The mining industry is pressing for lower contribution to the fund to be handled by the District Mineral Foundation for minerals such as zinc, lead, iron ore and copper.
“The contribution in the fund should not be proposed for these four minerals (zinc, lead, iron ore and copper). Certainly for zinc and lead it should be exempted as they are already paying the highest royalty in the world,” an industry insider said.
While the amended Mines and Minerals (Development and Regulation) Act has been notified on March 27, the rules for payment to the fund are yet to be finalised.
The concept of the District Mineral Foundations was introduced in the amendment to the MMDR Act. Each state government will set up a non-profit body to be called the District Mineral Foundation which will work for the interest and benefit of people and areas affected by the mining operations.
As per the MMDR Amendment Act, the contribution by the miner to the fund should be a percentage of the royalty paid on the mineral. However, this shall not exceed one-third (33 per cent) of the royalty.
Mining industry officials also question whether the districts will be capable of handling the level of funds generated from mining operations.
“The fund is to be utilised in the mine affected areas. Are these districts capable to take such funds? In the interest of the natural resource industry, royalties and taxes should be kept at par with other countries to make Indian companies globally competitive,” another industry official said.
Apart from the contribution to the District Mineral Fund, miners will also be required to pay 2 per cent of the royalty amount on minerals to the National Exploration Trust and 2 per cent of the net profit for corporate social responsibility spends.
According to industry data, royalties for the four minerals – zinc, lead, iron ore and copper – are amongst the highest in the world.