CAG flags ₹1,210 crore in mining irregularities in Odisha
By Staff Report 1 October 5, 2026 6:52 pm IST
The CAG has flagged ₹1,210.82 crore in mining irregularities in Odisha, including excess coal production, short levy of dues and unlawful extraction.
The Comptroller and Auditor General of India (CAG) has detected mining irregularities amounting to ₹1,210.82 crore in Odisha, involving unlawful coal production, short levy of royalty and mining dues, and mining without valid statutory clearances. The audit found that more than 1.17 crore tonnes of coal were produced at two Mahanadi Coalfields Ltd (MCL) mines either beyond environmental clearance limits or without valid environmental clearance. The CAG valued the coal at ₹975.57 crore.
At MCL’s Kalinga opencast project in Talcher, the environmental clearance for 8 million tonnes per annum of run-of-mine coal expired on 23 October 2021 after an extension linked to the COVID-19 period. The audit found that 1,15,66,590 tonnes of coal were extracted between 24 October 2021 and 31 March 2023, with a calculated value of ₹956.56 crore.
At MCL’s Kulda opencast project, the approved production capacity was increased from 19.6 million tonnes per annum to 21 million tonnes on 24 May 2022. The CAG found that production during 2022-23 exceeded the permissible pro-rata limit by 0.23 million tonnes, valued at ₹19.02 crore.
The audit also identified a short levy of ₹92.39 crore in royalty and other mining dues across nine MCL coal mines. Sizing charges were not included while determining the price of run-of-mine coal for assessment purposes. The short levy comprised ₹69.99 crore in royalty, ₹21 crore towards the District Mineral Foundation and ₹1.4 crore towards the National Mineral Exploration Trust.
The CAG further identified a potential revenue implication of ₹27.74 crore relating to two coal blocks in the Orient area of Jharsuguda district. The additional amount, equivalent to royalty on coal dispatched during the extended lease period, had not been levied or recovered.
In another case, mining at the Mahulsukha iron and manganese ore mine in the Koira mining circle continued for around one-and-a-half years without a valid consent to operate. The CAG calculated the value of the mineral extracted during the period at ₹45.59 crore.
The Odisha Steel and Mines Department defended the operations, citing provisions of the Mineral Concession Rules, 2016, the Mines and Minerals (Development and Regulation) Act and government orders concerning the transfer of rights and approvals from the previous lessee.
The CAG did not accept the explanation, noting that the previous lessee’s consent to operate had expired on 31 March 2020 and that a fresh consent for the new lessee was granted only on 31 March 2022. The audit also found that 27 leaseholders had delayed payments totalling ₹1,452.55 crore. Mining authorities failed to levy interest of ₹69.53 crore on these delayed payments.
Source: Business Standard
