First, the comparison of mining rights evaluation and management
As we all know, mining right evaluation plays an important role in modern mining financing. The value of mining right is the core or focus of the transaction. In a real and open market, a successful transaction can realize the value of mining rights. As a suggestion, evaluation plays an important auxiliary role in this process. With the increasing complexity of market, information and knowledge, evaluation becomes an important part of mining industry.
(A) the history of mining rights evaluation
China is a big mining country with a long history of mining and utilizing minerals, but the first mining law was not born until 1986. She took a completely different road from western countries in history, society and economic system.
China's mining right evaluation began with 1998. Three laws and regulations issued by the State Council stipulate that when applying for and transferring mining rights, the existing mining areas funded by the state should be evaluated. Whether the mining rights formed by other contributions need to be evaluated is decided by the parties themselves. It is believed that with the development of the market and the active trading, the parties will have the demand for mining right evaluation before the mining right transaction and during the mining financing process, and voluntarily hire appraisers to evaluate their mining rights or the mining rights to be obtained.
Before 1998, the mineral resources law did not allow mining rights trading. However, as a prerequisite for applying for mining rights, the applicant for mining rights needs to have the exploration results-geological exploration report. Therefore, the transaction of exploration results appeared in the 1990s, accompanied by the evaluation of exploration results. This may be regarded as a prelude to the evaluation of mining rights in China.
The history of mining right evaluation in Canada needs to be linked with other western countries because they have the same system.
The history of western mining right evaluation can be traced back to at least the second half of19th century. E. J. Mal-one wrote that the evaluation method was developed from the technology first proposed by Henry D. Hoskold 1877 in his paper "Evaluation Assistant for Engineers". According to E·J· Malone's research, the basic principles of mineral value and valuation began to take shape in the early 20th century. At the end of 1950s, discounted cash flow analysis was introduced and widely used in mining industry. However, the important development of evaluation methods, principles and standards came into being in the late 20th century.
1987 The American Appraiser Association has formulated the Unified Standard for Professional Appraisers (US-PAP). But until today, there are no special standards and guidelines for mining right evaluation in the United States.
Australia took the lead in drafting standards and guidelines for mining right evaluation. Valmin code was published in 1995 and revised in 1997. The Valmin Code has become a model for other countries.
In Canada, it was not until May 2003 that there were complete and comprehensive rules and guidelines for mining right evaluation, which was promoted by the "Bre-X" company scandal. The Toronto Stock Exchange and the Ontario Securities Commission (TSE/OSC) set up a Mining Standards Task Force (MSTF) to review the behaviors, standards and practices of the mining industry. 1999 65438+ 10, the working group suggested that the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) set up a committee to review and consult the ways and methods of mining right evaluation. From the spring of 2000 to the autumn of 2002, the Committee drafted and published a "preliminary discussion framework", "discussion draft", "draft mining right evaluation standards and guidelines" and "revised draft mining right evaluation standards and guidelines". In February 2003, the final draft of mining right evaluation standards and guidelines was formed, which will be officially promulgated and implemented in Montreal in May 2003. At the same time, other professional committees are also doing their best to build systems in other key areas, such as standardizing the definition of mineral reserves/resources, the qualification system for some professional and technical activities in the exploration mining industry, and the exploration standards for exploration practitioners. An important event in this process is that the CIMVal Committee organized an "evaluation day" at the CIM annual meeting (Mining Century 2000) held in Toronto on March 8, 2000. Many papers on mining right evaluation from experts in various fields were submitted or introduced at the meeting. These documents can be regarded as the basis of CIMVal standards and guidelines.
At the same time, the International Evaluation Standards Committee is preparing a set of international evaluation standards, which is expected to be finally accepted by the whole world.
In South Africa, another important mining country, the South African Mining and Metallurgy Association is following the footsteps of Australia and Canada to formulate standards and guidelines for evaluating mining projects, mining rights and mining assets.
(B) the formation and creation of mining rights norms
The evaluation standard of mining right is the result of the development and competition of mining activities. The purpose of mining right transaction is to raise limited funds and spread risks. Therefore, mining rights transactions involve a variety of industries. These industries are all concerned about the true value of trading objects, including mining rights holders, potential holders or applicants of mining rights, banks and bankers, large mining companies, stock holders and other investors.
Independent mining consulting company has its important role and position in mining industry. They provide various services including mining right evaluation for mining right transaction and financing parties.
In Canada, Australia and South Africa, organizations and groups from all walks of life participated in drafting, discussing, commenting and debating various standards and other aspects of mining rights. Participants expressed their opinions from different angles and viewpoints. Although they can't reach complete agreement, their work is fruitful and meaningful.
Canadian organizations and groups involved in the drafting process of standards and guidelines include:
Canadian Mining Association
Canadian Institute of Accountants (CICA)
Canadian Institute of Management Accountants (SMAC)
Financial Analysis Committee of Canada (CCFA)
Canadian Mining, Metallurgy and Petroleum Association
toronto stock exchange
Canadian Securities Commission
bank
mining company
consultant firm
China has done the same work on a relatively small scale. In this working group, there are no representatives of mining rights holders of exploration companies, mining companies and securities managers.
(3) Mining right evaluation management
At present, according to the current relevant laws and regulations in the State Council, it is still the responsibility of our government to supervise and manage the evaluation of mining rights. The Ministry of Land and Resources has issued three measures for the management of mining rights, namely, Interim Measures for the Management of Appraisal of Exploration and Mining Rights, Interim Measures for the Management of Appraisal Qualification of Exploration and Mining Rights, and Interim Provisions on the Qualification System of Mining Rights Appraisers.
The functional departments of the Ministry of Land and Resources organized and drafted two editions of technical guidelines for mining right evaluation. The first edition is called "Guide to Evaluation Methods of Exploration and Mining Rights". The second edition is the Guide to Mining Rights Evaluation, which has been applied in practice. The third edition is currently being revised and compiled. The author believes that the government will gradually retreat from the management position in this field, especially, first of all, from the technical methods.
In Canada and other western countries, the most relevant self-regulatory professional organizations are responsible for these affairs and tasks, such as the Canadian Mining, Metallurgy and Petroleum Association (CIM), the Australian Mining and Metallurgy Association (AusIMM) and the South African Mining and Metallurgy Association. These organizations are composed of people from different occupations and provide consulting services for mining in different fields. In order to restrain the practice behavior, fair competition and protect the interests of practitioners and customers, self-regulatory professional organizations have established some systems to regulate their members. One of the main measures and features of these systems is "the power of disciplinary action, including the power to suspend and dismiss members or employees of members".
(four) the conditions and environment for the evaluation of mining rights
In Canada, standards and/or guidelines have been issued in several fields related to mining, which provides a better and more standardized environment for appraisers to practice and establish norms in evaluation.
Canadian mining financing
This kind of coordination, tacit understanding and cooperation is still lacking in various professional fields of China mining industry. The management of government departments is uncoordinated. The current exploration norms and resource reserve standards are not applicable to the evaluation of mining rights that provide services for mining rights trading and mining financing.
(5) Management system
It is very important to establish an effective mining right evaluation management system. Canada's qualification system and exploration standards are efficient management systems, and its social and cultural foundation is the principle of good faith.
China has a similar management system, but the effect is not satisfactory.
1. Appraisers and appraisers
One of the important achievements and contributions of the national standard 43- 10 1 put forward by the mining standards task force (MSTF) and issued by the Canadian Securities Regulatory Commission (CSA) is the concept and system of talents. This concept evolved from the concept of "qualified personnel" used in Australia, Britain and South Africa.
43- 10 1 national standards define qualified personnel as natural persons, who are engineers or geologists with at least 5 years' experience in mineral exploration, mine development or mine management or evaluation of mining projects, or who have comprehensive experience in these fields and experience related to mining project objects and technical reports, and are also members of reputable professional associations.
A qualified person is a constrained professional, and he should reflect the application of professional standards and their responsibilities in the technical report provided to the public. The implementation of the concept of qualified personnel will ensure that only qualified personnel can carry out and report exploration and mining activities. This is one of the lessons of the scandal of Bre-X company. To be exact, the qualification system is needed to help rebuild investors' confidence, which is related to the future mining industry in Canada.
The qualified personnel system has its foundation in western countries, that is, the management of professionals. Engineers have been licensed in various jurisdictions in Canada for many years. At least seven provinces and regions have also implemented the geologist license system, and other jurisdictions are also formulating relevant laws and regulations.
The concept of qualified appraiser evolved from the concept of qualified personnel. CIMVal standards and guidelines define it as a natural person, who is a recognized expert with rich experience in mining right evaluation, has experience related to the target mining right, or relies on the current technical report of the target mining right completed by qualified personnel, and is supervised by or a member of a reputable professional association or self-discipline professional organization.
China also has a professional and technical personnel management system, which is run by government functional departments. Can not meet the needs of market economy activities, mainly in the following aspects: first, there is no restriction on the scope of employment, in fact, it has become a universal qualification; Second, there is no employment risk, and there is no discipline system to restrain morality and ability.
2. Exploration standards
At the end of last century, faced with several vicious incidents related to the stocks of mineral exploration and mining companies, the confidence of mining investors was shaken and mining stocks suffered major setbacks. In the past six years, Canadian mining industry has made great efforts to restore investor confidence. The exploration standard formulated according to the national standard 43- 10 1 is another important achievement of Canadian mining industry. In June 2000, the Guidelines for Mineral Exploration were issued, and the Guidelines for Estimating Mineral Resources and Mineral Reserves are being formulated. These professional standards are formulated to support and constrain qualified personnel to practice, and also provide a basis for supervision and inspection. It is equivalent to the common unified technical standard in Canada, which requires qualified personnel to abide by, but at the same time it is stated that it does not restrict the application of the original thinking and new methods of qualified personnel.
China also has a set of mineral exploration norms, which have guided the national geological exploration for more than 40 years. Although the General Rules for Geological Exploration of Solid Minerals revised in 2002 has made some efforts to adapt to the exploration work under the market economy system, there is still a lack of norms or standards for commercial mineral exploration. Compared with Canadian exploration standards, China's mineral exploration standards have little difference in content, while China's exploration standards are much more detailed. The main difference is that the Canadian exploration standard highlights the requirements for responsibility, while the China exploration standard highlights the requirements for technology. If Canadian qualified personnel do not work according to the exploration standards, they will face legal consequences and the risk of being disqualified. If China's exploration work can't meet the requirements of exploration norms, it will only affect the level of exploration results and have no other consequences. This shows the strength of their binding force. This difference is institutional. Canada's exploration standards are aimed at commercial mineral exploration, so responsibility is extremely important. The extent of each link of commercial mineral exploration is not only a technical problem, but also a question of the reliability, authenticity and legal responsibility of obtaining information.
(6) Purpose
CIMVal standards and guidelines list five basic purposes that appraisers must abide by in the evaluation process and drafting evaluation reports. They are substance, transparency, independence, ability and rationality. Obviously, these purposes are very important for appraisers and evaluations. They are always reflected in the whole process of evaluation.
China's "Administrative Measures for Mining Rights Appraisal" and "Guide to Mining Rights Appraisal" do not specifically propose professional purposes, but require appraisers and appraisal companies to independently engage in scientific and fair appraisal, and bear legal responsibilities for the objectivity, impartiality and authenticity of their appraisal reports.
(seven) mining rights evaluation standards and guidelines or provisions.
In 2000 and 2002, the Ministry of Land and Resources successively issued three interim measures for the qualification evaluation of employees, and organized the drafting of two versions of industry technical guidelines. They contain all the necessary contents to manage and guide the evaluation industry, as well as Canadian mining right evaluation standards and guidelines, which are similar in content scope and measures.
The main difference is that Canadian standards and guidelines define some key concepts and terms in mining right evaluation in detail, which is very necessary. They identified the assessed mining right value type as "fair market value"; Ensure that the evaluation result is valid within one day, and use a range of values to represent the evaluation value.
China's "Interim Measures for Evaluation" not only requires the qualifications of appraisers, but also requires the qualifications of companies that carry out evaluation business; If the value type of mining right is not determined, the validity period of the evaluation result is determined to be one year; The evaluation result is a single value.
(8) Employees
At present, in Canada, any individual can practice as a qualification appraiser as long as he meets all the characteristics described in the definition of "qualification appraiser" and follows and conforms to the standards and guidelines of CIMVal, without additional examination, registration and approval. However, we must adhere to the principle of good faith, attach a special page to the evaluation report to claim that we meet the requirements of qualified appraisers, list relevant experiences, and promise to follow standards and guidelines. It is understood that Canada is preparing to establish an appraiser association with reference to the Canadian Association of Professional Engineers and the American Association of Appraisers.
The evaluation industry in China has implemented the examination and registration system. To become a qualification appraiser, you need to pass a unified comprehensive examination. People who meet certain basic conditions can take this special exam. To become a certified appraiser, a qualified appraiser needs to be employed by a qualification appraisal institution and registered in a management institution. China Appraisers Association is under construction.
Second, the comparison of mining rights evaluation technology
The methods of evaluation can be classified as technical problems. Western countries have been evaluating mining rights as a part of real estate for a long time. By contrast, only six years in China. China's economic system reform has promoted the introduction of evaluation technology. Practitioners in China have carried out meaningful practice and research, especially on the worldwide problem of exploration right evaluation method.
(a) the connotation or definition of mining rights and the value of mining rights
In the comparative study, first of all, we should make clear the differences of the concepts of mining rights between the two countries. The concept and terminology corresponding to "mining right" in Canada and China is "mine land (production)". According to CIMVal standards and guidelines, mines (properties) include all rights and benefits obtained for obtaining material assets, including various licenses and permits. The value of mining rights consists of these rights, interests and the value of various physical assets within the statutory assets registered and filed by the Administration. In addition to mineral reserves and resources, physical assets include underground development and construction, processing plants and ground facilities. But for the mining right in the early stage of exploration, its assets and value mainly refer to minerals. Mines (production) are further divided into exploration, development, mineral resources and production.
CIM also defines the value of mining right among various value types, namely fair market value (FMV). It refers to the highest price that can be obtained in an open and unrestricted market, expressed in money or the value of money. All parties in this market are knowledgeable, balanced and cautious, independent in behavior and free from any coercion. The definition of fair market value seems to be a description of the process in which an asset generates its exchange value in a virtual market.
In China, the term "mining right" is usually only understood as the rights, certificates and interests of minerals. It is defined as the right to carry out economic activities to explore or exploit mineral resources. The Guide to Mining Rights Evaluation defines the value of mining rights as the amount of income that may be obtained by investing in mineral resources. This definition describes the process of generating value in production.
(2) Evaluation principle
CIMVal standards and guidelines put forward six general principles applicable to the evaluation of mining rights. They can be summarized as the timeliness of value, the timeliness of value prediction, the availability of value, the highest and best use principle, the timeliness of information and the return determined by the market.
The Guide to Mining Rights Evaluation lists the principles that 12 appraisers should consider in the evaluation. Namely;
(1) the principle of respecting the economic laws of geological resources;
(2) Abide by the principle of geological exploration norms;
(3) forecasting principle;
(4) the principle of supply and demand;
(5) the principle of substitution;
(6) the principle of change;
(7) the principle of competition;
(8) the principle of income increase and decrease;
(9) The most effective utilization principle;
(10) coordination principle;
(1 1) principle of income distribution;
(12) equilibrium principle.
(3) Evaluation method
In China and Canada, the three recognized evaluation methods are income method, market method and cost method. They are used under different conditions. There is no difference between the two countries.
(4) Evaluation method
CIMVal standards and guidelines put forward 14 methods for appraisers to choose and use in evaluation. This 14 method is further divided into main methods (7 methods) and secondary methods (4 methods), and comments are made respectively. Four methods belong to income method, six methods belong to market method and three methods belong to cost method. Some methods are widely used in Canada and are recognized as the first choice. Some methods are not widely used, but have been accepted. There are still some methods that are neither widely used nor accepted, so these methods are not divided into first-class or second-class evaluation methods. The purpose of listing unacceptable evaluation methods in the guide is not to limit the use and development of these methods by appraisers.
China mining right evaluation guide recommends three ways and eight methods.
Market law and its methods are widely used in Canada and other western countries. They are better and more ideal ways and methods. However, the technical problems of some methods need further discussion and improvement. The evaluation method of market method has not been applied to the evaluation of mining rights in China. The main reason is the lack of sufficient mining rights transactions, especially those that are unrestricted and non-mandatory.
(5) Reserves and resources
Mineral reserves and resources are very important parameters in the evaluation of mining rights. From many papers and articles discussing the evaluation of mining rights, we can know that in the past 20 years, the evaluation circles in western countries have been paying attention to and debating whether to consider the amount of mineral resources in the evaluation. Most people in this field can now accept the view that mineral resources should be considered when evaluating the value of exploration rights. However, the problem of how to determine the amount of mineral resources used for exploration right evaluation has not been well solved. I hope to produce a generally accepted principle and method to determine this parameter. This will help to compare the value of mining rights and apply comparable methods.
In China, practitioners have never doubted that mineral resources and their potential can be considered in the evaluation of exploration rights. But the correct estimation is still an unsolved problem.
(6) Exploration right evaluation
CIMVal standards and guidelines recommend about 9 evaluation methods of exploration rights currently used in some areas, and appraisers can choose to use them, of which 6 are market-oriented and 3 are cost-oriented.
China's "Guide to Mining Rights Evaluation" puts forward six evaluation methods of exploration rights. Two are based on cost, two are based on revenue, and the other two are based on market. Some evaluation methods of market law widely used in western countries have not been applied to China or introduced to China. One of the main reasons is that there are almost no transactions suitable for these methods in China, or they are not familiar with domestic miners.
If the characteristics of a prospecting right meet certain conditions, especially the reserves and resources, it can be evaluated by DCF and other income methods, which are the same in both countries.
At present, in the evaluation of mining rights, it has been widely accepted that the amount of mineral resources and its possible potential value should be considered and estimated in the value of mining rights, which is an important development. Nevertheless, there are still two unsolved problems in the evaluation of exploration rights. One is how to consider and estimate the value of exploration right without delineating the reserves and resources, and what elements can reflect its value and express it by mathematical methods. Another problem is how to determine the parameters of resources and potential in the evaluation of potential exploration rights with low credibility. The author thinks that these problems are worldwide, and they are the same for China and Canada.
Three. Concluding remarks and suggestions
China and Canada are both big countries with mineral resources, and mining plays an important role in the national economy. Both countries have made important contributions to the development of world mining industry and will make the same contribution in the field of mining right evaluation. At present, some Canadian mining companies are actively seeking investment opportunities in China, and the mining industry in China is also actively seeking investors. This will be a good opportunity for the development of mining right evaluation industry in both countries.
The comparison of the main aspects of mining right evaluation in this report is still preliminary and summary. They can be summarized as follows:
Obviously, there are some differences between China and Canada in mining right evaluation, but the gap is not very big, especially in management system, establishment and development. Relatively speaking, there is a big gap between evaluation techniques and methods. In addition to the reasons mentioned above, the lack of contact and communication between China employees and their western counterparts is another reason. Communication and practical experience are extremely important for the development of mining right evaluation in China.
Mining right evaluation is accompanied by the emergence and development of economic system and legal system. The concept of assets and its basic legal characteristics were formed when the constitutions of Canada and other countries were established. Is consistent with the economic system. China is carrying out economic system reform, seeking to establish an effective system, and mining rights are the product of the reform. Its effect will be tested in practice. Although it is too early, it can be believed that China's laws and regulations related to mining rights are constantly improving.
Due to the differences in history and system, people consider and compare values from different angles and economic angles. Canadian counterparts are mainly driven by the economic significance of assets under market conditions in the field of evaluation, and they consider the investment and cost of assets, rather than the natural attributes of the value of minerals themselves. Evaluation is a business for them, not a theoretical and scientific research.
The introduction of qualified personnel and qualified appraiser system is beneficial to the evaluation of mining rights in China. It is worth considering developing this system in China. The development and progress of mining right evaluation in China need the support of effective system.
Due to the problems of roles and functions, evaluation is not suitable for government management. In China, there is an urgent need to develop self-discipline professional organizations to meet the needs of the market economy system. This will be an important part of the mining financing system.
In China, mining rights and other terms need to be widely discussed before they can be defined in detail and clearly.
refer to
[1] Historical review of E.J. Malone's mining right evaluation method. Mr. Ross D.Lawrence provided a copy of the document.
[2] Ross D. Lawrence's income method .2001
[3] [3] Can Ross D. Lawrence DCF forecasting method determine fair market value only based on proven mineral reserves and possible mineral reserves?
[4] Keith Spence's "Canadian Mining Rights Evaluation Criteria" development and evaluation practice summary.
[5] Canadian mining rights evaluation standards and guidelines
[6]Maureen C.Jensen, Bill Pearson, Recent Situation of CIM Notification of Canadian Qualification System, February 2006, 5438+0, Volume 94.
[7] Guide to Mining Rights Evaluation. Beijing: China Dida Publishing House, 200 1.
[8] Guide to Evaluation Methods of Exploration and Mining Rights, Beijing: Geological Publishing House, 1998.
[9] Interim Measures for the Evaluation and Management of Exploration and Mining Rights. Ministry of Land and Resources Document [1999] No.751March 30, 999.
[10] Interim Measures for the Administration of Qualification Evaluation of Prospecting and Mining Rights. Document of Ministry of Land and Resources, Land and Resources Development [200 1]
[1 1] Interim Provisions on the Qualification System of Mining Right Appraisers. Document No.82 [2000] of Ministry of Personnel and Ministry of Land and Resources, August 4, 2000