PSE drafting rules on listing of mining firms

The Philippine Stock Exchange (PSE) is drafting guidelines on the listing of mining companies which include the adoption of the so-called Joint Ore Reserves Committee (JORC) Code as a measure to determine the profitability of mining firms.

PSE president Francis Lim said the exchange is open to waiving its three-year track record requirement for mining firms who are looking to engage in a public offer of their shares.

In place of the track record requirement, the PSE is looking at adopting the JORC Code as an option to measure a mining company’s financial health. "There will be a JORC like certification that would be required," Lim said.

The proposal to adopt the JORC Code has already been brought up last year but it never took off due to a sluggish market.

The JORC Code is utilized and accepted in Australasia (Australia, New Zealand, and neighboring Islands in the South Pacific). It has been used both as an internal reporting standard by a number of major international mining companies and as a template for countries in the process of developing or revising their own reporting documents, including the United States of America, Canada, South Africa and the United Kingdom/Europe.

The purpose of the JORC Code is to provide a minimum standard for reporting of exploration results, mineral resources and ore reserves in Australasia, and to ensure that public reports on these matters contain all the information which investors and their advisers would reasonably require for the purpose of making a balanced judgment regarding the results and estimates being reported.

Lim said the exchange has received a lot of inquiries from mining firms on the requirements for listing on the exchange. Among these firms, he said, is the Carmen Copper Mines which is owned by Atlas Consolidated Mining.

After being in the doldrums for over a decade, the mining sector has picked up owing to a Supreme Court ruling in December that recognized the constitutionality of the 1995 Mining Act, thus allowing full-foreign ownership of large-scale mining operations in the country.

Lim said the exchange considerably benefited from the mining boom of the 1960’s.

From a market share of 19.9 percent in 1961, the mining sector surged to 78.7 percent of the market’s trading value in seven years.

After 30 years, however, the industry suffered a long slump brought about by a series of political woes, economic frailties and global downtrend.

In 1993, the mining sector only contributed a mere 5.3 percent to the stockmarket’s value and dropped even more to 0.2 percent in 2002.