A metallurgical accounting system is the key tool to assess a mine’s financial performance and achievement of operational excellence. Consequently, metal accounting should include the full value chain and reconciliation of the entire mining operation including geology, mineral resource and mineral reserve estimation, grade control and final saleable products.
The fact that saleable metal flows and inventories for financial reports are normally limited to only the metallurgical process plants may give the wrong impression that metal accounting does not concern the entire mining operation.
Mining companies normally state their metal inventories in their financial accounts. However, the reliability of the inventory value depends on the metal amount being accurately determined. Reliable metal accounting requires accurate measurements, sampling and chemical analysis.
Validation of the actual amount of metal present in the saleable product is normally reliable. However, quantifying the amount of metal in the mining process, as work in progress, intermediate products or in stockpiles is more challenging. This is mainly due to inadequate mass measurement, sampling error and analytical accuracy that deteriorates as the particle size of material increases.
Metal accounting is vital to sound corporate governance and, to assist in this area of scrutiny, Micon reviews and designs metal accounting procedures from the Mineral Resource estimate, conversion into Mineral Reserve, to the final saleable metal; detecting inconsistencies, bias, accounting errors, variabilities, and inefficiencies; and advises on enhancements to support accurate metal accounting.
Mineral Resources and Mineral Reserves, mass, sampling and analysis results are the inputs to metal accounting. Sound corporate governance requires that procedures are developed based on best international practices and, furthermore, that the Mineral Resource and Mineral Reserve estimates and other data generated are complete, accurate, consistent and transparent, to produce reliable financial accounts.
Micon’s metal accounting practices entail an all-inclusive view, which starts at the Mineral Resource, includes transfer of ore from the mine to the concentrator, smelter, and refinery, and ultimately into the financial accounts.
Considering the aforesaid, a properly designed metal accounting process is vital for mining companies to monitor, check and improve the flow of material and therefore cash flows through improved metal recovery and identification and quantification of losses and emissions.
Micon considers the AMIRA P754 Code of Practice for Metal Accounting as the basis for all metallurgical accounting engagements. Our experts examine the systems, procedures and methodologies already in place to determine the most cost-effective, multi-disciplinary approach towards improving metal accounting to be a reliable and accurate system proceeding from the Mineral Resources to the final saleable product.
Our reviews and designs adhere to the AMIRA Code when performing metal accounting assessments and are based on the following ten principles:
- metal accounting must be based on accurate measurements of mass and metal content;
- the system must be consistent and transparent, and the source of all inputs must be clear;
- the accounting procedures must be well documented, as well as being user friendly for ease of application;
- the system must be subject to regular internal and external reviews;
- management must respond timeously to rectify findings raised;
- where provisional data are used or where rogue data are detected, the procedures to be followed and levels of authorisation must be clearly defined;
- the system must generate enough data for various applications and should be free of bias;
- target and actual accuracies must be clearly stated;
- validation of in-circuit inventories is required by at least annual physical stocktakes. Procedures and authority levels required for changes and unaccounted variances must be defined; and
- stringent effort should be made to identify bias and reduce it to an acceptable level.
Micon subscribes to the enlarged definition of metal accounting as the estimation of metal in a mine and subsequent process streams over a defined time period, rather than the limiting metal accounting to the ongoing process of accounting for metal throughput of only the metallurgical circuit. As such, our team of experts includes experienced geologists, mining and process engineers, who fully understand the principles of mass balance, metal reconciliation, grade and process control, and data evaluation.
For assistance with – or reviews of – existing metal accounting processes, including Mineral Resources and Mineral Reserves through to final saleable metal, to identify inconsistencies, incorrect accounting, bias and inefficiencies, and identification of improvements to support accurate metal accounting contact the author, Derick R de Wit or any of our professional staff through the Micon website: www.micon-international.com/our-team.