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United Nations Framework Classification Building a new resource consciousness
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Dawn of the
Anthropocene
• Revenue Volatility
• Swings in revenue can confound companies and States’ best efforts to balance budgets.
• The “Dutch disease”
• The apparent causal relationship between the increase in the economic development of a specific sector (for example natural resources) and a decline in other sectors (like the manufacturing sector or agriculture).
• Resource depletion/exhaustion
• Lack of attention to exploration and discovery of new resources will deplete the resources
What are the issues?
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Ensure sufficient, reliable, affordable and environmentally responsible supplies of energy and raw materials
Demonstrate alignment to SDGs
Decarbonize the economy
Social acceptance
The Challenges for mineral industry
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“If mining companies truly hope to repair their image, they must do more than change their messaging. They must also fundamentally change their behaviors around the way they mine how they engage with communities, attract talent, and deliver on their promises.”
James FergusonGlobal Mining Tax Leader
Deloitte UK
Depleting grades
Difficult mining conditions (greater depths; difficult terrain)
Improving productivity with decreasing grades
Increasing energy and other requirements for processing
Boom-Bust cycles
Changing mineral working conditions
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A quarter of mining production, representing up to US$50bn in annual revenue, could be exposed to water shortages and drought by 2030.
CDP, July 19, 2017. “World’s mining heavyweights put $16 billion at risk in climate costs.” https://www.cdp.net/en/articles/investor/press-release-worlds-mining-heavyweights-put-16-billion-at-risk-in-climate-costs
Water stress
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• Technology• Big data
• Artificial intelligence
• Ultra selective mining
• Comprehensive resource recovery
Mining 4.0
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• New business models needed to:
• Discover of “clusters of value”
• Value-added mineral products and services
• Comprehensive recovery
• Secondary resources from “wastes” – Zero waste
• Water resources• Land resources
Value beyond minerals
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Holistic resource management
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Policy, Legal and Contractual Framework
Sector organization, Resource
management and Regulations
Fiscal design and administration
Revenue Management and
Distribution
Sustainable Development
Implementation
Urgent need to remove the fragmentation of industry life-cycles and bring in a resource management methodology that is agile and responsive to current needs.
Resources RedefinedResource progression is critical
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• UNFC is a project maturity-based, resource-progression oriented tool for the management resources.
• UNFC provides a balanced view of socio-economic factors, technology and uncertainties involved in the classification of resources and provides a progression pathway for projects.
• UNFC put emphasis on figuring in social and environmental considerations at the centre of resource management.
UNFC is different from other resource classification and management tools in being responsive to requirements of the Global Agenda 2030, the aspirations of the society and the modern outlook of the industry.
Defining resources with UNFCThe 3 Criteria
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UNFC using all sub-categories
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UNFC Classes defined by categories and sub-categories
To
tal co
mm
od
ity i
nit
ially in
pla
ce
Extr
acte
dSales Production
Non-sales Production
Class Sub-classCategories
E F G
Kn
ow
n D
ep
osit
Commercial
Projects
On
Production1 1.1 1, 2, 3
Approved
for Development1 1.2 1, 2, 3
Justified
for Development1 1.3 1, 2, 3
Potentially
Commercial
Projects
Development
Pending2 2.1 1, 2, 3
Development
On Hold2 2.2 1, 2, 3
Non-Commercial
Projects
Development
Unclarified3.2 2.2 1, 2, 3
Development
Not Viable3.3 2.3 1, 2, 3
Additional quantities in place 3.3 4 1, 2, 3
Po
ten
tial
Dep
osit Exploration
Projects[No sub-classes defined] 3.2 3 4
Additional quantities in place 3.3 4 4
Growing applications of UNFC
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UNFC AdoptionIncreasing global use of UNFC
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• UNFC is part of the United Nations System of Environmental-Economic Accounting (SEEA), a system now widely adopted for organizing national data for the derivation of coherent indicators and descriptive statistics to monitor the interactions between the economy and the environment.
• The Nordic countries (Norway, Sweden and Finland) have developed standard sub-regional guidelines for applying UNFC
• Russian Federation has bridged its oil and gas classification system to UNFC and China has developed bridging documents for minerals and petroleum. India is actively using UNFC.
• The African Mineral Development Centre (AMDC), of the African Union has decided to adopt UNFC
• The Coordinating Committee for Geoscience Programmes in East and Southeast Asia (CCOP) has decided to develop guidelines for adoption of UNFC as the unifying framework in 14 member countries.
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UNFC Mineral Management Framework
Sustainable Development Goals
SDG 1
SDG 2
SDG 5
SDG 6
SDG 7
SDG 8
SDG 9
SDG 10
SDG 11
SDG 12
SDG 13
SDG 17
UNFC Mineral Management
International studies
Goverment management
Compmany management
Public disclosure
Controling Factors
Definitions Up-scaling
• EGRC has a Working Group to examine the social and environmental aspects of the classification. Two guidance notes are available:
1. Accommodating environmental and social considerations in UNFC
2. Clarification of terminology and concepts related to UNFC
Social & environmental considerationsEnsuring that resources a developed in a sustainable manner
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• “Evaluators must possess an appropriate level of expertise and relevant experience in the estimation of quantities associated with the type of deposit under evaluation.”
• Two guidance notes developed:
• 1. UNFC Specification for Evaluator Qualifications – Top-level guidance
• 2. Competent Person Requirements and Options for Resources Reporting –Detailed guidance on generic requirements for public reporting and disclosures for all commodities
UNFC Evaluator / Competent Person
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• Promote the consistent and coherent classification of all mineral resources and “values”
• Provide specifications and guidelines that will allow the mineral industry to align to good outcomes
• Resource classification
• Resource management
• Socio-economic and commercial assessment
• Innovation planning and management
• Definition of life-cycle and certification of recovery chains
UNFC Mineral Management System
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• Innovation in the mineral sector (exploration, mining, processing, remediation, mine closure) and understanding of how sustaining, transformational and experiential innovations are going to change discovery of resources in the future.
• The mineral potential that will be mined in the future (materials that will be required for the future).
• How we foresee mineral industry transformation, especially through the networked development and identifying clusters of value.
• Success stories focused on building and nurturing a catalytic environment conducive to innovation in mineral management.
• Development of less water consuming mining, milling and processing technologies
Predicting the future of mining
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A Global Workspace
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UNFC Resource
Management System
Policy
Social
Economic
Regulatory
Metallurgical
Comprehensive recovery
Environment
Value-addition
Secondary resources
Exploration
Mining
Processing
Sorting
Refining
Safety
Infrastructure
Marketing
Legal
Fiscal
Revenue
Site Closure
Remediation
External costs
Human Resources
SD Implementation
A New Resource Consciousness
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Exploration Projects
Commercial Projects
Potentially Commercial Projects
Non-Commercial Projects
Be in sync with the top-down process
Compare results and options
Make realistic assumptions
Collect, check and use available data across E, F and G
Top – down section of knowledge
Bottom – up flow of information
VisionPolicy
Regulations
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Recent publications
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