Reliability of Reserves posted on the IDX.

Reliability of Reserves posted on the IDX.   (Vol 103)


A mining company’s principal source of income is its license to explore, mine and sell the coal or minerals from its tenements. This income is entirely dependent on the reliability and quality of the reserve statement, and an investors decision to buy or sell shares may be influenced by their confidence in the company’s assurance that such reserves are secure. A review of the 2017 – 2018 annual reports of companies listed on the mining board of the Indonesia Stock Exchange (IDX) was undertaken to get an appreciation of the reliability of reserves as reported in these annual reports. The overall responsibility of the annual report posted on the IDX is with the company directors, but the reliability of reserves is also a reflection of the Competent Person that should have prepared the material for stating the resources & reserves.


Responsibility of Annual Reports.

The Annual reports are made up of a descriptive document developed by the company directors and acknowledged by the commissioners, plus a financial report prepared and signed-off by a consultant auditor which is accepted by the company directors. Information on the company’s coal and/ or mineral resources & reserves, plus reference to the professional reporting code, can typically be found in the descriptive and financial parts of the annual report. All responsibility for the content and accuracy of the annual report lies with the directors.

  1. A) IDX requirements.

The Indonesian Stock Exchange (IDX) Rule number 1-A.1 on the listing of shares for mining companies requires at least one director to have a background education in engineering, and having at least 5-7 years managerial work experience in mining companies. The Rule also requires the company to have proven and probable reserves based on the report of a Competent Person, and a statement from the Competent Person stating that the data in the Feasibility Study is still relevant within a 1 year prior to listing.  This Rule defines a Competent Person as; Competent Person is an independent party which is registered with the professional organizations in the field of mining and or geology, which exercise its expertise based on standards established by the relevant authorities, or published by professional organizations either domestic or overseas.” The rules for ongoing annual reports do not contain specific requirements to include one director as an engineer, nor have ongoing resource & reserve reports signed off by a Competent Person. However, we might consider companies that do not extend these listing rules into annual reports to be considered as having less credible resources & reserves.

The Decision of Chairman of Capital Market Supervisory Agency No. KEP-38/PM/1996 about Annual Reports sets our regulation No. VIII.G.2 the contents for annual reports. Section 3.b.1 states that reports should not be misleading. It is herein suggested that this non-misleading requirement could be best complied with by including a Competent Person’s sign-off on each year’s resources & reserve statements. The format of the sign-off should also fully comply with the appropriate professional reporting code rules. Section 3.b.2.f requires a specific explanation of material information. Section 3.d requires such other information to be analyzed and discussed. Section 3.d.8 requires information about business risk. It is here in suggested that a specific explanation including material information, analysis and business risk associated with the resources & reserves is best delivered in-part by the Competent Person.

  1. B) Professional Competent Person Codes.

The Indonesian Competent Person reporting code (KCMI) of year 2011 is applicable until September 2019, wherein the 2017 version becomes the new compulsory standard. These codes are similar to the JORC code of 2004 and 2012 for reporting by Competent Persons. The codes main principals are transparency, materiality and competency. The codes include instructions on all forms of public reporting that are to be complied with.  The codes state “The Company’s Public Report concerning Exploration Results, Mineral Resources or Ore Reserves is the responsibility of the Company’s Board of Directors. All such reports should be based on, and reasonably reflect the information and supporting documents prepared by one or several “Competent Persons Indonesia” (CPI). A company publishing a Public Report must announce the name or names of the CPI, stating whether the CPI is a permanent employee of the company, and if not, it should include the name of the company to which the CPI works. Such reports may be issued with the written permission of one or several CPIs regarding the form and content of the report”. The codes go on to give some examples of appropriate wording that should appear in the public report reflecting the compliance with these reporting codes. The codes continue with setting out specific terminology and report requirements to avoid misleading the public readers. The Canadian CIM NI43-101 code is similar. In Australia & New Zealand the law requires public reporting of exploration results, resources & reserves to comply with the JORC code, and more stringent laws apply in Canada for compliance with the NI32-101 code. At present the Indonesian law does not support the KCMI code, but recognizes the SNI code and a separate form of Competent Person for reporting to the Government (not public reports). The KCMI 2017 code is recognized by the international body of CRISCO, that registers the various national resource & reserve reporting codes. The IDX has a MOU with the professional associations that developed and manage the KCMI code (IAGI and PERHAPI) for professional compliance of mining IPO prospectus prior to launching. This MOU does not extend to reviewing annual reports after the IPO is completed.

Annual reports that do not follow such industry “best practices” (compliance with IDX reporting regulations and professional reporting codes) may be seen by the public as having less credibility for their resources & reserves.


Data Source.

As of 13 May 2019, there are 47 Mining companies listed on the IDX. The criteria for listing on the mining board is that such companies receive more than 50% of their income from mining related activities. Therein some larger conglomerates that have mines, but are not listed on the mining board, are not reviewed herein. As at 13 May 2019, some 7 of the 47 companies had not yet provided their 2018 annual report, wherein this review included these 2017 annual reports. Fourteen (14) of these company’s business activities are related to the oil & gas industry or mining services that do not have coal, mineral or rock resources or reserves, and are excluded, leaving 31 mining companies for this review. Many of the companies have multiple projects, some of which are at different stages of development (exploration, feasibility, production), wherein the declared resource & reserve information can vary, and the Competent Person (CP) may report on only some projects. A different CP may be engaged for different projects at different times. The reader of this review is recommended to examine each company and each project carefully to decide for themselves on the credibility of reporting for resources & reserves. The names of the CP and the director assumed as acting in the engineer role were checked against CP registered with IAGI & PERHAPI and the AusIMM to verify their CP status. Note that a few AusIMM members have elected to not have their names on the published list of members.


Summary Table.

  • The first four (4) columns give the company IDX code, company name, year of annual report and commodities. Multiple projects are indicated with an X.
  • The next four (4) columns give the resources & reserve reporting Code, the actual year for the reporting of resources & reserves, the name of the Competent Person and their membership of professional association. Note that in many cases the competent person is not named, wherein the consulting companies name is inserted.
  • The last three (3) columns gives the director with engineering background, the field of their degree, and their professional association (AusIMM, PERHAPI, IAGI). Note that in some cases several directors in one company hold appropriate engineering degrees.



  • The companies that had failed to lodge their 2018 annual report by the first deadline (3 months after end of financial year) may reflect issues with management. Typically, these companies have not reported their resources & reserves in the 2017 report, which may reflect issues in not getting a competent person to complete a satisfactory report.
  • Many companies have multiple projects, and in some cases have different commodities. Different commodities typically each require a separate competent person.
  • Some Annual reports do not define a professional code for the resources & reserves. Others mention JORC (without specifying the date), JORC 2012, or KCMI (no date) or with date 2011 or 2017. In one case the Canadian NI43-101 code is used. The correct reference to the code is a reflection on the director’s attention to reporting pertinent details, and possibly lack of consultation with the competent person in preparing the report.
  • The year of the resource & reserve statement is typically the same as the Annual report, though in some cases it applies for earlier years. Many companies seem to take their earlier resource & reserve reports and simply deduct production since that earlier reserve report to arrive at the 2018 remaining reserves. Unless a suitable modeling and survey reconciliation is properly undertaken, this is NOT a recommended method for a competent person. In such cases, the mining and production losses, plus other factors may affect the remaining reserves. The annual reports typically fail to specify, in some detail, how the adjustments were undertaken.
  • The name of the Competent Person is occasionally listed, but in many cases only the consulting company that undertook the resource & reserve report is mentioned. These consulting companies may not use the same competent person for each project, wherein it is not easy to cross check who was the assigned competent person. The broad industry, and institutional investors, often recognize that one competent person may be considered better than a different competent person, and so reflect on the reliability of the stated resources & reserves.
  • The names of the competent person were checked against current registers from the appropriate professional associations (except where Canadian & AIG were not available for this review). It is possible that older reports were properly undertaken by competent persons who have since ceased to become members of their professional associations, and such old reports may be accepted. In cases where no current professional association can be confirmed, then caution may be advised when considering such resource & reserve reports.
  • The technical directors, and their formal degrees are listed. The annual reports do not specify if they are the nominal compliance director with suitable engineering degree as required for listing a mining company.
  • Some of the technical directors are members of AusIMM/ IAGI / PERHAPI wherein it may be assumed those directors will strive to uphold the principals of transparency, materiality and competency.

The overall finding is that no IDX mining companies annual report is fully compliant with regards the professional codes requirements on public reporting.


Geological & Mining Risk.

The reliability of reserves being available for production comes with a further qualifier of geological and mining risk. This review found only one (1) company specifically mentioned geological risk, and several addressed the weather that can be a part of mining risk. In some cases, the reports (including financial) mentioned operational risk in reference to the variance in assumptions used to develop economic models of the feasibility study or ongoing production plans. This is not what a competent person would recognize as being a significant geological or mining risk. All annual reports are required by regulation to report on  financial risk, price risk, currency risk, and the companies usually report on legal, environment, health and safety, security risks. Many annual reports devote chapters to their risk committee, risk assessment and abatement programs. A few go further on the theory of defining risks as being low-moderate – high impact and frequent, often, seldom and rare in frequency. It seems none of these annual reports mention the rare frequency and very high impact that is typically associated with some geological and mining risks. Even one annual report that mentioned a highwall failure in a previous year that devastated the company’s performance for more than a year did not discuss such geological or mining risks. The world wide mining industry has seen the devastating impact of tailings dam failures, regional flooding. These (and other) geological & mining failures are happening, or are being actively prevented (e.g. dewatering mine face, monitors installed to check movement in mine faces etc.) on a local level each year in Indonesia, but are typically not addressed in these annual reports. Competent Persons in geotechnical engineering, in mining and other disciplines are herein recommended to contribute to the mining industries annual reports, to better determine the risk profile of these companies.



This review and associated table may reflect on the overall professionalism of a listed company, and could contribute to a comparative rating of such mining companies. It is hoped this review may prompt the mining companies to improve their professional compliance in future reports of resources & reserves. It is hoped this review will further encourage the professional associations that support the KCMI reporting code, and the IDX, to work together to improve the required reporting standards for public reporting in Indonesia.

Overall the reliability of resources & reserves posted on the IDX would seem to be well behind Australia and Canada where there is strong public participation in their stock exchange, and strong supportive regulations on reporting. The recent Jakarta Post article “IDX, BPJS team up to deepen financial market” is encouraging that the IDX is seeking to broaden public participation in the stock exchange market. A broader participating public shall open up the stock market to greater public scrutiny, and this could lead to law suits where directors fail to fully report on the companies reserves and risks.

A broader market should also lead to an updating of market reporting rules. We see digital platforms such as Facebook are increasingly required by public opinion and regulation to police their platforms to block inappropriate content. We may expect the IDX platform to modernize its responsible outlook, in taking a greater role in policing its listed companies to provide more transparency, materiality and competency from company reports.


Table 1. Data on Resources & Reserves annual reporting 2017 – 2018 IDX mining board.  


IDX code Company Report


Mineral Code Year of R/R report CP name Member


Technical Director Formal degree Dir is CP/


1 ADRO Adaro Energy 2018 Coal X


JORC 2012





Joseph Crisostomo

Yansen Palobo

Peter Mucalo





Chia Ah Hoo Civil Eng
2 ANTM Aneka Tambang 2018 Bauxite, Ni  & Gold X


JORC 2012 2018 Bronto Sutopo AusIMM Sutrisno Tatetdagat Mining Eng
3 ARII Atlas Resources 2018 Coal X




2018 Internal experts &

NRM 2018

Britmindo 2013

SRK 2012

Hans J. Kaschull

Joko K. Sulistyono

Ika Riawan

Mining BSC

Mining Eng.

Eng Geology



4 ATPK ATPK Resources 2018 Coal X


Reserve number given. No data found Bagus Dwinanta Saleh


Geological Eng
5 BORN Borneo Lumbung Energi & Metal 2017 Coal X


JORC 2013 No data found
6 BOSS Borneo Olah Sarana Sukses 2018 Coal JORC 2012 2018 No data found Reza Pranata


Mining Eng.
7 BSSR Baramulti Suksessarana 2018 Coal X


Not found stated reserve. Soelendro Atmosoetjipto


Mining Eng.
8 BUMI Bumi Resources 2018 Coal X


Zinc & Gold


One coal

No code for minerals


No data found


No data found.

Haiyong Yu Mining Eng.
9 BYAN Bayan Resources 2018 Coal X


JORC 2012 2016


Runge Minarco

New resources Mine Consult

Witoro Soelarno


Mining Eng.
10 CITA Cita Mineral Investindo 2018 Bauxite X


JORC 2012 2011



PT.Geomine Andalusite

Aroma Citragading

Robby Rafianto Geological Eng. AusIMM/IAGI
11 CKRA Cakra Mineral 2017 Zircon & Iron sands Not found stated reserve.
12 CTTH Citatah 2018 Marble Not found stated reserve.
13 DKFT Central Omega Resources 2018 Nickel X



No code stated. 2018 Artha Tyhi Mineral

Bumi Konawe Abadi

Mulia Pacific Resources

Itamatra Nusantara

Andi Jaya Chemical Eng.
14 FIRE Alfa Energi Investama 2018 Coal X


No code stated. 2016 Sinar Peridotindo Utama. Ishak Rahman


Civil Eng.
15 GEMS Golden Energy Mines 2018 Coal X


JORC 2018 Salva Mining PL. Biddala Reddy Mining Eng.
16 GTBO Garda Tujuh Buana 2018 Coal 2018 Mineserve Citra Teknik Octavianus Wenas Operations Dir.
17 HRUM Harum Energy 2018 Coal X


Not found stated reserve. Eddy Sumarsono.

Kenneth Thompson

Mining Eng.

Mining Eng.

18 INCO Vale Indonesia 2018 Nickel CIM NI43-101 &


No data found No mining / geology/ engineer.
19 INDY Indika Energy 2018 Coal JORC 2017 Runge Pincock Minarco No mining / geology/ engineer.
20 ITMG Indo Tambangraya Megah 2018 Coal JORC 2018 Bramantya Putra.

Ignatius Wurwanto.

Padungsak Thanakij



Mining Eng.

21 KKGI Resources Alam Indonesia 2018 Coal JORC 2012 2018 Britmindo Singapore PL. Winanto Geology Eng. IAGI/
22 MBAP Mitrabara Adiperdana 2018 Coal Not found stated reserve. Syadaruddin Geology Eng.
23 MDKA Merdeka Copper Gold 2018 Gold JORC 2012 Robert Spiers.

Kari Smith

Adam Moroney




Colin Moorhead Geology AusIMM
24 MITI Mitra Investindo 2018 Oil & Gas


Not found stated granite reserve.
25 PSAB J Resources Asia Pasifik 2018 Gold JORC 2012 &KCMI 2017 2018 Behre Dolbear Australia PL Colin Davies Geologist
26 PTBA Tambang Batubara Bukit Asam 2018 Coal No code stated. 2018 Joko Pramono Mining Eng. AusIMM
27 SIAP Sekawan Intipratama 2017 Coal & Stone JORC LAPI ITB Christian Ponto Geologist
28 SURE Super Energi 2018 Coal X


JORC 2011



Mining One PL

Roza Putra.


Achmad Hawadi

Mining Eng.




29 TINS Timah 2018 Tin &

Coal &Ni

No code stated Riza Tabrani

Muhammad Rizki



30 TOBA Toba Bara Sejahtra 2018 Coal JORC 2012 2018 Sudharmono Saragih. Mining Eng.
31 ZINC Kapuas Prima Coal 2018 Pb & Zn JORC 2012 2016 SMGC Padli Noor Civil Eng.

* X = Multiple Projects.