20 February 2009
Supplementary comments on UNFC from Geoscience Australia
Background
Geoscience Australia (GA) and its predecessors (Bureau of Mineral Resources and Australian Geological Survey Organisation) have prepared assessments of Australia’s mineral resources since the mid 1970s. The national minerals inventory is published online as an annual report: Australia’s Identified Mineral Resources. The latest report (to the end of December 2007) is available at: http://www.ga.gov.au/minerals/exploration/resources_advice/AIMR2008.jsp. The information on which this series is based comes mainly from company reports of Ore Reserves and Mineral Resources under the Joint Ore Reserves Committee (JORC) Code.
Issue: National vs commercial reporting of mineral resources
A point that GA has made in several previous submissions, which does not appear to us to have been reflected adequately in the ongoing development of the UNFC, is that national/international inventory reporting and commercial reporting cannot both be done satisfactorily under a single scheme. There needs to be two distinct but compatible schemes for:
Overall, the national and commercial reporting schemes have different levels of detail and time frames for consideration of resources.
The UNFC currently has a focus on commercial reporting. This is fine, as long as it is acknowledged that a different but compatible scheme is needed for national/international reporting, with “bigger boxes” for the resource categories than is the case in the current scheme.
This point is illustrated for Australia in the following. Under the JORC Code, “Reserves” describe the component of mineralisation within a particular tenement/deposit that have the highest level of geological and economic certainty and no barriers to mining (environmental, legal or other) – Reserves are currently economic and feasible. To reflect its longer term/less detailed view, Australia’s national inventory uses the term Economic Demonstrated Resources (EDR) to describe the resources with highest geological and economic certainty – EDR are made up of JORC Reserves plus Resources that GA experts consider are likely to be economic in a 25 year or longer time frame. In reporting EDR, the national inventory disregards any current environmental, legal or other barriers to mining particular resources (because many of these could change with changing circumstances), but any current resource access issues are identified through inclusion of an additional “Accessible EDR” category.
To provide an example of relationships between EDR and Reserves, GA’s estimates of EDR for bauxite are much greater than the aggregated JORC Reserves from published company reports for several reasons, including (a) Reserves are not recalculated regularly by companies, (b) the various bauxite deposits are known to continue well beyond the published Reserve outlines, and (c) companies are signalling their long term intentions by planning new plant. Similarly, international reporting has to link to – and take a similar long term view to – national reporting. GA equates Australia’s EDR for uranium with the IAEA/OECD-NEA Uranium Group’s Reasonably Assured Resources recoverable at costs of <UD$80/kg U. Of course, this correlation will change with metal price; prior to the uranium price increases (from 2003), GA equated RAR recoverable at costs of <UD$40/kg U with EDR. It is noted that the points made herein mirror those made in a submission in 2008 by the Uranium Group, of which I am a Vice Chair, which stated that the group could not use the UNFC in the form it was then published.
Supplementary comments on UNFC from Geoscience Australia
Background
Geoscience Australia (GA) and its predecessors (Bureau of Mineral Resources and Australian Geological Survey Organisation) have prepared assessments of Australia’s mineral resources since the mid 1970s. The national minerals inventory is published online as an annual report: Australia’s Identified Mineral Resources. The latest report (to the end of December 2007) is available at: http://www.ga.gov.au/minerals/exploration/resources_advice/AIMR2008.jsp. The information on which this series is based comes mainly from company reports of Ore Reserves and Mineral Resources under the Joint Ore Reserves Committee (JORC) Code.
Issue: National vs commercial reporting of mineral resources
A point that GA has made in several previous submissions, which does not appear to us to have been reflected adequately in the ongoing development of the UNFC, is that national/international inventory reporting and commercial reporting cannot both be done satisfactorily under a single scheme. There needs to be two distinct but compatible schemes for:
- National reporting, which reports the total tonnes (etc.) of each metal/commodity in each resource category in Australia. This provides succinct information which is easy for politicians and bureaucrats to understand; it is the most appropriate information for broad government policy and decision making; and
- Commercial reporting by mining/exploration companies, which provides grades and tonnages for specified categories of resources at individual tenements/mineral deposits – companies listed on the Australian Securities Exchange are required to report using the JORC Code to provide a transparent guide for investment decisions.
Overall, the national and commercial reporting schemes have different levels of detail and time frames for consideration of resources.
The UNFC currently has a focus on commercial reporting. This is fine, as long as it is acknowledged that a different but compatible scheme is needed for national/international reporting, with “bigger boxes” for the resource categories than is the case in the current scheme.
This point is illustrated for Australia in the following. Under the JORC Code, “Reserves” describe the component of mineralisation within a particular tenement/deposit that have the highest level of geological and economic certainty and no barriers to mining (environmental, legal or other) – Reserves are currently economic and feasible. To reflect its longer term/less detailed view, Australia’s national inventory uses the term Economic Demonstrated Resources (EDR) to describe the resources with highest geological and economic certainty – EDR are made up of JORC Reserves plus Resources that GA experts consider are likely to be economic in a 25 year or longer time frame. In reporting EDR, the national inventory disregards any current environmental, legal or other barriers to mining particular resources (because many of these could change with changing circumstances), but any current resource access issues are identified through inclusion of an additional “Accessible EDR” category.
To provide an example of relationships between EDR and Reserves, GA’s estimates of EDR for bauxite are much greater than the aggregated JORC Reserves from published company reports for several reasons, including (a) Reserves are not recalculated regularly by companies, (b) the various bauxite deposits are known to continue well beyond the published Reserve outlines, and (c) companies are signalling their long term intentions by planning new plant. Similarly, international reporting has to link to – and take a similar long term view to – national reporting. GA equates Australia’s EDR for uranium with the IAEA/OECD-NEA Uranium Group’s Reasonably Assured Resources recoverable at costs of <UD$80/kg U. Of course, this correlation will change with metal price; prior to the uranium price increases (from 2003), GA equated RAR recoverable at costs of <UD$40/kg U with EDR. It is noted that the points made herein mirror those made in a submission in 2008 by the Uranium Group, of which I am a Vice Chair, which stated that the group could not use the UNFC in the form it was then published.