Why in news?
The Allahabad High Court, while deciding a mining dispute on 30 December 2025, observed that District Mineral Foundations (DMFs) are a beneficial provision of the Mines and Minerals (Development and Regulation) Act. The court held that Section 9‑B, which mandates contributions from mining lease holders towards a DMF, should be liberally interpreted to ensure that funds reach communities affected by mining.
Background
DMFs are non‑profit trusts established by state governments under Section 9‑B of the MMDR Act 1957 (as amended in 2015). They aim to extend the benefits of mineral wealth to people living in mining areas. Mining companies must contribute a portion of royalty payments to the DMF of the district where extraction occurs—10 % of royalty for leases granted after 12 January 2015 and 30 % for older leases. These funds are channelled into local development works.
Use of funds
- High‑priority areas (≥60 % of funds): Drinking water supply, sanitation and public health; environmental conservation and pollution control; healthcare facilities; education; welfare of women, children, the elderly and persons with disabilities; skill development programmes.
- Other areas (≤40 % of funds): Physical infrastructure such as roads, bridges, railways and public buildings; irrigation and watershed projects; energy supply and alternate livelihood activities.
- PM Khanij Kshetra Kalyan Yojana: The Pradhan Mantri scheme guides the use of DMF funds to ensure they directly benefit mining‑affected communities.
Significance of the ruling
- Beneficial interpretation: The court emphasised that statutory schemes like DMF should be interpreted in favour of those they are meant to assist, ensuring that corporations cannot avoid contributions.
- Community welfare: By upholding mandatory contributions, the ruling strengthens funding for health care, education, clean water and other essential services in mining districts.
- Transparency and accountability: State governments must ensure that DMF funds are utilised transparently and that local communities participate in decision‑making.
Conclusion
The judgement reinforces the idea that natural resources are a public trust and that profits from mining should translate into tangible benefits for local populations. Effective implementation of DMF and PMKKKY guidelines can improve the lives of people in resource‑rich but under‑developed districts.
Source: Live Law
