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.
Footnotes1 Issues and Options paper - p6
2 Issues and Options paper - p4
3 Issues and Options paper - ibid
4 Issues and Options paper - p7
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
