Towards a Unique Set of International Reporting Codes for Mineral Resources
The mining industry depends on financial investments that, in turn, depend on how well investors understand the risks involved in estimating mineral resources or ore reserves.
Professional organizations in several different countries have published codes that set minimum standards for public reporting of mineral resources and ore reserves. However, each code defines the term “resource” differently and has, in general, a unique approach.
The mining industry is in need of one international set of guidelines. As populations increase so does the continuous demand for commodities worldwide and investors should be able to access standard and detailed information before making any investment decisions. Over the past 30 years, mining has demonstrated that many of the future resources are of lower grade and deeper in the earth’s crust. Finding new deposits with high grades is rare and companies have to rely more on developing lower grade deposits worldwide.
Mining investors face the challenge of deciding which company with multiple international projects to invest in. During
the most recent boom in the mining industry (2006-2008), companies tended to prepare reports for investors based on the eventual stock exchange for which they wanted the listing.
There are a number of resource/ reserve codes in use worldwide, primarily developed in countries with highly developed mining industries, including:
• JORC CODE – Joint Ore Reserve Committee (Australasia)
• SAMREC CODE – South African Mineral Committee (South Africa)
• REPORTING CODE – (UK /Western Europe)
• CIM GUIDELINES (NI43-101) – Canadian Institute of Mining, Metallurgy and Petroleum (Canada)
• SME GUIDE – Society for Mining, Metallurgy and Exploration (USA)
• CRIRSCO CERTIFICATION CODE – (Chile)
With today’s globalization of industries, the world is moving towards a single international market and the industry should have one set of guidelines. By generating specific global guidelines, investors will be helped in the process of making prudent investments that may result in a reduction in the number of dishonest or fraudulent resource scams.
These new guidelines will accomplish the following:
• Reduce if not eliminate misleading reporting and consequently fraudulent scams;
• Create global standards for resources;
• Provide an excellent benchmarking tool for projects worldwide, and
• Reduce the number of third party reviews on resource validation. There are a few initiatives to generate new global resource guidelines that will replace all current guidelines. These proposals are currently under development, but they will be integrated, published and subject to voting by early 2011.
*Andrew J. Ramcharan is the
Manager of Corporate Development at