With the approval, the company can begin mine development activities at the block, which is found to host 64 million tones of mineable coal reserves with potential production of 4 million tones of coal per year.
Essar Energy chief executive officer Naresh Nayyar said with the approval, the company can now accelerate development at the Aries coal mine to provide fuel for its Salaya I power plant.
"This is a major step forward in our strategy of providing full fuel security for all of our power generation assets, thereby eliminating price and delivery risks," he added.
Unit 1 of the power plant with a capacity of 600MW has already been commissioned and unit 2 with the same capacity is nearing completion.
Currently, Essar Shipping and Logistics is delivering the fuel for the Salaya I power project that Essar acquired for $118m in April 2010.
The company has already begun building the supporting road and port infrastructure while the first coal shipments are expected to be within 9-12 months.
