Mumbai: London-based Essar Energy Plc on Wednesday announced its unit Mahan Coal Ltd has secured “Stage II" forest clearance from India’s ministry of environment and forests (MoEF) for its Mahan coal block in Madhya Pradesh.

“This clearance is subject to fulfilment of some further conditions," Essar Energy said on its website. “Mahan Coal will now be required to sign a mining lease agreement with the state of Madhya Pradesh before commencing mining operations."

Essar Power, which is a 98.27% subsidiary of Essar Energy, holds 50% of Mahan Coal. The Mahan coal block was originally allotted to the mining firm in 2006, the company said.

The clearance by MoEF comes barely three weeks after environment activist group Greenpeace India rolled down a huge poster that read “I Kill Forests: Essar" on the facade of Essar’s headquarters in Mumbai. The banner also featured pictures of Prime Minister Manmohan Singh and environment minister M. Veerappa Moily. The protest was related to Essar Power’s plans to start mining at Mahan
in Madhya Pradesh—one of the oldest deciduous-forest regions of India.

Greenpeace India, meanwhile, reacted sharply to Wednesday’s development. “As feared, (M. Veerappa) Moily continues to extend hasty clearances to projects that will strip thousands of their livelihood and only source of survival," said Priya Pillai, a campaigner for Greenpeace India, on Wednesday night.

“Despite clear evidence of violations of the Forest Rights Act and other mandatory conditions, Moily has pushed through “Stage II" clearance for the Mahan coal block. This project involves the loss of over 500,000 trees and will impact over thousands of people in 54 villages," Pillai said.

Essar Group has sued Greenpeace India and the villagers of the Mahan Sangarsh Samiti for 500 crore in a defamation suit following the activist group rolling down the banner on 22 January.

The controversial coal block was in 2006 granted to Mahan Coal—a joint venture of Essar Power and Hindalco Industries Ltd. It was granted an in-principle approval for mining by MoEF on 18 October 2012, after pressure from a group of ministers (GoM) on coal mining. The approval came with 36 conditions that required range of studies to be completed and several processes under Forest Rights Act complied with. There are 62 villages that depend on the forest for their livelihood.

Greenpeace India activists, however, had demanded Essar Group should drop the mining project and that Moily should be sacked who, according to the organization, has been fast-tracking environment clearances with disregard for forests, human establishments and wildlife.

Mint couldn’t immediately contact Essar Group for a comment to this story.

London-based Essar Energy, through its subsidiaries, owns one of India’s fastest growing private sector oil and gas companies with a diverse portfolio of exploration and production assets. Its Vadinar refinery in Gujarat, is India’s second largest private sector oil refinery with throughput capacity of 20 million metric tonnes per annum (mmtpa), or 405,000 barrels per day (bpd), the company’s website said.

Essar Energy’s Stanlow refinery in the UK is that country’s second largest refinery with throughput capacity of 296,000 bpd, or 14.6 mmtpa. Essar Energy is part of the $39-billion Essar Group.