Mahan Super Thermal Power Project
Mahan Super Thermal Power Project is a 1,200-megawatt coal-fired power station owned by Essar Energy in Madhya Pradesh, India.
The undated satellite photo below shows the power plant near Bandhaura, Khairahi, KarsuaLal and Nagwa villages.
When it received its environmental clearance in 2007, this project was conceived as a 2,000 MW project (4x500 MW). By 2010 the project had been scaled back to 1,200 MW (2 x 600 MW). In March 2016 it was scaled back up to 1,800 MW (3 x 600 MW).
The first unit of 600 MW of Mahan I was commissioned in 2013. The second unit of 600 MW was expected to be completed in 2014, but the power station has faced delays in construction and operation due to difficulties in securing mining approval for the Mahan Coal Block, the captive mine for the Mahan Power station and Mahan Aluminium power station.
In April 2016 Essar received environmental clearance for a 3 x 600 MW coal plant.
Given Essar's debts in 2018, and with no progress on the unit since 2016, it is likely that the unit is shelved.
Ownership and financial problems
According to media reports in May 2018, Indian multinational bank ICICI Bank, in a consortium that includes Rural Electrification Corp, Power Finance Corp, Punjab National Bank and IDFC, is looking to sell Essar Power to recover Rs 6,600 crore of dues. Essar Power, in turn, has approached the ICICI Bank-led consortium for a strategic restructuring of its debt. Essar Power has a power purchase agreement for 300 MW from the Mahan plant with group company, Essar Steel, which itself is undergoing insolvency resolution process. For the remaining 900 MW of untied capacity, the company is looking to sign medium-to-long term power purchase pacts.
Coal for the proposed plant would be sourced from the Mahan coal block through a 50:50 joint venture with Hindlaco Industries, called Mahan Coal Ltd.  (Note: this plant is not to be confused with Hindlaco Industries 900MW Mahan Aluminium power station which is also drawing coal from the Mahan coal block.)
Coal mine stalled
Mahan Coal Ltd (MCL) is a jointly owned company by London-listed Essar Energy and India's Hindalco Industries to mine the Mahan coal block in India.
In its 2010 annual report Essar complained that the Mahan coal black had not received approval for development: "While we are optimistic of a favourable outcome, we will not be in a position to supply coal from our own mines ahead of the commissioning of the 1,200 MW Mahan I coal fired power project. The first unit of this power plant will commence commissioning in September 2011. We have therefore applied to Coal India Limited for tapering coal linkage until our own mines are operating at full capacity. We expect to receive this clearance shortly."
In its 2013 annual report, Essar announced that it had received stage 1 forest clearance for the Mahan coal block. The company said that it plans to seek additional coal from Coal India’s e-auction process and to consider the use of imported coal.
The 2013 annual report further stated that:
- The Stage 2 clearance is progressing well and is expected in the next few months and, once secured, we estimate it will take 9 to 12 months to produce first coal and it will then take between two to three years to ramp up to the full capacity of 8.5 mmtpa. In addition to e-auction and imported coal, Essar Energy has applied for medium term allocations of coal under Coal India’s tapering coal linkage system. Receipt of a tapering coal linkage allocation will improve the economics of Mahan I.
In February 2014, Mahan Coal Ltd was granted environmental approval to extract around 100 million tonnes of coal.
The coal allocation was later scrapped in September 2014 following a Supreme Court order. In the reallocation process, which started in February 2015, Essar Power secured the bid for the Tokisud North coal mine at a bid of Rs.1,110 for every tonne of coal mined. Coal from this mine will be used for Essar’s Mahan plant. Essar will contract with the AMR Group for mining services. Essar plans to begin mining within 2015.
Protests and opposition
Local villagers in the forest area of the proposed Mahan mine have stated that they will resist the mine. According to Reuters, final forest clearance for MCL came from environment minister Veerappa Moily, who in less than three months approved more than 70 big projects worth over $40 billion, some of which were stalled by his predecessors over environmental concerns. Moily has been accused of acting in haste for industrial interests.
Inhabitants say clearance was given to the project in violation of the Forest Rights Act, a 2008 law that gives affected communities a right over the forests. A village vote in Amelia supporting the MCL mine was rigged with hundreds of forged signatures, they said. MCL said it had no say in the vote. The allegation has forced district authorities to launch an inquiry, and the outcome could scupper the mining project.
Greenpeace says MCL's project will fell hundreds of thousands of trees and affect the livelihoods of 14,000 people who sell products such as mahua seeds and tendu leaves, used to make cheap alcohol and hand-rolled cigarettes (beedi) respectively.
Sponsor: Essar Energy
Location: Bandhaura, Khairahi, KarsuaLal, and Nagwa villages in Singrauli tehsil, Sidhi district in Madhya Pradesh, India
Coordinates: 24.0086735, 82.4170303 (exact)
- Unit 1: Operating (2012)
- Unit 2: Operating (2018)
- Unit 3: Shelved
- Unit 1: 600 MW
- Unit 2: 600 MW
- Unit 3: 600 MW
- Environmental clearance for 4x500 MW coal plant, India MoEF, Apr 20, 2007
- Environmental impact assessment
- Environmental clearance for 3x600 MW coal plant, India MoEF, Apr 8, 2016
Resources and articles
- Essar Energy, "2010 Annual Report", Essar Energy, April 2011, page 26.
- Environmental clearance, India MoEF, Apr 8, 2016
- Abhineet Kumar, "Essar Power's Rs 11,000-crore investment awaits mining approvals "Parent group has denied allegations that Navbharat Power is a front for getting coal blocks allotted," Business Standard, November 1, 2013.
- "Monthly report on Broad Status of Thermal projects in the Country," India CEA, November 2014
- "Supply of coal to Power Plants," India Ministry of Power, July 23, 2015
- "Monthly Report on Broad Status of Thermal Power Projects in the Country," Government of India Ministry of Power, March 2016
- "Monthly Report on Broad Status of Thermal Power Projects in the Country," Government of India Ministry of Power, October 2016
- “Broad Status of Thermal Power Projects in the Country,” India Ministry of Power, Sep 2017
- "Monthly Report on Broad Status of Thermal Power Projects in the Country," Government of India Ministry of Power, November 2017
- "Essar Power MP stabilises Unit II of 2×600 MW Mahan power plant," electricalpowerinfo.com, Mar 21, 2018
- "Monthly Report on Broad Status of Thermal Power Projects in the Country," Government of India Ministry of Power, February 2018
- "ICICI-led group to sell Essar Power arm to recover dues," Free Press Journal, May 26, 2018
- Hindalco Industries, "Greenfield projects", Hindalco Industries website, accessed November 2011.
- Essar Energy, "Power", Essar Energy website, accessed March 2012.
- "Annual Report 2013," Essar Energy, accessed October 2013
- Nita Bhalla, "Battle over Essar-led project reflects India's new mining pains," Reuters, Mar 20, 2014.
- "Essar Power to restart work on Rs1,000 crore Tori project," Live Mint, Apr 13, 2015
- Tokisud North Mine, MSTC website, accessed May 2015.
Related SourceWatch articles
- Promit Mukherjee , "Nod for Hindalco & Essar’s Mahan coal block soon", DNA, July 7, 2011.