AEG Recommendations on
Mineral Exploration
UN STATISTICS DIVISION
Economic Statistics Branch
National Accounts Section
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Treatment in 1993 SNA

“mineral exploration” as a category of
produced fixed asset.

“subsoil deposits’ as a category of nonproduced assets.

Exploration, whether successful or not, is
treated as gross capital formation.
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Calls for review of present treatment

Is the exploration activity separable from
the value of the asset?

How to measure exploration activity?
How to value the deposit?


How to record payments by the extractor to
the legal owner of the deposit?

In whose balance sheet is the deposit
recorded?
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Since 1993

SEEA examined these questions in depth
and made detailed proposals.

Canberra-II Group scrutinised the SEEA
and confirmed that the 1993 SNA needed
clarification but not substantive change.
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AEG decisions:


Exploration activity is separable from
deposits
The group agreed to maintain a
distinction between:
•
•
‘mineral exploration and evaluation’ as a
produced asset and
the mineral deposit as non-produced assets.
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AEG decisions: Mineral exploration
and evaluation

Change the item “mineral exploration” to
“mineral exploration and evaluation” to
make SNA compatible with the IASB
coverage of this item.

Agreed that “mineral exploration and
evaluation” is market production to be
valued either at market prices, if
purchased, or as the sum of costs plus
mark-up, if produced on own-account.
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AEG decisions: How to value
deposits


•
•
•
There are 3 options to value deposits:
Present value of net returns from exploitation
Market prices (seldom available)
Owner’s valuation
The group agreed that the preferred valuation
for mineral deposits, market price, is seldom
available. In default, the deposit should be
valued as the present value of future receipts
of resource rent.
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Decision on payments to owner of
deposit

In principle, payments by the extractor to the owner of
the deposit are property income.

However, when the owner is government and the
payments are described as taxes, adhering to this
principle introduces a discrepancy between taxes in
the SNA and in government accounts. This needs
further consideration.

The question of attribution of the ownership of a
deposit extracted by a unit not the legal owner is
deferred to a future meeting when leases and licenses
will be discussed more generally.
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Thank You
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