27 October 2011

ASX calls for submissions on reforms to Aussie resource reporting

The ASX has asked for submissions on proposed reforms to resource reporting in an aim to harmonise Australian reporting requirements with international best reporting practice, enhance access to capital and reduce costs.

The proposed reforms will affect the internal work listed companies must do to support disclosure and how disclosure is made.

The paper covers two areas:
  • Part A – mining companies, looks at enhancing disclosure of exploration information, Mineral Resources, Ore Reserves and associated production targets by reference to international reporting requirements and reporting issues identified in the Aussie market.
  • Part B – oil and gas companies, looks at promoting consistency and confidence in reporting of petroleum reserves, other petroleum resources and related production targets by adopting standardised technical definitions, a petroleum resources classification system and updated general reporting requirements.
Aussie mining and oil and gas companies have until 27 January 2012 to comment on these proposed reforms.

Interestingly, the Australasian Joint Ore Reserves Committee (JORC) has cited an inability by the ASX to reach an agreement with JORC in respect of a joint paper. As a result, JORC will release its own issues paper in respect of the JORC Code. Mining companies should make separate submissions to both the ASX and JORC.

For a full copy of the paper go to http://www.asxgroup.com.au/media/PDFs/ASX_LRs_Review_Issues_Paper_mining_and_oil_gas_reserve_and_resource_reporting_20111005.pdf

21 October 2011

Double edged sword of E&R boom

Last night Freehills hosted 80 guests from the energy & resources industry at a Gala Dinner preceding the AMPLA Conference, with Key Note Speaker Shadow Minister for Energy & Resources, the Hon. Ian Macfarlane outlining the double edged sword of prosperity and scrutiny that is influencing Australian E&R. Prosperity in the form of projects totalling over “$300b in the pipeline” versus domestic and international scrutiny. “Now is the time to make the most of the boom,” he said, reflecting on increases in employment in his local electorate due to the coal seam industry. “E&R has come of age” as now the community are witness to the revitalisation of regional Australia. 

Macfarlane spoke of the responsibility of ensuring everyone is a beneficiary of these prosperous times falls on Government to “get it right… involve those participants not directly involved,” and called for co-operation and co-existence with farming and manufacturing in his address, stating that the Coalition would ensure that no tariffs would hinder these industries allowing for greater benefit from co-operative projects.

However, it was not all positive with Macfarlane reflecting on Australia’s current political dynamic with a Green controlled Gillard Government at the helm the carbon tax that will be passed by Christmas. But the political banter was to be expected and did not overshadow the engaging address.

Macfarlane affirmed the Coalition’s intention to repeal the Carbon Tax and any Mineral Resource Rent Tax, stating that the Coalition’s policy is that such taxes will stifle the current boom by placing Australian E&R in an un-competitive position, compared to Africa and South America. The speculation of the future remains, however when questioned over the current stability of foreign investment he was more direct, admitting confidence was destroyed and investors spooked by “weird things”, such as the ousting of Rudd, condensate tax on North West Shelf producers, failed super profits, and now the carbon tax. “if we were to win…the fix would not be quick and would take 10 years to recover.”

The elephant in the room was the timeframe and process of unwinding the taxes.

The final insight was the notion of a sovereign fund. Macfarlane argued that it is irresponsible for Labor to immediately spend the proceeds from the mining taxes. He would like to see a sovereign fund raised from the “unusual amounts” provided by the boom to be retained and grow from the interest rather than being spent. Though he stressed that a sovereign fund is not a Coalition policy. 

Macfarlane concluded that the end of the boom would one day come, and would require action to secure prosperity 20 or 30 years down the track. 

However, it remains uncertain as to exactly what a successful Coalition would do.

As noted by Business Spectator’s Robert Gottliebsen in his column this morning, the mood of the night was buoyant. Freehills would like to sincerely thank the Hon. Ian Macfarlane for his insightful address.

Your comments are most welcome.
Keynote speaker the Hon. Ian Macfarlane.

Business Spectator’s Robert Gottliebsen quizzing Macfarlane during question time.
Freehills’ Mining Industry Lead Partner, John Tivey with keynote speaker the Hon. Ian Macfarlane.