To the Code and the subsoil - according to the rules of reporting




To the Code and the subsoil - according to the rules of reporting

The Code of Public Reporting on Exploration Results, Mineral Resources and Mineral Reserves adopted in Kazakhstan — KAZRC — was considered one of the most progressive in the world at the time of joining CRIRSCO. Now it remains to take two very important steps for the successful development of the mining and metallurgical industry of the Republic: to conduct high-quality training of Kazakhstani specialists and, perhaps, the most important step is to adopt the Code of the Republic of Kazakhstan on Subsoil and Subsoil Use, which will take into account the application of KAZRC as the only reporting code in Kazakhstan. Without it, all other accepted documents simply will not be able to work. 

The KAZRC Code will still need to be popularized in different countries. At the same time, the most important thing is that exchanges accept it on an equal basis with other codes of the CRIRSCO family, trusting reports prepared according to KAZRC standards. The first step has been taken — The Kazakhstan Stock Exchange (KASE) has already made changes to the listing rules using KAZRC. Now it is necessary that the Code be recognized by the world's leading exchanges. CRIRSCO members suggested that the KAZRC Association contact the Hong Kong Stock Exchange in the near future in order for the Kazakh Code to be recognized there. There were different opinions about which standard to adopt in Kazakhstan — the Australian JORC, the Canadian CIM or the Russian NAEN. A document of understanding was even signed with the Russian government and sent to the CRIRSCO committee. But Kazakhstan has its own unique features that needed to be paid attention to. The CRIRSCO Committee recommended that the republic, as a leader in uranium extraction by underground borehole leaching, take into account the unique reserves of this type of mineral raw materials and, having developed a standard for evaluating the results of geological exploration, assessing resources and reserves of uranium, include it in the national code. This idea was never reflected in the final version of the KAZRC code, since the IAEA reporting standards for uranium facilities do not match the CRIRSCO standards in terms of reporting on mineral reserves. At the same time, it is possible to prepare reports on uranium according to CRIRSCO/KAZRC standards. 

CRIRSCO also recommended that a national standard be prepared with the broad involvement of representatives of the mining and geological community in this work, which actually happened. Experts from AGMP, APGO, PONEN, KASE, and consulting companies were involved in the preparation of the code. As a result, they created their own code, and not just borrowed someone else's experience, even if it was proven and very useful. In addition, the introduction of an Australian or Canadian standard would force subsoil users to work closely only with certain exchanges, although both of them are the most popular in the world for reporting on solid minerals. 

By the way, the national codes had nine members before Kazakhstan was accepted into the CRIRSCO family: Australia, Brazil, Canada, Chile, the EU, Mongolia, Russia, South Africa and the USA. And, if we talk about how much KAZRC is similar in content to any of them, then their principles are the same, and the differences consist mainly in certain articles and formulations related to the peculiarities of a particular country. It cannot be otherwise, since national standards must necessarily comply with the international template for reporting on exploration results, mineral resources and reserves (CRIRSCO Template), which was first published in 2006. It is based on the Australian JORC Code. 
The CRIRSCO template is a consolidated version of all current national standards, which provides for their compatibility. It eliminates ambiguity in the interpretation of concepts and terms used in different national codes when evaluating TPI deposits. Many of the provisions of the template in the preparation of national codes must be accepted as a postulate. It is also important that it clearly defines the criteria for evaluating mineral resources and reserves for TPI. Due to these advantages, the CRIRSCO reporting system has been widely recognized in the world. It is understandable to local specialists, investors, employees of banks and commodity exchanges.

— The template is periodically changed, responding to the challenges of current global trends and the requirements of global mining companies and the investment market. During the CRIRSCO annual meeting in 2016, it was decided to update the requirements for ecology, closure and reclamation of mines and include the concept of mineral waste (waste from mining and metallurgical enterprises) in the glossary. Also, a table was added to the template reflecting the minimum necessary detail by discipline and type of work for each stage of study (Scoping Study, Pre-Feasibility Study and Feasibility Study). There is also a list of the minimum necessary sections that should be present in both the mineral Resources report (MRE) and the technical audit report (DueDiligence)," explained Nikolay Yenshin, General Manager of SRK Consulting (Kazakhstan) Ltd, KAZRC representative in the CRIRSCO committee. — These additions were proposed by the head of the South African delegation, Roger Dixon, who included them in the updated version of the SAMREC code and suggested adding these items to the CRIRSCO template. After the approval of the final version of the template, appropriate changes should be made to all national codes developed on the basis of the CRIRSCO template, including KAZRC. 

However, the KAZRC Code itself does not work as an independent document. It should become part of the new Code on Subsoil and Subsoil Use, and only after that it will be fully adopted in Kazakhstan, replacing the current standards of the GKZ. It is expected that the adoption of the Subsoil Code will be completed by the end of this year and it will enter into force in early 2018. 
— In fact, the main difficulty in preparing the KAZRC Code was to explain to the professionals what would happen next. If you study its contents, it will become clear that it involves the transition to new drilling standards and quality control procedures, the introduction of advanced technologies for assessing resources and reserves. This is an important step that will increase the reliability of the assessment of the results of exploration and the investment attractiveness of Kazakhstan," says Nikolay Yenshin. — The main feature of the CRIRSCO family of codes, to which KAZRC belongs, is the presence of a competent person responsible for the technical side of preparing the report and the company for which this report is being prepared. 
Moreover, the top manager of the company is responsible for the prepared report as a whole. It is important that experts are not appointed by the State, but are selected from among the members of professional independent expert organizations. The novelty of the implemented standard also lies in the fact that a competent person sets requirements for technical parameters for evaluating an object (drilling network and others). Moreover, based on the specifics of a particular deposit. The parameters are developed individually for each such object. In addition, if the current GKZ standards have specific instructions for each type of deposits and each type of minerals, then the KAZRC standard has only guidelines, without direct instructions. According to the KAZRC Code, a competent person can be recognized as such by independent professional organizations. In Kazakhstan, such a professional association is the PONEN (Professional Association of Independent Experts of the subsoil), consisting of recognized experts in the field of geology and mining. To date, PONEN has received recognition in the CRIRSCO Committee itself, as well as in the member organizations of CRIRSCO: South Africa SAMCODES (South Africa), OOERN (Russia), PERC (European Union), MRC (Mongolia). The others are CIM (Canada), AIG (JORC, Australia), Comisi?n Minera de Chile (Chile), CBRR (Brazil) — consider this issue in accordance with the current procedures. This means that Kazakhstani experts can work at the international level using those codes that have already been recognized by PONEN. 

— In addition to professional education, a competent person must have at least five years of practical experience with the type of mineral raw materials for which he is considered competent, and with those types of deposits that are evaluated, — Nikolay Yenshin emphasizes the essence of the most important aspects of the KAZRC standard. 

— There is a significant similarity with the standards of the GKZ, because a person without work experience could not become an expert of the GKZ. Each GKZ expert was recognized as such only after he accumulated experience and confirmed his reputation. That is why Kazakhstani specialists should not be too afraid of these innovations. They will understand the requirements of the KAZRC standards, since its main provisions are in tune with the instructions and methodological recommendations of the GKZ," said Georgy Freiman, Chairman of the Board of Directors of GeoMineProject LLP, who is Deputy Chairman of the Executive Committee of the PONEN. — However, it is not easy to find the necessary highly qualified specialists for all types of domestic deposits. The formation of the Kazakhstan institute of competent persons is a difficult task, given that a whole generation of geologists has "dropped out" in Kazakhstan.

The most important aspect of recognizing a competent person is his specialization and specific experience, on the basis of which he can take responsibility for a qualified expert opinion. For example, if a professional with extensive experience in prospecting and exploration for porphyry copper mineralization has never previously been involved in calculating reserves or geological and economic assessment, he will not have the right to act as a competent person when preparing relevant reports. More precisely, he can participate in the ongoing work on their compilation, but not sign such documents as a competent person. To do this, he will need to gain experience in conducting such work.
Thus, a highly qualified geological surveyor does not have the right to act as a competent person in the field exploration. As well as an experienced specialist in the exploration and evaluation of reserves of vein gold deposits, he cannot assume responsibility as a competent person when preparing reports on stratiform polymetallic or iron ore, or rare metal deposits. According to Georgy Freiman, the lack of experience in applying international standards for the preparation of geological reports is the main problem that many domestic specialists will face. But there is only one way to solve it — to start preparing reports in accordance with the new Kazakh Code of KAZRC. And experience is a gainful thing. To gain such experience and ensure the preparation of reports in accordance with the KAZRC Code, it will be necessary to involve specialists from abroad, and, first of all, from CIS countries, as members of the PONEN. What else will change in the work of geologists after the adoption of the Code on Subsoil and Subsoil Use and, as a result, the entry into force of the KAZRC Code? 

The quality control procedures described in the standards of the KAZRC Code differ significantly from those that are still in force in Kazakhstan. This applies both to the content of geological reporting, and directly to the physical volume of drilling and other exploration work. For example, the use of samples known in terms of content (so-called standards), additional duplicate samples (duplicates) and forms (empty samples with zero content) is introduced so that each batch sent to the laboratory for analysis can be checked. This practice significantly saves time and increases the accuracy of laboratory conclusions. The error detection process is accelerated. Similar quality control procedures have been adopted all over the world and, therefore, the results of exploration will be accepted with confidence by foreign specialists and investors. It will take some time for the transition from the current GKZ system to the new classification of the calculation and evaluation of KAZRC reserves. — Step-by-step transition is very important. If you destroy the existing mechanism without building a new one ready to take over the functions of the old one, it is easy to create a crisis in the industry," Georgy Freiman is sure. — Many Kazakhstani companies whose shares are listed on international stock exchanges report on the basis of GKZ standards, and local specialists do not imagine what knowledge will be needed to switch to other reporting standards, since reports for exchanges are carried out by foreign competent persons. In addition, in his opinion, it is necessary to debug the mechanism for obtaining statistics for the entire life of a mining project: from exploration to closure and reclamation, using KAZRC. It is important to decide what will happen to facilities that have been in operation for many years, at what stage and for what period of time it is necessary to prepare reports according to new standards? 

— Of course, it will take a certain period during which both standards of geological reporting will operate in parallel in the republic: GKZ and KAZRC, — Nikolay Yenshin supports the opinion of his colleague. — The procedures for such a period should be prescribed by regulations and regulations after the adoption of the new Code "On Subsoil and Subsoil Use". 

In order for Kazakhstani specialists to fill in the gaps in knowledge, in September last year, a memorandum of cooperation on the implementation of KAZRC international reporting standards was signed between the Committee of Geology and Subsoil Use of the Ministry of Investment and Development (MIR) of the Republic of Kazakhstan, the KAZRC Association and PONEN. In accordance with the principles and recommendations of the CRIRSCO committee, training programs for Kazakhstani specialists in reporting according to KAZRC standards should be coordinated and registered with the KAZRC Association. Teachers can be qualified specialists who are members of the PONEN, as well as recognized foreign professional organizations. The document on completion of training in KAZRC reporting Standards (CRIRSCO) must be certified by the educational organization, the KAZRC Association and the PONEN. For training in international reporting standards, the association has signed relevant agreements with KazNRTU named after K. Satpayev and the Institute of Engineering and Information Technology of KBTU. The courses will be conducted by both domestic and foreign experts who are members of CRIRSCO recognized professional organizations. The consent to train Kazakhstani specialists has already been received from representatives of PERC (Europe), SAMREC (South Africa), MPIGM (Mongolia).