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District Mineral Foundations (DMFs)

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  • Context (TH): District Mineral Foundations have been set up in 644 districts of 23 states.
  • These are set up under Section 9B of Mines and Minerals (Development and Regulation) Amendment Act, 2015.
  • It is a trust set up as a non-profit body by State governments in districts affected by mining works.
  • It is a non-lapsable fund, separately set up for each district.
  • It is funded through contributions from miners.
  • The mining companies are required to pay DMF 30% of the royalty amount for leases granted before 2015 and 10% for leases granted through the auction mechanism post-2015,
  • The operation and composition of DMF comes under the jurisdiction of the State Governments.
  • The central government may give directions regarding the composition and utilisation of funds by DMFs.
  • The DMFs are expected to implement the Pradhan Mantri Khanij Kshetra Kalyan Yojana using the funds.

Pradhan Mantri Khanij Kshetra Kalyan Yojana

  • It was launched in 2015 to provide for welfare of areas & people affected by mining-related operations.

Usage of funds

  • At least 60% of the funds to be used in High priority areas like drinking water supply, health care, sanitation, education, women, childcare, welfare of aged & disabled people, etc.
  • Up to 40% of the funds for creating a supportive and conducive living environment. It will be spent on making roads, bridges, railways, waterways projects, irrigation and alternative energy sources.
  • Not more than 5% of the funds can be used for administrative expenses.


  • Affected areas: All areas directly and indirectly affected by mining-related operations.
  • Affected persons: It includes those who have legal rights over the land being mined, who have occupational rights and other traditional rights on mined lands.

Participatory Decision making

  • The DMFs can take all major decisions in consultation with the ‘gram sabhas’ of the respective villages, including identification of beneficiaries.
  • For the 5th and 6th scheduled areas, mandatory approval of Gram Sabha is required for all plans, programs and projects to be taken up under PMKKKY and identification of beneficiaries.

Mines and Minerals (Development & Regulation) Act, 2015

  • The Act amends the Mines and Minerals (Development and Regulation) Act, 1957.
  • New category of mining license: i.e. the prospecting license-cum-mining lease is created. It will be granted by state governments for both notified (with the approval of central government) and other minerals.
  • All leases shall be granted through auction by competitive bidding, including e-auction.
  • It provides for the creation of:
    1. District Mineral Foundation (DMF)
    2. National Mineral Exploration Trust (NMET)

National Mineral Exploration Trust

  • It is a trust set up as a non-profit body by the Central Government.
  • Mandate: For regional and detailed exploration of minerals, with special emphasis on strategic and critical minerals.
  • Rate of contribution to NMET: 2% of royalty paid.
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