Mahan Coal is an equal JV between Essar Power and Hindalco Industries.
Mahan Coal is an equal JV between Essar Power and Hindalco Industries.

MUMBAI: Fresh voting by tribals to decide on the fate of Essar Power and Hindalco Industries’ coal mining project in Mahan forests in Madhya Pradesh has been called off after the region’s district collector was transferred just before the scheduled voting.

Village Council vote, also known as Gram Sabha, was supposed to take place in Amelia village this week. However, district collector M. Selvendran, who was going to facilitate the process, was transferred to Bhopal last week, putting a question mark on whether fresh voting of villagers will take place eventually.

Mahan Coal is an equal joint venture between Essar Power and Hindalco IndustriesBSE 0.03 %. Certain villagers in Amelia have alleged that last year’s voting on the project was fraudulent. District collector Selvendran’s decision last month to hold fresh voting came on the heels of Jabalpur High Court’s order to probe fraudulent voting claims.

“The special Gram Sabha is yet to be formally proposed, if at all. The new district collector will take a call on the entire matter separately,” Ramakant Tiwari, CEO, Mahan Coal, told ET. The new district collector Raghuraj MR told ET that there’s no news on the Gram Sabha right now.

The companies have invested Rs 20,000 crore in their projects and are waiting for the final mining lease from the state government. Once the lease comes in, the coal project will cut 5 lakh trees to mine coal for Essar Power and Hindalco’s ventures.

Hindalco needs low-cost coal to produce energy-intensive aluminium. The company is running its Mahan plant on coal transported from other regions, which is increasing its input costs. It’s the same with Essar Power, which is a subsidiary of Ruia-controlled Essar Energy. The future of the project hinges on coal under Mahan forests. Without captive coal, the projects will become unviable in the long run.

Mahan Sangharsh Samiti, a local body formed with the help of environmental campaign group Greenpeace, has protested against deforestation, claiming destruction of livelihoods of 50,000 tribals dependent on the forest. Greenpeace is demanding voting in not Amelia, but 54 villages that depend on the forest.

Gram Sabhas, which have the power to approve or disapprove mining projects, have gained more importance recently. Tribals in Odisha rejected Vedanta’s plan to mine bauxite in Niyamgiri hills last year.

“The new collector has taken charge and has not conveyed any decision on the Gram Sabha to us yet. He will look into the matter and take a call,” said Priya Pillai, a senior campaigner with Greenpeace India.