Govt likely to fix miners' contribution to DMF at 30%

The Mines Ministry is likely to set miners' contribution to the District Mineral Foundation (DMF) at 30 per cent and will notify the guidelines soon after consultations with the Prime Minister.
Parliament had in March this year passed the Mines and Minerals (Development and Regulation) (Amendment) act, 2015, which mandates setting up of a DMF in all districts where mining takes place, for development of the area.
"The contribution to DMF has been agreed at 30 per cent for new leases. The guidelines have also been finalised and these will be notified this week itself. The Mines Ministry now has to seek Prime Minister's consent on these issues, which will happen as soon as he returns from the UAE tour," a source said.

On the quantum of payment towards DMF for existing miners, the source said the amount will not be 100 per cent of the royalty paid to the state as the idea is to get as much funds possible for DMF to develop project affected areas, but also ensure the companies are not excessively burdened.
According to the MMDR Act, the miners' contribution to DMF should not exceed one-third of the royalty rate for new concessions (through mines auction) and not exceed the royalty in respect of existing concessions.
This is designed to address a long-time grievance of civil society that people affected by mining are not cared for and with these funds, states will be able to address the issues of development in the districts where mining is taking place, the source added.

According to a senior official, the Mines Ministry will also notify the guidelines for the National Mineral Exploration Trust (NMET) this week.
To encourage mineral exploration in the country, the MMDR Act proposes to set up NMET, out of the contribution from the mining lease holders.
This would allow the government to have a dedicated fund to undertake exploration. In addition, the transferability provision (in respect of mining leases to be granted through auction) would permit flow of greater investment to the sector and increase efficiency in mining.