The government will put on offer 46 coal blocks during the auction to begin next month.
"The Coal Mine Development and Production Agreement (CMPDA) specifies the terms and conditions of operation of the mines by the successful bidder in the auction," Coal Joint Secretary and the Nominated Authority for the coal auctions Vivek Bharadwaj said.
Bharadwaj further said the features of the agreement include "a clause mandating the successful bidder to comply with all the applicable laws in relation to health, safety, welfare, social security and minimum wages for the workers."
He further said that the successful bidder will conduct mining operations at the coal mine in accordance with the milestones or "efficiency parameters".
Failure to comply with the efficiency parameters would result in appropriation of the performance security, he added.
Some of the other features of the CMPDA includes payment of upfront amount in three instalments and appropriation of bank guarantee in case of failure, anti-corruption provisions, periodic reporting by successful bidder to the Nominated Authority and state Governments for various stages of mining, he said.
The agreement also provides for withdrawal/cancellation of vesting order in the event of non-compliance with the provisions of the CMPDA, he said.
There would also be a clause containing list of events on which the "Agreement may be terminated, viz. failure to pay upfront amount... non-compliance with anti-corruption laws, failure to pay monthly payment, etc."
The successful bidder, he said, shall provide performance security (bank guarantee) which will be aggregate of one year royalty, annual peak rated capacity of mines multiplied by Final Price Offer.
"The conditions for performance bank guarantee and the format for the same is made part of the CMPDA," he said.
The government had said on Thursday that it has kick-started the allocation process for 36 mines to PSUs.

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