ASX and Australian Resources
ASX has a long history of listing mining companies. Mining dominated the market for most of the last century, however it lost relative importance over the last 15 years as the Australian market became increasingly diversified. However recent buoyant conditions have meant that mining is beginning to regain some of its traditional standing in the Australian equity market. Mining growth over the last twelve months has increased its proportion of total market capitalisation to close to 20% of the Australian market. Listed mining companies represent about one third of all ASX listed companies.
Over the years, ASX has had a rewarding partnership with the mining industry, with a shared vision of the importance of clear reporting standards to the promotion of investor confidence.
Nowhere has the benefit of partnership and co-operation been more evident than the development of the JORC code. JORC is the Australasian Joint Ore Reserves Committee. Here, the industry and ASX worked closely to create a world first - the adoption of a practical and effective set of minimum reporting standards and guidelines for the mining industry. The purpose of the JORC Code was to ensure that mining and exploration companies reported all the information that investors and stockbrokers would require in order to come to an understanding of the results and estimates of the company.
JORC has since become a blueprint for similar initiatives around the world and played a significant part in establishing Australia’s reputation as a global centre of mining excellence.
History of JORC
JORC originated in the aftermath of the Poseidon boom (early 1970’s), when improving flows of global capital combined with the metal price cycle produced a wild boom and crash. The Australian Federal Government demanded the Industry “get its act together” or face external regulation. ASX as the market operator and regulator did not impose standards on the industry – it looked to industry to take the lead.
ASX approached the Australian Mining Industry Council (AMIC, representing the mining companies) and the Australasian Institute of Mining and Metallurgy (AusIMM – representing mining industry professionals – engineers, geologists and metallurgists) and the first JORC was formed. This produced a set of guidelines in 1972. The important concept of using a ‘competent person’ to sign off on information was introduced at that time.
In 1989, the guidelines were replaced by the first Code, published by AusIMM. This was binding on professionals and included improved definitions of reserves and resources.
Most importantly, in 1989 the Code was incorporated in the ASX listing rules of the exchanges and became mandatory for companies who wanted to list on our market facility.
JORC, AusIMM and AIG take complaints about non-compliance very seriously. There are effective disciplinary procedures in place and effective sanctions for non-compliance. Disciplinary sanctions are a major factor in the process.
Refinements to the Code originate in the industry and are then incorporated in the ASX listing rules following appropriate consultation and public exposure. The JORC Code is internationally recognized and imitated; it has proved highly effective and a central plank in the fundraising success of the mining industry.
A revised version of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code) (Word 335 KB) became effective on 17 December 2004.
Additional Reporting Requirements for Mining Producing and Mining Exploration Companies
In addition to annual and half-yearly reports, mining entities are also required to lodge quarterly reports with ASX.
A mining producing entity must complete a quarterly report which must include:
- Details of the mining production and development activities of the entity or group relating to mining and related operations, and a summary of the expenditure incurred on those activities. If there has been no production or development activity, that fact must be stated;
- A summary of the exploration activities (including geophysical surveys) of the entity or group, and a summary of the expenditure incurred on those activities. If there has been no exploration activity, that fact must be stated.
A mining exploration entity must complete a quarterly report and include:
- Details of the exploration activities of the entity and a summary of the expenditure incurred on those activities. If there has been no exploration activity, that fact must be stated;
- Details of the mining production and development activities of the entity if any, and a summary of the expenditure incurred on those activities.