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On 26 April 2012, the Standing Council on Energy & Resources
(SCER) released an Issues & Options Paper (Options Paper),
seeking public and stakeholder comments on proposals to expand
reporting obligations on those resources companies not already
subject to ordinary disclosure requirements under the Australian
Securities Exchange (ASX) Listing Rules. This Options Paper is in
addition to the current consultation process being undertaken by
the ASX and the Joint Ore Reserves Committee in respect of enhanced
disclosure obligations under the ASX Listing Rules (for our eAlerts
on this issue, please click
here).
The Options Paper has been prepared on the basis of a perceived
decline in the quantity and quality of resources information
disclosure made by non ASX listed companies – including
foreign owned and domestic unlisted companies. Citing the
importance of the mining industry to Australia's
future1, the Options Paper notes that such information
is needed:
by industry to enable it to better assess the risks and rewards
associated with investment in exploration or mining
by governments and their respective agencies to ensure
consistent data is used for policy and revenue purposes and to
formulate sound policies on a range of issues including
infrastructure, environmental management, occupational health and
safety and skills.
Current reporting requirements
ASX requirements
ASX listed resources companies are required to disclose resource
information in accordance with the JORC Code.
However, private and foreign resources companies are not
required to report on exploration results, mineral resources and
ore resources publicly. The recent surge in takeovers of Australian
resources companies has caused many of these to be delisted from
the ASX, with the new parent company not reporting mineral
resources at all or only aggregates of Australian mineral resources
across international regions.
The Options Paper notes that this "has now reached a
critical point where Australia no longer has an accurate Economic
Demonstrated Resources for a range of
minerals"2.
State/territory legislative
requirements
There are various reporting requirements at the exploration and
mining stages across the states and territories. However, the
Options Paper notes that these reporting obligations have not been
"systematically enforced"3, many non-ASX
listed companies are unwilling to report voluntarily and upon
request, and the information which is provided is focused on
production rather than mineral resources and ore reserves, given
the emphasis on production royalties in state and territory
budgets.
Information sought
These deficiencies have prompted the SCER to initiate three
proposals to potentially expand the information that is provided to
regulatory agencies around the country. Such information would
include the following:
tenements details
location/distance to nearest town
commodity types
ownership details
mine site operator details
amount of ore reserves (proved, probable)
amount of mineral resources (measured, indicated,
inferred)
status and details of operations
production capacity
actual and forecast production
processing history and forecast
product specification.
Importantly, the Options Paper notes that the information would
be aggregated to protect confidentiality and would not be reported
on a "by deposit" basis4.
Three options
The three proposals are:
voluntary survey– a survey could be used to collect
resource information and jurisdictions would collate and supply the
data to Geoscience Australia by 30 September each year
regulatory – compulsory reporting to mirror listed
company disclosure obligations. This could involve additional
tenement conditions or legislative amendments
do nothing – that is, use existing mechanisms such as
state and territory legislative requirements (referred to above)
and direct requests for information.
Next steps
The Option Paper proposes a range of specific questions in which
it seeks stakeholder feedback. The consultation period will close
at 5.00 pm AEST on Friday 18 May 2012. The results of the
consultation will be considered by the SCER in June 2012 and if the
SCER decides to pursue reform, a further round of consultations may
occur in the second half of 2012.
Footnotes
1 Issues and Options paper - p6 2 Issues and Options paper - p4 3 Issues and Options paper - ibid 4 Issues and Options paper - p7
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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