District Mineral Foundation Trust is established by the State Government by notification as a trust or non-profit as perpetual body in the mining operation affected districts. Every mining lease holder contributes a fraction of Seigniorage Fee / Royalty, to the DMF as per rates prescribed by Central / State Governments. This fund is used for welfare of the people affected in the mining affected areas.

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

The Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY) are implemented by the DMF’s of the respective districts using the funds accruing to the DMF. The overall objective of PMKKKY scheme are-

• To implement various developmental and welfare projects/programs in mining affected areas, and these projects/programs will be complementing the existing ongoing schemes/projects of State and Central Government.
• To minimize/mitigate the adverse impacts, during and after mining, on the environment, health and socio-economics of people in mining districts.
• To ensure long-term sustainable livelihoods for the affected people in mining areas.

The funds of the Trust shall comprise of initial deposit of Rs.1,000/- (Rupees one thousand only) made by the Government and include –

• (a) payment to the Trust made by the lessees of major mineral leases at the rates specified by the Central Government;
•  (b) payment to the Trust made by the lessees of minor mineral leases at the rates specified in these rules;
•  (c) all receipts and incomes including interest accrued on the deposits made in the bank;
• (d) voluntary contributions, if any, received by the Trust from any person or Organization

The Governing Council shall –

(1) lay down broad policy framework and or approve rules and procedures for the functioning of the Trust and review its working;

(2) approve annual plan and annual budget of the Trust upon the recommendations of the Managing Committee;

(3) manage, administer, supervise, monitor and review the expenditure of the Trust Fund at regular intervals; and

(4) appoint an auditor from the List of approved auditors notified by the Accountant General of Tamil Nadu for the Trust Fund in the meeting of the Governing Council on such terms and conditions as may be decided by the Trustees.

** The Governing Council shall meet at least twice in a year, and shall be convened as desired by the Chairman

• To implement various developmental and welfare projects/programs in mining affected areas, and these projects/programs will be complementing the existing ongoing schemes/projects of State and Central Government.
• To minimize/mitigate the adverse impacts, during and after mining, on the environment, health and socio-economics of people in mining districts.
• To ensure long-term sustainable livelihoods for the affected people in mining areas.

The Managing Committee shall –

(1) while discharging its functions, follow the policy framework and the directions of the Governing Council from time to time;

(2) exercise due diligence in carrying out its duties for protecting the interests of the Trust;

(3) ensure timely collection of contribution from the concerned mining lease holders in accordance with the provisions of the Act;

(4) prepare the Master Plan/Vision Document, rules and procedures for the functioning and for the activities of the trust;

(5) assist in the preparation of the annual plan and the annual budget of the Trust along with the proposed schemes and projects;

(6) supervise and ensure the execution of the annual plan and the approved schemes and projects;

High-priority areas – at least 60% of PMKKKY funds to be utilized under these heads:

• Drinking water supply
• Environment preservation and pollution control measures
• Health care
• Education
• Welfare of Women and Children
• Welfare of aged and disabled people
• Skill development

Other priority Areas – Up to 40% of the PMKKKY to be utilized under these heads

• Physical infrastructure
• Irrigation
• Energy and Watershed Development
• Any other measures for enhancing environmental quality in mining district.