1. United Nations Framework Classification
Meeting the challenges in total resource development and channelling investments
Charlotte GRIFFITHS
Deputy Director
Sustainable Energy Division
UNECE
UMREK Workshop
Ankara, Turkey, 26–27 January 2017
U M R E K
National Resources and Reserves Reporting Committee

2. UN Regions
UNECE
ESCWA
ESCAP
ECA
ECLAC 2

3. Sustainable Development Goals & Paris Climate Agreement
17 GOALS TO TRANSFORM
OUR WORLD 3

4. UNFC
United Nations Framework Classification for Fossil Energy and Mineral Reserves and Resources 2009
- name change coming soon as part of UNFC revision
Global, generic, principles-based system
Applicable to solid minerals, fluids, renewables (geothermal), injection projects
Based on three criteria
Economic and social viability
Field project status and feasibility
Geological knowledge
Developed by Expert Group on Resource Classification at UN Economic Commission for Europe, Geneva – with a global mandate 4

5. Why is UNFC needed?
Need for common global language for energy and mineral resource estimates
“Terminology chaos”
What are “proved reserves”?
What are “mineral resources”?
Increasing overlap between mining and oil & gas industries
Major issue with respect to “unconventional” resources
CRIRSCO Template (family of codes eg JORC, PERC) designed for mined solids
SPE-PRMS (for petroleum) designed for fluids
Long-term planning (at company and national level)
Need to see total resource base for “sustainability”
Increasing need to be able to compare renewable energy resources with non-renewable resources

6. Proved reserves must be…
Why three criteria…
Proved reserves must be…
Economic to extract (commercially feasible)
Global Physical Resource (defined with high confidence)
Feasible technically
to extract

7. UNFC – How it works E axis categories G axis categories
F axis categories
G axis categories
(General physical confidence)

8. UNFC Class: 111 UNFC – how it works 8 Category Definition E1
Extraction and sale has been confirmed to be economically viable.
UNFC Class: 111
Category
Definition F1
Feasibility of extraction by a defined development project or mining operation has been confirmed.
Category
Definition G1
Quantities associated with a known deposit that can be estimated with a high level of confidence. 8

9. UNFC – examples of classes
E1, F1, G1 9

10. UNFC – sub-categories
The system allows further granularity through sub- categories
Important for discovered sub-economic resources (i.e. helps to understand why they are not reserves and barriers to progression)
These are optional
These sub-classes also align with some mining companies’ reporting practices
If using JORC, PERC etc will allow expansion to cover total resource base

11. UNFC – using sub-categories
UNFC Classes defined by categories and sub-categories
Total commodity initially in place
Extracted
Sales Production
Non-sales Production
Class
Sub-class
Categories E F G
Known Deposit
Commercial
Projects On
Production 1
1.1
1, 2, 3
Approved
for Development
1.2
Justified
1.3
Potentially
Development
Pending 2
2.1
On Hold
2.2
Non-Commercial
Unclarified
3.2
Not Viable
3.3
2.3
Additional quantities in place 4
Potential Deposit
Exploration
[No sub-classes defined] 3
Each criterion is sub-divided into 3 or 4 defined categories
Optional use of sub-categories for more granularity 11

12. UNFC and CRIRSCO Template are aligned
Sales Production
Non-sales Production
Class
Commercial
Projects
Potentially Commercial
Non-Commercial
Additional quantities in place
Exploration
Extracted
Class
Mineral Reserves
Mineral Resources
Not reported
Exploration Target
(quantities not reported)
All remaining resources
Reported
Total commodity initially in place
Not reported 12

13. How can we use alignment?
Quantities can be estimated using current well-established commodity-specific systems e.g. CRIRSCO family of codes (JORC, PERC, etc.)
Reporting under these systems can continue unchanged, but the same quantities can also be reported under UNFC using the numerical codes
UNFC can be used for estimates not covered by CRIRSCO codes and hence cover the full resource base
Reporting is then independent of commodity type, extraction methodology and ambiguous terminology
The systems operate in parallel – they are not competitors

14. UNFC history 1992 1997 2004 2009 Started development of system
UNFC for solid fuels and mineral commodities published
2004
UNFC extended to cover oil, natural gas & uranium
2009
UNFC-2009 published

15. UNFC history continued
2013
UNFC-2009 incorporating Specifications (ECE Energy Series No. 42)
2014
Red Book and UNFC Bridging Document published
2014
Application to renewables started
Renewables specifications
2015
Guidelines for application to nuclear fuels

16. UNFC history continued
2016
Injection Project Specifications
2016
Generic Renewable Specifications
2016
Geothermal Specifcations
2016
Bridging document to Russian Federation Oil & Gas Classification

17. UNFC UNFC stakeholders Governments Creators of energy Industry
management of resources
to provide data and information necessary to deploy technology, management and finance to serve host countries, shareholders and stakeholders
Creators
of energy
& mineral studies
Industry
UNFC
to facilitate formulation of consistent and far-sighted policies
Financial Community
to provide information necessary to allocate capital appropriately so reducing costs

18. Governments (UNECE & non-UNECE)
EGRC
Expert Group on Resource Classification – comprehensive global constituency representing all users of resource information
Academia
Governments (UNECE & non-UNECE)
EGRC
International organizations
Industry
Financial Sector Incl. standard setters
Professional Societies & Associations

19. UNFC Bridged to Russian Federation Working to bridge to Chinese
UNFC – United Nations Framework Classification for Fossil Energy and Mineral Reserves and Resources
Bridged to Russian Federation
Environmental and Social Guidance
Working to bridge to Chinese 19

20. Domains of application of UNFC

21. Government vs corporate reporting
Manage the full resource base
Requirement for both governments and companies
Need to understand both short-term potential (reserves) and long-term potential (discovered and undiscovered resources)
Government reporting externally
Government reporting is variable, but full disclosure of resource base provides a basis for meaningful global studies
Usefulness is currently limited by inconsistent use of terminology (e.g. resources)
Corporate reporting externally
Corporate reporting is appropriately constrained by securities regulators and stock exchanges (e.g. CRIRSCO family of codes)
Main goal is to protect investors and disclosures are constrained
UNFC can become basis for regulatory/public reporting system
Onus on user of estimate (Government, Stock Exchange etc) to provide detailed specifications on assurance process and/or experience of Evaluator 21

22. UNFC evaluator / competent person
UNFC Generic Specification M – “Evaluators must possess an appropriate level of expertise and relevant experience in the estimation of quantities associated with the type of deposit under evaluation.”
Term Competent Person is widely used in association with regulations addressing public corporate resource reporting in the extractive industries.
At its 8th session, April 2017, EGRC will consider providing two guidance notes to support:
- UNFC-2009 Specification for Evaluator Qualifications – Top-level guidance
Competent Person Requirements and Options for Resources Reporting – Detailed guidance on generic requirements for public reporting and disclosures for all commodities

23. Competent person requirements
Competent Person has long been a common facet of stock exchange rules pertaining to public reports issued for a range of company transactions.
EGRC guidance will address requirements related to:
- Estimation of quantities or volumes
- Classification of resources for reporting for (a) national resource management functions (b) public reporting by companies (c) financial reporting functions of companies and (d) internal resource management
Will include options for generic requirements on:
Disclosure and responsibility
Education and experience
Continuous training and licenses
Professional body affiliation etc.

24. Energy needs investment!
Sustainable energy
= USD 1.25 trillion per annum
= 3x current levels 24

25. Comparing energy projects

26. Comparing energy projects

27. Comparing energy projects

28. Ongoing initiatives Specifications and Bridging
Renewable energy projects – Solar, Bioenergy, Wind, Hydro
Anthropogenic resources
China solid minerals and petroleum
Russia solid minerals
Guidelines / Best practice documents
The Nordic UNFC project
Uranium/Thorium
Competent Person
Environmental and social guidance
EU projects: GeoERA, FORAM, COST Minea
Africa: UNFC = African Mineral Resource Management System
Coming: UNFC revision, groundwater?

29. Delivering on SDGs and SE4ALL
Securing affordable and sustainable energy for the future requires a common standard for:
Global communications about energy
Recognition of environmental and social considerations
Developing long-sighted policies for global markets
Government resources management for security and efficiency
Cost effective allocation of financial resources
Industry processes to ensure common understanding of impact of new technologies and optimization of project management decisions
UNFC 29

30. Conclusions Cooperation with Turkey – integral to UNFC development
Long-term planning (at company and national level)
- need to see total resource base for “sustainability”
Aligned to CRIRSCO family of codes
UNFC can be used for regulatory/public reporting
- Onus on user of estimate (Government, Stock exchange etc) to provide detailed specifications on assurance process and/or experience of Evaluator
Aids investors
Global communications tool

31. Questions? Thank you for your attention!
Join the next meeting
of the Expert Group on Resource Classification
"Beyond classification: managing resources sustainably”
Palais des Nations, Geneva, Switzerland 25–28 April 2017
Thank you for your attention!