United Nations Framework Classification for Mineral Resources
United Nations Framework Classification for Mineral Resources
The United Nations Framework Classification for Mineral Resources (UNFC) is a universally acceptable and internationally applicable resource project-based and principles-based classification system for defining the environmental socio-economic viability and technical feasibility and maturity of projects to develop resources. UNFC provides a consistent framework to describe the level of confidence of the future quantities produced by the project. Sources such as solar, wind, geothermal, hydro-marine, bio-energy, hydrocarbons, minerals, nuclear fuels, water, and injection for storage, are the feedstock to resource projects from which products can be developed. The sources can be in their natural or secondary (anthropogenic sources, tailings, etc.) state.
The United Nations Framework Classification for Fossil Energy and Mineral Reserves and Resources 2009 (UNFC‐2009) is a universally acceptable and internationally applicable scheme for the classification and reporting of fossil energy and mineral reserves and resources and is currently the only classification in the world to do so. As with extractive activities, UNFC‐2009 reflects conditions in the economic and social domain, including markets and government framework conditions, technological and industrial maturity and the ever present uncertainties. It provides a single framework on which to build international energy and mineral studies, analyze government resource management policies, plan industrial processes and allocate capital efficiently.
Present day globalized world has resulted in an increasing number of multi‐resource organizations operating in many different countries and jurisdictions. In addition, the development of new types of resources, such as the mining of bitumen to produce synthetic crude oil, demonstrates that the historic boundaries between the minerals and petroleum sectors, which are reflected in different resource classification systems, public reporting requirements and accounting rules, is no longer sustainable. By covering all extractive activities, UNFC‐2009 captures the common principles and provides a tool for consistent reporting for these activities, regardless of the commodity. UNFC‐2009 is a strong code, offering simplicity without sacrificing completeness or flexibility. It paves the way for improved global communications which aids stability and security of supplies, governed by fewer and more widely understood rules and guidelines. The efficiencies to be gained through the use of UNFC‐2009 are substantial.
UNFC‐2009 applies to fossil energy and mineral reserves and resources located on or below the earth’s surface. It has been designed to meet, to the extent possible, the needs of applications pertaining to energy and mineral studies, resources management functions, corporate business processes and financial reporting standards.
The typical successive stages of geological investigation i.e. reconnaissance, prospecting, general exploration, and detailed exploration, generate resource data with clearly defined degrees of geological assurance. These four stages are hence used as geological assessment categories in the classification. Feasibility assessment studies form an essential part of the process of assessing a mining prospect. The typical successive stages of feasibility assessment i.e. geological study as initial stage followed by prefeasibility study and feasibility study / mining report as well defined. The degree of economic viability (economic or sub-economic) is assessed in the course of pre-feasibility and feasibility studies. A pre-feasibility study provides a preliminary assessment with a lower level of accuracy than that of a feasibility study, by which economic viability is assessed in detail. Fig 1 shows classification of minerals.
Fig 1 Classification of minerals
UNFC‐2009, which can either be applied directly or used as a harmonizing tool, is the successor to the UNFC of 2004. The revision process has resulted in a simplified and user‐friendly version of the classification with generic high level definitions. These are designed to ensure alignment with other widely used systems in the extractive industries – such as the Committee for Mineral Reserves International Reporting Standards (CRIRSCO) Template and the Society of Petroleum Engineers (SPE) / World Petroleum Council (WPC) / American Association of Petroleum Geologists (AAPG) / Society of Petroleum Evaluation Engineers (SPEE) Petroleum Resource Management System (SPE‐PRMS) – and to facilitate mapping with other classification systems.
The definitions of the UNFC‐2009 categories and sub‐categories have been simplified and the most commonly used classes are defined using plain language, providing harmonized generic terminology at a level suitable for global communications. The use of commonly used words which are widely misunderstood by non‐experts and which do not have a unique meaning is avoided. Most importantly, the word ‘reserves’ is not used other than in a general sense ‐ ‘reserves’ is a concept with different meanings and usage, even within the extractive industries, where the term is carefully defined and applied by technical experts.
The update 2019 of UNFC is an update of the United Nations Framework Classification for Fossil Energy and Mineral Reserves and Resources 2009 incorporating Specifications for its Application (ECE Energy Series 42 and ECE/ENERGY/94) which was issued at the end of 2013. The name of the United Nations Framework Classification for Fossil Energy and Mineral Reserves and Resources 2009 (UNFC-2009) was changed to the United Nations Framework Classification for Resources in 2017.
The importance of environmental and social issues in the context of resource classification is appropriately recognized throughout this updated version of UNFC. At the first session of the expert group on resource management (formerly known as the expert group on resource classification until end-2018) in April 2010, it was agreed that generic specifications are to be developed for UNFC, but only to the extent considered necessary to achieve an appropriate level of consistency in the reporting of estimated quantities under UNFC. UNFC is aligned with some other classification systems through a bridging document. A bridging document explains the relationship between UNFC and another classification system, including instructions on how to classify estimates generated by application of that system using the UNFC numerical codes.
Categories and sub-categories
UNFC‐2009 is a generic principle‐based system in which quantities are classified on the basis of the three fundamental criteria of economic and social viability (E), field project status and feasibility (F), and geological knowledge (G), using a numerical and language independent coding scheme. Combinations of these criteria create a three‐dimensional system with these three criteria forming the three axes. The process of geological assessment is carried out normally in stages of increasing details. Categories (e.g. E1, E2, E3) and, in some cases, sub‐categories (e.g. E1.1) are defined for each of the three criteria as set out and defined. Tab 1 gives definition of categories and supporting explanations.
|Tab 1 Definition of categories and supporting explanations|
|Categories||Definition (a)||Supporting explanation (b)|
|E1||Extraction and sale has been confirmed to be economically viable. (c)||Extraction and sale is economic on the basis of current market conditions and realistic assumptions of future market conditions. All necessary approvals / contracts have been confirmed or there are reasonable expectations that all such approvals / contracts will be obtained within a reasonable timeframe. Economic viability is not affected by short‐term adverse market conditions provided that longer‐term forecasts remain positive.|
|E2||Extraction and sale is expected to become economically viable in the foreseeable future. (c)||Extraction and sale has not yet been confirmed to be economic but, on the basis of realistic assumptions of future market conditions, there are reasonable prospects for economic extraction and sale in the foreseeable future.|
|E3||Extraction and sale is expected to become economically viable in the foreseeable future or evaluation is at too early a stage to determine economic viability. (c)||On the basis of realistic assumptions of future market conditions, it is currently considered that there are not reasonable prospects for economic extraction and sale in the foreseeable future; or, economic viability of extraction cannot yet be determined due to insufficient information (e.g. during the exploration phase). Also included are quantities which are forecast to be extracted, but which will not be available for sale.|
|F1||Feasibility of extraction by a defined development project or mining operation has been confirmed.||Extraction is currently taking place; or, implementation of the development project or mining operation is underway; or, sufficiently detailed studies have been completed to demonstrate the feasibility of extraction by implementing a defined development project or mining operation.|
|F2||Feasibility of extraction by a defined development project or mining operation is subject to further evaluation.||Preliminary studies demonstrate the existence of a deposit in such form, quality and quantity that the feasibility of extraction by a defined (at least in broad terms) development project or mining operation can be evaluated. Further data acquisition and / or studies may be required to confirm the feasibility of extraction.|
|F3||Feasibility of extraction by a defined development project or mining operation cannot be evaluated due to limited technical data.||Very preliminary studies (e.g. during the exploration phase), which may be based on a defined (at least in conceptual terms) development project or mining operation, indicate the need for further data acquisition in order to confirm the existence of a deposit in such form, quality and quantity that the feasibility of extraction can be evaluated.|
|F4||No development project or mining operation has been identified.||In situ (in‐place) quantities which will not be extracted by any currently defined development project or mining operation.|
|G1||Quantities associated with a known deposit which can be estimated with a high level of confidence.||For in situ (in‐place) quantities, and for recoverable estimates of fossil energy and mineral resources which are extracted as solids, quantities are typically categorized discretely, where each discrete estimate reflects the level of geological knowledge and confidence associated with a specific part of the deposit. The estimates are categorized as G1, G2 and / or G3 as appropriate. For recoverable estimates of fossil energy and mineral resources which are extracted as fluids, their mobile nature generally precludes assigning recoverable quantities to discrete parts of an accumulation. Recoverable quantities should be evaluated on the basis of the impact of the development scheme on the accumulation as a whole and are usually categorised on the basis of three scenarios or outcomes which are equivalent to G1, G1+G2 and G1+G2+G3.|
|G2||Quantities associated with a known deposit which can be estimated with a moderate level of confidence.|
|G3||Quantities associated with a known deposit which can be estimated with a low level of confidence.|
|G4||Estimated quantities associated with a potential deposit, based primarily on indirect estimated quantities associated with a potential deposit, based primarily on indirect evidence.||Quantities which are estimated during the exploration phase are subject to a substantial range of uncertainty as well as a major risk that no development project or mining operation may subsequently be implemented to extract the estimated quantities. Where a single estimate is provided, it should be the expected outcome but, where possible, a full range of uncertainty in the size of the potential deposit should be documented (e.g. in the form of a probability distribution). In addition, it is recommended that the chance (probability) that the potential deposit will become a deposit of any commercial significance is also documented.|
|(a) The term ‘extraction’ is equivalent to ‘production’ when applied to petroleum|
|(b) The term ‘deposit’ is equivalent to ‘accumulation’ or ‘pool’ when applied to petroleum|
|(c) The phrase ‘economically viable, encompasses economic (in the narrow sense) plus other relevant ‘market conditions’, and includes consideration of prices, costs, legal / fiscal framework, environmental, social and all other non‐technical factors which can directly impact the viability of a development project|
The first set of categories (the E axis) designates the degree of favourability of social and economic conditions in establishing the commercial viability of the project, including consideration of market prices and relevant legal, regulatory, environmental, and contractual conditions. The second set (the F axis) designates the maturity of studies and commitments necessary to implement mining plans or development projects. These extend from early exploration efforts before a deposit or accumulation has been confirmed to exist through to a project which is extracting and selling a commodity, and reflect standard value chain confidence in the geological knowledge and potential recoverability of the quantities. The definitions of subcategories are given in Tab 2.
|Tab 2 Definitions of sub-categories|
|E1||E1.1||Extraction and sale is economic on the basis of current market conditions and realistic assumptions of future market conditions.|
|E1.2||Extraction and sale is not economic on the basis of current market conditions and realistic assumptions of future market conditions, but is made viable through government subsidies and / or other considerations.|
|E2||No sub‐categories defined|
|E3||E3.1||Quantities that are forecast to be extracted, but which will not be available for sale.|
|E3.2||Economic viability of extraction cannot yet be determined due to insufficient information (e.g. during the exploration E3 phase).|
|E3.3||On the basis of realistic assumptions of future market conditions, it is currently considered that there are not reasonable prospects for economic extraction and sale in the foreseeable future.|
|F1||F1.1||Extraction is currently taking place.|
|F1.2||Capital funds have been committed and implementation of F1 the development project or mining operation is underway.|
|F1.3||Sufficiently detailed studies have been completed to demonstrate the feasibility of extraction by implementing a defined development project or mining operation.|
|F2||F2.1||Project activities are ongoing to justify development in the foreseeable future.|
|F2.2||Project activities are on hold and / or where justification as a commercial development may be subject to significant delay.|
|F2.3||There are no current plans to develop or to acquire additional data at the time due to limited potential.|
The categories and sub‐categories are the building blocks of the system, and are combined in the form of ‘classes’. UNFC‐2009 can be visualized in three dimensions, as shown in Fig 2.
Fig 2 UNFC categories and examples of classes
UNFC‐2009 can also be represented in a practical two‐dimensional abbreviated version which is shown in Tab 3.
|Tab 3 Abbreviated version of UNFC, showing primary classes|
|Produced||Sold or used production|
|Production which is unused or consumed in operations (a)|
|The project’s environmental-socio-economic viability and technical feasibility has been confirmed||Viable projects (c)||1||1||1,2,3|
|The project’s environmental-socio-economic viability and / or technical feasibility has yet to be confirmed||Potentially viable projects (d)||2 (e)||2||1,2,3|
|Non-viable projects (f)||3||2||1,2,3|
|Remaining products not developed from identified projects (g)||3||4||1,2,3|
|There is insufficient information on the source to assess the project’s environmental-socio-economic viability and technical feasibility||Prospective projects||3||3||4|
|Remaining products not developed from prospective projects (g)||3||4||4|
|(a) Future production that is either unused or consumed in the project operations is categorized as E3.1. These can exist for all classes of recoverable quantities.|
|(b) G categories may be used discretely, or in cumulative scenario form (e.g. G1+G2).|
|(c) Estimates associated with viable projects are defined in many classification systems as reserves, but there are some material differences between the specific definitions that are applied within different industries and hence the term is not used here.|
|(d) Not all Potentially viable projects will be developed.|
|(e) Potentially viable projects may satisfy the requirements for E1.|
|(f) Non-viable projects include those that are at an early stage of evaluation in addition to those that are considered unlikely to become viable developments within the foreseeable future.|
|(g) Remaining products not developed from identified projects or prospective projects may become developable in the future as technological or environmental-socio-economic conditions change. Some or all of these estimates may never be developed due to physical and/or environmental-socio-economic constraints. This classification may be of less value to renewable resource projects but can still be used to indicate the amount of unrealized potential. It is emphasized that the remaining products are quantities which, if produced, could be bought, sold or used (i.e. electricity, heat, etc., not wind, solar irradiation, etc.).|
A class is uniquely defined by selecting from each of the three criteria a particular combination of a category or a sub‐category (or groups of categories / sub‐categories). Since the codes are always quoted in the same sequence (i.e. E, F, G), the letters can be dropped and just the numbers are retained. The numerical code defining a class is then identical in all languages using Arabic numerals.
While there are no explicit restrictions on the possible combinations of E, F and G categories or sub‐categories, only a limited number is normally applicable. For the more important combinations (classes and sub‐classes), specific labels are provided as a support to the numerical code, as shown in Tab 3.
As shown in Tab 3, the total commodity initially in place is classified at a given date in terms of the following.
- Extracted quantities which have been sold i.e. sales production.
- Extracted quantities which have not been sold i.e. non‐sales production.
- Quantities associated with a known deposit which can be recovered in the future by extractive activities. Technical and commercial evaluation studies based on defined development projects or mining operations constitute the basis for the classification.
- Additional quantities in place associated with a known deposit which is not to be recovered by any presently defined development project or mining operation.
- Quantities associated with a potential deposit which can be recovered in the future provided that the deposit is confirmed.
- Additional quantities in place associated with a potential deposit which is not expected to be recovered even if the deposit is confirmed.
Material balance of total quantities can be maintained by full application of the classification. For this purpose a reference point is needed to be established where the quantity, quality, and sales (or transfer) price of recovered quantities are determined.
With the exception of past production which can be measured, quantities are always estimated. There is a degree of uncertainty associated with the estimates. The uncertainty is communicated either by quoting discrete quantities of decreasing levels of confidence (high, moderate, and low) or by generating three specific scenarios or outcomes (low, best, and high estimates). The former approach is typically applied for solid minerals, while the latter method is normally used in petroleum. A low estimate scenario is directly equivalent to a high confidence estimate (i.e. G1), whereas a best estimate scenario is equivalent to the combination of the high confidence and moderate confidence estimates (G1+G2). A high estimate scenario is equivalent to the combination of high, moderate, and low confidence estimates (G1+G2+G3). Quantities can be estimated using deterministic or probabilistic methods.
Where relevant, discovered quantities which can be recovered in the future are subdivided into (i) quantities which are forecast to be sold, and (ii) quantities which are forecast to be extracted but not sold.
Potentially recoverable quantities can be recovered in the future through projects which are contingent on one or more conditions yet to be fulfilled. Contingent projects are classified into projects for which the social and economic conditions are expected to be acceptable for implementation and those where they are not. In the former case, contingency is caused by the recovery project not being sufficiently matured to confirm technical and / or commercial feasibility, which can then provide the basis for a commitment to extract and sell the commodity at a commercial scale. In the latter case, neither the project nor the economic and social conditions are sufficiently matured to indicate a reasonable potential for commercial recovery and sale in the foreseeable future. A deposit or an accumulation may give rise to several projects with different status.
For further clarity in global communications, additional generic UNFC‐2009 sub‐classes are defined based on the full granularity provided by the sub‐categories. These are shown in Tab 4.
|Tab 4 UNFC‐2009 classes and sub‐classes defined by sub‐categories (a)|
|UNFC classes defined by categories and sub‐categories|
Total commodity initially in place
|Non sales production|
|Known deposit||Commercial projects||On production||1||1.1||1,2,3|
|Approved for development||1||1.2||1,2,3|
|Justified for development||1||1.3||1,2,3|
|Potentially commercial projects||Development pending||2 (b)||2.1||1,2,3|
|Development on hold||2||2.2||1,2,3|
|Non-commercial projects||Development unclarified||3.2||2.2||1,2,3|
|Development not viable||3.3||2.3||1,2,3|
|Additional quantities in place||3.3||4||1,2,3|
|Potential deposit||Exploration projects||[No sub‐classes defined] (c)||3.2||3||4|
|Additional quantities in place||3.3||4||4|
|(a) Refer also to the notes given in Tab 2|
|(b) Development pending projects may satisfy the requirements for E1|
|(c) Generic sub‐classes have not been defined here, but it is noted that in petroleum the terms prospect, lead and play are commonly adopted|
Harmonization of resource inventories
Classifications other than the one shown in Tab 1 can be generated by choosing appropriate combinations of categories, or by grouping or further subdividing the categories. This permits the harmonization of resource inventories which are developed on the basis of different classification systems.
On the other hand, when the unabbreviated UNFC‐2009 is used to build a resource inventory, this can be converted to inventories developed on other harmonized classifications without going back to the basic resource information.
Adaption to national or local needs
Classifications frequently need to be adapted to national or local needs. Modifications of this nature are to be checked for consistency with the unabbreviated UNFC‐2009 and other applications in use.
Definition of various terms
Various terms used the United Nations Framework Classification for Fossil Energy and Mineral Resources are given below.
Aligned system – It is a classification system which has been aligned with UNFC as demonstrated by the existence of a bridging document which has been endorsed by the expert group on resource management.
Bridging document – It is a document which explains the relationship between UNFC and another classification system, including instructions and guidelines on how to classify estimates generated by application of that system using the UNFC numerical codes.
Category – It is the primary basis for classification using each of the three fundamental criteria of environmental-socio-economic viability (related categories being E1, E2, and E3), technical feasibility (related categories being F1, F2, F3 and F4), and degree of confidence (related categories being G1, G2, G3 and G4).
Class(es) – It is the primary level of resource classification resulting from the combination of a category from each of the three criteria (axes).
Criteria – UNFC utilizes three fundamental criteria for resource classification namely (i) favourability of environmental-socio-economic conditions in establishing the viability of the project (E axis), (ii) maturity of technology, studies and commitments necessary to implement the project (F axis), and (iii) degree of confidence in the estimate of quantities of products from the project (G axis). Each of these criteria are sub-divided into categories and sub-categories, which are then combined in the form of classes or sub-classes.
Evaluator – Evaluator is a person (or persons) performing estimation and / or classification.
Generic specifications – Specifications (as documented in this specifications document) are those requirements which apply to the classification of products of a resource project using UNFC.
Identified project – An identified project is a project which is associated with a known source.
Known source – It is a source which has been demonstrated to exist by direct evidence. More detailed specifications can be found in relevant source-specific aligned systems.
Mapping document – It is the output of a comparison between another resource classification system and UNFC, or between that system and existing aligned systems, which highlights the similarities and differences between the systems. A mapping document can provide the basis for assessing the potential for the other system to become an aligned system through the development of a bridging document.
Numerical code – It is the numerical designation of each class or sub-class of resource quantity as defined by UNFC. Numerical codes are always quoted in the same sequence (i.e. E, F, G).
Potential source – It is a source which has not yet been demonstrated to exist by direct evidence, but is assessed as potentially existing based primarily on indirect evidence. More detailed specifications can be found in relevant source-specific aligned systems.
Product – Products of the project can be bought, sold, or used, including electricity, heat, hydro-carbons, hydrogen, minerals, and water. It is noted that with some projects, such as for renewables, the products (electricity and heat etc.) are different from the sources (wind and solar irradiation etc.). In other projects the products and sources can be similar e.g. in petroleum projects both the sources and products are oil and / or gas, although the fluid state and properties can change from reservoir to surface conditions.
Project – A project is a defined development or operation which provides the basis for environmental, social, economic, and technical evaluation and decision-making. In the early stages of evaluation, including verification, the project can be defined only in conceptual terms, whereas more mature projects are to be defined in considerable detail. Where no development or operation can presently be defined for all or part of a source, based on existing technology or technology presently under development, all the quantities associated with that source (or part thereof) are classified in category F4. These are quantities which, if produced, can be bought, sold, or used.
Sources – Sources, such as bio-energy, geothermal, hydro-marine, solar, wind, injection for storage, hydro-carbons, minerals, nuclear fuels, and water, are the feedstock for resource projects from which products can be developed. The sources can be in their natural or secondary (anthropogenic sources, tailings, etc.) state.
Specifications – These are additional details (mandatory rules) as to how a resource classification system is to be applied, supplementing the framework definitions of that system. Generic specifications provided for the UNFC in this specifications document ensure clarity and comparability and are complementary to the source-specific requirements included in aligned systems, as set out in the relevant bridging document.
Specifications document – It is specifications for the application of the United Nations Framework Classification for Resources (UNFC).
Sub-categories – These are the criteria of environmental, social, and economic viability, technical feasibility, and degree of confidence.
Sub-classes – These are the optional sub-division of resource classification based on project maturity principles resulting from the combination of sub-categories.
Systeme International d’Unites – It is the internationally recognized system of measurement and the modern form of the metric system. Prefixes and units are created and unit definitions are modified through international agreement as the technology of measurement progresses, and as the precision of measurements improves. It is abbreviated to SI.
UNFC – It is the abbreviation for United Nations Framework Classification for Resources.
Guidelines on the application of key instructions in UNFC
The guidelines on the application of key instructions in UNFC are given below.
Classify (according to UNFC) – It is to assign estimated quantities to a specific class (or sub-class) of UNFC by reference to the definitions of categories or sub-categories for each of the three criteria and taking into account both the generic specifications and the source-specific requirements which are included in the aligned system, as set out in the relevant bridging document.
Harmonization of classification systems – It is to identify significant differences between systems, if any, by mapping and then, if necessary, to adjust definitions and / or specifications of one system so that they lead to comparable results. A system which is harmonized with UNFC can become an aligned system through the development and endorsement (by the expert group on resource management) of a bridging document.
Mapping between classification systems – It is to generate a mapping document by comparing the definitions and specifications of each category / class of one classification system to the definitions and specification of each of the categories / classes in another system in order to identify the similarities and differences between them.
Mapping through an aligned system – It is to perform the mapping of a third classification system to UNFC by first mapping it to a system, which is already mapped to, and aligned with, UNFC.
Align systems – It is described under harmonization of classification systems.
Apply UNFC directly – It is to classify quantities without first generating estimates in an aligned system. This still needs adherence to both the generic specifications and the source-specific requirements which are included in the aligned system, as set out in the relevant bridging document.
Use UNFC as a harmonizing tool – It is described under harmonization of classification systems.
Guidelines on the use of project maturity to sub-classify projects using UNFC
UNFC provides scope to sub-classify projects by applying the full range of sub-category definitions. The application of this level of granularity of the system is optional, though it is becoming widely recognized as a powerful tool for portfolio management purposes, both at corporate and at a national level. The sub-classes reflect the concept of classification on the basis of project maturity, which broadly corresponds to the probability that the project eventually achieves viable operation and product sales or use.
The category and sub-category definitions, as well as all generic specifications and relevant resource specifications necessary for the high-level classification into viable projects, potentially viable projects and non-viable projects, are to be satisfied before consideration is given to assignment to the appropriate sub-class.
The project maturity sub-classes are based on the associated actions (i.e. business decisions, government permits etc.) needed to move a project towards viable production. The boundaries between different levels of project maturity are designed to align with internal (corporate) project ‘decision gates’, hence providing a direct link between decision-making and the capital value process within an organization, and the characterization of its portfolio of assets through resource classification.
It is important to note that while the goal of the developer is always to move projects ‘up the ladder’ toward higher levels of maturity, and eventually to viable production, a change in circumstances (e.g. a change to local environmental, social, or market considerations, or to the applicable fiscal regime, or disappointing results from further data acquisition) can lead to projects being ‘downgraded’ to a lower sub-class. If the sub-classes in Tab 4 of UNFC are adopted, the following guidelines are to be applied.
The term ‘on production’ is used where the project is actually producing and selling or using one or more products as at the effective date of the evaluation. Although implementation of the project may not be 100 % complete at that date, the full project is to have all necessary approvals and contracts in place, and capital funds committed. If a part of the project development plan is still subject to separate approval and / or commitment of capital funds such that it is not presently certain to proceed, that part is to be classified as a separate project in the appropriate sub-class.
The term ‘approved for development’ needs that all approvals / contracts are in place, and capital funds have been committed. Construction and installation of project facilities are to be underway or due to start imminently. Only a completely unforeseeable change in circumstances which is beyond the control of the developers is an acceptable reason for failure of the project to be developed within a reasonable time frame.
The term ‘justified for development’ needs that the project has been demonstrated to be technically feasible and environmental-socio-economic viable, and there is a reasonable expectation that all necessary approvals / contracts for the project to proceed to development and operation is going to be forthcoming.
Potentially viable projects
The term ‘development pending’ is limited to those projects which are actively subject to project-specific technical activities, such as acquisition of additional data (e.g. appraisal drilling) or the completion of project feasibility studies and associated socio, environmental, and economic analyses designed to confirm project viability and / or to determine the optimum development scenario. In addition, it can include projects which have non-technical contingencies, provided these contingencies are presently being actively pursued by the developers and are expected to be resolved positively within a reasonable time frame. Such projects are expected to have a high probability of achieving viability.
The term ‘development on hold’ is used where a project is considered to have at least a reasonable chance of achieving viability (i.e. there are reasonable prospects for eventual economic production), but where there are presently major non-technical contingencies (e.g. environmental or social issues) which need to be resolved before the project can move towards development. The primary difference between ‘development pending’ and ‘development on hold’ is that in the former case the only significant contingencies are ones which can be, and are being, directly influenced by the developers (e.g. through negotiations), whereas in the latter case the primary contingencies are subject to the decisions of others over which the developers have little or no direct influence and both the outcome and the timing of those decisions is subject to significant uncertainty.
The term ‘development unclarified’ is appropriate for projects which are still in the early stages of technical and environmental-socio-economic evaluation (e.g. a recent new discovery), and / or where considerable further data acquisition is needed, in order to make a meaningful assessment of the potential for a viable development, i.e. there is presently insufficient basis for concluding that there are reasonable prospects for eventual viable production.
The term ‘development not viable’ is used where a technically feasible project can be identified, but it has been assessed as being of insufficient potential to warrant any further data acquisition activities or any direct efforts to remove contingencies. In such cases, it can be helpful to identify and record these quantities so that the potential for a viable development opportunity is recognized in the event of a major change in technology or environmental-socio-economic conditions.
Remaining products not developed from projects
Quantities are only to be classified as ‘remaining products not developed from projects’ where no technically feasible projects have been identified which can lead to the production of any of these quantities. Some of these quantities can subsequently be produced in the future due to the development of new technology.