Planning for closure

Since all mines will eventually fully exploit their Mineral Resources and Ore Reserves and cease operating, it is imperative that planning for closure should begin at the outset of every project.

Closure, which is an integral part of every operation’s life cycle, includes the assessment of associated liability costs and the assurance of adequate financial provision to cover these costs, as well as optimised planning to ensure closure costs are minimised. For various reasons – a decline in the gold price, excessive cost inflation, labour issues, political risk, safety or environmental issues – mining operations may be halted, either temporarily or permanently, before their Mineral Resources and Ore Reserves are fully depleted.

AngloGold Ashanti is committed to rehabilitation and to leaving a positive legacy once mining has ceased.

The AngloGold Ashanti Closure Planning Team works closely with all levels of the business and disciplines – from engineering to finance – to improve the integration of closure planning and its implementation into daily business activities, beginning at the very start of operations and projects.

Integration takes into account the end use of land and, where applicable, open pits, the design and construction of waste rock dumps to maximise the opportunity for progressive rehabilitation and the incorporation of sustainable livelihood development into each operation’s community investment programmes.

Closure affects various stakeholders – such as local communities and suppliers – on whom it may have significant and long-lasting impacts. The management of community expectations is thus critical to the closure strategy, and livelihood preservation and infrastructure support are important considerations in closure planning. Local people employed by the company may receive education and training, enabling them to seek viable employment or livelihood alternatives.

Communities also require information on rehabilitation of the landscape and on any lasting environmental impacts.

During 2013, a decision was taken to cease mining at Yatela in Mali, based on a declining gold price. Yatela community development activities have not been negatively affected by the halting of mining activities. A revised plan for social development, focused on expanding and enhancing community development and current socio-economic projects, has been developed.

AngloGold Ashanti’s Closure Planning Management Standard (previously the Closure and Rehabilitation Management Standard) was thoroughly reviewed in 2012/2013, based on experience gained in the implementation of the initial standard, which was introduced in 2009. The revised standard, which retains the requirements for integrated closure planning from exploration and project design, clarifies what is expected to ensure that sites are closed in accordance with the company’s values. A guidance document on the application of the standard and a self-assessment tool to assist with the prioritisation of closure planning efforts at the operations are expected to be finalised in early 2014.

Remediation obligations and provisions

The company’s long-term remediation obligations include decommissioning and restoration liabilities relating to past operations, based on their Environmental Management Plans (EMPs) in compliance with regulatory requirements. An assessment of closure liabilities is undertaken annually and is presented in the table below.

Provisions for remediation costs are made when there is a present obligation, when it is probable that expenditure on remediation work will be required and when the cost can be estimated within a reasonable range of possible outcomes. These costs are based on facts currently available, technology expected to be available at the time of the clean-up, laws and regulations presently or virtually certain to be enacted, and previous experience in the remediation of contaminated sites. Provision for restoration and decommissioning costs are made at the present value of the expenditures expected to settle the obligation, using estimated cash flows based on current prices and discounted at a pre-tax rate that reflects current market assessments of the time value of money.

The decline in total group rehabilitation obligation to $728.4m at the end of 2013, from $841.1m at the end of 2012, was a consequence of a number of factors, most notably an increase in the group discount rate used in the calculation of the obligation and changes in the timing of the future cash outflows relating to the obligation. The group discount rate increased as a result of increases in longer-term government yield rates.

Rehabilitation liabilities per operation ($m)
2013
Restoration
2013
Decommissioning
2013
Total
2012
Total
South Africa 10.0 68.1 78.1 148.8
Great Noligwa 0.6 6.4 7.0 10.1
Kopanang 1.2 9.4 10.6 18.0
Moab Khotsong 3.3 15.5 18.8 25.6
TauTona(1) 1.7 9.0 10.7 27.9
Mponeng 0.5 0.7 1.2 5.5
Legacy projects        
– Vaal River 6.8 6.8 14.2
– West Wits 4.5 4.5 7.0
– Other 0.5 0.5 0.6
ERGO(2) 21.8
Mine Waste Solutions 2.2 15.2 17.4 17.2
Nufcor 0.6 0.6 0.9
Continental Africa 273.3 137.7 411.0 427.5
Ghana        
Iduapriem 29.8 7.4 37.2 43.0
Obuasi 139.4 44.1 183.5 183.6
Other 9.6 9.6 8.7
Guinea        
Siguiri 33.6 36.3 69.9 70.7
Mali(4)        
Morila 3.8 1.0 4.8 5.0
Sadiola 14.9 12.4 27.3 24.0
Yatela 8.7 5.9 14.6 15.1
Namibia        
Navachab(3) 5.5
DRC        
Mongbwalu 5.4 1.8 7.2 8.4
Kibali(4) 3.7 3.7 2.1
Tanzania        
Geita 28.1 25.1 53.2 61.4
Australasia 21.9 31.2 53.1 61.5
Australia        
Sunrise Dam 19.7 9.6 29.3 40.0
Tropicana 2.2 21.6 23.8 21.5
Americas 194.3 42.3 236.6 249.5
Argentina        
Cerro Vanguardia 37.0 10.3 47.3 46.2
Brazil        
AngloGold Ashanti Mineração 66.5 20.0 86.5 86.7
Serra Grande 15.7 6.7 22.4 23.8
United States of America        
Cripple Creek & Victor 73.4 5.3 78.7 91.1
Colombia        
La Colosa 1.7 1.7 1.7
  499.5 279.3 778.8 887.3
Less equity-accounted investments included above(4) (27.4) (23.0) (50.4) (46.2)
Total as disclosed in the Annual Financial Statements 2013 472.1 256.3 728.4 841.1
  1. (1) Includes Savuka.
  2. (2) Transferred during 2013 to DRDGOLD Limited.
  3. (3) During 2013, the restoration obligation of $2.1m and decommissioning obligation of $2.0m relating to Navachab were transferred to held-for-sale liabilities.
  4. (4) The equity-accounted investments refer to the Mali assets and Kibali in the DRC.