The stage 1 clearance will enable the company to accelerate mining at the coal block.
Coal from the operations will fuel Essar Energy’s 1,200MW Mahan phase I power project, which is yet to be commissioned.
Mahan Coal, a 50-50 joint venture between Essar Energy and Hindalco, owns the block. Essar will use 60% of the coal output and Hindalco will utilize the rest.
Essar Energy chief executive officer Naresh Nayyar said, "We are pleased to have received approval from the ministry allowing us to accelerate development at the Mahan coal block to provide fuel for our Mahan I power plant and deliver much needed electricity for the people of India."
Essar Energy, based in Mauritius, is primarily focused on the energy industry in India.
