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Article: What is the AMIRA P754 Code?

The AMIRA P754 project, 'Metal Accounting and Reconciliation', had the goal of making sure that the tracking, accounting, and auditing of mined materials like precious metals and commodities was done in a reliable, transparent and auditable way. In 2003 AMIRA (an independent association of minerals professionals which develops, brokers and facilitates collaborative research projects) initiated their P754 research project, and the Code for Metal Accounting was published in its current version in 2007.

This code was meant to provide uniform and dependable guidelines and rules for accurately tracking quantities of mined materials that are extracted and processed, as well as how to keep track of the balance of all mined material in the production process.

The AMIRA P754 Code for Metal Accounting has become a widely accepted industry best practice guideline.

The objective of mass measurement for Metal Accounting is to measure the amount, or amount of flow, of a particular material or component, taking into account its humidity or density, over a certain period of time, with a degree of accuracy that is adequate for metal balancing. Common measurement methods applied in metallurgical plants are scales, weighbridges, weigh tanks, bins, hoppers, magnetic and density flow meters.

Metal accounting depends on data of acceptable quality integrated from a variety of sources. In this case, it is not enough to comply with the Code and its principles, it is also essential to attend to the problems related to the design and equipment selection, certification and calibration of monitoring equipment, data management and plant management.

Some of the main principles and objectives of the AMIRA P754 code be summarised as follows:

  1. Accurate and transparent reporting: The code emphasises the importance of accurate and transparent reporting on metal production and sales, in order to ensure that stakeholders can trust the information provided by the mining company.

  2. Standardised definitions and methods: The code provides standardised definitions and methods for key metal accounting concepts, such as ore reserves and metal reconciliation, in order to promote consistency and transparency in reporting.

  3. Continuous improvement: The code encourages mining companies to continually review and improve their metal accounting processes, in order to increase efficiency and accuracy.

  4. Compliance with legal and regulatory requirements: The code requires mining companies to comply with relevant legal and regulatory requirements related to metal production and sales.

  5. Good governance: The code emphasises the importance of good governance in metal accounting, including the need for effective internal controls and independent oversight.

Metal accounting is a process used to measure and analyse information related to the production of metal products. For detail on metal accounting, read our article, “What is Metal Accounting?” Common issues with metal accounting traditionally include a lack of standard metal accounting procedures, inexperienced personnel being responsible for it, inaccuracies or incompleteness in measuring, sampling and analysis, inconsistent methods of calculating metal recoveries for metal lock-up figures, and potential for manipulating data. There is also a risk that senior management may be uninformed of the accuracy and reliability of the data they use to make financial decisions and report to shareholders.

To attempt to address these problems, the Code set out 10 Principles of Metal Accounting which are summarised below:

1. The metal accounting system must be based on accurate measurements of mass and metal content. It must be based on a full Check in-Check out system using the Best Practices as defined in the Code, to produce an on-going metal/commodity balance for the operation. The system must be integrated with management information systems, providing a one-way transfer of information to these systems as required.

2. The system must be consistent and transparent and the source of all input data to the system must be clear and understood by all users of the system. The design and specification of the system must incorporate the outcomes of a risk assessment of all aspects of the metal accounting process.

3. The accounting procedures must be well documented and user friendly for easy application by plant personnel, to avoid the system becoming dependent on one person, and must incorporate clear controls and audit trails. Calculation procedures must be in line with the requirements set out in the Code and consistent at all times with clear rules for handling the data.

4. The system must be subject to regular internal and external audits and reviews as specified in the relevant sections of the Code to ensure compliance with all aspects of the defined procedures. These reviews must include assessments of the associated risks and recommendations for their mitigation, when the agreed risk is exceeded.

5. Accounting results must be made available timeously, to meet operational reporting needs, including the provision of information for other management information systems, and to facilitate corrective action or investigation. A detailed report must be issued on each investigation, together with management’s response to rectify the problem. When completed, the plan and resulting action must be signed-off by the Competent Person.

6. Where provisional data has to be used to meet reporting deadlines, such as at month ends when analytical turn-around times could prevent the prompt issuing of the monthly report, clear procedures and levels of authorisation for the subsequent replacement of the provisional data with actual data must be defined. Where rogue data is detected, such as incorrect data transfer or identified malfunction of equipment, the procedures to be followed, together with the levels of authorisation must be in place.

7. The system must generate sufficient data to allow for data verification, the handling of metal/commodity transfers, the reconciliation of metal/commodity balances, and the measurement of accuracies and error detection, which should not show any consistent bias. Measurement and computational procedures must be free of a defined critical level of bias.

8. Target accuracies for the mass measurements and the sampling and analyses must be identified for each input and output stream used for accounting purposes. The actual accuracies for metal recoveries, based on the actual accuracies, as determined by statistical analysis, of the raw data, achieved over a company’s reporting period must be stated in the report to the Company’s Audit Committee. Should these show a bias that the Company considers material to its results, the fact must be reported to shareholders.

9. In-process inventory figures must be verified by physical stock-takes at prescribed intervals, at least annually, and procedures and authority levels for stock adjustments and the treatment of unaccounted losses or gains must be clearly defined.

10. The metal accounting system must ensure that every effort is made to identify any bias that may occur, as rapidly as possible, and eliminate or reduce to an acceptable level the source of bias from all measurement, sampling and analytical procedures, when the source is identified.

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