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Exxaro Resources Limited
Group and company annual financial statements for the year ended 31 December 2020
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Currently viewing: | 13.3 Provisions | Next: 13.4 Contingent liabilities

CHAPTER 13:Provisions and contingencies

13.3

PROVISIONS
 
Group 
Environmental rehabilitation 
Note  Restoration 
Rm 		 Decommis‑ 
sioning 
Rm 		 Residual 
impact 
Rm 		 Other site 
closure 
costs 
Rm 		 Other1
Rm  		 Total 
Rm 
At 31 December 2020 
At beginning of the year  2 432  544  1 345  83  4 404 
(Reversal)/charge to operating expenses  6.1.3  (60) (85) (986) 14  17   (1 100)
– Additional provisions  316  14  44  16  17   407 
– Unused amounts reversed2  (376) (99) (1 030) (2) (1 507)
Unwinding of discount rate on rehabilitation costs  12.1.2  169  44  92  305 
Provisions capitalised to property, plant and equipment  10.1.3  (88) (88)
Utilised during the year  (18) (3) (16) (3)  (40)
Reclassification to non-current liabilities held-for-sale  (467) (52) 576  (2) 55 
Acquisition of subsidiaries  8.3  6  29  4  39 
Transfer of operation  8.6  (642) (97) (705) (1 444)
Total provisions at end of the year  1 420  295  323  79  14   2 131 
Non-current  1 284  295  300  60  7   1 946 
Current  136  23  19  7   185 
1 Relates to a constructive obligation created with certain BEE minorities within the Cennergi group to receive distributions in proportion to their percentage interest prior to their in-substance share options being exercised.
2 The residual impact includes an adjustment to the EMJV environmental rehabilitation provision, amounting to R818 million. 
Group 
Environmental rehabilitation 
Note  Restoration 
Rm 		 Decommis‑ 
sioning 
Rm 		 Residual 
impact 
Rm 		 Other site 
closure 
costs 
Rm 		 Total 
Rm 
At 31 December 2019 
At beginning of the year  2 516  451  975  80  4 022 
(Charge)/reversal to operating expenses  6.1.3  (244) 52  301  18  127 
– Additional provisions  374  56  403  19  852 
– Unused amounts reversed  (618) (4) (102) (1) (725)
Unwinding of discount rate on rehabilitation costs  12.1.2  228  47  139  414 
Provisions capitalised to property, plant and equipment  10.1.3  (4) (4)
Utilised during the year  (58) (15) (73)
Reclassification to non-current liabilities held-for-sale  (4) (69) (73)
Loss of control of subsidiary  8.6  (6) (2) (1) (9)
Total provisions at end of the year  2 432  544  1 345  83  4 404 
Non-current  2 366  544  1 334  61  4 305 
Current  66  11  22  99 
Company 
Environmental 
rehabilitation 
Note  Restoration 
Rm 		 Other site 
closure 
costs 
Rm 		 Total 
Rm 
At 31 December 2020 
At beginning of the year  37  37 
Reversal to operating expenses  6.1.3  (3) (3)
– Unused amounts reversed  (3) (3)
Unwinding of discount rate on rehabilitation costs  12.1.2  3  3 
Utilised during the year  37  37 
Total provisions at end of the year  37  37 
Non-current  37  37 
At 31 December 2019 
At beginning of the year  36  2  38 
Reversal to operating expenses  6.1.3  (2) (1) (3)
– Unused amounts reversed  (2) (1) (3)
Unwinding of discount rate on rehabilitation costs  12.1.2  3  3 
Utilised during the year  (1) (1)
Total provisions at end of the year  37  37 
Non-current  37  37 
Funding

The FPR contains funding requirements in the form of financial guarantees as well as trust funds. Exxaro has financial guarantees per mine which are ceded to the DMRE, as well as environmental trust funds.

Group
At 31 December Note 2020
Rm		 2019
Rm
Estimated unscheduled restoration and decommissioning closure costs   (6 058) (7 065)
Estimated unscheduled post-closure residual impact costs (952) (2 475)
Total environmental provisions (2 038) (4 321)
Present value of unscheduled restoration and decommissioning costs discounted over LoM   (1 715) (2 976)
Present value of unscheduled post-closure residual impact costs discounted over LoM and five years of rehabilitation   (323) (1 345)
Environmental rehabilitation funds in trust1 10.3.2 1 337 2 039
Financial guarantees ceded to the DMRE2 13.4 3 696 3 994
Current funding excess 2 995 1 712
1 2020: Excludes an amount of R296 million which is being held in trust on behalf of Arnot OpCo until they have established an environmental rehabilitation trust fund of their own that’s approved by the DMRE.
2 2020: Excludes an amount of R543 million which relates to the operational guarantees for the ECC operation that was reclassified to non-current assets as held-for-sale.

Exxaro Resources Limited Group and company annual financial statements for the year ended 31 December 2020