The present study reveals the impact of mining in relation to geology as well as to environment. Panandhro is a village near the site of lignite mining in Eastern Kachchh region. The samples were collected from different locations in and around Panandhro site where actual mining is carried out. As this region belongs to tertiary age, different types of rocks were studied here and was found that clay, grey shale, carbonaceous shale and shaly lignite and lignite etc. The composite litholog of the mining area of Panandhro was studied during March 2013. The thin sections of lignite and other rocks which were observed in and around Panandhro mining area were studied. Water samples were collected from different locations in and around the Panandhro site and were analyzed for different parameters like total hardness (calcium hardness & magnesium hardness), chloride, SO4, total dissolved solids, suspended solids, chemical oxygen demand, biological oxygen demand and electrical conductivity. Soil samples from different locations were collected and analyzed for different environmental parameters.