District mineral fund will make mining unviable: Assocham

The provision for setting up of a 'District Mineral Fund' in the MMDR (Amendment) Bill, 2014 for development of project-affected people will make Indian mining firms uncompetitive and thus, should be dropped altogether, said industry body Assocham.
"DMF (District Mineral Fund) would make mining companies in India uncompetitive and economically unviable and therefore, proposal for creating DMF may please be dropped altogether," it has said in a recent letter to Steel and Mines Minister Narendra Singh Tomar.
In order to earmark funds for benefit of persons affected by mining as also for rebuilding of infrastructure in mining affected areas, the draft Mines and Minerals (Development and Regulation) (Amendment) Bill, 2014, has proposed to set up a DMF in every district affected by mining.

The non-profit body would be funded by an additional levy related to royalty, the rate of which will be prescribed by the Centre.
Arguing that royalty on minerals is one of the highest in the world, Assocham said mineral industry of the country has already been highly-taxed.
In India, iron ore attracts 15 per cent royalty compared to 4.8 per cent in Russia, three per cent in Argentina, two per cent in Brazil and between 0.5-3 per cent in China.
The industry body has also said existing mineral-based industries which do not have captive mines or adequate captive resources matching to their requirement need to be given preferential allocation through auction or competitive bidding route.

"Private sector needs to be given greater role in exploration/prospecting of notified as well as notified minerals," it said.