At least 60% of mineral foundation to be used for social infrastructure

The Centre is likely to make it mandatory for new District Mineral Foundation (DMF) to spend at least 60 per cent of its money on social infrastructure such as schools, hospitals, women and child development. This year's amendment to the Mines and Minerals (Development and Regulation) Act, passed in March, says "state governments have to set up a DMF in every district affected by mining-related operations…the object of a DMF shall be to work for the interest and benefit of persons, and areas affected by mining-related operations, in such manner as may be prescribed by the state government".

According to a senior official, the Centre will soon issue binding guidelines for state governments. These would specify that only up to 40 per cent of the amount could be used for physical infrastructure such as roads and bridges. For, the worry here is that the DMF funds would be so used as not to give any substantial benefit to the locals.

Most districts affected by mining and related operations are extremely poor, not having amenities like clean water, schools or hospitals.

By the new law, all mining or composite licences (prospecting-cum-mining) would be allotted by state governments only through auction. New lease holders would pay an amount prescribed by the Centre to the DMF, not to exceed 33 per cent of the equivalent of royalty.

Old lease holders will also pay a fixed rate prescribed by the Centre, not to exceed the royalty amount, to the DMF. The centre is yet to take a final decision on these rates.