Coal production worth ₹975.57 crore at two Mahanadi Coalfields Limited mines in Odisha was carried out in violation of environmental clearance conditions during 2021-23, according to a compliance audit by the Comptroller and Auditor General of India. The audit said 1,17,96,540 tonnes of coal were produced either after an environmental clearance had expired or above the permitted production limit.
The larger violation was recorded at the Kalinga Open Cast Project under the Talcher mining circle. The mine’s environmental clearance expired in October 2021. After accounting for extensions granted by the Union environment ministry in connection with the Covid-19 period, the clearance remained valid only until October 23, 2021, the audit report said.
Despite the expiry, the mine continued production and extracted 1.15 crore tonnes of coal between October 2021 and March 2023 without a valid environmental clearance. The value of this production was assessed at ₹956.56 crore. Citing provisions of the Mines and Minerals (Development and Regulation) Act, 1957, the CAG said the lessee was liable to pay the value of the mineral extracted without lawful authority.
The second case involved the Kulda Open Cast Project under the Rourkela mining circle. Its approved environmental clearance for coal production was increased from 19.6 million tonnes per annum to 21 million tonnes per annum in May 2022. However, because the revised approval took effect partway through the financial year, the permissible production for 2022-23 was calculated at 20.77 million tonnes on a pro-rata basis.
The mine nevertheless produced 21 million tonnes during the year, exceeding the permissible level by 2.3 lakh tonnes. The CAG estimated the recoverable value of this excess production at ₹19.02 crore. Combined with the Kalinga project, the violations involved nearly 1.18 crore tonnes of coal and a recoverable amount of ₹975.57 crore.
The audit also questioned the effectiveness of mining oversight. It found that authorities had not adequately verified the validity of environmental clearances and approved production limits while assessing operations. In the Kalinga case, the Deputy Director of Mines, Talcher, “did not check the validity of EC and lawfulness of the production from the mine”, the report noted.
The irregularities were communicated during the audit process. The concerned deputy directors of mines said compliance would be furnished after verification of records, according to the report. The government’s response was awaited when the audit was finalised.
The findings place the focus on the administrative checks that are meant to connect environmental approvals with actual mine output. Environmental clearances set the legal conditions under which extraction can continue, while production approvals and mining assessments determine whether operators remain within those limits. In the cases identified by the CAG, the audit found gaps in verifying both conditions before or during production assessment.
The next step is the response and compliance action by the state mining authorities and the concerned authorities overseeing MCL operations. The audit report’s finding leaves the recovery of ₹975.57 crore and the verification of records at the centre of the government’s pending action.
