Odisha’s coal mines face a potential recovery of ₹975.57 crore after the Comptroller and Auditor General found that 1.17 crore tonnes of coal were produced either without valid environmental clearance or beyond approved production limits. The findings relate to two mines operated by Mahanadi Coalfields Limited and were included in the CAG’s compliance audit report for the year ended March 2024.
The largest violation was reported at the Kalinga Open Cast Project in the Talcher mining circle. According to the audit, the mine’s environmental clearance expired in October 2021. After accounting for extensions granted by the Union environment ministry during the Covid-19 period, the clearance remained valid only until October 23, 2021.
The mine nevertheless continued production after the clearance had lapsed. Between October 2021 and March 2023, it extracted 1.15 crore tonnes of coal without a valid environmental clearance, the CAG report said. The value of the coal produced during this period was assessed at ₹956.56 crore.
A second violation was recorded at the Kulda Open Cast Project under the Rourkela mining circle. The mine’s approved coal production capacity was increased from 19.6 million tonnes per annum to 21 million tonnes per annum in May 2022. However, because the approval took effect during the financial year, the permissible production for 2022-23 was calculated on a pro-rata basis at 20.77 million tonnes.
The mine produced 21 million tonnes during the period, exceeding the permissible level by 2.3 lakh tonnes. The CAG estimated the recoverable value of this excess production at ₹19.02 crore. Taken together, the two cases involved 1,17,96,540 tonnes of coal and a recoverable amount of ₹975.57 crore.
The audit linked the recovery to provisions of the Mines and Minerals (Development and Regulation) Act, 1957. Under those provisions, the lessee is liable to pay the value of minerals extracted without lawful authority. The findings place the focus not only on the mines’ compliance but also on how production and environmental approvals were monitored by mining authorities.
The CAG criticised officials for failing to adequately verify the validity of environmental clearances and approved production limits while assessing mining operations. In the case of the Kalinga project, the report said the Deputy Director of Mines, Talcher, “did not check the validity of EC and lawfulness of the production from the mine”.
After the audit pointed out the irregularities, the concerned deputy directors of mines stated that compliance would be furnished after verification of records. The government’s response was awaited when the audit report was finalised. The next step is therefore expected to involve verification of the records and determination of action on the recoverable amount identified by the audit.
