The MRC Code will help Mongolian professionals gain international recognition

• 2016-11-01
• 533

Joining CRIRSCO (Committee for Mineral Reserves International Reporting Standards) in October 2014 as its 8th member meant Mongolia could use the internationally recognized MRC Code. The NGO, Mongolian Professional Institute of Geosciences and Mining, represents Mongolia at CRIRSCO, and in this interview with MMJ, Oyungerel B., Executive Director of MPIGM, talks about the code and about how much has been accomplished and what lies ahead.

Let’s start by understanding what MRC or the Mongolian Resource Committee Code is.
To have an internationally recognized code for public reporting of mineral reserves and resources for Mongolia was big achievement for Mongolian geology and mining sector. First of all, I have to mention about how Mongolia joined CRIRSCO. In 2010, Ministry for Mineral Resources and Energy initiated, with financial support from the World Bank, a project on developing a national reporting code for exploration results, mineral resources and mineral reserves in compliance with CRIRSCO Template. This was completed on 2014 with result of an internationally recognized public reporting code for mineral resources and reserves. There was a requirement that only an independent professional organization formed by the professionals who can act with high professional ethics could be a member of the CRIRSCO and the MPIGM was established for that. I was a resource consultant at Snowden Consulting company, an Australian internationally recognized company, that time. Snowden Consulting Company was working for this project to consult Ministry and I was responsible to complete this project.

Generally three requirements were needed to be a member of CRIRSCO. Only a RPO (recognized professional organization) which is NGO could represent a country, the countryhad to have an internationally recognized code, and the lastwas to have a professionally competent person to publicly report exploration results and mineral reserve and resources. We satisfied all three criteria.

MRC Code reporting seeks to reduce risks both for companies that plan to raise money for a project and for potential investors in the project or company. Different countries give different names to the exercise. For example, in Australia, it is the JORC Code, and in Canada the name is NI 43-101. These are all CRIRSCO compliant codes. CRIRSCO was established in 1994 and now has 10 members: Russia, Chile, Australia, Canada, the USA, South Africa, Mongolia, Brazil, the EU, and Kazakhstan. India is likely to join this year.

CRIRSCO prefers its members to have appropriate regulatory provisions. The NGO MPIGM was accepted by it only after stringent checks by the 14 representatives of its seven members (there was 7 members in 2014) of its operational principles, membership rules, ethics, and other criterias. The MRC Code had 52 clauses, one diagram, one table, and one appendix, all based on the CRIRSCO Template. It was officially approved on 14 October 2014, after a mention in the Mineral Law as amended in July 2014, with Art. 10.1.18 approving “procedures for open reporting to the public of minerals resources, deposit reserves and exploration work results together with non-governmental organizations of geology and mining sector which have been nationally and internationally recognized”.

Thus it was that in October 2014 Mongolia joined CRIRSCO as its 8th member. Our progress could have been faster, if the process had not been slowed down by external events such as the 2012 Parliamentary elections. But the Mining Ministry started taking an active interest in 2013, mainly through Baatartsogt B., head of its Geological Policy Department, its senior staff Altankhuyag D., and the Minister’s advisor Bat-Erdene D.

How many Mongolian professionals are ready to be certified by your organization as competent to report exploration results, mineral resources or reserves?
Joining CRIRSCO allows qualified Mongolians to be internationally recognized as such. Someone’s competence depends more on their experience than on the university degrees obtained. Membership of recognized professional organizations or recognition by them is also important. And, of course, any true professional has to be ethical. Our Mongolian practices are somewhat flexible, and this can lead to unfortunate results.For example, someone skilled in gold reserve/resource reporting may not be the best choice for coal reporting.

Many professionals in Mongolia are good enough to be recognized at the international level, but their opportunities for international exposure have been limited. No longer, though, thanks to our CRIRSCO membership. But now they have to be active themselves if they want to be recognized internationally. They have to not only improve their skills but also to show what they can do. And knowledge of English is also important.

It is our priority to get Mongolian professionals their due recognition. Some ten of them are members of AusIMM (The Australasian Institute of Mining and Metallurgy) and we could start to accredit from.We are ready to hold some training for aspiring professionals but they have to come tous on their own initiative.

What are the benefits of becoming an internationally recognised professional?
First, such Mongolians can replace foreign professionals in any public reporting assignment in Mongolia. Second, you will get consultancy work anywhere in the world, and be paid at the same rate as anybody else. Such instances of success will also raise the ethical bar for national professionals.

So the Mongolian code for resource reporting is now internationally acknowledged like, say, the Australian JORC Code?
Yes. However, CRIRSCO member countries adhere to their own codes, all of which, including ours, are basically the same principles, whether it is the Australian JORC, the Canadian NI 43-101, South Africa’s SAMREC our MRC, or the EU’s PERC code. Mongolia has its own rules for resource classification and reporting but these do not tally with international rules. So we have to bridge these to the MRC code definitions. A similar situation obtained in Russia when doing the NAEN code to join CRIRSCO, they created a bridging document between traditional code and a new code.

Is there any Mongolian project where resource reporting is being done under the MRC Code?
As of today, there is no such project. Most Mongolian companies in the geology and mining industry are relatively small, and are limited liability companies. It is unnecessary for them to make resource/reserve reporting in MRC code, which is for public reporting and hence a must for public limited companies. Mongolian companies listed on the Mongolian Stock Exchange have to make their resource/reserve reporting under the MRC Code. If strategically important deposits’ resource reporting is done under the MRC Code, it would reduce the risks for both our country and investors.

Incidentally, the Mineral Law direction that 10 percent of the total shares of any strategic deposit company will be sold on the Mongolian Stock Exchange is not observed. In another breach of the law, foreign companies owning deposits in Mongolia are registered here as LLCs. This is against transparency, as an LLC does not have to reveal its operational geological information. Ironically, such information is easily available in the foreign bourses where these companies are listed.

What should be done to ensure that the Mongolian Stock Exchange insists on the MRC Code?
The Hong Kong Stock Exchange and the Australian Stock Exchange use the JORC code, while the Toronto Stock Exchange uses NI 43-101. But all three are free to additionally use other internationally recognized codes, too. I met the head of the Mongolian Stock Exchange almost every year since the MRC Code preparation project started in 2011 to discuss how use of the code can be made mandatory, but since all incumbents were soon replaced, nothing came of my meetings.

Finally in July 2015, when Angar D. was CEO, MPIGM signed a memorandum with MSE to begin work on companies listed there using the MRC Code. We held three trainings for staff at the stock exchange, underwriting companies, and geology and mining companies. I hope a final decision would be taken soon.

Last August, you gave a presentation for a workshop of IAEA-UNECE international training course in UB. There is a resource reporting code called UNFC-2009. Would you explain a bit about this?
Yes, I presented a presentation about MRC Code, CRIRSCO and their interrelationships with UNFC-2009 classifications. UNFC-2009 is a framework classification, not really a reporting code. It reflects mostly uranium, coal, oil and gas classifications. This documentation includes a chapter that how CRIRSCO classification should be used for solid minerals resources/reserves classifications. UNFC-2009 framework classification is not accepted by any of the Stock Exchanges today.

Is there any country where all companies have to use an international code in their reports? That would be an effective way to end the practiceof misreporting the deposit resources, I think.
There are examples where private small mines also adhere to the code and we do have plans to bring all the mines and geological projects in Mongolia under the code. That would make misreporting difficult but  we cannot take any immediate steps in that direction as most small mines do not need to make their resource reporting according to MRC Code.

Much paper work will be needed to coordinate resource reporting for all mines. This can be taken up as a priority task if the money is found for the work. Meanwhile MPIGM holds regular trainings for companies’ professionals. In June 2015 and again in June 2016 we arranged trainings on MRC Code in cooperation with AusIMM. The first was more theory-based and the second was more into practical issues. MPIGM plans to help sector people gain familiarity with the MRC Code at a more advanced level. Our present priority is, however, to help develop the skills of Mongolian professionals.

Source:  http://en.mongolianminingjournal.com