SA rand
Figures in  million20102009


Cost of sales

 Production costs (a)2 2742 334
 Amortisation and depreciation of mining properties, mine development costs and mine plant facilities249294
 Amortisation and depreciation of assets other than mining and mining related assets (b)3469
 Rehabilitation expenditure (c)35(46)
 Care and maintenance cost of restructured shafts2719
 Employment termination and restructuring costs (d)7110
 Share-based payments (e)3822
 Impairment of assets (f)24952
 Provision for post-retirement benefits12
 Total cost of sales2 9782 756
  (a) Production costs include mine production, transport and refinery costs, applicable general and administrative costs, movement in inventories and ore stockpiles, and ongoing environmental rehabilitation costs as well as transfers to and from deferred stripping. Ongoing employee termination costs are included, however employee termination costs associated with major restructuring and shaft closures are excluded. Production costs, analysed  by nature, consist of the following:  
  Labour  costs, including contractors1 5121 410
  Stores and materials545549
  Water and electricity281210
  Changes in inventory(14)8
  Capitalisation of mine development costs(239)(234)
  By-products sales(1)(1)
  Royalty expense5
  Total production cost2 274 2 334
 (b)Amortisation and depreciation of assets other than mining and mining related assets  
  Other non-mining assets2
  Intangible assets3024
  Amortisation of issue costs245
  Total amortisation and depreciation 3469
 (c)For the assumptions used to calculate the rehabilitation costs, refer to note 3.4 of the Group financial statements.  
 (d) During the 2010 financial year, Brand 3, Harmony 2 and Merriespruit 3 shafts were closed and placed on care and maintenance. The closures contributed to employment termination and restructuring cost. The group also engaged in a voluntary retrenchment process during the year, resulting in additional retrenchment costs.  
 (e)Refer to note 27 for details on the share-based payments schemes operated by the company.  
 (f) Impairments were recognised during the year as a result of shaft closures discussed in 1(d) above as well as the revised business (life-of-mine) plans, which affected Merriespruit 1 shaft. Impairments recorded in the 2009 financial year relates mainly to revised business plans, which included increases in labour and electricity costs.  
  Impairment tests were performed as required by IAS 36, Impairment of Assets, and as a result these impairments were recorded. For assumptions used to calculate the recoverable amount, refer to note 3.1 of the group financial statements.