| | | 27 | Provision for environmental
rehabilitation | | |
| | | | The group’s mining and exploration activities are subject to extensive environmental laws and regulations. These laws and regulations are continually changing and generally becoming more restrictive. The group 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 | | |
| 1 523 | 1 530 | | Balance at beginning of year | 198 | 196 |
| (294) | (45) | | Disposal of assets | (6) | (32) |
| 207 | 56 | | Change in estimate – Balance sheet | 7 | 27 |
| 3 | 28 | | Change in estimate – Income statement | 4 | – |
| – | 128 | | Additions to assets | 17 | – |
| 120 | 118 | | Time value of money and inflation component of rehabilitation costs (a) | 16 | 13 |
| (29) | (4) | | Translation | 2 | (6) |
| 1 530 | 1 811 | | Balance at end of year | 238 | 198 |
| – | (119) | | Disposal groups classified as held for sale | (16) | – |
| 1 530 | 1 692 | | Total provision for environmental rehabilitation | 222 | 198 |
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| | | |
(a) | Includes both continuing and discontinued operations. During the financial year 2010 the group recognised time value of money credit adjustments of R17 million relating to both the sale of Big Bell and reclassification of Mount Magnet to held for sale. | | |
| | | | | | | |
| | | | While the ultimate amount of rehabilitation costs to be incurred in the future is uncertain, the group has estimated that, based on current environmental and regulatory requirements, the total cost for the mines, in current monetary terms, is approximately R2 644 million (US$346.6 million) (2009: R2 203 million (US$285.4 million)). Refer to note 3.4 for the estimations and judgements used in the calculations. | | |
| | | | | | | |
| | | |
Included in the charge to the income statement is an amount of R26 million (US$3 million) (2009: R33 million (US$4 million)) relating to the time value of money. | | |
| | | | | | | |
| | | | Future net obligations | | |
| 2 203 | 2 644 | | Ultimate estimated rehabilitation cost | 347 | 285 |
| (1 597) | (1 702) | | Amounts invested in environmental trust funds (Refer to note 19) | (223) | (207) |
| 606 | 942 | | Total future net obligations | 124 | 78 |
| | | | The group intends to finance the ultimate rehabilitation costs from the money invested in environmental trust funds, ongoing contributions, as well as the proceeds on sale of assets and gold from plant clean-up at the time of mine closure. The group has guarantees in place relating to the environmental liabilities. Refer to notes 19 and 36. | | |