On October 1, the Society for Mining, Metallurgy and Exploration (SME) filed a Petition for Rulemaking with the US Securities and Exchange Commission (SEC) to amend Industry Guide 7, which contains the SEC’s basic disclosure policy for mining companies. The SME said: “The SEC’s Industry Guide 7 has become increasingly outdated and out-of-sync with mineral reporting and disclosure standards used in the rest of the world. US mining companies and their investors have suffered as a result.”

“SME and the mining industry have been working diligently with the SEC for over eight years to try to clarify and update Guide 7 to no avail,” said SME Executive Director David Kanagy. “It is vital for the SEC to move forward in the near-term to realign the U.S. reporting regime for mining companies, both for the protection of investors and for the removal of competitive harm to US mining companies,”  

Specifically, SME’s petition requests the SEC to institute changes to Industry Guide 7 to address the following issues:

• Mining, as an increasingly international industry, has developed comprehensive, uniformly accepted and understood standards for the reporting of exploration results, mineral resources and mineral reserves. Industry Guide 7 is substantially different from these standards and hampers US mining companies in communicating with their investors and in coordinating disclosures in multiple jurisdictions.
• Mining companies and investors around the world consider mineral resource estimates as material and fundamental information about a company and its projects. Industry Guide 7’s prohibition on the reporting of mineral resources as such in SEC reports limits the completeness and relevance of SEC reports for investors. The SEC’s practice of allowing disclosure of mineral resource estimates in press releases and on websites, with no guidance or standards as to how mineral resource information should be reported, creates confusion and fails to ensure the quality and reliability of the information provided.
• Industry Guide 7 discourages mining companies from listing in the US. This harms US stock exchanges, financial markets and the overall economy. In the current environment, reforming Industry Guide 7 would be a substantial step in supporting the US mining industry and advancing economic growth and job creation in the US.