District Mineral Foundation

The District Mineral Foundation (DMF) is a district-level, non-profit trust created to ensure that communities bearing the costs of mining also share in its benefits. Its statutory purpose under Section 9B of the MMDR Act, 1957 is to work for the interest and benefit of persons and areas affected by mining-related operations.

Statutory basis and mandate

The State Government must establish a DMF by notification in every district affected by mining-related operations. This framework was introduced through the MMDR Amendment Act, 2015.

• The DMF addresses the local social, economic and environmental consequences associated with mineral extraction.
• Its composition and functions are prescribed through State Government rules, within the statutory framework and applicable Central Government directions.

Funding mechanism

Mining concession holders finance the DMF through mandatory contributions made in addition to royalty. The Act authorises a contribution not exceeding one-third of the royalty payable.

• For minerals other than minor minerals, the 2015 Contribution Rules prescribe 30 per cent of royalty for mining leases granted before 12 January 2015 and 10 per cent for leases granted on or after that date.
• Contributions for minor minerals are governed by rules made by the respective State Government.

Role in inclusive growth

The DMF converts part of the mineral revenue generated from a district into local welfare and development expenditure. It supports inclusive growth by directing resources towards mining-affected people and areas rather than allowing the benefits of extraction to remain detached from its local costs.

• Its spending can address welfare, public services, environmental damage and livelihood needs in mining-affected areas.
• The DMF institutionalises benefit-sharing, but effective outcomes depend on identifying affected communities, local participation and accountable use of funds.

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