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The Competition Commission of India approves the combination involving share subscriptions in Thriveni Earthmovers and Infra Private Limited, the demerger of the mining development and operations business from Thriveni Earthmovers Private Limited, and the acquisition of Lloyds Surya Private Limited. The notifying parties include Lloyds Metals and Energy Limited, Thriveni Earthmovers and Infra Private Limited, and additional investors. The Commission concludes that the combination does not create appreciable adverse effects on competition in India.
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COMPETITION COMMISSION OF INDIA
Combination Registration No. C-2025/03/1254
13th May 2025
Notice under Section 6(2) of the Competition Act, 2002 jointly given by Lloyds Metals and Energy Limited, Thriveni Earthmovers and Infra Private Limited, Prakar Estates and Promoters LLP, Naaval Prakar Farms LLP, Aeon Trading LLP, Lloyds Enterprises Limited, Mahaprabhu Ventures Private Limited, and Indrani Patnaik
CORAM:
Ms. Ravneet Kaur
Chairperson
Ms. Sweta Kakkad
Member
Mr. Deepak Anurag
Member
Order under Section 31(1) of the Competition Act, 2002
$^1$ The Notice was followed by voluntary submissions dated $6^{\text{th}}$ March 2025.
Private Limited (MVPL), and Indrani Patnaik (Additional Investors) also became notifying parties to the Notice. The Notice has been given pursuant to execution of the Share Subscription Agreement entered amongst LMEL, Additional Investors, and TEIL on $17^{\text{th}}$ February 2025 (SSA); and the Demerger Scheme filed with the National Company Law Tribunal (NCLT), Chennai on $9^{\text{th}}$ October 2024 (Demerger Scheme).
Subscription to the shares of TEIL: LMEL will subscribe to certain equity shares, representing 79.82% of the total issued, subscribed and paid-up equity share capital of TEIL. Further, the remaining equity shares, representing 20.18% of the total, issued, subscribed and paid-up equity share capital of TEIL shall be held by Additional Investors;
Merger of MDO Business: The mining development and operations (MDO) business (MDO Business) of Thriveni Earthmovers Private Limited (TEMPL) will be demerged from TEMPL to TEIL. As consideration for the demerger, TEIL will issue fully paid-up 9.5% non-cumulative non-convertible redeemable preference shares (RPS) to the shareholders of TEMPL (TEMPL Shareholders); and
Acquisition of Lloyds Surya: TEIL will acquire 99.83% shareholding in Lloyds Surya Private Limited (Lloyds Surya).
It has been stated that LMEL shall provide a guarantee of up to INR 2,500 crore to the promoters of TEMPL or entities controlled by them for redemption of RPS. The redemption of the RPS will be guaranteed by LMEL, and the promoters of TEMPL shall have the right to require LMEL to acquire or redeem the RPS as per the agreed terms.
The notifying party(ies), vide communications dated $19^{\text{th}}$ March 2025 and $7^{\text{th}}$ April 2025 issued under Regulation 14 of the Combination Regulations, were required to remove defects from the Notice and furnish certain information relevant for the purpose of assessment of the combination. The notifying party(ies) made their submissions vide responses dated $28^{\text{th}}$ March 2025, $21^{\text{st}}$ April 2025, and $26^{\text{th}}$ April 2025.
It has been submitted that LMEL, belonging to the Lloyds Group as well as Thriveni Group, was incorporated in 1977 as an iron ore mining company. Currently, its business segments include: (a) iron ore mining; (b) Direct Reduced Iron (DRI/Sponge Iron) production; (c) generation of captive power; and (d) pellet trading. LMEL supplies iron ore fines and pellets mined/produced around the world. The business operations of the Lloyds Group include importing, exporting, and dealing in iron and steel, alloy steel scrap, steel tubes, pipes, and wires. Additionally, the Lloyds Group engages in investment activities, acquiring and managing shares, stocks, debentures, and other securities.
Lloyds Surya is a wholly-owned subsidiary of LMEL. It began operations recently. Currently, it transports iron ore mined by its holding company i.e., LMEL only.
TEIL and the MDO Business belong to the Thriveni Group. The Thriveni Group is a diversified mine developer, engaged in activities including exploration (through drilling operations), development and operations, mineral processing, equipment refurbishing, logistics and marketing services. TEIL is a newly incorporated entity. Currently, it does not have any business operations, in India or abroad. TEMPL, through its MDO Business, is engaged in the business of mine development and operation, providing end-to-end services (including through government contracts) in relation to iron ore, coal, baryte and manganese.
It has been submitted that MDO arrangements typically entail the mine leaseholders contracting out entire operations to the MDO service provider, a third party, which takes the responsibility of mining, developing and operating the particular mine and then supplying the extracted mineral to the mine leaseholder. The mine owner/leaseholder is solely responsible for determining the mining methodology, selecting the areas to be mined, and deciding the quantity of mineral to be extracted. This includes the preparation of a comprehensive and detailed mine plan in accordance with applicable regulatory and technical standards. Once finalized, this mine plan is handed over to the MDO service provider for execution under a formal contractual arrangement. The MDO service provider is required to implement the plan as per the scope, timelines, and specifications defined by the mine owner.
With regard to the vertical linkages of iron ore mining, it has been submitted that the backward linkages include inputs such as transportation and raw materials, while the forward linkages relate to the processing of the ores including smelting, refining, semi-fabrication and manufacture of iron ore products.
It has been submitted that the MDO Business does not form part of the iron ore value chain and does not give rise to any horizontal overlaps/vertical/complementary relationships with mining of iron ore or production and sale of iron ore pellets. This is largely based on the argument that the MDO do not supply inputs to iron ore producers, nor do they depend on iron ore production for their activities. The iron ore value chain commences only when commercially extractable reserves are exploited. Since development operations precede extraction and do not result in the supply of raw materials or services to iron ore producers, they do not constitute an upstream or downstream activity within the iron ore value chain.
In this regard, the Commission observes that an MDO service provider renders services to mine owner/leaseholder by performing various activities inter alia drilling, excavation of minerals and associated rejects, spoils, sub-grade materials from the pits, hauling of the minerals to the processing plants and processing of the mineral for further use, hauling of the processed mineral to designated stockyards and proper storage, analysis of the quality of the mineral mined, ensuring security of the mining area where the MDO services are being carried out. In other words, the MDO provide service to the mine owner/leaseholder by bundling one or more activities required to extract minerals and in precedence and furtherance of the same.
Further, it is observed that MDO service provider groups one or more of the activities depicting vertical linkages and may supply them as packages to the mine owner/leaseholder, doing away with the requirement of mine owner/leaseholder to indivisibly procure the said inputs. Therefore, the activities of a MDO service provider (in the instant matter, MDO Business) exhibit vertical interface with the mining activities of a mine owner/leaseholder (in the instant matter, LMEL).
It has been submitted that there is an existing commercial arrangement wherein LMEL that owns mining lease for the iron ore mine located at Surajgarh Village, Gadchiroli, Maharashtra (Surajgarh Mine) till 2057, has assigned the development, operation and maintenance of the Surajgarh Mine to TEMPL.
The markets share of TEMPL's MDO Business for provision of MDO services in India is in range of 5-10%. It has been submitted that other than the Surajgarh Mine, LMEL [including the promoters/ultimate controlling person (UCP) of LMEL and other entities forming part of the same group and their affiliates] (LMEL Group & Affiliates) do not own/hold a lease to any other mine in India. TEMPL's MDO Business is engaged in providing MDO services for iron ore mining to a diverse portfolio of clients, covering 11 mines other than the Surajgarh Mine of LMEL. During FY 2023-24, MDO Business of TEMPL produced 34.84 million MT of iron ore from the mines serviced by it. As LMEL Group & Affiliates does not own any other mines, TEMPL cannot divert its MDO business only to the Lloyds entities post the Proposed Combination. Further, the activity of provision of MDO services in India, is characterised by presence of various other players such as Adani Enterprises Limited, Dilip Buildcon Limited, Essel Mining & Industries Limited, BGR Mining & Infra Limited, VPR Mining Infrastructure Pvt. Ltd.
The Commission observes that as the LMEL Group & Affiliates do not own/hold a lease to any other mine in India, other than the Surajgarh Mine, LMEL is not likely to have any incentive to foreclose MDO services to other iron ore mine owner/leaseholder because LMEL would not have avenue to deploy the capacity that would be relieved if MDO Business stops supplying services to the competitors of LMEL. Therefore, foreclosure concerns are not likely to arise.
Considering the material on record, including the details provided in the notice and the assessment of the Proposed Combination based on the factors stated in Section 20(4) of the Act, the Commission is of the opinion that the Proposed Combination is not likely to have appreciable adverse effect on competition in India. Therefore, the Commission approves the Proposed Combination under Section 31(1) of the Act.
This order is without prejudice to the proceeding being initiated under Sections 43A of the Act.
This order may be revoked if, at any time, the information provided by the notifying parties is found to be incorrect.
The information provided by the notifying parties shall be treated as confidential in terms of and subject to provisions of Section 57 of the Act.
The Secretary is directed to communicate this order to the notifying parties.
