What is District Mineral Foundation (DMF)?

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What is District Mineral Foundation (DMF)? Blog Image


In a written reply in Rajya Sabha, the Coal and Mines Minister recently said the District Mineral Foundation (DMF) has been set up in 644 districts in 23 states.

About District Mineral Foundation (DMF)

  • DMF is a trust set up as a non-profit body under the Mines and Minerals (Development and Regulation) (MMDR) Amendment Act 2015.
  • Purpose: To work in the interest and benefits of persons and areas affected by mining-related operations in a manner as may be prescribed by the respective State Government.
  • Funding: It is funded through the contributions from the holders of major or minor mineral concessions in the district, as may be prescribed by the Central or State Government.
  • Jurisdiction:
    • The operation of DMFs falls under the jurisdiction of the relevant State Government. 
    • The composition and functions of the District Mineral Foundation shall be such as may be prescribed by the State Government.
    • The fund for DMF is collected at the district level.

Key Facts about Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY)

  • The Ministry of Mines launched PMKKKY in 2015 for the welfare of areas and people affected by mining-related operations, using the funds generated by DMFs.
  • Objectives:
    • to implement various developmental and welfare projects in mining-affected areas, complementing the existing ongoing schemes of the State and Central Government;
    • to minimize/mitigate the adverse impacts, during and after mining, on the environment, health, and socio-economics of people in mining districts; and
    • to ensure long-term sustainable livelihoods for the affected people in mining areas.
  • Implementation:
    • It will be implemented by the DMFs of the respective districts using the funds accruing to the DMF. The MMDR Amendment Act, 2015, mandated the setting up of DMFs in all districts in the country affected by mining related operations.
    • The Central Government has notified the rates of contribution payable by miners to the DMFs.
    • In case of all mining leases executed before 12th January, 2015 miners will have to contribute an amount equal to 30% of the royalty payable by them to the DMFs. If mining leases are granted after 12.01.2015, the rate of contribution would be 10% of the royalty payable.
  • Utilisation of Funds:
    • At least 60% of PMKKKY funds to be utilized for High priority areas such as Drinking water supply, Health care, Education, Environment preservation etc.
    • Up to 40% of the PMKKKY to be utilized for other priority areas such as- Physical infrastructure, Irrigation, Energy and Watershed Development etc.

Q1) What is rat-hole mining?

It is a method of extracting coal from narrow, horizontal seams, prevalent in Meghalaya. The term “rat hole” refers to the narrow pits dug into the ground, typically just large enough for one person to descend and extract coal. Once the pits are dug, miners descend using ropes or bamboo ladders to reach the coal seams. The coal is then manually extracted using primitive tools such as pickaxes, shovels, and baskets.

Source: DMF set up in 644 districts for welfare of mining-affected people: Pralhad Joshi