District Mineral Foundations (DMFs)

Recently, the Allahabad High Court held that the formation of District Mineral Foundations (DMFs) is a beneficial legislation. The Court stated that DMF provisions must be interpreted liberally to ensure justice for people and areas that are negatively affected by mining operations.

About District Mineral Foundations (DMFs)

District Mineral Foundations are statutory bodies established by State Governments through official notifications. They derive their legal status from Section 9B of the Mines and Minerals (Development and Regulation) Act, 1957, as amended by the MMDR Amendment Act, 2015.

In every district affected by mining-related activities, the State Government is required to establish a non-profit trust, known as the District Mineral Foundation.

Purpose of DMFs

The primary purpose of DMFs is to work for the interest and benefit of people and areas affected by mining-related operations. The manner of functioning and utilization of funds is prescribed by the respective State Governments.

Jurisdiction and Governance

The operation of DMFs falls under the jurisdiction of the respective State Governments.
The composition, structure, and functions of the DMFs are also determined by State Government rules and guidelines.

Funding of District Mineral Foundations

DMFs are funded through mandatory contributions from holders of major and minor mineral concessions in the district.

The Central Government has notified the contribution rates as follows:

• For mining leases executed before 12 January 2015, miners must contribute 30% of the royalty payable to the DMF.

• For mining leases granted after 12 January 2015, the contribution rate is 10% of the royalty payable.

Utilisation of DMF Funds

The funds available with the DMF Trust are used for:

• Overall development of mining-affected areas based on an Annual Action Plan.

• Creation of local socio-economic infrastructure.

• Providing, maintaining, and upgrading community assets and services.

• Organizing skill development and capacity-building programmes to promote employment and self-employment opportunities.

Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY)

The Ministry of Mines launched PMKKKY in 2015 to ensure the effective utilization of DMF funds for the welfare of mining-affected people and areas.

Objectives of PMKKKY

The objectives of PMKKKY include:

• Implementing developmental and welfare projects in mining-affected areas.

• Minimizing and mitigating the adverse environmental, health, and socio-economic impacts of mining.

• Ensuring long-term and sustainable livelihoods for people living in mining regions.

Utilisation of PMKKKY Funds

• At least 60% of the funds must be used for high-priority sectors such as drinking water, healthcare, education, sanitation, and environmental conservation.

• Up to 40% of the funds may be used for other priority areas, including physical infrastructure, irrigation, energy, and watershed development.

Conclusion

District Mineral Foundations play a crucial role in ensuring inclusive and sustainable development of mining-affected regions. The recent High Court judgment reinforces the welfare-oriented intent of the DMF framework and strengthens the rights of communities impacted by mining activities.