Lok Sabha Question No. 3037 (UNSTARRED), answered on 2025-03-19
Subject: Sale of Undeveloped Coal Block
Ministry: COAL
Asked by: Shri Sasikanth Senthil

## GOVERNMENT OF INDIA MINISTRY OF COAL LOK SABHA UNSTARRED QUESTION NO. 3037 TO BE ANSWERED ON 19.03.2025

## Sale of Undeveloped Coal Block

## 3037. SHRI SASIKANTH SENTHIL:

Will the Minister of COAL be pleased to state:

(a) whether the Ministry is aware of the decision regarding sale of the undeveloped Gondbahera Ujheni East coal block and if so, the details therof;

(b) the rationale for allocating the block to a single bidder in two auction rounds incompatible with principles of transparency and fair competition;

(c) the details of provisions under the Coal Block Development and Production Agreement which permit such transfers along with the existing safeguards to prevent speculative trading; and

(d)  whether  the  Ministry  has  assessed  the  impact  of  this  sale  on  India's  energy  security, domestic  coal  production  and  local  livelihoods  in  coal-rich  areas  like  Singrauli,  Madhya Pradesh and if so, the details thereof?

## ANSWER

## MINISTER OF COAL & MINES (SHRI G. KISHAN REDDY)

Reply (a) The Gondbahera Ujheni East coal block, allocated to M/s MP Natural Resources Private  Limited  on  10.10.2022,  has  been  transferred  to  M/s  Mahan  Energen  Limited  (a subsidiary  of  same  group)  as  per  provisions  of  Coal  Block  Development  &  Production Agreement (CBDPA) executed with allocatee.

Reply (b) Allocation of coal mine was done through a fair and transparent process. As per the provisions  of  the  tender  document,  coal  mines  are  initially  offered  for  auction  in  the  first attempt. In cases where a mine receives only a single bid, the auction process is annulled and mine  is  carried  forward  to  the  second  attempt  of  auction.  When  a  mine  receives  a  single qualifying bid in second attempt of auction, it is allocated to the bidder to ensure the timely commencement  of  operations.  Such  allocation  is  essential  for  enhancing  coal  production, reducing import dependency, and strengthening the coal sector's contribution to the national economy.

Reply (c) Provisions in CBDPA related to transfer of coal mines are as under:

Page 1 of 2 "Clause 13.1.1: Any change in Control of the Successful Bidder or any transfer of the Coal Mine by the Successful Bidder, shall be subject to Applicable Laws and may be undertaken after  the  Lock-in  Period,  with  an  intimation  to  the  Nominated  Authority  and  the  Central Government if no later than 15 (fifteen) days prior to (a) the proposed change in Control of the Successful Bidder; or (b) transfer of the Coal Mine by the Successful Bidder, as the case may be and provided that pursuant to such change in Control, the Successful Bidder continues to meet the Eligibility Conditions or in case of transfer of Coal Mine by the Successful Bidder, the transferee meets the Eligibility Conditions.... "

Clause 13.1.3 (ii): For  Partially Explored Mines, Lock-in Periods shall be in two phases: (a) First, till one year of the date of issuance of Allocation Order provided that at least 15% of estimated exploration expense has been incurred by the Successful Bidder; or(b) Second, after preparation of Geological Report till the execution of Mining Lease or order by the Central Government under Section 11 (1) of the Coal Bearing Areas (Acquisition and Development) Act, 1957, as the case may be."

Further, t he provision of a Lock-in Period for both Fully Explored and Partially Explored Mines ensures that the Successful Bidder cannot transfer or dilute control over the coal mine until  substantial  commitment  and  progress  have  been  made  (such  as  execution  of  Mining Lease, incurring minimum exploration expenditure, or preparation of Geological Report). This discourages entities from acquiring mines for mere trading purposes without operationalizing them.

Reply (d) Coal mine will now be developed and subsequently operated by M/s Mahan Energen Limited (a subsidiary of same group) and it will not have any impact on India's energy security, domestic coal production and local livelihoods.

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