In its third triennial report, KPMG said that while financial reporting had improved for 44 of the mining companies surveyed since the last reporting survey in 2003, investors were still seeking consistency in how financial reports and its information were presented.

The adoption last year of the ‘International Financial Reporting Standards’ (IFRS) has seen marked improvements in mining companies’ reports, together with the reduction of the national ‘Generally Accepted Accounting Principles’ (GAAP), but had still not removed the various methods in presenting reports.

“The impetus for an international standard is driven by the capital markets needing the most reliable information possible,” partner in KPMG’s energy and natural resources Alison Kitchen said.

“Much progress has been made to enable users to better understand the numbers, but more is needed if the mining industry is to continue to receive capital markets’ support.”

Reporting of changes to reserves and resources, qualitative and quantitative data and financial instruments were all key areas over which investors were still seeking clarity.

While the survey found that 91% of mining companies – an increase from 78% in 2003 – disclosed the reserve and resource data in annual reports, the information is still presented in different ways depending on the reporting jurisdiction.

KPMG said that while there was a move to more quantitative data and reporting of sensitivities in some areas, it was still inconsistent in breadth and depth. Additionally, many companies were reporting on part of the risks associated with management of commodity price, exchange rate and interest.

However, reporting in mine closures and rehabilitation liabilities in full increased from 33% in 2003 to 93%, while there was a marked improvement – from 32% in 2003 to 59% - in the disclosure of stripping costs and laybacks in open pit mines.

Also noticeable was the prevalence of corporate social responsibility with the ‘Global Reporting Initiative’ providing the framework for such reporting.

“The industry has made great strides in developing its own reporting guidelines, prompted somewhat by the gradual convergence of IFRS and GAAP – and for that it should be applauded,” Kitchen said.

“However, if external stakeholders are truly to get a better picture of how the industry is faring, then a greater degree of consistency across its financial reporting principles is required sooner rather than later.”