The Centre has told the Supreme Court that the amendments to the mines and minerals Act and the introduction of the District Mineral Fund (DMF) have been made after considering the apex court’s directions in April last year, asking all mining lessees to contribute 10% of the sale price of the iron ore sold to the Goa Permanent Fund (GPF).
After the amendments, the Goa government had set up DMF for collecting funds to ensure sustainable development in mining activities.
The mines ministry, in its fresh affidavit, said the Mines and Minerals (Development and Regulation) Amendment Act, 2015, which came into being on January 12, enables it to prescribe the amount paid by a mining lease or prospecting licence-cum-mining lease holder to the DMF in addition to royalty.
Though the affidavit stops short of stating that the GPF must make way for the DMF, it explains that right now it has notified a DMF of 30% of the royalty, which roughly translates into 4.5% of average sale price published by the Indian Bureau of Mines, as the existing rate of royalty for iron ore is 15% on ad valorem basis. While the government notes that this figure can be increased to 100% of the royalty in future, it has left it for the SC to pass appropriate directions in this regard.
The government said every holder of a mining lease or a prospecting licence-cum-mining lease shall, in addition to the royalty, pay to the DMF an amount at the rate of 30% of the royalty in respect of mining leases granted before January 12, 2015, and 10% royalty for mining leases or prospecting licence-cum-mining leases granted on or after commencement of the new Act.
The affidavit comes in the wake of Vedanta (formerly Sesa Goa and Sesa Sterlite) seeking exemption from contributing twice towards social impact funds set up in Goa for restoration of environment damaged in the course of mining operation.