Sikkim Notifies District Mineral Foundation Rules to Benefit Mining-Affected Communities

The Government of Sikkim, through its Mines and Geology Department, issued the Sikkim District Mineral Foundation Rules, 2025, on August 2, 2025, which came into force upon their publication in the Official Gazette on August 11, 2025. These rules were enacted in exercise of powers conferred by sections 9B, sub-section (4) of section 15, and section 15A of the Mines and Minerals (Development and Regulation) Act, 1957 (Central Act No. 67 of 1957). The legislation establishes District Mineral Foundations (DMFs) as Trusts in each district of Sikkim, aiming to address the welfare and development needs of areas and individuals impacted by mining and quarrying operations. Each Trust is constituted as a body corporate, possessing perpetual succession and a common seal, signifying its status as a distinct legal entity.

The rules detail the composition and functions of the governing bodies for these Trusts. A Board of Trustees, chaired by the District Collector, includes ex-officio members from various district-level departments, Members of Parliament (Lok Sabha) and Members of the Sikkim Legislative Assembly whose constituencies contain mineral concessions, and nominated representatives from Panchayati Raj Institutions or Urban Local Bodies. This Board is tasked with overall control, approving annual budgets, action plans, master plans, and sectorial allocations, as well as monitoring the Trust's functioning and granting administrative sanctions for projects exceeding Rupees 50 lakhs. A Managing Committee, also chaired by the District Collector, oversees day-to-day management and can sanction projects up to Rupees 50 lakhs. The funds for these Trusts are to be sourced from payments made by lessees of both major and minor mineral leases, with minor mineral lessees required to contribute an amount equivalent to 20 percent of the royalty, in addition to royalty payments. These funds are also augmented by interest on deposits and voluntary contributions. The legislation provided: “The objects of the Sikkim District Mineral Foundation Trust shall be to work for the interests and benefits of persons and areas affected by mining or quarrying related operations in the district, in the manner as specified in these rules.”

The primary objective of the Sikkim District Mineral Foundation Rules, 2025, is to ensure that the benefits of mineral extraction are shared with the communities and regions that bear the environmental and social costs of such operations. This legislative intent addresses a critical gap in the earlier statutory framework, which primarily focused on mineral regulation and revenue generation, often without a direct mechanism for local community development and welfare in mining-affected zones. The rules aim to implement the Pradhan Mantri Khanij Kshetra Kalyan Yojana (PMKKKY), a centrally approved scheme, by specifying a comprehensive list of permissible activities. These include high-priority areas such as drinking water supply, environmental preservation and pollution control, healthcare (with a focus on primary and secondary facilities, staffing, and equipment), education (infrastructure, staffing, and financial support), welfare of women, children, aged, and disabled people, and skill development for livelihood support. Other priority activities encompass physical infrastructure (roads, bridges), irrigation, energy and watershed development, and afforestation. The rules mandate that at least 70 percent of the funds be utilized for high-priority activities, with up to 30 percent for other priority activities, allowing for flexibility in specific circumstances. The legislation also establishes clear mechanisms for identifying directly and indirectly affected areas and people, including families displaced by mines and those with traditional rights. To ensure accountability and transparency, the rules stipulate annual audits, preparation of annual reports, and mandatory public disclosure of information on a dedicated website, including details of contributions, project progress, and beneficiaries. The State Government retains powers to issue guidelines and directions, and a State Level Committee is constituted to monitor and review the functioning of the Trusts, ensuring convergence with State and District Plans and preventing the use of Trust funds for activities covered by the 'polluter pays principle'.

Keywords: Sikkim, District Mineral Foundation, Mining, Quarrying, Mineral Lessees, Welfare, PMKKKY, Mines and Minerals Act, Community Development, Environmental Protection

Geo Tags: India, Sikkim District: Not Applicable