REPORT OF A STUDENT EXERCISE
(SLSP 5091 - MAJOR POLICY EXERCISE - year 2000)
MASTER OF POLICY STUDIES COURSE
SCHOOL OF SOCIAL SCIENCE AND POLICY
UNIVERSITY OF NEW SOUTH WALES
GOVERNMENT ACQUISITION OF INFORMATION FROM
MINERAL EXPLORATION AND MINING:
A POLICY REVIEW
by J. G. Byrnes, 2000
Acknowledgment & Disclaimer :
In 1989 the Premier approved a policy (Memorandum No. 89/18) which enables payment of fees levied on state employees for courses that meet the skills requirement of their agency or of the public service. The writer’s participation in the University of New South Wales Master of Policy Studies course has been progressing under this aegis and the topic of this report is closely similar to my work in the Geological Survey, New South Wales Department of Mineral Resources. The writer is grateful for the Department’s assistance in sponsoring these studies. Any comments and expressions of opinion within this report are solely the writer’s views. Unless otherwise noted, they do not express the views of the NSW Department of Mineral Resources.
FOREWORD & ACKNOWLEDGMENTS
Foreword
Acknowledgments
1. INTRODUCTION
1.1 Aim
1.2 Scope and importance of mineral exploration
1.3 The structure of this review
2. REASONS FOR INFORMATION BEING ACQUIRED BY GOVERNMENTS
2.0 General
2.1 Mineral values and investment information
2.2 Information essential for safety aspects
2.3 Information for the furtherance of geoscience
2.4 Information for assistance of future exploration
2.5 Information for land use planning
2.6 Mine closure planning
2.7 Other perceived shortcomings
3. HOW INFORMATION IS ACQUIRED
3.0 General
3.1 Systems for attributing mineral rights
3.1.1 The Crown system
3.1.1.1 Australian practices
3.1.2. The US or Claim-Patent system
3.1.3 Claims in Canada
3.2 Organisational and administrative factors
3.3 Importance of comprehensiveness
3.4 The work of GGIPAC and CSIRO
4. WHAT BECOMES OF ACQUIRED INFORMATION
4.1 Digitisation and Digital Imaging
4.2 Access and distribution via the Internet
4.3 The role of libraries
5. TOWARDS BEST PRACTICE POLICY
5.0 General suggestions for future development
5.1 Best practice preferred policy
5.2 Rates of implementation
5.3 Desirability of explicit policy in this area
REFERENCES
[ And Endnotes ]
FOREWORD & ACKNOWLEDGMENTS
Foreword
The world in which most people live and work is complex. Demands often overlap, life can be difficult and conflicts abound. To impart a sense of order and certainty where there could otherwise be chaos or danger, people in all societies and walks of life look for guidance, formal statements from accepted sources of authority, codes of practice, rules, and other forms of policy. Policy concerns not only the exercise of power but also the ways action can best be shaped within the resources available to human organisations. The field of policy studies is concerned both with how this happens (policy processes) and with the nature of policies formulated (policy content).
This report forms part of a student exercise (SLSP 5091) carried out during the Master of Policy Studies (MPS) course, ongoing, at the School of Social Science and Policy (SSSP), University of New South Wales. Earlier projects undertaken by the writer during the MPS course have been on forest policy, mine safety policy, globalisation, and the Asian financial crisis of 1997. SSSP is part of the Faculty of Arts and Social Sciences and takes a social science perspective on policy studies. In practice that sees it linking the social sciences to the policy process and being vocationally geared to policy analysis and social research positions.
The purpose of subject SLSP 5091 is to practice completing a piece of policy research in conjunction with a client. Ideally the client and the exercise could be real-life entities, even involving some matter that is in train. However, the exercise will also work as a hypothetical policy field. The present case is hypothetical and is not a topic known to be under active consideration at present for policy formulation.
My chosen topic is government acquisition of information from exploration and mining. In this research I have considered why it should be done, how it is done in practice, how it might be more optimally done, and whether forming clearer and more explicit policy on the matter might be of assistance. Research tools were primarily the library of the NSW Department of Mineral Resources and the Internet. To limit the search scope, fossil fuels were excluded and environmental management per se was excluded.
During this exercise it was hoped to determine how mineral exploration information flows in the three major countries, Australia, Canada and the USA, which between them have about 40% of global exploration expenditure. This, however, did not prove possible as very little quantitative information on this was obtainable in the time available. Particularly little was found about what happens in the USA. Australia and the USA have very different patterns in this regard. Canada is something of an intermediate case, having many similarities with Australia but also having a basic claims-patents system that was early imported from the United States.
Acknowledgments
Within the NSW Department of Mineral Resources, Peter Lewis, Manager Information Systems (Exploration: NSW), and Geoffrey Brookes (Manager Geoscience Information Services, which includes DIGS), both of the NSW Geological Survey, took an interest in and actively assisted with the project. Mr Lewis acted as a supervisor in the workplace while Dr Hal Colebatch, of UNSW, acted as campus supervisor. Mr Brookes enthusiastically provided assistance in the form of pertinent papers and records to read. Jenny Evans, Corporate Information Manager of the NSW Department of Mineral Resources read the report draft and offered advice, especially in regard to records management and compliance with broader government policies as treated in section 5.1.
Numerous people, geoscientists and others, were communicated with (mainly by email) on aspects of this investigation. Most of these persons reside in the USA, Canada, UK, and other Australian states. One is deserving of particular mention, Mr Murray Maynard who was with the Northern Territory Department of Mines and Energy when first contacted. Although I have not had the pleasure of meeting Mr Maynard (communication being solely via email and from reading old file articles and newsletters by him) it seems appropriate to note what an inspiring figure he is to this particular field. His work shows a passion for implementing reforms to exploration reporting and it was some writings of his which strongly inclined me to take on this topic as the Major Policy Exercise for the MPS course. His work shows a protracted stridency and consistency in encouraging others towards the cooperation and unity needed to achieve beneficial standards-based records management policy.
Comments and expressions of opinion within this report should, unless explicitly attributed to others, be taken to represent the writer’s own views, and are not those of the NSW Department of Mineral Resources.
John G. Byrnes
1. INTRODUCTION
1.1 Aim
Collection, management and dissemination of information from mineral resource exploration and mining is a major activity of the NSW Department of Mineral Resources and of its counterparts elsewhere in Australia. This review sets out to provide a resource for possible future policy development in this area by comparing some existing policies and practices, by identifying explicit and implicit rationales which underpin them and by suggesting certain possible lines of future action.
The strong impacts of globalisation on mineral exploration in recent years (Warin, 2000), the widespread liberalisation of policies on direct foreign investment, and other changes in financial and informational ease of flow (particularly the influence of the Internet), all suggest competitive advantage in an improved geoscientific information management regime.
1.2 Scope and importance of mineral exploration
According to a 1997 estimate by GGIPAC, the total of Australian mineral exploration information by then accumulated had cost more than $30 billion (1997 dollars) in exploration expenditure to obtain. And during the year 1996-1997, a further $1.15 billion was spent on exploration, about 60% of that being on gold exploration. Figures such as these make one suspect that by far the greatest volume of geoscience information being generated annually in Australia is that in the exploration reports supplied to government under statutory reporting requirements. The standard and presentation of this material may often be below that of more academic work but this is offset by features of quantity and geographic spread. Quantities of accumulated reportage are not accurately known but are doubtless large (e.g. number of reports in storage in the Australasian region was estimated in 1998 as about 72,000 - NSW 9,175; NT 7,593; PNG 173; Qld 23,580; SA 5,675; Tas 4,912; Vic 5,437; WA 15,514.
The Metals Economics Group (MEG) annually surveys spending on exploration. On their figures, Australia has the highest proportion of global expenditure on exploration for any single country. The 1999 figures were Australia 18.7%, Canada 10.8 %, and the United States 10.0%. The situation of Australia has remained relatively stable over a decade, whereas Latin America has gained in importance, and both Canada and the United States have experienced marked fall-offs.
1.3 The structure of this review
The structure of this review is based on the three basic questions that may be asked in almost any field: Why do we want something, how do we get it, and what then will become of it. Applying this to the present topic:
•
Why is it wanted?- For monitoring of compliance with authority conditions
- Safety (avoidance of mine site perils, evidence in enquires or legal proceedings)
- Investment (efficiency, probity and anti-fraud)
- Geoscience (the furtherance of)
•
How is it obtained?- Most effective request method is as a requirement under licence
- Transferred via hard copy but technology will soon allow fully digital transfer
- Current focus should be on maximisation of re-useability
•
What should become of it?- Preservation control should be under aegis of appropriate archival legislation
- Full digital copy should be maintained at agency level within government
- All data, once released to open file, should be made readily available
- It is desirable for data to be low cost (preferably free) and available via Internet
2. REASONS FOR INFORMATION BEING ACQUIRED BY GOVERNMENTS
2.0 General
Australian state governments have moved towards comprehensive collection and preservation of information from minerals exploration. This is the case also for information from mining, although with greater variation there between the states.
Reasons often found stated by governments for collecting exploration and mining information include: data archiving to assist future explorers, monitoring of compliance with authority conditions, calculation of royalties, assisting the management of state mineral resources, optimising resource extraction, obtaining information about land values, and environmental management. Information from exploration and mining has the potential to enable development of improved models of genesis of economic mineral deposits and to inform more effective strategies of mineral exploration and extraction. Other stated motives are investor protection and safety concerns. Geoscientific values are rarely found stated in higher level policy as anything more than extreme generalisations. For example, the Minerals and Metals Policy of Canada states that the government will "further enhance the timely dissemination of geoscientific maps and data through the application of state-of-the art information technologies" (Government of Canada, 1996). This is of some interest (e.g. a de facto commitment to using the internet) yet is devoid of any detail.
In some Canadian provinces, information acquisition and management is very similar to that in Australia, but in the United States of American the situation is quite different, being noteworthy for the absence of much basic information collection. An explanation for the contrast between USA and Australia lies in the different history of control of mineral resources in the two countries. In Australia minerals have remained largely under government (Crown) control and the rights to them are leased or licenced rather than transferred outright. In the USA, by contrast, the mineral rights were permanently severed from Crown control with the War of Independence and then conceptually given to the people after some deliberation of the options by the Continental Congress. Hence in the US the citizens in theory already own the minerals and have free access to locate them on public land, and a free right to mine them upon discovery there. All this is theoretically without requiring administrative consent or licence under the General Mining Law of 1872. Nonetheless, if such rights still exist they must be recognised also as impinged upon severely by later environmental regulations. In Australia, mines departments (invariably interested in mineral potential and geo-technical aspects) have administered Crown minerals. In the USA by contrast the public lands are administered by the Bureau of Land Management which has never had such detailed mineral interests. It does not do much more than record claim locations with regard to mineral resources. This situation has eluded any reform and as it is deeply rooted in the constitutional heritage and essence of the nation, no single government agency has the power or scope to address it even. Only Congress has power over the situation and it tends to exercise that power mainly in regard to environmental matters. Congress requested that the National Academy of Science (National Research Council) assess hardrock mining on the federal lands, over 350 million acres, in the western United States. To conduct that study, the National Research Council appointed the Committee on Hardrock Mining on Federal Lands in January 1999. In its report (National Academy of Science, 2000) the Committee recorded that it was "consistently frustrated by the lack of reliable information on mining on federal lands"
2.1 Mineral values and investment information
Despite the fact that minerals have such a major role in sustaining our economy, mining has also been remarked upon as a wealth-destroying enterprise. This was the opinion of Adam Smith who wrote in The Wealth of Nations (1776): "Projects of mining, instead of replacing the capital employed in them, together with the ordinary profits of stock, commonly absorb both capital and profit", and "Of all those expensive and uncertain projects, however, which bring bankruptcy upon the greater part of the people who engage in them, there is none perhaps more perfectly ruinous than the search after new silver and gold mines. It is perhaps the most disadvantageous lottery in the world ....the common price of a ticket is the whole fortune of a very rich man". This may seem surprising to many, yet modern studies still do arrive at a similar conclusion, and mining is at best concluded by many to be only a marginally profitable industry in its own right (McDonald, 1993). In addition there are the well know hazards of deceit (Fayant, 1907b; Sykes, 1978). Mining frauds and severe misbehaviour continue in recent times, the Bre-X Minerals Busang "gold deposit" case in Indonesia being a $6 billion dollar fraud which caused Canadian securities regulators and stock markets to set new standards (Carscallen et al., 1998; Collins, 1998; Whyte, 2000).
Societies will always require and extract earth commodities, and the benefits and profit-taking from this multiplies over a wide range of downstream activities (transport, manufacturing, construction, etc.). However the enterprises operating at the exploration or extraction interfaces are not noted as highly profitable overall and loss-making exercises are commonplace there. As with gambling, some do well but the majority are likely to lose, and many studies have commented on investment in this area as being poor and often unsatisfactory. Some studies have suggested that most mines have ended up sustaining an absolute loss, and that only a small percentage ever repaid the invested capital. Studies on the average real return on capital in mining have put the figures as low as 2-5%, or going even lower into negative figures if there is continued re-investment (e.g. Miskelly, 1992, found for the 1980s that the Australian Stock Exchange’s All Mining Index returned minus 6.9% on the ca. A$42 billion invested). Even in boom periods the average rate of return on capital rarely reaches 10% in mining
The opinion has been expressed that exploration economics should be a cornerstone of the foundation of any government department concerned with the long-term viability of the mineral sector (Mackenzie and Doggett, 1992). However, there are many deficiencies in records-keeping which currently make any such goal quite impractical. Worldwide standardisation in the provision of exploration expenditure statistics remains poor. Data from communist countries has been largely lacking, and the quality and consistency of data from the USA has long been adversely commented upon by economic researchers. Indeed, surprising as this may seem, only two countries, Canada and Australia, conduct official comprehensive surveys of non-petroleum mineral exploration expenditures.
For example, the only exploration expenditure statistics available in the public domain for the United States for the years 1970 through 1979 are rough estimates by Schreiber and Emerson (1984). The US exploration statistics for the 1980-1991 decade are from incomplete annual surveys that were carried out by the American Bureau of Metal Statistics (ABMS) on behalf of the Society of Economic Geologists. That ceased and since 1992 results of the proprietary annual survey of worldwide mineral exploration expenditures prepared by the Metals Economics Group (MEG) of Halifax, Nova Scotia, has been the only source of aggregate exploration statistics for the United States.
Despite such shortcomings in collection of statistics, it is clear that since 1972 (maybe earlier), the top three destinations of mineral exploration capital from worldwide sources have been consistently the same three countries. These are Australia, Canada and the United States. The US has been in third place since 1980. Canada was in top place until 1991, following which Australia has been in top place.
Endnote 1 - Additional information on mineral values and investment,
Endnote 2 - Mining frauds and scams
Endnote 3 - The late 1960s boom
Endnote 4 - Dot.com fervour
2.2 Information essential for safety aspects
Collection of mining information is of obvious importance to human safety, as well as to the stability of buildings in proximity of mining operations. The University of Pittsburgh maintains a project dedicated to examining the functional requirements for optimising evidence value in records-keeping (http://www.lis.pitt.edu/~nhprc/evidence.html), which is a factor that could be of interest wherever safety aspects are of potential concern. The potential importance of safety concerns is well known and may be illustrated here by means of two case studies. Both cases involved conflicting or incorrect maps. The loss of Lake Peigneur on 20 November 1980 is a famous incident (Nichols et al., 1981), known world-wide. The Gretley Colliery inrush case in NSW in 1996 (Staunton, 1998) is not so exceptional. It is the sort of mine tragedy, involving loss of life, of which there are many examples. However, it is particularly significant here for two reasons. It resulted from inadequate acquisition and management of information on the part of government, and in turn it has lead to major review and changes within NSW administration of mining.
Abandoned mines may present a subsidence hazard to developments as well as a personal safety hazard to individuals. The Bureau of Land Management in Nevada has estimated in Press Release 68 of year 2000 (http://www.nv.blm.gov/ news.releases/Press_Releases/ fy_2000/PR_00_68.htm) that about 125,000 abandoned mine features exist in Nevada, of which some 50,000 may present some degree of physical hazard. During the past 30 years, 13 people died in abandoned mine incidents within that state, and others were injured.
Endnote 7- Case studies - The loss of Lake Peigneur
Endnote 8- Case studies - The Gretley Colliery inrush
2.3 Information for the furtherance of geoscience
Information flow from exploration activities is very large and of obvious potential value to geoscience. It is essential for geoscientists to press for its acquisition as a matter or policy as experience shows that others are likely to overlook this aspect. Legislative reformers considering changes to mining law (e.g. Omalu and Waelde 1998) have continuously neglected the important matter of reporting requirements.
Exploration for minerals and fossil fuels worldwide produces a vast amount of information and data. For example, petroleum data in Western Australian government storage numbered over 700,000 items by 1996. Another major repository is for the petroleum exploration data submitted to the federal government under the Australian Petroleum (Submerged Lands) Act. This is deposited at the Australian Archives facility at Villawood, New South Wales. By 1996 it was occupying over 12 kilometres of shelf space consisting of survey tapes and supporting documentation. Over 200,000 rolls of tape are involved. Data deterioration is of serious concern, especially for magnetic data stored on tapes. Tape has an expected shelf life of only 10-15 years.
In Australia at present the requirement for geoscientific reporting applies both to exploration and mining titles. Recent leases tend to require both full particulars of all exploration and a summary of all geological findings acquired through mining or development evaluation activities. This was not always the case and many leases granted under former Mining Acts had no reporting requirements.
Although mineral resources departments preserve such geoscientific data primarily to assist future mineral explorers, the benefits will flow to the whole of geoscience, and to whatever others may have use for geoscientific information.
2.4 Information for assistance of future exploration
McKenzie and May (1992) have assessed pre-competitive exploration research in Australia. All the Australian States and the Northern Territory have, since the 1990s, been conducting pre-competitive exploration initiatives which feature high-resolution airborne geophysical surveys. In NSW this was known as Discovery 2000 (Cramsie 1998) which ran from 1994 to 2000, and has been renewed as "Exploration New South Wales: Mining beyond 2000" with a further funding commitment of $30M for a period of seven years. The bulk of such funding is spent on regional airborne geophysical surveys.
Perhaps as a response to the downturn in exploration since 1997, the Australian States at the turn of the millennium began literally to part with this information at a "give-away" price, or even at an operating loss. Doing so, it was believed, might help attract more exploration investment. The NT took the lead in reducing the price of geoscience data to zero (resulting in a 7000% increase in distribution). The trend continued in 1999 with moves to make all Geological Survey of Victoria digital data free and all Western Australian government-funded or open-file airborne geophysical data sets free. Under formerly prevailing "commercialisation" policies such digital data, especially high resolution geophysical data, had tended to be regarded as a prime asset and valuable income source. The pricing policy about-face gained momentum after States began competing to make data as easily available as possible in the hope of it attracting investment. Proponents of price lowering believed that new exploration would be encouraged by the availability of high quality digital data at low prices. Provision of digital data at cost of reproduction is widely regarded as reasonable by consumers (e.g. Victoria currently charges $75.00 per data set including media). The States (e.g. Victoria, Western Australian, Tasmania) were concerned, however, to somehow prevent third party brokers from being attracted to the prospect of on-selling data that is suddenly available at greatly reduced cost. One way to address that was for the data to be released under licence agreement which allows free usage but restricts third party redistribution. Significant work has been ongoing towards development of policy on transfer, sale and licencing of all geographically-referenced data (AGSO 1995, 1997); and a draft Access and Pricing Policy for Government-held Information exists for NSW (Department of Information Technology and Management, http://www.ditm.nsw.gov.au).
2.5 Information for land use planning
Land use planning has long been a recognised application of information acquired from exploration reporting, although a relatively indirect one. It is the last-mentioned item in a string of applications noted by geologists Lipple and Street (1986, p. 136) "Mineral exploration results are recycled to industry to enhance further exploration operations and avoid duplication. The information resource is also applied to research, commodity and regional evaluation, administration and land use management". Possibly land use planning would nowadays be seen as not the least of the applications for "recycled" mineral exploration results. As humans increases in numbers and their impact on the earth, the competition between differing options for use of land can only be increasing. Mineral resource agencies are concerned to play a major part in guarding against what could be unnecessary restrictions imposed on land access for exploration (also known as minerals "sterilisation"). Land use referrals involving minerals in New South Wales are about 1100 cases per annum at present. Such relate to changes in the status of land or to proposed developments that might impact on access for exploration and mining. In some cases, particularly those under the 1992 National Forest Policy (Regional Forestry Agreement process), there is increasing participation in integrated whole-of-government approaches (Barnes et al., 1999). This calls for transparent assessment processes and information collations which should be intelligible to both specialists and non-specialists alike because of the growing levels of public participation. Mineral potential maps are generated by geoscientists who make heavy use of GIS methods (AGSO 1995, 1997) and mineral deposit data sets which in turn have been extracted largely from exploration reports. The availability of a simple representation of mineral potential in conjunction with supporting data greatly influences non-geologists when balancing mineral values against other land use values. As a corollary, such maps also focus attention on areas which are under-explored.
Tyler (1995) has treated in non-technical language how geologic information can be incorporated in the land-use development process, giving examples of how geologic information is used in the development process by some cities and counties in the USA.
2.6 Mine closure planning
In the past, when mines closed many of the records have been lost, destroyed or abandoned. There are past stories of floors of mine office buildings left awash in loose papers after the local population had commandeered or salvaged useful filing cabinets and other furniture (e.g. mentioned by local historians for the Great Cobar Mine). Quite possibly the abandoned papers might have contained letters from the Department of Mines instructing that mine plans must be submitted. Government’s requests would be too little and too late if arriving when there was but a caretaker or two left on site.
Records may be of no further use to the company, particularly if it is bankrupt or going out of existence. They are however of potential value to governments, to the people of the State, to local history, to future land users, and to geoscience in so far as they record geological observations.
Over recent decades there has been great increase in mine closure planning, driven by environmental requirements. Formal requirements on "planning for closure" by way of public documentation and community consultation began in the mid 1990s. However, none of the mine closure plans perused during this review contained any measures to mitigate the losses or damage to information systems that are chronically known to be associated with mine closure (e.g. "A Technical Framework for Mine Closure Planning" by the Mineral Industry Research Organisation in Great Britain at http://www.apexis.co.uk/). Information protection could be accommodated under existing plans, such as under preservation of valuable attributes generally, but it needs to be more specifically catered for. Most of the literature on the subject of mine closure is connected with the control or disposal of volumes of waste materials, or acid drainage control. Closure checklists typically overlook information management aspects (e.g. http://www.kma.co.nz/Info3.htm).
Legislation has long contained provision that mine plans must to be provided to government on closure, however the "on closure" wording for such requirement has become increasingly unsatisfactory. Particularly with the advent of computer mine planning and drafting, all consideration of transfer needs to be now well in advance of closure lest the necessary expertise become no longer available at the site and systems fall into disarray.
Advances have focussed on environmental aspects and recently in Australia also on financial matters such as the securing of mineworker entitlements. Attention to information system matters is also needed as there have been numerous examples of information loss connected with mine closure. The root cause of the Gretley mine tragedy is one such example. It involving the inadequate gathering of mine plans at closure, compounded by later mistakes in interpretation and re-drawing from poor quality originals. Loss of underground mine plans also leads to problems at the stage of later surface developments over old mining areas.
Increased emphasis on forward planning for mine closure is of world wide occurrence. The trend has clearly been towards necessity of having a formal closure plan prior to the granting of a development lease. In many jurisdictions it is necessary to have both a closure plan and a plan of financial assurance. The latter aims to ensure that funds will remain available after the mine ceases to operate. In some cases temporary mine closure plans are formulated for circumstances such as periods of exceptionally low metal prices. Temporary closure plans focus on the maintenance of systems expected to resume. They remain in place pending resumption of normal operations or implementation of the permanent mine closure plan.
Currently in Australia a "Strategic Framework for Mine Closure" brochure is about to be published by ANZMEC/MCA. This for the first time may be addressing the information loss problem. It will include the principle that "Records of the history of a closed site should be preserved to facilitate future land use planning" (from Draft copy).
2.7 Other perceived shortcomings
Potential for information loss related to mine closures, especially relatively sudden ones, has been one of the longest known short-comings in regard to information from mining and exploration. Two other long-realised shortcomings are that financial comparisons cannot easily be made between jurisdictions unless there is standard period expenditure reporting, and that in many countries prospectors may just disregard government requirements entirely.
Without use of standard accounting dates for exploration reporting the result is that although expenditure details are collected, it is impractical to do much with this information as it is not easily manipulated. Having expenditure reporting of every licence tied to a different non-standardised date makes information collation and exchange between states almost impossible.
Unlicenced or unrecorded prospecting is not considered very significant in Australia but elsewhere it has been of considerable scale. Governments may simply see little reason to devote resources to monitoring the activity of small miners. In certain states (Africa, South America, Philippines) prospecting or mining without permit of any kind has been very widespread at times. This became especially noticeable in the 1980s with the rise of gold price. By 1991 almost 50% of China’s gold production was believed to be coming from small miners and the Philippines in 1986 had an estimated 500,000 people distributed over uncontrolled gold diggings throughout the country (Burke, 1995).
3. HOW INFORMATION IS ACQUIRED
3.0 General
Many governments are able to obtain information as a condition of licence or other concession. The accumulation of geoscientific information that is destined for public release may be regarded as a public good. An assumed role of the State is often to take the control necessary to ensure the common welfare. For example, Article 33(3) of the Indonesian constitution stipulates this by saying that land, water and natural riches contained therein shall be controlled by the State and shall be exploited for the greatest welfare of the people. Individual agencies make similar statements. For example, the mission of the New South Wales Department of Mineral Resources is: "To ensure that the people of NSW benefit from the responsible assessment, development and management of their mineral resources".
The USA stands in something of a difficult relationship to the practice of obtaining mineral information for the cumulative public good in return for grant of mineral rights. Following the American Revolution the resolved sentiment of the new government (not without dissension) was one of assigning in principle the agricultural lands and mineral wealth directly to the usage of the people, and specifically to avoid re-creating another King-like figure under the guise of the State. The right to prospect and acquire minerals on public land, without need of licencing is embodied in the first General Mining Law of the US, formed in 1872. The law is largely unamended in itself although there are many other legal instruments which impede or frustrate it.
In Australia the gaining of information via demand of licence conditions works very well in practice. America has excluded itself from this possibility and the chance of reversing early congressional decision-making on this point would seem unlikely to be pursued. For Australia, the only significant challenge to the wisdom of licence conditions found during the current review was made by the Industry Commission (1991) which appeared to have a preference for American style privatisation of mineral rights. The views of the Commission however did not at the time win any public support from the local industry. Also, the Commission itself concluded that even if an American-like private rights system were better, the cost for Australia to move in such a direction would be quite prohibitive.
3.1 Systems for attributing mineral rights
Three alternative concepts are widespread in regard to mineral ownership. They are that minerals belong to whoever finds them irrespective of rank, or that ownership should be vested with a powerful ruler who will act for the common good, or that both the discovery and working of minerals should be a solely state-run activity. These are the ideas basic to the free miner (or free access) or claim-patent (American) system, the regalian or Crown system, and the socialist system respectively. They are end-member ideas and mixtures of them may be found to have existed, or even co-existed, over time in various domains.
The most striking contrast is that between the Crown licencing system of exploration and its flow-on consequences, as is practiced in Australia, and the claim-patent system and its consequences under the USA 1872 Mining Law. The 1872 Mining Law is probably one of the greatest and most durable pieces of constructive legislation in the American experience. It well served the US in earlier times, however mounting dissatisfaction with it is now widely acknowledged on all sides. In global terms, US prominence of exploration activity has been diminishing in recent times and it is seems highly feasible that the 1872 Mining Law no longer serves the best interests of that nation as a whole. In terms of information preservation, flow of information ultimately to the public domain, and furtherance of geoscience as a whole, it may be that the US system is wasteful.
3.1.1 The Crown system
In Australia part of the process of obtaining representative and responsible self-government was that the colonial legislatures proclaimed control over the Crown Lands which at that time were often termed the "waste lands of the Crown". Under the earlier imperial or regalian system of management, most fee simple land grants gave full title to all resources apart from certain wood for the royal naval needs and the prerogative reservation of the royal (or precious) metals. Subsequent laws were amended to reserve all minerals from Crown grants of freehold land.
Comparisons between Australia, New Zealand and Canada tend to be close by reason of common inheritance and tendency to copy one from the other. For example, the Gold Fields Act 1859 of British Columbia was recorded to have been "framed on the experience of the Australian Colonies, and .... the New Zealand Code..." (Gardner 1993, p.236). All three countries had early developed versions of the free miner or free access system (unrestricted entry to public lands, right to stake claims and right to minerals found).
The Crown system is similar across Australian. Nominally regalian, and with direct Crown influence now essentially extinct in Australia, the system is universally seen as one via which the States administer mineral resource exploration and exploitation for the benefit of all (cf. concepts of commonwealth, common wealth, common good). The States must balance competing land use demands, bearing in mind the general welfare of the whole community (Thompson 1991).
3.1.1.1 Australian practices
Mining law consolidation occurred in Australia with the Victorian Mining Statute of 1865, which was closely followed by other colonies (Lang and Crommelin 1979). This established terms of mining tenure for unoccupied Crown land. The recording or registration of tenements was gradually improved. For example, in NSW the 1871 Gold Fields Royal Commission of Inquiry recommended compulsory registration of claims (NSW Government 1871, p. 65). Crown ownership of minerals was only gradually standardised across Australia. For example, in Victoria minerals were not reserved from land grants until 1891, and it was not until the 1893 Mines Act that the government resolved strongly against private ownership of minerals, whereupon all gold and silver included with prior land grants was resumed.
The demise of the mining claim as a significant title to prospect and mine under occurred gradually in Australia and was concurrent with the development of large area forms of exploration entitlement. Such titles were provided for in Queensland in 1930, in Tasmania in 1958, in the Northern Territory in 1962, in New South Wales in 1963, in Victoria in 1964 and in South Australia in 1971. Various terms were used for forms of authority issued in satisfaction for large area applications: authorities to enter, prospecting licences, and exploration licences. Over time, "exploration licence" became the standard term used across Australia and legislation governing exploration became more similar between the States (Thompson 1991).
3.1.2 The US Claim-Patent or Free Miner system
The free miner system became established in the US during the Californian goldrush. The codes of goldfield camps were adopted into US federal law (Gilmore & Stewart, 1970). The free miner system embodied under the General Mining Law of 1872 is applicable only to the US public lands, also called federal lands, much of which is in the American West (Batabyal, 1998; MacDonnell, 1976). It provides free and open access for hard rock mineral exploration and mining on the public lands (Ricketts et al., 1950). These rights are inalienable and were assigned to the people by the first Continental US Congress. The rights may persist indefinitely once a deposit is located and claimed, although a find could be successfully over-staked if the required minimal annual assessment work (later set as US $100 equivalent) had not been kept up. After a degree of assessment work, sufficient to demonstrate that a viable mineral deposit is present, private ownership can be acquired by purchase of fee simple title, which process is called patenting. However, the land can alternatively be mined at any time without the necessity of owning it via patent. Although the basic mining law has been little changed, the freedom to follow it unimpeded has been lessened by numerous other laws, such as for environmental protection. Surface disturbance matters are managed by the Bureau of Land Management (BLM, 1999). The 1872 Law has been under serious challenge (Congressional Research Service, 2000; Shiffries, 2000).
Endnote 9 - The USA General Mining Law of 1872
Endnote 10 - How the claim-patent system works
3.1.3 Claims in Canada
In general, claim staking in Canada has similarity to that in the USA, and claims may be similarly patented following suitable assessment work. As in the US, mineral claims are recorded with provincial departments, and the administrations of the Yukon and Northwest Territory (Thomson, 1997). Unlike the USA, there is no uniform mining law across all of Canada and provinces have been free to set their own conditions. Larger exploration areas in Canada, named concessions, may incur very substantial fees or be allocated by auction, whereas claim costs have generally been kept as low as possible.
3.2 Organisational and administrative factors
Organisational factors may be crucial to the recording of both mineral rights (titles) and exploration progress. Typically, titles and geoscientific work is organisationally separated, and these areas may maintain quite separate information systems. A third area is also commonly recognised, with a stronger policing role. Policing involves the many regulatory functions (inspection of mines, health and safety, collection of royalties, etc.). The geoscience area tends to be rich in geologists and geophysicists, and the policing areas are traditionally richer in engineers.
Keeping record of mineral titles can be a large task (e.g. annual claims of up to 70,000 in Ontario [Anders, 1991]; and British Columbia celebrated the staking of the millionth claim in that province in 1969). Ontario had 164,934 active claims in 1995. Licencing and titles management are activities which are often combined at branch level. They are often also in the same agency responsible for geological survey and mineral resources generally. This, however, is by no means always the case and there are examples where the various functions have been conducted from very different departments. For example, in Montana the Bureau of Mines and Geology is not directly engaged in any regulatory activities, which are instead handled by the Department of State Lands. Similar is the case in New Mexico; whereas in Utah the Utah Division of Oil, Gas and Mining directly handles regulation, exploration and development, and likewise in Nevada (Marcus 1991).
If the basic functional areas become separated across different agencies, as sometimes happens, then the potential difficulties of maintaining integrated information management are very obvious. The relative efficiencies of different modes of combining the basic functions is considered to be a significant factor for study. However, that would be a large study and it is beyond the present scope to examine in detail. Were this aspect studied further, New Zealand should be examined as a case where ideological change (to neo-liberal) has been strongly translated into organisational changes. This carried the situation in New Zealand well away from the traditional "Geological Survey" mode. In New Zealand the geoscientific motive of data collection (versus collection solely for reason of "monitoring work programs") has weakened considerably compared to the situation in Australian states (and also, New Zealand public servants have stricter instructions not to impose any additional compliance costs upon industry).
Liberalisation and neoliberalism have been the major political source of the organisational changes. Liberalisation and privatisation of infrastructure to downsize government has swept the world, as has financial deregulation. A majority of the world’s countries engaged in this in some form during the 1990s (A World Bank database tracks some of the extent of privatisation - http://www.worldbank.org/ html/fpd/privatesector/ppidb.htm). Many if not most geological agencies have been physically downsized and many have been radically changed. In particular, direct government involvement in mining has been greatly reduced. The World Bank (1992) advised that governments should not undertake any detailed mineral exploration or evaluation work, nor undertake feasibility work. The British Government by 1993 favoured radical reduction of the ailing coal industry, to 19 pits and 18,000 miners. There had been, by comparison, 958 pits and 718,000 mine workers in 1947.
Radical neoliberal reform of exploration in Australia is considered in the report (1991) by the Industry Commission inquiry into the Australian minerals industries in 1989-1990. However, such views did not meet with favour in Australia and did not come into effect. They are highly incompatible with the system that has persisted.
3.3 Importance of comprehensiveness
Australian State governments for some time have realised the value and benefits of taking a comprehensive approach to reporting requirements (e.g. Dash, 1987). Western Australia has been something of a leader in the quest for more comprehensive reporting, and in the development of reporting guidelines to facilitate that (Lipple & Street, 1986). Following the introduction of the 1978 Mining Act in Western Australia the Geological Survey there began seeking comprehensive exploration data and results. Reasons for this stated at the time were to reduce duplication of effort, reduce financial risks, and contribute to geology. The standards for mineral exploration reporting in Western Australia state that reports shall be complete and internally consistent records of all geoscientific activities carried out and information obtained on the mining tenement(s) during the reporting period. New South Wales similarly seeks for all geoscientific activities to be reported ("...full technical report covering all exploration activities" to contain "Full details and results ..."). Tasmania likewise asks for full details of all work carried out ("full technical report detailing all exploration undertaken and results obtained"). Wording followed by the States in fact derives from the first of two generic exploration reporting guides which GGIPAC coordinated during the 1990s. The New Zealand Crown Minerals Act 1991 likewise recognised the importance of a central repository of exploration results and for reporting requirements it was stated that "detailed reports in respect of all prospecting, exploration and mining activities will be required to be forwarded to the Secretary of Commerce ..." (Miscellaneous provisions, 1991 Act).
For territories where governments do not pursue comprehensive acquisition of exploration information, the vast bulk of the generated geological exploration and development work may never be made public and this data is at risk of eventually being lost. At least geoscientists should likely feel that any moves which increase the ultimate preservation and re-use/re-useability of exploration results will be advancements for the common good. However no significant amount of direct discussion on this matter was encountered during the course of this exercise. One would think that the professional bodies have probably commented on this somewhere, yet nothing of this nature was located.
Without comprehensive reporting, geologists compiling mineral industry information must rely on a variety of other means. They must visit properties, seek discussions and correspondence with individuals and companies, search newspapers and trade journals, check tenement records, and so on. All this is much less efficient that having the benefit of licence holders’ reports which may be relied up as being complete.
Another issue for a government agency not receiving comprehensive exploration reporting from a licence holder or operator is knowing what it should then record from the myriad of other ‘part sources’ available. There are constantly more and more periodicals and internet services broadcasting fragmentary information on mineral exploration activity. Information occurs in company annual and quarterly reports, press releases, stock exchange items, and so on. What of this, if any of it, needs to be systematically retained? The simplest answer is ‘none of it’ if comprehensive reporting from original sources is in place.
3.4 The work of GGIPAC and CSIRO
In Australia the Government Geoscience Information Policy Advisory Committee (GGIPAC) in 1999 produced the document "Requirements for the Submission of Digital Mineral Exploration Data" which forms an effective national standard. This has been most significant in standardising national practice for exploration reporting, including digitisation. For GGIPAC to arrive at this national standard took almost a decade. The earliest activity on routine report digitisation came from NSW, and the first attempt at standardisation to agreed minimum digitisation guidelines was led by the NT. The NT formulated Draft Requirements from a major re-vamp on the first (1990) wish list drawn up on digital reporting by GGDPAC (GGIPAC). The NT Draft Requirements were passed to all states via GGIPAC. Western Australia as the nation’s major state for mineral exploration activity had funding and vision that made it a national leader in the drive to pull all the states together for standardisation. The practical moves towards standardisation of digital data files was done mainly in WA, with significant input from Victoria (DMR, 1987-2000).
The states are moving, albeit at different rates, to implement GGIPAC’s "Requirements for the Submission of Digital Mineral Exploration Data". Adopting PDF format (guidelines dated 13/11/1998), the Northern Territory began accepting digital reporting on 1 January 1999. Northern Territory and New South Wales announced that all reports on exploration licences should be submitted digitally from 1 January 2001. New South Wales made the announcement in Minfo (NSW Mining and Exploration Quarterly, Issue No. 65 of November 1999) and strongly encouraged explorers to move to digital submission during year 2000. South Australia and Tasmania developed new guidelines in November 2000. For South Australia ( http://www.pir.sa.gov.au/pages/minerals/legislation/ elreports.htm) the new guidelines came into force from January 2001 and for the first year require submission of one hardcopy and one digital report. Digital submission is not be mandatory in the first year but is strongly encouraged
For Tasmania, the newsletter of Mineral Resources Tasmania, ProspecTas (Issue 14, November 2000), repeated almost verbatim the November 1999 standards for digital statutory reporting in Minfo 65. ProspecTas 14 also published a fuller (6 page) version of the GGIPAC standards which is useful. And whereas NSW nominated 1 January 2001 as the date by which reporting must become fully digital, Tasmania nominated 1 November 2001. Queensland announced that it was moving to have report data submitted in digital form and that this would eventually be made accessible over the Internet. Victoria is also committed to "eventual" downloadable delivery via Internet. South Australia appears to have not yet announced commitment.
As regards the future of hardcopy, the Australian states do currently vary somewhat. New South Wales took a relatively hard line (following 1 January 2001) and now requires mandatory digital reporting with all reports wholly in digital form. Paper reports are no longer acceptable (unless accompanied by a full digital copy). South Australia requires that one hardcopy and one digital copy be submitted, in place of the previously required 2 hardcopies. However for South Australia submission of a complete set of digital data was not made mandatory during the first 12 months. The feasibility of full digital submission was left for later assessment. Tasmania has indicated that it will require submission of both hardcopy and parallel digital copy. Reporting guidelines are available at the websites of these two departments (http://www.minerals.nsw.gov.au , http://www.mrt.tas.gov.au). The NSW reporting guide is at http://www.minerals.nsw.gov.au/explore/explore.htm and copy of the latest update (DMR 2001) is also on the accompanying disk.
Endnote 11- Further initiatives by CSIRO
4. WHAT BECOMES OF ACQUIRED INFORMATION
Appreciating just how much preservable information of all kinds abounds is an on-going exercise for faculty and students at the School of Information Management and Systems at the University of California at Berkeley where they currently estimate an annual equivalent of 250 megabytes is produced per person for each man, woman, and child on earth. Printed documents now comprise less than 0.003% of information storage. Magnetic storage is the largest medium and shipped hard drive capacity has been doubling every year (http://www.sims.berkeley.edu/how-much-info/internet/rawdata.html).
It has been said that a piece of paper may last 500 years, and a CD-ROM lasts 10 years. As the world has moved to digital information all governments must develop high level strategy to preserve essential electronic data. The digital preservation and security task is ever expanding, e.g. Geological Survey of Victoria’s geoscientific backup task has surpassed 2000 tapes/cycle.
The question of what becomes of acquired information has two main aspects, re-use of information or data, and preservation. Preservation issues in the past mainly concerned protecting paper against fire, insects and damp. With the move to digital data the preservation issues are now a lot more diverse. Of major concern is the degeneration potential of storage media, involving both physical degradation processes and protection from stray magnetic fields. Magnetic storage data must be copied periodically to refresh, and/or transferred to more up-to-date media. All software applications will sooner or later be abandoned, so data cannot be left in that form.
Several organisations cater for concerns about permanent preservation. One of the major ones is CLIR (Council on Library and Information Resources; http://www.clir.org). Others concerned particularly about digital preservation include InterPARES, or Project for International Research on Permanent Authentic Records in Electronic Systems (http://www.interpares.org); and the Commission on Preservation and Access (http://palimpsest.stanford.edu). InterPARES evolved out of previous research carried out at the University of British Columbia's School of Library, Archival and Information Studies on "Preservation and Integrity of Electonic Records" (a.k.a. "The UBC Project") which defined the requirements for creating, handling and preserving reliable and authentic electronic records in active recordkeeping systems (http://www.interpares.org/UBCProject/).
Some instructive cases collected by InterPARES are:
· The Pentagon lost the majority of its Gulf War records when an officer incorrectly downloaded some games onto a military computer.
· In the USA, the government knows more about the 1860 census than the 1960 census because the data of the latter were stored on an early form of computer tape which has suffered deterioration.
· For thousands of databases and digital files of the government of the former East Germany the documentation of the digital systems on which the records were generated is missing, the software codes are unknown, and the storage media themselves are obsolete and in poor condition.
Support for low cost dissemination of government-acquired information is widespread. In Australia it is hardly an issue as the taxpayer has already funded the majority of data collection and curation expenses. In the US the First Amendment to the Constitution reflects a belief that democracy means a people enabled to know what their government is up to. Commonly a private citizen may acquire an entire database from a US agency at the cost of duplication.
4.1 Digitisation and Digital imaging
The digitisation wave commenced in the 1990s with large programs to mass convert paper copy to digital images and/or OCR text files. A large bibliography on digitisation issues and methods is available at the National Library of Canada (http://collection.nlc-bnc.ca/100/200/301/nlcbib-e/n02/dig-bib.htm ).
The scanning process is costly, and Governments for this and other reasons have seen it as desirable to cut costs by shifting the digitisation requirement to private enterprise. In 1999 it was generally decided across all Australian states that fully digital submission of reports would be required from industry (e.g. after 1 January 2001 in the case of New South Wales). The main digital formats acceptable were decided as PDF, TIFF and JPEG.
4.2 Access and distribution via the Internet
Government-held information has been more or less pre-paid for by the community and needs to be rendered non-confidential swiftly rather than let languish. It should be made mobile and moved towards easier and cheaper accessibility, other than where doing so may contravene some other good or contravene legislation. Root and Chopra (1997) introduce the generalities of distributing geoscientific data via the World Wide Web. Australian and Canadian efforts to bring this to reality may be noted.
In Canada, exploration information collected on public lands is filed with the province or territory, held confidential for a period of time ranging from 3 to 5 years, and then made accessible to the public. Claim information is also available in a similar format. From personal contacts there is well known to be future Canadian resolve towards release over the web. Monitoring of sites does not yet indicate achievement of this (e.g. www.mrn.gouv.qc.ca Quebec Ministry of Natural Resources, www.gov.on.ca/MNDM/MINES Ontario Ministry of Northern Development and Mines).
In New South Wales, DIGS was connected to the internet on 16 February 2000 (http://www.minerals.nsw.gov.au/). DIGS had been available to the public at Head Office since March 1996 and at regional offices since June 1998 (Brookes et al. 1999, DMR 2000). It was developed over five years as part of the $35M Discovery 2000 initiative. By providing global access to the entire open file records of mineral exploration, the preliminary literature search or prospect search phase of exploration can now theoretically be done from anywhere on earth, ending the necessity to physically visit New South Wales for such information gathering. It is believed that DIGS is the first internet application able to deliver a view of a complete geoscience report collection on the Web. However, it is apparent from email communications that others wish to follow. Other Australian States have a similar goal and the Ministry of Northern Development and Mines in Ontario has been working on a similar system for ERMES (Earth Resources and Minerals Exploration Web Site; http://www.gov.on.ca/MNDM/MINES/ermes/ermesintroe.htm). Currently that site does not give direct access to reports but it does contain raster and index data of documents and maps from 65,000 mineral exploration assessment (AFRI) files.
4.3 The role of libraries
In the USA and in Great Britain, or anywhere mining companies are generally not required to lodge results of exploration work with government, libraries may be the most ready repository wherever companies show a public spirited care for long term data preservation. Cases of mineral industry records ending in the care of American university libraries include donations of materials to the University of Idaho from the famous Coeur d’Alene silver mining region of northern Idaho, and company reports in university libraries in Utah and Wyoming.
The Manuscripts Division of the Mariott Library holds the records of the Federal Resources Corporation which had been active for uranium, gold, silver, copper, beryllium, and fluorspar (http://www.lib.utah.edu/spc/mss/accn1513/accn1513.html). The library’s holding comprises 108 boxes ranging from the 1930s up to the early 1980s.
At the American Heritage Center, University of Wyoming, the "Anaconda Geological Documents Collection" is from the Anaconda Copper Mining Company's 90-year program of exploration and development work throughout the United States and in 110 foreign countries. It is doubtless one of the largest bodies of economic geological data in the world. The collection contains over 1.8 million documents, or 54 tons of geological reports; maps; geological and geophysical data. It includes 18,000 local and regional mining and exploration studies; 5,500 reports on specific mining prospects; 10,000 documents containing geological, geochemical, geophysical drilling, assay, and other data; and 56,450 geologic, geochemical, geophysical, claim, and sample-location maps (http://uwadmnweb.uwyo.edu /ahc/depts/reference/anaconda.htm).
5. TOWARDS BEST PRACTICE POLICY
5.0 General suggestions for future development
This section on "towards best practice" contains what is mainly suggestions and checkpoints. A preferred policy can be stated, albeit in simple and general terms. However, the writer considers that to fully flesh out a detailed policy it would be necessary to first do more research than is presently possible. This would specifically include related pricing policy and also the desirability of integration with higher level (state/federal) information strategies. Some of the detailed work that needs to be done, or checked through, should be fairly "mechanical", such as integrating with state record-keeping policies and standards. However, other aspects are much more difficult to approach and at present might be acting as hindrances to policy formation in this area. One of the more difficult aspects is deciding how much to integrate in the one system. It is easy to state that present fragmentation of information should be addressed but that may be very difficult in practice. For example, information from mining is in practice often kept in quite different systems to information from exploration (e.g. one set in Oracle databases and the other in hypertext markup intranet-style form in the case of NSW). Policy that would require integrating very different systems of operation may in some organisations not be seen as practical.
5.1 Some principles for best practice policy
As result of this review, it is suggested that a best practice policy for acquisition, storage and re-useability of information from exploration and mining should include these features:
· Information on exploration and mining should be acquired and preserved by government.
· State level may be preferable to federal level for this activity [there may be exceptions to
this but examples of federal bodies adequately concerned with these matters are rare].
· The information acquired should be comprehensive and include all results.
· Information flow should be moved as soon as possible to being entirely digitised.
(Digitisation may initially involve back capture of older reports by scanning, and then
forward acquisition in digital form may be had by stipulation of direct digital submission).
· Dispersal of the scanning and/or other digitisation burden onto industry in order to relieve
public funding of that part of the acquisition cost burden.
· Upon cessation of confidentiality, information should be made accessible very promptly.
· Wide accessibility is to be encouraged and the Internet is a good vehicle for this.
· In keeping with a general freeing up of information, the cost of quality data supply should
become radically lowered from what it has been in recent years (under "commercialisation"
policy.
· Preservation control should be under an aegis of appropriate archival legislation
(viz. State Records Act 1998 and associated Standards, in the case of NSW)
· Acquisition policy must also be linked explicitly with central or whole-of-government policy.
· Strategies should be developed to overcome present fragmentation of information, and to enhance integration of information presently being acquired by different ogranisational wings for different purposes and in different areas.
The importance of securing a comprehensive authentic record of activities and findings in the timeliest manner may be stressed, as it is considered this may shortcut a lot of potential running in circles in downstream administrative areas. Of the other policy principles above, the point of favouring a drastic cut in charges is perhaps the most contentious. Cost recovery commercialisation permeated all arms of government as one of the changes accompanying the sweep to dominance of corporate managerialism and redesign (a.k.a. "re-invention") of government in the private enterprise mould (Osborne and Gaebler, 1992). This rose in dominance from the 1980s onwards and would almost certainly have given rise to a sizeable body of documentation available for further research. Also, offices such as the NSW Office of Information Technology have been developing pricing policy (the NSW one being still at draft stage). However none of that was sought in the present exercise. Therefore no rigorous justification can be given to support cost cutting as effective for the general good of the exploration industry or society. Nevertheless it will be remarked that expression of views by geoscientists and others in government and industry is overwhelmingly in favour of the current cost cutting trend in so far as the writer has heard (pers. com.).
In regard to making linkages to higher (state level or federal) government strategies, there can be various benefits envisaged for doing this. The work of InterPARES and CLIRS, as discussed in section 4, would possibly deal further with benefits from linkages or whole of government approach. One benefit is to ensure greater rigour, another may be to pre-empt possible demands for compliance later on. But a very important one may be to explore for ways of facilitating greater State "ownership". The more that exploration/mining information can be recognised and adopted widely by the community and by politicians as something of a state/national treasure or asset, then the better become the chances for future uninterrupted funding supply for acquisition and maintenance. Certainly it would be most desirable for an agency to move beyond having the continuity of acquisition and safe storage left reliant solely upon annual funds bidding of local management. It may be desirable to augment program management mindset with certain higher values when framing policy on the matter. Precisely how to do this is not suggested but perusal of state level strategies would seem a useful place to seek ideas. New South Wales some time ago released a "Blueprint" of envisaged future policy. and the Victorian Electronic Records Strategy (http://www.prov.vic.gov.au/vers/) is also a good example of strategy development by government to preserve electronic records. Some leads gathered during this exercise are:
a) http://www.records.nsw.gov.au/publicsector/rk/rmprog/httoc.htm
b) http://www.records.nsw.gov.au/publicsector/rk/fullacc/httoc.htm
c) http://www.records.nsw.gov.au/publicsector/rk/storage/toc.htm
d) http://www.records.nsw.gov.au/publicsector/erk/metadata/
metadata-std/NRKMStitle.htm
e) http://www.records.nsw.gov.au/publicsector/erk/
standard%20on%20ERK/firstpage.htm
f) http://www.records.nsw.gov.au/publications/documenting.htm
g) http://www.search.nsw.gov.au/oit/Publications_policy.asp
h) http://www.search.nsw.gov.au/oit/Publications_guidelines.asp
Of these, (a) is the NSW "
Standard on Records Management Programs" issued in April 1998. Minimum compliance requirements of that standard include that a public office will be able to demonstrate that a records management policy exists in the form of one or more identifiable policy statements, is known by staff, is reviewed at regular intervals, and is addressed in operating procedures, etc. Item (b), the NSW "Standard on Full and Accurate Records", also addresses what records keeping should be compliant with and includes a useful "Compliance Checklist". Item (c) is the "Standard on the Physical Storage of State Records" issued in April 2000. That standard covers all types of storage media (for example, paper, tapes, disks) except where electronic records are still active or mirrored on networks or on hard drives. Such records require different storage options and such will be examined under separate guidance to be issued by NSW State Records. This further standard is not yet close to being issued, nor can State Records advise of a preferred model or standard from elsewhere to consult at present. Item (d) is the NSW Recordkeeping Metadata Standard (Consultation Draft - December 2000). Item (e) is the "Standard on Recordkeeping in the Electronic Business Environment, issued December 2000. Item (f) is an item "Documenting the Future - Policy and Strategies for Electronic Recordkeeping in the New South Wales Public Sector" which was published in 1995 and introduced various concepts and strategies of a whole of government approach to electronic recordkeeping. Item (g) sets out the NSW government information policy framework and publications. Item (h) lists OIT’s downloadable guidelines.Such state guidelines and policies would naturally have been made compliant before their release with the national best practice (which is widely accepted to be Australian Standard AS 4390 - Records Management). AS 4390 has been explicitly accepted as Code of Best Practice for the New South Wales pubic sector. Another related standard which the New South Wales Office of Information Technology is supporting is Australian Standard AS 4590 on information interchange. NSW is expected to develop its own recordkeeping metadata standard in the near future. As the purpose of a metadata standard is to facilitate complete and authentic recordkeeping on activities it should be pertinent to any policy which embraces up front (first instance/timely) comprehensiveness. The standard will also set various elements of metadata as mandatory for all NSW public agencies to maintain (http://www.records.nsw.gov.au).
5.2 Rates of implementation
Although not a single state or nation was found during this review to have actually declared a policy such as the above preferred one (i.e. embracing principles as in 5.1), the writer’s strong impression is that this will happen. This general trend of policy seems to be not only on the rise in Australian but also poised to spread globally. The countries which most obviously appear to be advancing towards such policy are Australia and Canada. Recent statements also indicate that Ireland will move in the same direction. It is about to begin scanning of images with a view to making these images available eventually via the Geological Survey of Ireland web site (http://www.gsi.ie/workgsi/minerals/min-frame.htm ).
Australia is expected to have some direct regional influence. Australian standards will almost certainly flow on to New Zealand and Papua New Guinea. Also, following recent developments in Fiji (where there is now in place the protocols for a scanned report system) there is possibility of similar digital reporting standards throughout the South West Pacific Rim.
One overall impression is that technology in recent years has been driving changes and leading policy, not the reverse. This may be one reason why Canada and Australia, both long term leading countries in matters related to mineral exploration, are joined policy-wise by Ireland which had not previously been greatly noted for exploration matters. The common link may be information technology, and that it is Ireland’s general rise in the latter area which could bring it’s exploration information management preferences in line with those of Australia and Canada. For example, it is common comment that Ireland has embraced the knowledge-driven economy to revolutionise itself from being a former "basket case" of Western Europe into the world's largest exporter of computer software.
5.3 Desirability of explicit policy in this area
As observed many times during this review, policy in this field is more generally inferred from practice than explicitly stated. There currently appear to be few, if any, formal policies on acquisition of geoscientific information from exploration and mining.
That operations may be extensive without explicit policy being in existence is not in itself highly surprising or unusual to encounter. To give two other examples of such, New South Wales lacks a state "Minerals Policy" (which has been an acknowledged deficiency for some years) and until relatively recently NSW also lacked any Prosecution Policy for dealing with breaches of mine safety regulations. The need to have explicit policy on the acquisition of information is generally something which is not manifest in organisations. It is common to find policies about how already-possessed information may be shared or sold. It is rare to find any policy which deals with the acquisition or in-coming side rather than the outgoing side of information movement. If a need for policy starting from acquisition is real, and if such policy would be of benefit, then the first step which would have to be taken would be one of promoting widespread realisation of the need itself. People may ask why then even bother to think of policy for this topic area if there are no organisations apparently even desirous of it? To answer that question it is helpful to first understand how easy (perhaps even desirable at times) it may seem for major departments of government not to formulate significant public policies. Space precludes going into that matter more deeply but for the interested reader there may be no better example than to look at the case of getting the prosecution policy formed within the New South Wales Department of Mineral Resources. Many pertinent factors of that are presented within the lengthy report of judicial inquiry into the Gretley mine tragedy (Staunton, 1998).
If there were a comprehensive explicit rationale for the gathering of information from exploration and mining, some believe that this would make future directions more certain, and thereby assist in the planning for information handling and storage. Furthermore, given the competition between different nations for the exploration dollar, and the general lowering of barriers to international financial flow, there is interest in recognising the different situations that pertain in different countries in this subject area. In particular, the assumption of Australian states has been that comprehensive gathering and due release of information (following licence expiry or a period of confidentiality) must ultimately benefit all those engaged in mineral exploration and geological research in a region and will attract additional ongoing exploration to that region. How does this compare with countries, such as the USA, where such information is simply not collected?
REFERENCES
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Batabyal, A., 1998. On land use, minerals development, and institutional design in the American west. Resources Policy, 24(3), 139-146.
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THE ENDNOTES
2.1 Mineral values and investment information
Endnote 1- 2.1 Mineral values and investment information
Endnote 2- 2.1.1 Mining frauds and scams
Endnote 3- 2.1.2 The late 1960s boom
Endnote 4- 2.1.3 Dot-com fervour
Endnote 5- 2.1.4 The role of stock exchanges [separate, on disk]
Endnote 6- 2.1.5 Effectiveness of Canadian measures [separate, on disk]
2.2 Information essential for safety aspects
Endnote 7- 2.2.1 Case studies - The loss of Lake Peigneur
Endnote 8- 2.2.2 Case studies - The Gretley Colliery inrush
3.1 Systems for attributing mineral rights
Endnote 9- 3.1.2.1 The USA General Mining Law of 1872
Endnote 10- 3.1.2.2 How the claim-patent system works
3.3 Importance of comprehensiveness
Endnote 11- 3.4 The work of GGIPAC and CSIRO
ENDNOTE 1 --- 2.1 Mineral values and investment information
There is little doubt that mineral exploration, as an activity taken on its own, is a generally poor and often unsatisfactory investment overall. The overall outcomes are much as in gambling, that some will do well but most will lose. Not only do most lose at the stage of failing to make discoveries but even for mines which had made it to the production stage one Canadian study (Taylor 1994) concluded that 75% would still sustain an absolute loss in the end. Taylor studied 50 mines which had opened in Canada since 1980 and estimated that only 10% might achieve what their feasibility studies had predicted. He considered that 75% would suffer an absolute loss, and 15% might barely repay the invested capital. Of the mines which Taylor found doomed to produce an absolute loss, many fail within a year or so. Others may go on for many years with recurrent operational profits that are encouraging to some degree yet eventually inadequate for pay back of the initial capital. MacKenzie and Woodall (1998) compared productivity factors between Australia and Canada.
On average the real return on capital of operating mining companies over the last 20 years is only 5% (Humphreys 1999). A 5% profitability at any time is not very attractive, and if re-invested the prospects become even grimmer. Miskelly (1992) found that between 1970 and 1990 the inflation adjusted Accumulation Index (capital gain with reinvested dividends) for a portfolio of major Australian mining shares declined to give a real rate of return of minus 1.2% per annum. Other studies also conclude overall negative result, e.g. for the 1980s decade, Miskelly (1992) findings were that the Australian Stock Exchange’s All Mining Index returned minus 6.9% on the ca. A$42 billion invested. Thus a broad portfolio held throughout the 1980s would have almost halved in real term value. Similarly, McDonald (1993) found that during 1983-1999 the value of the mining industry on the Australian Stock Exchange did indeed halve despite the re-investment of capital equivalent to the full market capitalisation. The average dividends over that period never exceeded 5% and barely averaged 2.5%.
Other somewhat better results pertain to different time frames and scope of activity (e.g. Mackenzie and Doggett 1992). Even so, average returns seldom exceeded 10%. The average rate of return on capital employed by Canadian metal mining companies only reached 9.5% in 1969-1973 which was a relatively boom period worldwide (McPherson and Owens 1977). Such performance contrasts starkly with some other areas of enterprise, where a multi-billion investment would be expected to give a yield of over 10% per annum.
The mining industry activity is cyclical and activity peaks occur every few years (in Australia the last peaks occurred in 1972, 1982, 1987, 1997). At peaks which are mining booms, strong profits do occur on the more speculative side of trading. However, associated with these boom times have been many major cases of fraud. Government measure to counter this have lead to much of the increased regulation via stock exchanges and security commissions.
ENDNOTE 2 --- 2.1.1. Mining frauds and scams
How well exploration information is reported in the marketplace, and to the public, is an important consideration for the institutions who oversee the securities laws and stock exchanges. Various other state agencies also actively warn investors of possible mining scams. For example, the Arizona Department of Mines and Mineral Resources has a web page on mining scams (http://www.admmr.state.az.us/ scams.htm), as does the Nevada Bureau of Mines and Geology (http://www.nbmg. unr.edu/lab/minefraud.htm ; http://www.nbmg.unr.edu/scam.htm), and the Nevada Commission on Mineral Resources, Division of Minerals (http://www.nbmg.unr.edu/ scam.htm) Nevada has a gold mining industry which annually produces more gold than all other states in the U.S. combined. It is third in world gold production behind only South Africa and Australia, and all this makes it a favourite state for precious metals scamsters to operate in.
In so hazardous a financial environment as mining, where enterprise failure is not at all unusual, there is need for investor protection because shady practices may slip by unnoticed in the general milieu of genuine-effort failures and dissipation of funds for no economic gain.
There is a very long list of mining scams and frauds, quite apart from those projects which failed through bad luck or bad management. In one classic piece of investigative research, "Fools and Their Money", Fayant (1907) undertook to trace the fate of the USA mining boomers of the year 1901. His results showed the extent of their rapid slide into total loss and obscurity. The early 1900s boom in the US was similar to the late 1960s boom in Australia in that it rode a wave of high optimism. During the winter of 1900-01, the US was in the full swing of an unprecedented era of commercial prosperity. Great industrial and railroad mergers, creating hundreds of millions of new securities, inflamed the popular mind. Fayant investigated every mining company that advertised its shares in the Sunday edition of the New York "Herald" during 1901, and in two months of the autumn of 1902. This totalled some 150 companies. By and large these ads made spectacular assertions and claims.
How many of those were making money by 1907 and paying dividends to their stockholders? Fayant gave the answer as "just one!". That one had paid two dividends of one per cent each, and its stock was selling in the market at less than half what investors paid for it five years ago. Out of all the many millions invested in such an array of the claimed world’s best mines, only one company was paying a dividend, and that dividend was smaller than what would be paid by the savings banks. Another eighteen were gold mines still hoping to strike it rich, but in need of more money. Some of the ventures Fayant found to be moribund. And the majority, some 104 companies, were already dead and gone, forgotten by all but the investors who put their money into them.
Mining frauds and severe misbehaviour continue in recent times, the Busang case in Indonesia being a $6 billion dollar fraud (Collins 1998, Whyte 2000). The main Australian episode is measured in millions rather than billions, involving the Poseidon boom of 1969-1970. The Poseidon affair lead to major reforms in Australia, such that Collins (1998) judged Australian mining fraud prevention to be a generation ahead of North America.
The main focus of investor protection is on government monitoring of private enterprise. But for some countries the possibility of government corruption may also be a significant investment disincentive. This is often linked to the ability of government agencies to use large and discretionary regulatory and licensing powers, and some suggest that mining law reforms to remove such powers should eliminate the basis for corruption (e.g. Omalu and Waelde 1998).
ENDNOTE 3 --- 2.1.2 The late 1960s boom
The late 1960s boom in Australia, which extended into the early 1970s before collapse, followed upon a market already boosted by a string of genuine discoveries through the sixties. The peak activity in 1969-1970 was focussed on nickel but via stock market excitement had expanded to embrace other minerals as well. Following an ore intersection in Western Australia by a small company Poseidon NL in September 1969 the company’s share market value rose phenomenally from $2.2M to $711M by February 1970. According to evidence gathered by a Senate inquiry, the Poseidon boom was accompanied by a long series of lies by directors and geologists to shareholders, stock exchanges and others. In insider share trading the wife of the then Chairman of the Perth Stock Exchange was favourably allotted shares (Senate Inquiry 1974). In the face of disclosed untrustworthiness by the stock exchanges, the Australian government formed a Securities Commission to supplement the former reliance upon the self-regulatory procedures of the stock exchanges.
ENDNOTE 4 --- 2.1.3 Dot-com fever
Dot-com fever is a recent phenomenon. It involves a major worldwide flow of interest amongst speculators away from the "old economy" to the "new economy" of information technology, and to the "dot.com" stocks (Macdonald 2000, Moon 2000). By March 2000 it was estimated that over 100 Australian mining and exploration companies had "gone dot.com", steering resources away from exploration and into speculative technology stocks, and leaving some to wonder who would do the exploring in Australia if the trend continued. The situation was analysed on 14 April 2000 by CIBC World Markets Australia Ltd (CIBC World Markets is the global investment banking, securities brokerage and asset management arm of the Canadian Imperial Bank of Commerce, eighth largest bank in North America)(Macdonald 2000). Macdonald found that the weighted average share price rise for the first 67 mining companies going dot.com during December 9 to March 29 was 155%. For an ensuing group of 65 which had announced intention to travel this path, the average share price rise during the period was 192% (weighted by market capitalisation). Over the same period, by contrast, there was an average 18% continued decline in Australian mining stocks. The exit of companies over 18 months shrank the number of genuine explorers in Australia from 270 to 70 by April 2000.
This spectacular rise in speculative share values was a typical bubble-burst leadup and was "corrected" dramatically when on 15-17 April 2000 the internet bubble burst. Share prices began their collapse in the United States on Friday. Australia followed suit when the markets opened on Monday 16 April, wiping $36.2 billion from the value of the affected shares.
ENDNOTE 7 --- 2.2.1 Case studies - The loss of Lake Peigneur
The loss of Lake Peigneur was one of the worst accidents in the history of Louisiana. It is best described in the original investigative report by Nichols et al. (1981). There are also extracts concerning it in various magazine articles and on the internet (e.g. http://www.interlog.com/~jjyuill/lossofa.htm, http://www.users. globalnet.co.uk/ ~weirds/lake.htm, http://www.ripvanwinkle.com/disaster.html). The http:// www.interlog.com/~jjyuill/lossofa.htm version provides an illustrated dot-point summary of the main facts.
This incident occurred when Texaco was drilling for oil in Lake Peigneur in Southern Louisiana. There were two drill rigs in operation, one on the lake shore and one out on the surface of the lake. At the latter, the drill was down 1,250 feet when it got stuck. When pulled loose, the drill inexplicably jumped up and down in five and ten foot sharp leaps. This was most unusual for a device that weighs 40 tons. One hour later on the men on the rig noticed that it was listing badly, and they abandoned it.
The drill had inadvertently punctured mine workings in an underlying salt dome, and soon a cataclysmic whirlpool formed. Within seven hours the entire 1,100-acre lake had disappeared down the whirlpool, along with two drilling rigs, a tugboat, 11 barges, a loading-dock, 70 acres of Jefferson Island with its Rip Van Winkle botanical gardens, greenhouses, a house trailer, trucks, tractors, a parking lot and tons of mud and trees. A canal which normally flowed out of the lake toward the Gulf of Mexico, reversed it's course, eventually creating a 50 foot waterfall (the highest ever to exist in the state) where the canal water emptied back into a crater formed on the drained lake floor. An underground gas well ruptured and sent bubbles of natural gas to the surface where they ignited and burned.
The entire lake, once about a mile by two miles, had drained into the salt mine, and the mining operations were ruined forever, with the loss of employment for the people employed at the mine. The Diamond Crystal salt company sued Texaco for ruining it's mine. Texaco counter-sued the salt company. The drilling contractor sued Texaco for the loss of equipment. The Rip Van Winkle Gardens sued both parties for their losses.
Texaco had before drilling obtained maps showing where the mine workings were, but the charts conflicted; only one put the mine under the drill hole. Texaco never checked with Diamond Crystal and vice versa. Texaco claimed that only Diamond Crystal knew where both the drilling rig and the tunnels would be. Diamond Crystal claimed that they had no information as to how deep the rig would drill.
ENDNOTE 8 --- 2.2.2 Case studies - The Gretley Colliery inrush
The Gretley Colliery case involved the drowning of four miners when they broke into water-filled workings of an old abandoned colliery. The workings should not have been there according to the NSW Mines Department map which Gretley Colliery was working to. The Department sought to legally deny all responsibility, however the inquiry revealed serious errors and deficiencies by the Department over a lengthy period. The Gretley Colliery disaster cost the NSW government well over $4 million at the inquiry stage and lead to reforms of even greater cost.
Core factors of the case involved the management of mine records and plans, the implementation of procedures, and the lack policy on prosecution.
The four who perished, Edward Batterham 48, Mark Kaiser 30, John Hunter 36, and Damon Murray 19, were killed on November 14, 1996, when they broke into flooded underground workings. The abandoned mine workings were encountered at quite some distance from where a map obtained from the Department indicated them to lie. It was the worst mining disaster in the State for 20 years.
The inquiry into this incident lasted for nine months and resulted in Judge James Staunton ruling that personnel of the Department had shown "an absence of reasonable care" and that maps, which the department had incorrectly created, "sat like a loaded gun in the archives of the department".
After this incident the NSW government allocated an additional $13.9 million for mine safety over five years. In future all investigation reports on deaths and accidents in mines would be dealt with by a committee to eliminate the discretionary decision-making power which had resided with one individual under the previous administrative structure.
ENDNOTE 9 --- 3.1.2.1 The USA General Mining Law of 1872
The 1872 Mining Law was signed into force by President Ulysses S. Grant and allowed public mineral lands to be purchased for $2.50 or $5 per acre. This aspect has not been changed. Minerals that can be claimed under the Mining Law are frequently referred to as "locatable" minerals. The law applies to 432 million acres of publicly-owned lands in the western United States, principally those lands administered by the Bureau of Land Management (BLM) and the U.S. Forest Service. There are also lands managed under the Bureau of Reclamation, National Park Service, National Wildlife Refuge System, and others which are subject to the Mining Law.
In more than a century and a quarter this law has not been significantly reformed and it has been legislatively amended very infrequently. It was intended to allow open access for exploration, occupation and purchase of mineral lands. It allows for the privatisation (full fee title purchase, or patent) of these federal lands, subject to mineral discovery, at the now very low rate of U.S. $2.50 or U.S. $5 per acre payment to the federal government. There are no royalties or further fees payable on the value of contained minerals. More than 360,000 mining claims (covering perhaps 7 million acres) have been patented under this law but in recent years opponents of the law have been successful in having a rolling series of moratoria emplaced to frustrate its operation.
In 1997, the U.S. Department of the Interior Secretary, Bruce Babbitt, signed four patents under the 1872 Mining Law to privatise public lands and minerals with an estimated recoverable mineral value of more than $16.8 million. For this, the taxpaying public of America received $910. Babbit declared "I am committed to discussions that will lead to genuine reform of this relic of a law that has outlived its usefulness. We need a fair return on the minerals that belong to all Americans. I have no choice but to carry out my responsibilities under this law. Unfortunately, until Congress steps forward to enact meaningful reform of this law, I must continue to give away America's mineral resources for an unfair return to taxpayers".
Those four patents were small in comparison to others the Secretary of the Interior had signed. Since taking office in January 1993, Babbitt signed 39 mining patents conveying public mineral lands worth nearly $15 billion to private ownership and in return, the taxpayer received $24,511. [Press release - U.S. Department of the Interior].
Fossil fuels and some other minerals are not managed in the US under the General Mining Law. The General Mining Law of 1872 was used to transfer most pubic land mineral rights into private hands up until 1920 when the Mineral Leasing Act was brought in for fossil fuels. Gerard (1998) examined why Congress enacted a leasing system for fossil fuels but not for hardrock minerals. With coal, for example, there is much more of a central planning approach. In June 1979, the Secretary of the Interior adopted a new leasing program for management of coal resources on federal lands. Information from the Department of Energy and from the coal mining and coal consuming industries is used to estimate demand and plan coal lease tracts. Leasing arrangements are brought in progressively to satisfy regional targets set in advance via such planning.
ENDNOTE 10 --- 3.1.2.2 How the claim-patent or location system works
Under the 1872 Mining Law any citizen had free access to explore for minerals on the public lands. Staking a claim and recording it with the county is known as locating the claim. Claims require work to be done on them, known as assessment work, in order to remain in good standing. An annual report on the assessment work done was required but often this was allowed to merely take the form of an affidavit that the minium work had been done (work to the value of $100 in the case of a lode claim). Under later legislation enacted by the 102nd Congress, claimants could pay an annual holding fee of $100 per claim in lieu of the previous requirement for $100 worth of actual work to be done. Where a mineral deposit is determined as economically recoverable, and at least $500 of development work has been performed, the claim holder may file a patent application for title to surface and mineral rights. Fees as set in 1989 are of $250 per application, plus $50 per claim within each application. If the application is approved, the claimant pays the purchase fee of $2.50 per acre for placer claims or $5 per acre for lode claims.
ENDNOTE 11 --- 3.4 The work of GGIPAC and CSIRO