Is Your Business Safe From Metal Accounting Risks?
Tips for Improving Metal Accounting Practices in the Mining Sector
RIGOROUS CORPORATE GOVERNANCE requirements and turbulent economic conditions have put intense pressure on mining organisations to improve their accounting practices. Inaccurate estimates of metals inventory and processing plant performance pose huge risks – including undetected losses, lack of market responsiveness, and ultimately lost profits. An automated, systematic approach is required to deliver comprehensive, timely, and validated information.
By Kate Lothian
TIMES ARE TOUGH for mining companies. The global economic outlook is bleak, and even China is no longer immune from the slowdown. In addition, international regulations and compliance regimes (voluntary or otherwise) now make senior management personally responsible for accounting figures, with any whiff of potential wrong-doing resulting in a damaged reputation, at the very least. The importance of ‘spotless’ metal accounting
was underlined when a group of six companies including BHP Billiton and Anglo American developed a set of rigorous yet practical metal accounting guidelines (AMIRA P754 code). These guidelines stress the importance of ‘mine to product’ state-of-the-art metal accounting solutions which improve the credibility and transparency of the reporting process.
By adhering to the following ‘Ten Best Practices
of Metallurgical Accounting’ and implementing a powerful enterprise metal accounting software solution, organisations can reduce risk, maximise profitability, and ensure compliance with the AMIRA code.
1. Straight-Through Processing: Completeness & Integration
Best practice metal accounting requires straight-
through processing (STP) of data throughout the entire accounting cycle to ensure a single, accurate, and auditable view of production. Data collection and handling should be thought through carefully during the design stage of the metal accounting system. There should never be any need for re-keying of data or manual intervention; all data should be automatically processed in one system. For situations where the data is required for purposes other than metal accounting such as forecasting or operating costs evaluation, access to and utilisation of the data should be controlled and limited. All system output, however, should have the capacity to be easily integrated into mine, process, laboratory, ERP, and financial reporting systems.
2. Measurement Accuracy The foundation of any metal accounting strategy is the input of good quality data. Plants must ensure that sampling equipment is fully functional by performing on-going maintenance tests to identify any source of bias. In addition, the accuracy of
An automated, systematic approach is required to deliver comprehensive, timely, and validated information
38 March 2013
the various processes involved in obtaining data for metal accounting must be measured on an annual basis, or as soon as the nature of one of the measurement parameters
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84