XML 221 R16.htm IDEA: XBRL DOCUMENT v3.22.2.2
PROVISION FOR ENVIRONMENTAL REHABILITATION
 12 Months Ended
Jun. 30, 2022
Provision for environmental rehabilitation [abstract]  
PROVISION FOR ENVIRONMENTAL REHABILITATION
11
 
PROVISION FOR ENVIRONMENTAL
 
REHABILITATION
SIGNIFICANT ACCOUNTING ASSUMPTIONS AND ESTIMATES
Estimates of future environmental
 
rehabilitation costs are determined
 
with the assistance of
 
an independent expert and
 
are based
on the
 
Group’s environmental
 
management plans
 
which are developed
 
in accordance
 
with regulatory
 
requirements, the
 
life-of-
mine plan
 
(as discussed
 
in note 9)
 
which influences
 
the estimated
 
timing of
 
environmental rehabilitation cash
 
outflows and
 
the
planned method of rehabilitation which in turn is influenced by developments in trends and technology.
An average nominal discount rate ranging
 
between
10.2
% and
10.3
% (2021: between
8.9
% and
9.0
%), average inflation rate of
5.5
% (2021:
5.2
%) and
 
the discount
 
periods as
 
per the
 
expected life-of-mine
 
were used
 
in the
 
calculation of
 
the estimated
 
net
present value of the rehabilitation liability.
ACCOUNTING POLICIES
The net present value of the
 
estimated rehabilitation cost as at reporting
 
date is provided for in
 
full. These estimates are reviewed
annually and are
 
discounted using a
 
pre-tax risk-free rate
 
that is adjusted to
 
reflect the current
 
market assessments of
 
the time
value of money and the risks specific to the obligation.
Annual changes
 
in the
 
provision consist
 
of financing
 
expenses relating
 
to the
 
change in
 
the present
 
value of
 
the provision
 
and
inflationary increases in the provision, as well as changes in estimates.
The present value
 
of dismantling and
 
removing the asset
 
created (decommissioning liabilities)
 
are capitalised to
 
property,
 
plant
and equipment against an increase in the rehabilitation provision. If a decrease in the liability exceeds the carrying
 
amount of the
asset, the excess is recognised in profit or loss. If the asset value is increased and there is
 
an indication that the revised carrying
value is not
 
recoverable, an impairment
 
test is performed
 
in accordance
 
with the accounting
 
policy dealing with
 
impairments of
property,
 
plant
 
and
 
equipment.
 
Over
 
time,
 
the
 
liability
 
is
 
increased
 
to
 
reflect
 
an
 
interest
 
element,
 
and
 
the
 
capitalised
 
cost
 
is
depreciated over the life of the related asset. Cash costs incurred to
 
rehabilitate these disturbances are charged to the provision
and are presented as investing activities in the statement of cash flows.
The present value
 
of environmental rehabilitation
 
costs relating to
 
the production of
 
inventories and sites
 
without related assets
(restoration liabilities) as well as changes
 
therein are expensed as incurred and
 
presented as operating costs within cost
 
of sales.
Cash costs incurred
 
to rehabilitate these
 
disturbances are presented
 
as operating activities
 
in the statement
 
of cash flows.
 
The
cost of ongoing rehabilitation is recognised in profit or loss as incurred.
Amounts in R million
Note
2022
2021
Opening balance
 
570.8
568.9
Unwinding of provision
7
45.0
44.7
Change in estimate of environmental rehabilitation recognised in profit or loss
5.1
(2.2)
(12.4)
Change in estimate of environmental rehabilitation recognised to decommissioning asset (a)
9
(67.2)
26.4
Environmental rehabilitation payments (b)
(28.7)
(56.8)
To
 
reduce decommissioning liabilities
(25.4)
(51.0)
To
 
reduce restoration liabilities
14
(3.3)
(5.8)
Closing balance
517.7
570.8
Environmental rehabilitation payments to reduce the liability
(28.7)
(56.8)
Ongoing rehabilitation expenditure
 
1
23
(31.6)
(48.3)
Total
 
cash spent on environmental rehabilitation
(60.3)
(105.1)
1
 
The Group also performs ongoing environmental rehabilitation
 
arising from its current activities concurrently with production.
 
These costs do
not represent a reduction of the above liability and
 
are expensed as operating costs
Change in estimate of environmental rehabilitation recognised to decommissioning asset
During the
 
current year,
 
updates were
 
made
 
to the
 
Ergo life
 
of mine,
 
resulting in
 
the inclusion
 
of the
 
Daggafontein TSF
 
as a
Mineral Reserve on
 
a planned basis
 
increasing the life
 
of mine. During
 
the current year,
 
updates were also
 
made to the FWGR
life of mine, changing the expected timing of environmental rehabilitation cash outflows.
(b)
 
Environmental rehabilitation payments
38ha of
 
the Brakpan/Withok
 
TSF,
 
3ha of
 
the Daggafontein
 
TSF and
 
17ha of
 
the Driefontein
 
4 TSF
 
were vegetated
 
during the
year.
GROSS COST TO REHABILITATE
The
 
Group
 
estimates
 
that,
 
based
 
on
 
the
 
life
 
of
 
mine
 
plan
 
and
 
current
 
environmental
 
and
 
regulatory
 
requirements,
 
the
 
total
undiscounted rehabilitation cost is approximately R
815.1
 
million (2021: R
742.2
 
million).