Extending the Application of PAS 55/ ISO 55 000 to Mineral Asset Management

"A mineral resource constitutes the principal underlying asset of a mining company, and must be exploited and managed in such a way that maximum value is derived from it. Various asset management frameworks applicable to physical assets are available. This paper focuses on the extension of an asset management approach, particularly the Publicly Available Specifications (PAS) 55 asset management framework and the International Organization for Standardization (ISO) 55000 series of standards, to mineral assets. It is concluded that PAS 55 and the ISO 55000 series of standards can be extended to manage mineral assets, resulting in an integrated approach to sustainably optimize value from the company’s mineral assets. The benefits include improved returns on mineral assets, maximum mineral asset utilization, creation of an organizational culture focused on quality and continuous improvement, and assurance to stakeholders that the mineral assets are being efficiently managed over their entire life-cycle. In the context of this paper, a ‘mineral resource’ refers to both Resources and/or Reserves as classified by the SAMREC Code. IntroductionMining involves the extraction of valuable mineral resources from the Earth’s crust. A mineral resource is unique among natural resources in the sense that it is a wasting asset, which means that its value depreciates continuously with extraction. In addition, it is often impaired from time to time as commodity price changes (Macfarlane, 2011a). Since a mineral resource is a wasting asset there is a single opportunity available to optimize value from its extraction. Mine planning involves identifying a strategy to exploit the mineral resource in a way that maximizes value at an acceptable risk level throughout the life of mine (LOM). This optimum extraction strategy changes as economic conditions change, particularly commodity prices, as well as with improvements in orebody knowledge as mining progresses. It is the mineral deposit that competitively distinguishes two different mines and dictates the location of a mine; hence the adage ‘the orebody dictates’. Therefore, a mineral resource is the primary tangible asset possessed by mining companies and must be managed in such a manner that maximizes its value at an acceptable risk level (Macfarlane, 2011a)."