Tamil Nadu has revised the District Mineral Foundation (DMF) framework to strengthen the use of mining-related funds for people and areas affected by mineral operations. The Tamil Nadu District Mineral Foundation Rules, 2025, replace the 2017 rules and introduce stricter penalties, clearer spending norms, and a new livelihood-focused endowment fund.
Key Changes in DMF Rules
- The revised rules supersede the Tamil Nadu District Mineral Foundation Rules, 2017.
- The District Collector will serve as chairperson of the District Mineral Foundation Trust, the Managing Committee, and the Governing Council.
- Royalty or seigniorage fee will not be accepted unless the mandatory Trust Fund contribution is also paid.
- The rules aim to ensure that mining revenues are linked directly to local welfare and rehabilitation needs.
Penalty for Non-Compliance
- If a mining lease, composite licence, quarry lease, or permit holder violates the contribution rule, a monetary penalty will apply.
- The penalty will be equal to a one-time payment of the contribution, along with the unpaid contribution and 12% interest for the period of default.
- Earlier, such contravention could lead to imprisonment up to two years, a fine up to ₹5 lakh, or both.
- For continuing contravention, an additional fine of up to ₹50,000 per day may be imposed after the first conviction.
Spending Priorities Under DMF
- At least 70% of the Trust Fund must be spent in the directly affected area.
- Priority sectors include drinking water supply, environment preservation, health care, education, and welfare of women.
- The rules reinforce the idea that DMF funds should support communities most impacted by mining activity.
Endowment Fund for Livelihoods
- Districts with annual collection of ₹10 crore or more must maintain an endowment fund.
- The fund can be up to 10% of annual receipts.
- It will be used to create and sustain livelihoods in areas where mining has stopped, including due to mineral exhaustion.
- The provision is intended to support long-term economic transition in mining-dependent regions.