Introduction
The mining industry is increasingly recognising the importance of Environmental, Social, and Governance (ESG) factors in project planning, execution, and reporting. The latest draft of the JORC Code which is up for consultation until 30th October 2024, reflects this shift by incorporating significant changes aimed at enhancing ESG disclosures. Among these updates, particular attention is given to mine closure outcomes, ensuring that sustainability is not an afterthought but a fundamental part of resource development from start to finish. https://www.jorc.org/
The Need for Enhanced ESG Reporting
In recent years, stakeholders, including investors, regulators, and communities, have demanded greater transparency and accountability in how mining projects address ESG issues. The draft JORC Code responds to these demands by introducing new clauses that require material ESG factors to be disclosed at every stage of a project’s life cycle, from exploration to closure.
The key changes focus on ensuring that ESG considerations are not only integrated into project planning but also reported with the granularity appropriate to the project stage. This approach ensures that as a project evolves, the understanding and management of ESG risks and opportunities become more detailed and aligned with the project’s maturity.
Key ESG Changes in the Draft JORC Code
The draft JORC Code introduces several key changes to improve ESG disclosures:
- Specific ESG Clauses: New clauses have been added that mandate the disclosure of material ESG considerations appropriate to the study stage. This ensures that from exploration through to closure, ESG factors are systematically considered and reported.
- Reporting Criteria in Table 1: A new section in Table 1 (Section 5.5) has been added, which requires baseline ESG disclosures at the exploration stage, with increasing detail as the project advances to the Reserves stage. This tiered approach ensures that the level of ESG reporting is commensurate with the stage of the project and its materiality.
- Guidance Matrix: The introduction of a Guidance Matrix provides a structured approach to ESG reporting, outlining themes and impacts that users of the JORC Code should consider. This matrix is designed to ensure that relevant ESG issues are addressed consistently across projects.
Emphasising Mine Closure Outcomes
One of the most critical stages where ESG considerations come into play is during mine closure. The draft JORC Code’s updates place a strong emphasis on mine closure, recognising it as a pivotal phase that can significantly impact both the environment and local communities.
Environmental Restoration and Rehabilitation
The updated JORC Code requires detailed mine closure plans that focus on environmental restoration and rehabilitation. These plans must outline how the land will be restored to a stable and sustainable condition post-mining, including efforts to manage or re-establish ecosystems. This focus on environmental outcomes is crucial in ensuring that mining projects do not leave lasting negative impacts on the landscape.
Social Considerations in Mine Closure
The social impact of mine closure is another area where the updated JORC Code demands greater transparency and accountability. The Code emphasises the need for ongoing community engagement and the consideration of socio-economic effects during and after closure. This includes plans for post-closure land use, which must be developed in consultation with local communities to ensure that the land can continue to provide value, whether through agriculture, conservation, or other uses.
Governance and Compliance
Governance plays a central role in mine closure, with the updated JORC Code highlighting the importance of adhering to regulatory requirements and ensuring transparency in closure planning. Companies are expected to document and disclose their closure plans comprehensively, demonstrating their commitment to ethical practices and regulatory compliance.
Financial Provisions for Closure
The draft JORC Code also addresses the financial aspects of mine closure, requiring clear disclosures on the provisions made to cover closure and post-closure activities. This financial transparency is critical to ensuring that companies are adequately prepared to meet their closure obligations without placing an undue burden on stakeholders or the environment.
Conclusion
The proposed changes to the JORC Code mark a significant step forward in integrating ESG considerations into the mining sector, with a strong emphasis on responsible mine closure. By requiring detailed and stage-appropriate ESG disclosures, the updated Code ensures that mine closure is not an afterthought but an integral part of the project lifecycle. These changes reflect the growing importance of sustainability in mining, ensuring that the industry can continue to meet the demands of stakeholders while minimising its impact on the environment and local communities.
For more information DM Andrew Hutton or visit or website www.iema.com.au