The coal extraction process in open-cast mining involves removing excess quantities of topsoil called 'overburden', resulting in accumulation over land and degradation of soil quality. Maintenance of such massive overburden dumps is challenging as the fine particles from the dumps are highly prone to cause air pollution in the surrounding areas. On the other side, there is an increasing demand for fine aggregate for use in concrete and mortar. Continuous and large-scale exploitation of natural river sand will result in a loss of stability of riverbanks and also increase the failure of irrigation wells and the associated farming. In this study, sand extracted from mine overburden from two locations with two fineness modulus through the wet-sieving process was used as alternative fine aggregate in mortar. Ordinary portland cement, hydrated lime, class-C fly ash and class-F fly ash as a binder at various combinations, and the properties are benchmarked with river sand as fine aggregate in the control mortar. Following ASTM C270, adopting sand-to-binder ratios of 2.25 and 3, the percentage of binder was varied maintaining the workability of 110% for all the combination mortar. The fresh properties, such as water demand and retention, and hardened properties, such as compressive strength, dry density, water absorption and durability properties like sorptivity, vacuum-saturated porosity and leaching, were determined. Characterisation techniques like Zeta potential, Thermogravimetric analysis (TGA) and Mercury intrusion porosimetry (MIP) were related to properties such as water retention, compressive strength and sorptivity, respectively. The study highlights the potential for including performance-based specifications in the current masonry and plastering mortar codes.