All of us working in the mining industry have a vested interest in being part of an industry that is viewed positively. The industry has made great strides in South Africa and globally in how all stakeholders are treated. Meaningful progress has been made in working conditions and in the interaction with host communities. Progress has also been made in protecting investors and facilitating investment into mining projects by large institutions and individual investors.
However, looking back, we see how tenuous these relationships are. Mining’s failures and misdemeanours have tended to leave lasting stains and leave the industry vulnerable to being judged on past mistakes and to more recent mistakes that readily overwhelm perceptions of the industry. We can see how much we are dependant on responsible behaviour by all participants if we are to continue to improve our reputation and be proud to be associated with this essential industry.
Progress in the industry has been greatly facilitated by collaborative endeavours and voluntary organisations. Companies and executives concerned about their reputations have collaborated to establish industry standards and norms that have tried to raise the bar for all participants. Failure to raise the bar, threatens the social licence of all mining companies. An accident in any part of the world can lead to disruptions for all operations as news is rapidly and widely distributed.
Mining codes were established originally to reduce the likelihood of investors being defrauded but have evolved. The codes are intended to be part of the correct allocation of capital – towards projects that are economically attractive and comply with good industry practice. The codes are not intended to be a burden on industry but to reduce the likelihood that capital is allocated to projects that appear attractive merely as a result of optimistic assumptions and that fail to adequately allow for meeting minimum standards.
SAMVAL focuses on valuation aspects and aims to establish criteria for valuators and for valuation approaches. It also looks to support the SAMREC code and there is interaction with international bodies such as IMVAL, facilitating alignment across important mining jurisdictions. It further looks to provide input to and receive guidance from other industry bodies like the SAIMM. The committee also interacts with the JSE and facilitates dialogue between industry and the stock exchange.
The committee also looks to track and respond to important developments and consider a range of topics ranging from the merits of site visits to how best to promote ethical behaviour and improvement in skill levels. Conferences and colloquiums are organised regularly to provide learning opportunities and to showcase best practice and new developments.
The conferences and colloquiums are an important mechanism for sharing knowledge and raising the standard of valuation through improving valuators’ understanding of the principles and practices incorporated into SAMVAL. The committee also looks to share the purpose and principles through direct discussions with companies and other stakeholders. Membership is open and actively encouraged and there is currently a particular focus on bringing in more members from producing mines to ensure that the relevance to both consultants and producers is understood and improved.
There is also an important knowledge transfer component. The mixing of generations of valuation professionals and the associated discussions facilitate the transfer of hard skills but also, importantly, knowledge of the history of the industry, the codes and the events that led to changes. These discussions would be very difficult outside of this setting as few companies have multiple generations of valuation professionals.
The SAMVAL code is the outcome of many years of collaboration, discussion and input by a range of experts and pioneers in valuation. The committee is the steward of this work in progress and actively looks to promote further development of the code and to bring in relevant people and opinions for consideration, ensuring that it remains relevant.