Definition of Mineral Reserves

=Overview=

The definition of mineral reserves, or the estimated quantity of minerals that could be extracted from a site, is of considerable importance to governments, international agencies, economists and the international energy industry.

Reserve definitions can be broadly split into 'resources' and 'reserves' according to geological certainty when exploring. While many different systems have been devised over the years to define reserves, there have been efforts in recent years to develop an international standards across all countries.

=Classification Standards=

Over the past century many differing standards for mineral classification have been developed by both governments and professional and industrial bodies. However as a result of the increasingly globalised nature of the mining industry, in recent years there have been calls by the Committee for Mineral Reserves International Reporting Standards (CRIRSCO) to develop a common terminology set of universal standards that 'talk' to each other across international borders.

The most widely accepted reporting standards used today across the global mineral industry are the JORC (Australia), the SME (US), SAMIREC (South Africa), PERC (Europe) and CIM (Canada). However, the similarity of the various national reporting codes and guidelines has enabled CRIRSCO to develop an International Minerals Reporting Code Template, to act as a 'core code and guidelines' to be adopted in any country for market-related reporting and financial investment.

=Terminology=

According to the CRIRSCO classification system, 'Exploration Results' are a pre-cursor to 'Mineral Resources' but are insufficient to estimate a volume, tonnage or grade of mineralisation. Beyond this, findings are classified as 'mineral resources' and 'mineral reserves', as described in more detail below.

Mineral Resources
According to CRIRSCO's Template, a ‘Mineral Resource’ is a concentration or occurrence of material of economic interest in the Earth’s crust in such form, quality and quantity that there are reasonable prospects for eventual economic extraction. The characteristics of a 'Mineral Resource' are based on specific geological evidence, sampling and knowledge and are subdivided, in order of increasing geological confidence into 'Inferred', 'Indicated' and 'Measured' categories.

Mineral Reserves
According to the CRIRSCO Template, a ‘Mineral Reserve’ is the economically mineable part of a Measured and/or Indicated Mineral Resource. The classification is based on assessments and studies and includes consideration of 'modifying factors' of mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors. These assessments demonstrate at the time of reporting that extraction could reasonably be justified.

Mineral Reserves are sub-divided in order of increasing confidence into 'Probable Mineral Reserves' and 'Proved Mineral Reserves'.

=Future of Mineral Classification Standards=

The necessity of establishing universally accepted standards for mineral classification, across traditional Western centres as well as emerging producers and consumers such as Russia and China, has become clear as public awareness of mining has increased because of high profile mergers and acquisitions, consumer demand and high commodity prices. Niall Weatherstone of CRIRSCO believes that is it is highly unlikely that a unified international standard for reporting will emerge for many years, but that progress is being made despite obstacles such as language barriers.

In 2006 at the request of the International Accounting Standards Board (IASB), a Convergence team was set up to examine possible ways of bringing solid minerals and petroleum definitions and guidelines closer together. While complete convergence between the two industries is unlikely in the medium term, the team has begun to develop a mutual understanding of their respective systems.

=References=