20 | Provision for environmental rehabilitation | | |
| | The company’s mining and exploration activities are subject to extensive environmental laws and regulations. These laws and regulations are continually changing and are generally becoming more restrictive. The company has made, and expects to make in the future, expenditures to comply with such laws and regulations, but cannot predict the full amount of such future expenditures. Estimated future reclamation costs are based principally on legal and regulatory requirements. The following is a reconciliation of the total liability for environmental rehabilitation: | | |
| | | | |
| | Provision raised for future rehabilitation | | |
| | Balance at beginning of year | 314 | 351 |
| | Change in estimate – Balance sheet | 28 | (14) |
| | Change in estimate – Income statement | 35 | (46) |
| | Additions | 69 | – |
| | Time value of money and inflation component of rehabilitation costs | 32 | 23 |
| | Total provision for environmental rehabilitation | 478 | 314 |
| | | | |
| | While the ultimate amount of rehabilitation costs to be incurred in the future is uncertain, the company has estimated that, based on current environmental and regulatory requirements, the total cost for the mines, in current monetary terms, is approximately R613 million (2009: R422 million). Refer to note 3.4 of the group financial statements for estimations and judgements used in the calculation. | | |
| | | | |
| | Included in the charge to the income statement is an amount R4 million (2009: R6 million) relating to the time value of money. | | |
| | | | |
| | Future net obligations | | |
| | Ultimate estimated rehabilitation cost | 613 | 422 |
| | Amounts invested in environmental trust funds (refer to note 11) | (225) | (212) |
| | Total future net obligations | 388 | 210 |
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| | The company intends to finance the ultimate rehabilitation costs from the money invested with environmental trust funds, ongoing contributions, as well as the proceeds on sale of assets and gold in lock-up from plant clean-up at the time of mine closure. The company has guarantees in place relating to the environmental liabilities. Refer to notes 10 and 28. | | |