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THE concept



Responsible Reserves

Population growth1 coupled with our evolving needs and desires for new technology and lifestyles mean that society is going to continue using non-renewable natural resources for centuries to come.  Extraction of these natural resources through activities such as mining is therefore crucial to human survival.  While mining activities have been undertaken and honed for thousands of years, there is still much more we can do to ensure that we mine in the most responsible manner possible.


In order for mining to become truly responsible, it needs long term commitment, support and leadership from all stakeholders inclusive of mining companies, investors and regulators.  To date, this has proven difficult, in part due to differing opinions on how responsibility might be interpreted, measured, and rewarded3. 


One critical part of mining is understanding and communicating the quantity, quality and value of mineral resources in the ground.  This is done through Resource and Reserve statements reported by all mining companies.  A Resource is the size and grade of an ore body in the ground, whilst a Reserve is the proportion of the resource that can be extracted economically.  Valuations of projects and investments are reliant on the content of these statements.  A number of robust codes4 have been developed, many of which require the signature of a Competent Person5 to validate the Resource / Reserve statement, which are in turn used to govern the reliability of the resource reserve statements. 


A simple yet effective way of providing stakeholders with confidence that a new or existing mining venture will be developed responsibly may be to improve the definition of a Reserve so that it becomes a resource that is both economic and responsible to extract.  Many Competent Persons responsible for signing-off on a Reserve statement already seek evidence for responsibility within the reserve calculations, however the current methodology does not formally include aspects of responsibility and is not universally applied.


By redefining a Reserve to be a resource that is both economic and responsible to extract, potential investors, insurers, suppliers, governments, employees and customers would rapidly be able to assign a full risk-based value (beyond financial) to an asset.  While there are many ways in which this could be done, a revised definition for a reserve might take into account the quantity and quality of the minerals, as well as the environmental, social and governance risks of taking them out of the ground. Put simply, this approach would de-risk investments or at least enable stakeholders to be more fully informed before committing significant sums of money to mine development. It would also put governments on notice, particularly in developing countries, to improve their regulatory regimes and governance to attract investment. This definition would need to include aspects that could only be measured on a qualitative basis, thereby requiring an element of subjective judgement, as is the case already on all full valuations of a project.


Updating the definition of a Reserve requires complex consultation with a wide array of interested parties.  This initial phase seeks to ascertain the appetite of the mining community, inclusive of miners, investors, regulators, NGOs, insurers (among others) to instigate a conversation.  Guidance has already been produced for the South African Code (SAMREC)6 which follows similar aspirations, however, for the approach to have global impact, all recognised Codes would need to be updated.



[1] Estimated to be 7.746 Billion as of 22nd November 2019.


[2] Sanderson, H (7th July 2019) “Congo, child labour and your electric car” Financial Times.


[3]. Responsible Investment in Natural Resources – conference summary paper (2019) Geological Society of London


[4] e.g. JORC


[6] SAMREC .

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