What is DMF?

District Mineral Foundations are statutory bodies in India established by the State Governments by notification. They derive their legal status from section 9B of Mines and Minerals (Development and Regulation) Act, 1957 as amended on 26 March 2015 as Mines and Minerals (Development and Regulation) Amendment Act, 2015. This amendment came into force from 12 January 2015.

Establishment

Each District Mineral Foundation is established by the State Governments by notification as a trust or non-profit body in the mining operation affected districts.

Objectives

The objective of District Mineral Foundation is to work for the interest of the benefit of the persons and areas affected mining related operations in such manner as may be prescribed by the State Government.

Composition and Functions

Composition and Functions of the DMF is prescribed by the State Governments taking guidelines from article 244 of Indian Constitution, fifth and sixth schedules, Provisions of the Panchayats (Extension to the Scheduled Areas) Act, 1996 and the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006. Funds every mining lease holder of will pay a fraction of royalty, not exceeding one-third of the royalty, to the DMF as per rates prescribed by Central Government. This fund will be used for welfare of the people affected in the mining affected areas.

ODMF Rule 2015

In exercise of the powers conferred by sub-section (4) of section 15 and section 15A read with section 9B of the Mines and Minerals (Development and Regulation) Act, 1957 (Act 67 of 1957), the Governor of Odisha do hereby make the following rules to regulate the composition, functions and manner of working of the District Mineral Foundations and the amount of payment to be made to the District Mineral Foundations by the concession holders of minor minerals for the interest and benefit of persons and areas affected by mining related operations and for purposes connected herewith. These rules may be called the Odisha District Mineral Foundation Rules, 2015.

Composition of Board of Trustees of the District Mineral Foundation
  1. The Board of Trustees shall consist of the following members; namely
    1. Revenue Divisional Commissioner or Collector, as may be decided by the Government, who shall be its Chairperson;
    2. Collector, if he is not the chairperson, Additional District Magistrate and District Level Officers of Steel and Mines, Forest and Environment, Rural Development, Works, ST and SC Development and Health and Family Welfare Departments and of such other Departments as the Government may specify, who shall be its members, ex officio;
    3. The Collector of the District shall be the Managing Trustee;
    4. Each Member of the Lok Sabha and each Member of the Odisha Legislative Assembly in whose constituency any major mineral concession is situated, shall be its ex officio members;
    5. A member of the Zilla Parishad situated within the District wherein the area in which any major mineral concession is situated to be nominated by the Government as an ex officio member;
    6. Not exceeding three members of Panchayati Raj Institutions or Urban Local Bodies from the area in which any major mineral concession is situated to be nominated by the Government as members.
  2. The Chairperson may invite such other Officials to the meetings of the Board, as he may consider necessary.
  3. The quorum for the Board shall be fifty percent of the members (4) The Board shall meet at least twice in a financial year.

About DMF Keonjhar

Keonjhar (Kendujhar) district, endowed with rich mineral deposits, occupies a prominent place in the mineral resource map of Odisha. The district fulfils the domestic and overseas demand with huge reserves of high-grade iron ore & manganese along with other minerals such as chromites, limestone, dolomite, nickel, granite etc. The entire forest range of Keonjhar is dotted with several surface iron ore & manganese ore mines of varying production capacities. Some of major mining agencies operating in the district are Essel Mining and Industries Ltd., Orissa Mining Corporation Ltd., Tata Iron and Steel Corporation Ltd.etc.

While district's mining sector contributes significantly to the state economy, however, there exists a discrepancy between the natural abundance of minerals found in the district and a corresponding development of the local communities. Historically the mineral rich revenue was distributed equitably across the state and there was no special advantage to the district owing to the mines around it. With the coming of District Mineral Foundation, this historical distribution is going to have a significant shift, especially leaning towards the district. 62% of Keonjhar's population still lives below the poverty line, with the worst sufferers being the marginalised groups of forest dwelling tribal communities and the opportunity knows the district now to correct the scenario. Keonjhar is home to a sizeable tribal population, including, Juangs, a Particularly Vulnerable Tribal Group who are totally dependent on forests and agriculture for their livelihoods and survival. As per the Census 2011, Scheduled Tribes constitutes 44.5%o of district's population with 11.62%o as Scheduled Castes. The district can now focus on these PVTGs and other tribal populations in a holistic manner with focused interventions in almost all priority sectors including health, drinking water and tackling environmental concerns during the process.

Window of Opportunity

The Mine and Minerals Development and Regulation (Amendment) Act 2015, has created provisions for sharing the mineral wealth with communities in the mining areas. The Act (Section 98) provides for the establishment of the District Mineral Foundation (DMF) for the benefit of communities and areas in districts directly or indirectly affected by mining related operations. The provision of District Mineral Foundation opens a window of opportunity to uplift the socio-economic status of mining-affected communities. As per various estimates, a total of 2555 million tonnes of iron ore is available as reserves in Keonjhar district. At the current rate of extraction of 55 million tonnes per year, the reserves will last for another 60 years. However, experts predict that as and when the global economy pulls itself out of the current slowdown, the rate of extraction will go up to 140 million tonnes per year, leading to exhaustion of the entire iron ore reserves of Keonjhar in a mere 23 years. Considering that the DMF in Keonjhar is largely limited to the availability of iron ore in the district, it is critical to recognize that its lifespan is finite and could be limited to a few decades only.

Calculating at the rate of Rs 500 Cr per annum, the total funds that will accrue under DMF Keonjhar over its lifespan is expected to be around Rs 25,000 Cr. This calls for a long term vision in planning and execution.