministry in November 2021 to open up for auctions two coal blocks nestled in one of India’s densest forests to address the rumoured coal shortage in the country. But the lobbying was poised to benefit its member, the Adani Group.

One of the two blocks the Association lobbied for is situated in Madhya Pradesh’s Singrauli coalfields and is close to a thermal power plant the Adani Group acquired in March 2022. The other, situated in Chhattisgarh’s pristine Hasdeo Arand forests, is adjacent to blocks mined by the Adani Group.

The Coal Ministry not only acted on the association’s demand to open up the two blocks but 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 auctions 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 (CMPDI) 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, clearly informed the Coal Ministry that none of the 15 coal blocks can be opened up for mining since they are in areas covered by very dense forests.

However, the Coal Ministry overruled its own expert scientific institution. 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.

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. Since there were no other bidders, the auction was declared unsuccessful. However, there is a catch here. More on this in part two of the series.

“It’s interesting that the association demanded that the block be put up for auction but only Adani became the sole bidder,” said Priyanshu Gupta, Assistant Professor at the Indian Institute of Management, Lucknow. “It can raise questions about institutional capture,” he said.

Apart from the Adani Group, the Association counts Vedanta, RP Sanjiv Goenka Group, Reliance and others as its members.

“The private sector plays a significant role in ensuring energy security for the nation and helps the government reduce dependence on international markets for critical imports,” an Adani Group spokesperson told The Collective over mail.

 “As a regular practice, various forums seek industry members' input to make relevant representations to the government.”

Detailed queries sent to the Ministries of Coal, the Environment and the Association of Power Producers remained unanswered despite reminders.

Manufacturing Demand

In the first week of October 2021, media reports carried an alarming statistic: India’s coal-fired power plants had only enough coal to last four days. The reports claimed this was “the lowest level in years”. The Coal Ministry refuted all claims of India facing a “coal shortage” in Parliament. It said the shortfall of stocks in power plants was on account of a demand surge and involved logistical reasons: heavy rains had interrupted transport of coal from mines to power plants. 

Experts have warned that the news of a momentary shortage of stocks in power plants could be used as a ruse for the government to hand over more mines to private companies. 

A month later, Ashok Khurana, the director general of Association of Power Producers and former bureaucrat of the Power Ministry, sent an email to the then Coal Secretary drawing attention to the news of coal shortage.

The association claims on its website that its role is to “highlight the issues facing the private sector, and ensure timely redressal to ensure that our (the private firms’) capacity addition targets can be met.” Adding that they are “an interface between private sector and the Government of India”, the Association says that it “has been repeatedly acknowledged as a responsible industry representative by the Government of India”.

The email, dated 29 November 2021, begins with the Association appreciating the government for “Atmanirbhar Abhiyan” and for “opening of commercial coal mining sector for private players”. Pointing towards the coal “shortage” that plagued thermal power plants, the Association said, “It is clear we need to shore up our self-reliance to fulfill the energy needs of the nation”.

The Coal Secretary is the top government official responsible for overseeing the coal sector, and part of their role is to be aware of the status of coal reserves in the country. But Khurana, by playing up the rumour of a coal shortage, was making a case.

Khurana named two blocks he thinks should be “included in the upcoming coal auctions” to “meet coal demand in the central and western part of the country”. First, he suggested Mara II Mahan block situated in Madhya Pradesh’s Singrauli coalfield. The block has over 950 million tonnes of coal and is spread over an area more than 50 sq km with 90% of that area classified as forests.

The second block Khurana recommended was Hasdeo Arand’s Pendrakhi. The block lies adjacent to Parsa and Kente Extension coal blocks – both of which are allocated to Rajasthan’s power distribution company and mined by the Adani Group. Companies prefer blocks adjacent to ones they already have for logistical reasons – ease in utilising existing infrastructure and transport. A summary of the Pendrakhi coal block’s area and coal reserves is not available on Coal Ministry or its affiliated websites.

While the block is not part of the 15 blocks the Environment Ministry recommended against auctioning in 2018, it is “close to the Lemru Elephant Reserve” as official correspondence notes. The Chhattisgarh government demarcated a part of Hasdeo Araya forest as an elephant reserve to keep the area off limits to mining and as a remedy to rising human-elephant conflicts in the region. Additionally, the state government passed a resolution in its assembly to not allow mining in Hasdeo Arand.

Four days after receiving Khurana’s letter, a Deputy Director in the Coal Ministry sent a letter to the Central Mine Planning and Design Institute drawing their attention to the association’s demand. 

The Ministry decided to act on the Association’s demand despite claiming in Parliament, later the same month, that the country had not seen a coal shortage. 

“Mara II Mahan coal block is among the 15 such coal blocks in respect of whom the MOEF&CC (Ministry of Environment, Forests and Climate Change) has conveyed that these blocks fall in area which need to be conserved and should be avoided,” the letter said. “CMPDIL is therefore requested to furnish their comments as to whether such blocks may be considered after taking out some portions that may be fragile”.

On 10 March 2022, the Coal Ministry sent another letter to the institute citing the letter by the Association of Power Producers. This time, the letter cited a similar representation from ASSOCHAM – another industry lobby group – for including Mara II Mahan and Pendrakhi coal blocks in auctions for commercial mining.

Twenty days later, CMPDI’s general manager Chiranjib Patra replied that the Pendrakhi block is “hydrologically sensitive” in addition to its proximity to the Lemru Elephant Reserve. The Environment Ministry, Patra said, would have to confirm if portions of Mara II Mahan and Pendrakhi can be carved out for mining without disturbing the forests around.

On 29 April 2022, the Coal Ministry set up a meeting with the institute’s officials to discuss the status of the 15 coal blocks the Environment Ministry wanted to keep off auctions. Pendrakhi was excluded from this review since it was not part of the list of 15 blocks. It has not been placed for auction either.

The institute presented its observations on the 15 blocks before the Coal Ministry officials, who held a “threadbare mine-wise discussion on each block”, according to the minutes of the meeting.

The institute concluded that “it may not be possible to carve out some portion” from any of the 15 blocks for coal mining. For Mara II Mahan, it said, “Block has 90% green cover. It may not be possible to carve out some portion from the block.”

Twisting Facts

Undeterred, then Coal Secretary Anil Kumar Jain wrote to the Environment Ministry in August 2022 that “CMPDI has informed that out of the aforesaid 15 coal blocks, five blocks do not fall in sanctuaries/National Parks/ESZ but have very dense forest or high green cover.”

The Ministry intends to put these five blocks up for auction, he added, “Considering high grade coal and substantial reserves in these blocks.”

Jain completely omitted the fact that the institute had specifically said no portions of the blocks could be carved out. In the five blocks, the forest cover ranged from 82% to 99% of the total area of the block.

On 15 December 2022, the Director General of Forest wrote back. “All mining proposals are processed on a case to case basis”, he said. “In case any forest land is involved, in any particular mine, then before starting actual mining operations, approval of the Central Government under the Forest (Conservation) Act, 1980 must be taken by the concerned user agency,” he added.

The letter did not refer to the Ministry’s 2018 decision to keep the blocks off auctions. No references were made to the forest cover either.

Game On

On 29 March 2023, the Coal Ministry announced the seventh tranche of commercial coal auctions with 98 blocks up for grabs.

Four blocks – Mara II Mahan, Tara, Mahan and Tandsi III & Tandsi III (Extension) – among the 98 on offer were from the list of 15 the Environment Ministry had recommended against auctioning.

None of these four were successfully auctioned. Mahan, Mara II Mahan and Tandsi III & Tandsi III (Extension) received only single bids, thus ruling them out of competition. Tara block saw competition with three bidders in the fray but was withdrawn after the Chhattisgarh government asked the Centre to exclude the block from the auctions.

The only bidder for Mara II Mahan was Mahan Energen Limited – an Adani subsidiary. This is the same block that the Association of Power Producers had lobbied for.

Mahan Energen Limited also owns the Mahan Thermal Power Plant situated in Madhya Pradesh’s Singrauli coalfield, which also houses the Mara II Mahan coal block.

“This matter concerns the relevant ministries and authorities and hence we would not be able to comment on it,” Adani Group spokesperson said regarding the decision to overturn Environment Ministry’s recommendations against opening up Mara II Mahan for mining. 

“As you may be already aware that Mara II Mahan Block is an underground mine, which has the least impact on the immediate environment, without the need for large-scale human displacement and deforestation during its development,” they added.

Adani Group’s hunger for coal from Singrauli coal fields began to grow with the acquisition of this 1,200 MW power plant from Essar Power for Rs 4,250 crore in March 2022. It had emerged as a successful bidder for the power plant in June 2021 — four months before the Association of Power Producers lobbied to open up the Mara II Mahan block. 

The power plant was originally meant to source its coal from the Mahan coal block, adjacent to Mara II Mahan, in Singrauli but couldn’t due to environmental and legal tangles. In 2006, then Congress-led government allotted the Mahan coal block to fire a power plant jointly proposed by the UK-registered Essar Group’s Essar Power and Aditya-Birla Group’s Hindalco Industries. By 2010, the government had classified the entire Singrauli Coalfields as a “no-go area”, meaning the area was too biodiverse and forest-rich to be mined. The “no-go” policy itself fell out of favour, with a top committee of cabinet ministers of the then government dismissing it as “having no legal basis”.

Even as the government began chipping away at the policy, the Mara II Mahan and Mahan coal blocks remained off limits for miners, turning into a battleground with environmentalists, tribespeople and environment ministry on the one side and miners and coal ministry on the other. The Modi government, too, while releasing a list of mining blocks for sale in 2022 had said that forests having green cover greater than 40% would not be put up for auctions in the tranche. However, it has now abandoned the decision.

In August 2023, the Adani Group received a green clearance to expand the power plant by adding 1600 MW capacity to the existing 1200 MW over an area of 920 acres. In its official submissions for expansion, the Group subsidiary noted that it will source its coal for the plant from government-owned Western Coalfields and “from commercial coal mines in the vicinity of the project site”. To fire the plant, the neighbouring coal-rich Singrauli forests were tantalisingly close for the group but were out of bounds for mining.

In the recently concluded seventh tranche of commercial coal mine auctions, the Mara II Mahan coal block, which is in the vicinity of the plant, was up for grabs after lobbying by the Association of Power Producers. Mahan Energen, the company that owns the Mahan Power plant, was the sole bidder. The auction was annulled. But, the block is now up for grabs.

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(Part two of the series will look at key changes made quietly by the government in coal auction regime)

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