Additional mining levy on CIL
Coal India Limited is likely to fork out an additional Rs.2,000 crore to Rs.2,500 crore as mining levies, with the Centre making the District Mineral Foundation (DMF) levy applicable on coal mining from the same date as it is for other minerals.
Levy on coal mining from retrospective effect
“You can’t have two sets of different rules for mining activity of major minerals and coal,” a top government official told The Hindu, confirming that the Coal Ministry has now issued a fresh notification making DMF applicable from January 12, 2015. “Coal is also generically a mineral, but the DMF levy was applied retrospectively for major minerals governed by the mines ministry, and prospectively for coal and lignite governed by the Coal Ministry.”
Earlier, Coal mininstry was in favour of levy from prospective effect.
Use of levy
The levy is used to fund local area development projects under the Pradhan Mantri Khanij Kshetra Kalyan Yojana and has so far yielded more than Rs.3,200 crore.
Miners have to pay an additional levy on top of royalty payments towards the District Mineral Foundation that will finance development projects in mining-affected areas, under the Mines and Mineral Development and Regulation Act of 2015.
The DMF levy is pegged at 30 per cent of royalty for mines allotted administratively in the past and 10 per cent for those acquired through transparent auctions — now a norm for all coal mines and major minerals such as iron ore.