Bhubaneswar: The Comptroller and Auditor General of India (CAG) has flagged violations of environmental clearance (EC) conditions at two coal mines operated by Mahanadi Coalfields Limited (MCL) in Odisha.
According to the CAG’s compliance audit for the year ended March 2024, the audit identified nearly 1.18 crore tonnes of coal as having been produced either without valid environmental clearance or beyond the permitted production limit.
The audit estimated a potential recoverable amount of ₹975.57 crore under provisions of the Mines and Minerals (Development and Regulation) Act, 1957.
Kalinga Open Cast Project Produced Coal After EC Expired
The major issue identified by the CAG relates to the Kalinga Open Cast Project in Talcher.
According to the audit, the mine’s environmental clearance expired on October 23, 2021, even after extensions applicable during the Covid-19 period were taken into account.
Despite the expiry of the clearance, mining operations reportedly continued until March 2023.
During this period, approximately 1.15 crore tonnes of coal were extracted without a valid environmental clearance, according to the CAG audit.
The value of the coal produced during the period was assessed at approximately ₹956.56 crore.
The finding represents the largest portion of the potential recoverable amount identified in the audit.
Excess Production Reported at Kulda Open Cast Project
The CAG also identified a production-limit violation at the Kulda Open Cast Project in Rourkela.
The environmental clearance limit for the mine was enhanced to 21 million tonnes per year in May 2022.
However, because the revised limit came into effect during the financial year, the permissible production for 2022-23 was calculated on a pro-rata basis at approximately 20.77 million tonnes.
The mine reportedly produced 21 million tonnes during the year.
This resulted in excess production of around 2.3 lakh tonnes, according to the audit.
The value of the excess coal was assessed at approximately ₹19.02 crore.
Audit Points to Gaps in Monitoring
The CAG also raised concerns over the monitoring and verification mechanisms used by mining authorities.
The audit pointed to inadequate verification of environmental clearance validity and approved production limits.
Environmental clearances specify conditions and production limits that mining operations are required to comply with. According to the audit findings, authorities did not adequately verify these requirements in the cases identified.
₹975.57 Crore Potentially Recoverable
Taken together, the two cases involve nearly 1.18 crore tonnes of coal linked to the reported violations.
The CAG calculated a potential recoverable amount of ₹975.57 crore under the relevant provisions of the Mines and Minerals (Development and Regulation) Act, 1957.
The figure includes the assessment associated with coal produced after the expiry of the environmental clearance at Kalinga and the excess production identified at Kulda.
What the CAG Audit Highlights
The findings underline the importance of monitoring environmental clearances throughout the operational life of mining projects.
For coal mines, production is subject to approved limits and environmental conditions. Any change in production capacity or continuation of mining after the expiry of an environmental clearance requires compliance with the applicable regulatory framework.
The audit has therefore highlighted the need for authorities to strengthen systems for tracking EC validity, approved production limits and actual coal output.
The findings are part of the CAG’s compliance audit covering the financial year ending March 2024.
