Radical changes to the code that governs how mineral deposits can be reported to investors would not have protected backers of gold miner Regis Resources from a shock Indigenous heritage ruling that derailed a $1 billion project in NSW, an industry meeting in Perth has been told.
The Regis example was raised on Monday as mining industry figures listened to the rationale behind proposed changes to the JORC code (which has its origins in the early publications of the Joint Ore Reserve Committee). The code dictates how companies describe the size and quality of their discoveries and mineral deposits.
Under the changes that some say are needed to offer better protection to investors, environment, social and governance considerations would be factored into JORC reporting for the first time.
JORC member Adam Myers told one of a series of meetings in Perth on Monday that a competent person as defined under the code could not have been expected to warn investors about what unfolded in the case of Regis and its proposed McPhillamys gold mine.
“It’s now going to be a requirement of the competent person to disclose any material opportunities or threats,” Mr Myers said of the proposed changes.
“We’re looking for balanced disclosure, and it’s about something that is known. If you’ve got an approval process, like in McPhillamys, where a late-stage request goes to a minister, and you’ve negotiated, followed all the process with the state-based approaches and then there’s a late decision that couldn’t be reasonably foreseen, it’s not a problem for the competent person.
‘It’s really about the known’
“Disclosing that there is an approvals process that may have an impact that, of course, is important. It’s really about the known. We’re not expecting people to have a crystal ball.”
Last month, federal Environment Minister Tanya Plibersek upended plans for McPhillamys with an 11th-hour call on Indigenous cultural heritage.
Regis was forced to withdraw its definite feasibility study on the proposed mine and scrapped the 1.89 million-ounce ore reserve previously attached to the project.
The competent person responsible for reporting would be able to enlist a specialist on matters such as heritage, the Perth meeting was told.
Attendees questioned how such specialists would be accredited and recognised as having sufficient expertise to make important calls on mining projects.
Association of Mining and Exploration Companies boss Warren Pearce said the proposed changes were unlikely to help investors by crossing the line into ESG matters.
“Ultimately, the JORC Code is about ensuring that mineral deposits are reported consistently across the industry, so that investors can rely on, and better understand, statements made by the companies,” he said.
“We’re already at a point where understanding the JORC Code is beyond all but genuinely sophisticated investors.
“Making it more complicated is unlikely to help, especially when it comes to more subjective areas such as ESG.”
The Association of Mining and Exploration Companies (AMEC) is consulting its members about the proposed changes.