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Village approvals for Mahan Coal may be sought again in June

LiveMint logoLiveMint 21-05-2014 Abhishek Shanker

Mumbai: Hindalco Industries Ltd and Essar Energy Plc’s plan to mine coal to feed a $3.8 billion aluminum smelter and power plants in Mahan in central India may be put to vote before villagers for a second time in June.

The administration of Singrauli in the state of Madhya Pradesh, where the joint venture Mahan Coal Ltd is located, may start meetings with villagers for their consent as early as next month, said M. Selvendran, the region’s chief administrator.

We were waiting for the parliamentary elections to get over and now the second village meetings would be held shortly, he said, referring to national elections that concluded on 16 May.

Former tribal affairs minister V. Kishore Chandra Deo alleged in February the companies used strong-arm tactics and forged signatures of local villagers to win agreement to begin mining. Ramakant Tiwari, chief executive officer of Mahan Coal, has denied the minister’s claims.

Hindalco, controlled by billionaire Kumar Mangalam Birla, and Essar Energy, run by billionaire brothers Shashi and Ravikant Ruia, need the coal to cut costs. The fuel from the mine could make Hindalco the lowest cost producer of the light-weight metal globally, Sanjay Jain, an analyst with Motilal Oswal Securities Ltd, said in a 17 May report.

Hindalco shares climbed as much as 3.2% to Rs161.25 in Mumbai, the highest since 15 February. The stock traded at Rs150.60 as of 11:42 am, while the benchmark S&P BSE Sensitive Index fell 0.2%.

Mahan Coal, which had secured approval from the environment ministry in February to mine fuel, has been seeking a mining- lease agreement with the government of Madhya Pradesh. The permit has yet to be granted, according to Selvendran.

The nation’s second-biggest aluminum maker plans to use Mahan’s coal to produce electricity, which accounts for almost 40% of the input cost, for its smelter. BLOOMBERG

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