India Coal
Adani awarded colossal Indian coal deposit despite low bid
Apr 22, 2024
Adani's acquisition of a vast coal deposit in Singrauli and its forthcoming expansions of the Mahan coal-power plant will make life hard for people living near these developments.

In March 2024, it was announced that a colossal coal block in central India was awarded to an Adani company. An earlier round of auctions for Mara II Mahan had attracted only one bidder, the Adani company, so no allocation was made. Concerns were then expressed that the Modi government might allocate the block to an Adani company in a second round even if no other bidders emerged. In the second round of the auction, the other bidder was a company mostly associated with mining iron ore and which is closely connected to a minister in the Indian government. Adani won the bidding.

At a glance:

Name of the coal block: Mara II Mahan

Reserves: 955.96 million tons

Coalfield: Singrauli coalfields

Location: Singrauli district, Madhya Pradesh

Type of mining: Underground

Owner: Mahan Energen Limited, an Adani Group subsidiary

Nearby coal-power plant: Adani’s Mahan / Bandhaura plant

Status: Approval process not begun

In the most recent round of auctions of coal blocks in India, the Adani Group won the biggest block by offering the government the lowest share of revenue of any of the successful bidders in the round.  It is to be expected that the higher the share of revenue proposed to go to the government, the more likely the bid is to succeed. The Adani Group outbid the only other competitor, a company linked to India’s Railway Minister, Ashwini Kumar Vaishnaw, to win the Mara II Mahan block. Vaishnaw’s background as a bureaucrat, corporate executive and, since 2019, a politician with the ruling BJP, has been described in a NewsClick story.

Mara II Mahan is important to the Adani Group because of its mammoth reserves (it contains nearly a billion tons of coal) and its proximity to other Adani-controlled coal blocks such as Dhirauli, Gondbahera Ujheni East and Gondbahera Ujheni. These will all serve as captive mines for the Mahan coal-power plant owned by the Adani Group’s subsidiary Mahan Energen Limited.

Adani's Mahan coal-power plant (otherwise known as the Bandhaura or Singrauli power plant) - on the doorstep of giant coal deposits recently acquired by Adani.

(Note that the Mahan power plant has previously been referred to by AdaniWatch as the Bandhaura power plant, after the village closest to it. It is referred to on Adani Power’s website as the Singrauli power plant, after the Singrauli coalfields. However, a recent presentation to investors by Adani refers to the plant and its proposed expansions under the name ‘Mahan’. For consistency, the power plant is referred to in this story as the Mahan plant.)

In an earlier auction of coal blocks, apprehensions had been brewing over whether Mara II Mahan would go to the Adani Group even if Adani was the only bidder. In articles published by the Reporters’ Collective and AdaniWatch last year, it was highlighted how an expert panel comprising top bureaucrats of the Modi government was allocating coal blocks that had failed to receive more than one bid each after two rounds of bidding. The articles explained how 11 coal deposits had been allocated to single bidders with the approval of an expert panel called the Empowered Committee of Secretaries (ECoS). These 11 mines included Gondbahera Ujheni East, which was allocated by the ECoS to its only bidder, an Adani Group subsidiary called MP Natural Resources Private Limited.

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The latest round of coal block auctions

On 15 March 2024, the Ministry of Coal published the overall result of the latest round of coal block auctions. In all, 13 coal blocks were auctioned. These included Mara II Mahan, with its 956 million tons of coal.

Of all the coal blocks in this auction, Mara II Mahan was auctioned at the lowest offer of revenue sharing, despite having the most coal. Adani’s subsidiary, Mahan Energen Limited, was declared the successful bidder, despite offering the government only 6% of the revenue it generates from mining the coal block. In contrast, the Babupura East block, which contains 115 million tons of coal, was auctioned with an offer to share 60.25% of the revenue generated. In this round, eight bidders were awarded coal blocks for offering to share more than 20% of the revenues generated with the government. Why the Adani Group company was successful in the auction of this coal block, given its low bid, is a mystery.

Stall holders and market-places contend with coal dust and other emissions from trucks transporting coal to the Mahan power plant, about to undergo a colossal expansion.

Background: how Adani won an earlier auction as the single bidder

In an article published on 11 October 2023 by the Reporters’ Collective, it was highlighted how the ECoS had been handing out coal blocks at its own discretion after auctions failed to attract a sufficient number of bidders. The article went on to describe how Gondbahera Ujheni East, a 250-million-ton block in the Singrauli coalfields in the central Indian state of Madhya Pradesh, had been awarded to the Adani-owned subsidiary MP Natural Resources Private Limited by the ECoS despite failing to attract more than a single bid. On 7 November 2023, AdaniWatch described how the coal ministry had hailed the process of commercial coal-mine auctions as a ‘tremendous success’ despite having allocated 11 blocks which had attracted only a single bidder. On 7 November 2023, referring to the AdaniWatch article, the opposition Congress party issued a statement alleging ‘bid rigging’ by the Modi government in awarding coal blocks at its discretion. The statement said:

‘According to the publication AdaniWatch, in 2022 the [Adani] Group was awarded the Gondbahera Ujheni East coal block in Madhya Pradesh, despite it being the sole bidder in the so-called auction. The mine had been one of several that had failed to find more than one bidder, when originally auctioned in 2021,’ said the statement by Jairam Ramesh, head of Congress communications, on X (formerly Twitter) on 7 November 2023.

The statement continued: ‘However, an Empowered Committee of Secretaries (ECoS) set up during the peak of the Covid lockdown in May 2020 had conveniently been empowered to allocate coal blocks that had single bidders, the second time they were auctioned. When the Gondbahera Ujheni East block was offered once again for auction, the ECoS awarded it to the single bidder – an Adani Group firm. The ECoS decision came despite the recommendation of an earlier expert committee that any auction with less than three bidders be annulled.’

Stream and forest threatened by the Adani Group's coal mines and expansions of the Mahan power plant.

On 7 November 2023, the coal ministry responded to a query filed by this correspondent through the Right to Information (RTI) Act, 2005, in which it refused to divulge the grounds on which discretionary allotment of coal blocks had been made. The ministry refused to share the minutes of the meetings of the ECoS in which decisions were made to allocate the 11 mines that received single bids.

‘Minutes of meetings of Empowered Committee of Secretaries (ECoS) will be submitted to the Cabinet shortly. Accordingly, at this stage the minutes of the ECoS cannot be provided to you as the same are exempted from disclosure under Section 8 (i) of the RTI Act, 2005,’ the ministry stated in its reply.

This correspondent then filed an appeal with the RTI Appellate Authority in the coal ministry. However, the appeal was rejected on 19 December 2023 citing the same exemption.

Mara II Mahan put up for sale twice

Mara II Mahan was put up for sale for the first time in a round of auctions launched by the government on 29 March 2023. However, the block received only one bid – from an Adani Group subsidiary, Mahan Energen Limited. Accordingly, the government cancelled the auction and issued a notice on 31 July 2023 that the security amount deposited by Mahan Energen Limited would be returned.

Later, not long after the Congress party had raised allegations of ‘bid rigging’, the Modi government decided to conduct a fresh round of auctions. On 20 December 2023, the government announced that 26 coal blocks were listed for sale by auction. Bidding for Mara II Mahan, one of the blocks up for auction, was under scrutiny because it had previously attracted only the Adani Group as a bidder. Would it again attract just the one bidder – the Adani company that had made the only bid in the previous auction? If so, would it be allocated by the ECoS to that Adani company.

Enter Thriveni Earthmovers Private Limited

On 20 February 2024, the coal ministry released the names of bidders for three coal blocks: Mara II Mahan, Mahan and Thesgora B/Rudrapuri. It emerged that while Adani’s Mahan Energen Limited had again bid for Mara II Mahan, an entirely new entity had entered the fray. The other bidder, Thriveni Earthmovers Private Limited, is registered in the city of Salem in Tamil Nadu as per documents accessed by this correspondent from the database of India’s Registrar of Companies.

Why Thriveni – a company with no apparent direct interest in coal production in India – would bid for one of the largest coal blocks ever auctioned is a mystery.

Thriveni Earthmovers’ connection to Railway Minister Vaishnaw

The documents accessed from the Registrar of Companies show that Thriveni Earthmovers has 11 subsidiary companies, including Thriveni Pellets Private Limited in which it holds 51% of the shares. Thriveni Pellets, in turn, holds 49% of the shares in yet another company called Brahmani River Pellets Limited, which is registered in Bhubaneshwar, the capital city of Odisha. In November 2017, Ashwini Kumar Vaishnaw joined Prabhakaran, who at present heads the Thriveni Group of companies, to incorporate Thriveni Pellets. The company manufactured pellets from iron-ore dust in the mineral-rich district of Keonjhar in the northern region of Odisha. Vaishnaw served as a director of Thriveni Pellets until June 2019.

Ashwini Kumar Vaishnaw

In February 2018, Vaishnaw became a director of Brahmani River Pellets, along with Prabhakaran. Vaishnaw continued as the managing director of Brahmani Pellets until three days before he was named as a Cabinet minister in the government of Narendra Modi in July 2021. Vaishnaw’s proximity to Narendra Modi can be gauged from the fact that after being inducted into the Cabinet, he was given charge of the important portfolios of Communications, Electronics & Information Technology, and Indian Railways (the largest railway network in the world). Ashwini Vaishnaw held one equity share in Brahmani River Pellets Limited which he transferred to his son on 6 August 2022. 

Vaishnaw’s election to India’s upper house of parliament

Vaishnaw has had political links both with the BJP of PM Modi and with the BJD, the ruling party in the state of Odisha since 1999. In June 2019, Odisha’s chief minister supported Vaishnaw when the latter was elected to India’s upper house of parliament, the Rajya Sabha, despite the two being from different political parties.

Reportedly, the chief minister of Odisha received a phone call from Narendra Modi requesting support for Vaishnaw to be elected to the Rajya Sabha. While remaining political adversaries in Odisha, the BJP and the BJD have not shied away from joining hands to support Vaishnaw, a former bureaucrat belonging to the Odisha cadre, in his bid for election to the Rajya Sabha. The NewsClick story referred to above quoted a source saying he believed that Vaishnaw and Gautam Adani were ‘close’.

On 20 February 2024, the day the names of the two bidders for Mara II Mahan were released by the coal ministry, it was also reported that Vaishnaw had again been elected to India’s upper house of Parliament, the Rajya Sabha.

The Adani Group wins Mara II Mahan

On 12 March 2024, the coal ministry announced that the successful bidder for Mara II Mahan was Mahan Energen Limited. Apparently, Thriveni Earthmovers had made a lower bid than that of the Adani company.

A detailed questionnaire was emailed by this correspondent to Vaishnaw asking, among other queries, about his direct shareholdings, if any, in Thriveni Earthmovers Private Limited. No response had been received at the time that this article was published. Thriveni Earthmovers has not responded to a query on the revenue share it had offered to the government in its bid for the Mara II Mahan coal block. It has also not responded as to why the company chose to bid for the coal block only in the second round of auctions.