Geology and Mining: Mineral Resources and Reserves: Their Estimation, Use, and Abuse

Abstract

Editor’s note: The Geology and Mining series, edited by Dan Wood and Jeffrey Hedenquist, is designed to introduce early-career professionals and students to a variety of topics in mineral exploration, development, and mining, in order to provide insight into the many ways in which geoscientists contribute to the mineral industry. Abstract Resource and reserve estimation is a critical step in mine development and the progression from mineral exploration to commodity production. The data inputs typically change over time and reflect variations in geoscientific knowledge as well as the modifying factors required by regulation for estimating a reserve. These factors include mineral (ore) processing, metallurgical treatment of the ore, infrastructure requirements for mine and workforce, and the transportation of processed products to buyers; others that will affect the production of metals and/or minerals from a deposit include economic, marketing, legal, environmental, social, and governmental factors. All are needed by the mining industry to quantify the contained mineralization within mineral deposits that likely warrant the significant capital investment required to build a mine. However, these resource and reserve data are estimates that change over time due to unpredicted variations in the initial inputs. Paramount to the two estimates are the quality and accuracy of the geologic inputs and the communication of these to the professionals tasked with making each estimate. Geostatistical processing of the grade of the resource has become a dominant element of the estimation process, but this requires transparent and informed communication between geologists and mining engineers with the geostatistician responsible for mathematically processing the grade data. Regulatory constraints also mean that estimated resources and reserves seldom capture the full extent of a mineral deposit. Similarly, co- and by-product metals and minerals that are commonly produced by mines may not be captured by resource and reserve estimates because of their limited economic contribution. This suggests that reporting standards for co- and by-products—particularly for the critical metals that may have a sharp increase in demand—need improvement. Finally, the importance of these data to the mining industry is such that informing investors and the broader public about the nature of resource and reserve estimates, and the meaning of associated terminology, is also essential when considering the global metal and mineral supply, and the role of mining in modern society.