The system will be powered by natural gas, a by-product of coal mining, and will comprise 12 units of 1.6 MW each, generating a combined total of 19.2 MW.
Output from the power plant will supply the mining operation as well as a nearby steel plant.
Approval comes from the Secretariat of Environment and Natural Resources (Semarnat) with a subsidiary of Altos Hornos de Mexico (AHMSA) receiving approval based on the Environmental Impact Assessment (MIA) presented last November to the federal agency.
Located in the Carboniferous Region of Coahuila and operated by the Mimosa Unit, the authorisation is valid for 40 years. The company will begin the bidding process for the first electricity generating plant shortly.
Mimosa has an annual output of 4 million tonnes of coal for steel production.