In 2008, Chile enacted Law 20.235, which introduced the concept of a Competent Person in Mining Resources and Reserves, established the legal regime for these professionals, and created the Competence Qualification Commission in Mining Resources and Reserves (ChCM). Prior to the enactment of this law, industries in Chile were guided by international standards for preparing technical reports on mining resources and reserves.
International Standards and Chile
International standards have defined a technical report as one intended to obtain a complete report based on evidence and issued by a competent person.
The technical report’s purpose is to certify mineral resources and reserves and summarize important and relevant technical information for potential investors or advisors regarding a mineral exploration, development, or production project.
The technical report is prepared so that those involved make informed investment decisions.
Chile is a member of CRISCO (Committee for International Mineral Reserve Reporting Standards), which aims to contribute to and maintain confidence in high standards of reporting mineral deposit estimates and exploration results. CRISCO defines three important bases for a technical report: materiality, Competence, and Transparency. Each of them is described in the figure below.
Chile is a member of CRISCO. Qualified Person certified by the Competence Qualification Commission in Resources and Mining Reserves (ChCM) has reciprocity with CRISCO member countries such as Canada, the USA, and South Africa, among others. The Definition of a Qualified Person described by CRISCO is based on their education, Ethics, and Experience; see the figure below.
Qualified Person certified by the Competence Qualification Commission in Resources and Mining Reserves (ChCM) has reciprocity with CRISCO member countries such as Canada, the USA, and South Africa, among others.
Luis Bernal, CEO PMC
IMPORTANCE OF THE QUALIFIED PERSON OR QP
The importance of being a Competent Person is to issue a Technical Report or Reports on Mining Resources and Reserves under an ethical, reliable, and technical framework, which provides certainty that the value of the deposit is valid for the entire production chain, investors, and competent authorities.
The mining industry is vital to national and global economies, with high product demand. It is an international business that depends on the trust of investors and other stakeholders for its financial and operational well-being.
Mining companies that want to explore, develop, or increase production require money from investors through the capital markets. Investors need to have confidence in the information coming from technical reports. This confidence comes from quality work carried out by a Qualified person who is an expert, experienced, and ethical professional through standards, guidelines, or promulgated laws (NI 43-101 in Canada, SME Guide in the USA, or Law 20,235 in Chile) and public and transparent technical reports.
The Competent Persons who sign these technical reports are published in Chile and abroad. In Chile, Useful Life Reports are issued that are addressed to Sernageomin. In contrast, other reports are presented in the company directories, sometimes in the CMF (Financial Market Commission), and others are Press Releases. On the other hand, reports that are published abroad go to different stock exchanges, for example NI 43-101 reports to Canada, Form 20-F to the USA and JORC to Australia.
If you want information on how to certify yourself as a Qualified person, you can visit the following sites:
– Chile, Comision Calificadora de Competencias en Recursos y Reservas Mineras
CONCLUSION
The Qualified Person (QP) is essential in the mining industry. They ensure that technical and exploration reports are accurate and reliable, validate that geological, metallurgical, and environmental data comply with quality standards and international regulations, and ensure that mining operations are transparent and protect the interests of companies, investors, and regulators. In such a complex and demanding sector, having a QP helps mitigate risks, optimize resources, and maintain confidence in the viability of mining projects.
