The latest edition of AIG News, the Australian Institute of Geoscientists member newsletter is now available in full colour and digital format and best of all FREE for all readers!
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Inside this latest issue…
From Your President; Institute News; Snippets; NSW Branch News; Education News; Membership Updates; Introducing the Papua New Guinea Geoscience Network; Remembering Fifty Years ago 1968-A Watershed Year; Plate Tectonics and Seismic Hazard in Peru: Revisiting the May, 1970 Earthquake; Australian Geoscientist Employment Survey; Australian Geoscience Today; U.S. Securities and Exchange Commission rescinds Guide 7; Ok Tedi Celebrates 50 Years Since Discovery; SMEDG Awards Dinner; Victoria Mineral Round-up – 2018; The geological relationship between Kanmantoo Cu-Au deposit mineralisation, hydrothermal metasomatism and igneous intrusives; The Making and Unmaking of a Rare Earth Element Deposit: Using Carbonate Melts to Process Phosphate-Hosted REE Ore; Paleobotany and paleoenvironments of the Latrobe Group brown coals, Gippsland Basin; Unravelling the thermal character of Earth’s earliest subduction systems; National Rock Garden Update; Victorian Mentoring Program 2018; Acquire releases GIM Suite 4 for smarter, streamlined geoscience data in the mining industry; Events Calendar and more…
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Updated regulations to allow U.S. mining and exploration companies to report mineral resources resources. Competent person requirements also feature in the new rules for the first time.
In October, the U.S. Securities and Exchange Commission (SEC) adopted a final rule that overhauls its existing disclosure requirements for mining company issuers. This represents the first major change since Guide 7 was adopted almost 30 years ago and brings the U.S. into line with countries following CRIRSCO reporting codes. U.S. companies will be required to begin to comply with the new rules in its first fiscal year beginning on or after Jan. 1, 2021.
Under the current SEC reporting rules, mining companies are not permitted to disclose mineral resources. In Canada, Australia, South Africa and other countries, companies have been required to disclose resources where it would be material information for investors.
Dual listed companies will benefit from decreased compliance costs. Previously, companies listed in the U.S.A. and a country following the CRIRSCO convention for mineral resource and ore reserve reporting were compelled to produce different annual reports and other public disclosure documents dealing with resources and reserves for different markets. U.S. exploration companies should find that the new rules assist with raising funds for exploration in the U.S.A. rather than having to resort to listing on overseas markets, including the TSX, TSX.V and ASX.
U.S. companies that are only subject to the SEC rules, may experience increased compliance costs because of the new requirement to disclose mineral resources and have statements of resources and reserves prepared by a qualified person. Canadian companies that are dual-listed in the US and Canada, have been allowed to comply with Canadian rules (NI 43-101) so are unlikely to be affected by the change.
The SEC announcement included some important provisions.
Geothermal energy is specifically excluded from the new rules.
A principles-based definition of materiality, consistent with Securities Act Rule 405 and Exchange Act Rule 12b-2, was adopted by the commission, whereby a matter is material if there is a substantial likelihood that a reasonable investor would attach importance to it in determining whether to buy or sell securities. The commission also proposed that a company should follow an approach requiring aggregation of all mining properties, regardless of size or type of commodity produced, when assessing the materiality of a registrant’s mining operations.
The commission also adopted a definition of mining operations that includes operations on all mining properties that:
- a company owns or in which it has, or it is probable that it will have, a direct or indirect economic interest;
- possesses, or lis likely to possess under a lease or other legal agreement, a right to sell or otherwise dispose of mineral products; or,
- has, or probably has, an associated royalty or similar right.
The commission also requires that companies materially disclose the basis for setting forward prices for commodities which form an essential component of asset valuation and, therefore, asset materiality. Companies may not exceed the average price for the preceding 24 months. Beyond this, however, qualified persons may use any reasonable and justifiable price, with transparent justification.
The new rules permit a mineral resources to be disclosed inclusive of mineral reserves, as long as mineral resources exclusive of reserves are also stated. This rule is more specific than current requirements of some other reporting codes, including the JORC Code (2012).
Inferred resources are also able to be used in economic analysis, as long as certain conditions are met.
The new rules adhere to the CRIRSCO convention where a public report about a company’s exploration results, mineral resources, and mineral reserves must be based on and fairly reflect information and supporting documentation prepared by a “competent” or “qualified person.” This is the first time that the commission has defined a role for competent persons which may be both individuals, or companies employing individuals responsible for preparing reports.
A “qualified person” is defined as a “mineral industry professional with at least five years of relevant experience in the type of mineralization and type of deposit under consideration and in the specific type of activity that person is undertaking”. Additionally, qualified persons must be “an eligible member or licensee in good standing of a recognised professional organisation at the time the technical report is prepared”. These requirements effectively mirror those of the JORC Code (2012).
The new rules allow multiple qualified persons to prepare a technical report provided the sections of the report for which individuals are responsible are clearly specified, signed dated and consented to by each individual.
Reports must include a consent statement from the qualified person, state whether the qualified person is an employee of the company and, if not an employee, what relationship or interests the qualified person may have in the company.
The rules specifically indemnify the qualified person from findings and conclusions regarding certain aspects of modifying factors discussed in technical reports that the qualified person specifically states were based on information provided by the company – another first and an important legal protection for individuals or groups acting as qualified persons.
A “recognised professional organisation” would have to be either recognised within the mining industry as a reputable professional association, or be a board authorised by U.S. federal, state or foreign statute to regulate professionals in the mining, geoscience, or related field.
Furthermore, the organization must:
- Admit eligible members primarily on the basis of their academic qualifications and experience;
- Establish and require compliance with professional standards of competence and ethics;
- Require or encourage continuing professional development;
- Have and apply disciplinary powers, including the power to suspend or expel a member regardless of where the member practices or resides; and,
- Provide a public list of members in good standing.
The commission has elected, however, to adopt a principles-based approach to professional organisation recognition rather than the approach adopted by existing CRIRSCO codes of publishing a list of Recognised Overseas Professional Organisations (ROPO) updated by organisations responsible for reporting standards in individual countries from time to time. AIG is considered to fully meet the commissions requirements of a recognised professional organisation, supported by it being recognised in all current jurisdictions where CRIRSCO template reporting codes are in use.
AIG welcomes the SEC announcement which brings the U.S.A. closer to countries with effective, transparent and material codes for exploration result, mineral resource and ore reserve reporting that provide informed investors with a basis for sound mineral asset investment decisions. The new rules also provide an opportunity for Australian geoscientists, experienced in the application of the JORC Code and Canada’s National Instrument NI 43-101, to share their knowledge and experience with their U.S. counterparts.
The SEC release announcing the new rules is available here.
AIG’s Australian Geoscientist Employment Survey has been running for almost ten years, regularly collecting data on employment prospects for geoscientists, as well as demographic data that provide insight into how our profession is evolving.
Since the surveys commenced, unemployment amongst Australian geoscientists has been as low as 1.6% in September, 2011, and as high as 19.5% in March 2016. We’ve seen a small fall in the proportion of geoscientists in full-time employment, from 74% in June 2009 to 69% in the September 2018 survey. There has been a similar fall in part-time employment from 4.5% to 3.3% for the same period. Self-employment (geoscientists working as independent contractors and consultants) has risen from 21% in June 2009 to 28% in September 2018.
Where are we today?
In September 2019, 89% of survey respondents were working, or seeking work as a geoscientist in Australia. 7% of respondents were not seeking work, 2% were retired but staying in touch with their former profession, and the remainder of respondents were working or seeking work in fields other than geoscience.
Mineral exploration, metalliferous mining geology and energy resource exploration and production employ 85.4 % of survey respondents, only slightly less than the peak of 87.4 % observed in December 2014.
This is vastly different to the situation in Europe and the USA, where environmental services, government agencies and academia are the greatest sources of employment for geoscientists. Fields of employment including diamond exploration, engineering geology, industrial minerals production, groundwater resource management, environmental geoscience, government geoscience and other fields are relatively small contributors of employment opportunities.
More than half of the geoscientists working in Australia are Western Australia based. More than ten percent of Australian-based or educated geoscientists work overseas.
Almost 75% of Australian geoscientists have a Bachelors Degree with Honours (requiring a minimum of four years full time study at most Australian universities). Almost 42% have a Masters degree or PhD. Almost 80% received their highest degree in Australia, while more than 90% earned their highest qualification in Australia, New Zealand, Great Britain, Canada or the United States of America.
Our profession appears to be ageing. Almost one third of Australia’s geoscientists have been involved in the profession for more than 30 years. Assuming a new graduate enters the workforce at 22-23 years of age, 30 years experience points to one third of Australia’s geoscientists being in their mid-fifties. The proportion of young geoscientists, with five or less years of experience stands out in these figures as being low, at less than 6%. This could be due to geoscience failing to attract students, or to early career geoscientists not seeing value in professional association membership. Geoscientists, for example, cannot act as Competent Persons in compliance with the JORC Code until they have at least five years relevant experience. Not being engaged with their peers through professional association membership could simply reduce awareness of surveys like the ones on which this article is based. Should the former proposition be true, however, our profession has a major problem that requires a concerted effort to attract more talented students to geoscience studies and careers.
Diversity was a hot topic in scientific circles throughout 2018. Overall, 85% of Australian geoscientists are men. The ratio of men to women geoscientists varies considerably, however, with years of experience. The greatest proportion of women in geoscience is amongst early career geoscientists, with less than five years experience, followed by mid-career geoscientists with 10 to 15 years experience. The proportion of women entering the profession of just under 30% demonstrates that more needs to be done to attract and retain women by Australian geoscience if greater gender balance is to be achieved. The goal of gender balance in the profession will only be achieved by a sustained effort over several decades.
The proportion of women with an honours degree or higher is 82%, greater than men with 74%.
Participation on different industry sectors varies considerably. Relatively few women work in mineral exploration, leading to greater participation in mining, energy resource exploration and production, government geoscience, engineering geology, industrial minerals and environmental geoscience.
In conclusion, this review of some of the survey results over time yielded a few surprises. Despite the highly cyclical nature of mineral exploration, it remains the dominant form of employment for geoscientists working in Australia. Fields where employment opportunities have grown considerably in the USA and Europe, including groundwater management and environmental geoscience, continue to be only a small part of Australia’s geoscience scene. This is surprising, given pressures on land for development in major cities where remediation of old industrial sites is a major source of land for urban development and the reliance of cities and towns on groundwater for an increasing proportion of their water needs has increased over the past ten years.
Does this raise questions regarding Australia’s focus on environmental stewardship more generally if we are not seeing an increased focus on these fields?
Similarly, engineering geology remains a relatively small sector of the geoscience profession, again against a backdrop of development of more difficult land for housing, industry and commercial uses in our major cities.
The figures can certainly be interpreted to demonstrate the importance of Australia’s resource industries to our economy, with the discovery of new mineral resources and stewardship of existing ones remaining the principal source of demand for geoscience capabilities.
Our profession is arguably making progress towards becoming a more diverse employer in Australia, but gender balance isn’t going to be achieved overnight. Achieving this will require sustained effort over decades, requiring commitment from all sectors of our profession. This occurs alongside an overarching need to ensure talented students are attracted to geoscience careers, which may well prove to be a significant contributor to geoscience in Australia in many ways.
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The latest Australian geoscientist employment survey results show little change in unemployment and underemployment amongst Australian geoscientists in Quarter 3 from Quarter 2, 2018.
Geoscientist unemployment in Australia during the third quarter of 2018 was little changed from the previous quarter. The unemployment rate fell from 8.5% at the end of June to 8.3% at the end of September. Under-employment amongst self employed geoscientists also fell slightly, from 13.2% to 12.9% for the same period.
Almost half (43%) of respondents reporting that they were under-employed said that they were achieving less than 25% of their desired level of self- employment, pointing to real unemployment and under-employment rates of 13.8% and 7.4% for the September quarter of 2018 respectively.
The survey results are interpreted to reflect anecdotal evidence of continued improvement in geoscientist employment in Australia throughout 2018, but the pace of improvement has been slow.
“Employment conditions for geoscientists in Australia are showing very welcome, gradual employment but the rate at which this improvement is happening remains slow” AIG spokesperson Andrew Waltho said.
State by state, unemployment fell in Western Australia and Queensland. A small increase in unemployment was observed in NSW and the ACT, but significant increases in unemployment were evident in Victoria, where unemployment increased by almost 11%, followed by South Australia at over 9%.
“In the latest survey, 23% of unemployed and underemployed respondents lost employment during the past three months”. “This was only slightly exceeded by the number of respondents re-entering the workforce” Mr Waltho said. “A significant number of geoscientists appear to be caught in an employment revolving door” Mr Waltho said.
The proportion of geoscientists employed in mineral exploration during the September quarter increased, from 65.3% to 66.1% during the quarter; the highest contribution proportion of survey respondents engaged in mineral exploration of 66.9% recorded by these surveys in September 2012, suggesting that increased mineral exploration in Australia is making a difference, but at the expense of other fields of practice. Little change was evident in employment in metalliferous mining and energy resource exploration and production.
The proportion of unemployed and underemployed geoscientists looking to leave their profession fell sharply from 4,2% at the end of June, to 2.6% at the end of September.
“The decline in geoscientists looking to leave their profession must be seen as a positive sign” Mr Waltho said. “These results are markedly down from the peak of 11.4% of unemployed and under-employed geoscientists looking to leave their profession recorded in December 2016” Mr Waltho said.
The proportion of geoscientists in full-time employment in the latest survey was 68.6%, well below the peak of 83.9% recorded in June 2014. Part time employment provided 3.3% of jobs. Some 28.1% of respondents identified as being self employed; up from 21.9% in the previous quarter and the low of 13.0% recorded in June 2013.
“We have clearly seen a trend towards engagement of self-employed geoscientists as consultants and contractors by exploration and mining companies over the past four to five years” Mr Waltho said. “This is reflected in data for employment and unemployment by years of experience, which points to almost half of unemployed geoscientists being the most experienced component of the workforce” Mr Waltho said.
“Early career geoscientists are also experiencing difficulties getting started in the profession” Mr Waltho said. “AIG is strongly focused on this issue with AIG’s National Graduate Committee working hard to improve opportunities for early career geoscientists through initiatives that, notably, include the Institute’s extremely successful mentoring programme” Mr Waltho said.
The next survey will open for contributions on 1 January 2019.