ICMM - International Council on Mining & Metals

PROJECTS

International reporting systems for reserves and resources

With the advent of a global industry, it is necessary to make the various classification systems in use for reserves and resources more compatible.

Amongst the stakeholders that are interested in resources and reserves are national governments, who may require minerals inventories to plan future economic development and prioritise land use.  Regulators are concerned to ensure that such development is appropriately controlled.

Many resource and reserve classification systems have been developed over the years although most have their roots in a single system documented in the 1970s.  Since then the systems applied by different users - minerals, petroleum, governments and others have diverged, and the global industry requires a move towards greater compatibility.

What is ICMM doing?

ICMM, through the Committee for Mineral Reserves Reporting Standards (CRIRSCO), is currently engaged in promoting convergence and comparability between different stakeholders with an interest in resource and reserve estimation, classification and reporting.

An overarching system termed the United Nations Framework Classification or UNFC has been developed, led by the United Nations Economic Commission for Europe (UNECE). A minerals version was published in 1999 and a petroleum version in 2004. These two classifications contained elements that were contradictory to each other and which also contradicted normal business practice in the minerals industry.  As a result, ICMM is engaging with the UNECE to assist in the development of a new UNFC. This would act as an ‘umbrella’ standard under which would reside the standards of the various industry sectors, including the International Reporting Template.

The purpose of the Template is to provide countries that either do not currently have a reporting standard or that wish to update their previous systems with a model for how this should be done; at the same time establishing international compatibility.  A number of countries such as Chile and the Philippines have adopted this approach and ICMM is engaging with others who wish to follow the same path, through the Committee for Mineral Reserves and International Reporting Standards (CRIRSCO).

As a pre-cursor to developing a new UNFC, ICMM has engaged with the petroleum industry through the Society of Petroleum Engineers who recently published the Petroleum Resource Management System (PRMS).  The PRMS is the petroleum industry’s equivalent of the International Reporting Template but goes further in terms of classifying materials that may currently be uneconomic or even undiscovered. ICMM and the SPE jointly developed a ‘mapping’ document that explains the similarities and differences between the two systems and this is currently being used in discussions with the United Nations and the International Accounting Standards Board (IASB) as the basis of a more easily understood framework for the extractive industries.

A resource is a body of mineralisation estimated on geological criteria with no guarantee that it will ever be mined - a reserve incorporates engineering, environmental, social, economic, and other studies that make it likely that mining will result

The IASB has requested both CRIRSCO and the SPE to develop a ‘converged’ position that could then be used in the development of a single set of International Financial Reporting Standards that would apply to both the minerals and petroleum industries.  The role of ICMM by engaging in this way is to influence the eventual outcomes in a positive way so that any resulting standards are easily understood by users and can be applied simply and cost effectively.

What do we hope to achieve?

In an ideal world, every country would have systems of governance that would be internationally compatible and accepted.  However, systems have largely developed independently over long periods and with the added complexity introduced by language differences, the ideal of single global communications systems is difficult to achieve.  However, there are signs of changes occurring in the mining industry with an increased desire on all sides to see more ‘joined up’ systems which in the end would benefit all stakeholders. ICMM will continue to engage in what is often a protracted process to encourage such developments.