Critical accounting estimates and judgements



Estimate of exposure and liabilities with regard to rehabilitation costs

  Estimated long-term environmental obligations, comprising pollution control, rehabilitation and mine closure, are based on the group’s environmental management plans in compliance with current technological, environmental and regulatory requirements.
  Significant judgement is applied in estimating ultimate rehabilitation cost that will be required in future to rehabilitate the group’s mines. Ultimate cost may significantly differ from current estimates.
  Management used an inflation rate of 6.23 % (2009: 6%) and the expected life of the mines according to the life-of-mine plans in the calculation of the estimated net present value of the rehabilitation liability. The discount rates used for the calculation are dependent on the shaft’s life of mine and are as follows: for 12 months – 6.75% (2009: 6.75%); for 1 – 5 years – 8% (2009: 8.25%); for 6 – 9 years – 8.5% (2009: 8.25%) and for 10 years or more – 9% (2009: 8.75%). These estimates were based on recent yields determined on government bonds.