Impala Platinum Holdings Limited 2

Impala Platinum Holdings Limited (Implats) discloses information regarding its financial provision for environmental rehabilitation in its annual financial statements.

The information which is publicly available is:

  1. The estimated figures for environmental rehabilitation obligations, and the funds and guarantees available to meet those obligations.
  2. That “estimates are determined by independent environmental specialists in accordance with environmental regulations.”1
  3. The basic assumptions used in the calculation of the environmental rehabilitation provision, and the accounting treatment of the rehabilitation obligations.
  4. That financial guarantees, an insurance policy and the Impala Pollution Control, Rehabilitation and Closure Trust Fund are the financial vehicles used to provide for future rehabilitation obligations.
  5. Financial provision for environmental rehabilitation disclosed per operation (excluding joint ventures).

Implats’ disclosures are more useful than those of its peers, because it discloses estimated figures for environmental rehabilitation obligations, and funds available to meet those obligations, per operation (excluding joint ventures), rather than as one consolidated figure. However, Implats’ disclosures nevertheless do not provide stakeholders with:

  • clear, understandable, comparable information about the type and extent of environmental damage covered by these estimated liabilities;
  • the methods and experts used to calculate the estimated liabilities;
  • sufficient information to enable external verification that the estimated liabilities have been accurately calculated;
  • clear, understandable explanations for why the estimates and funds set aside for financial provision for environmental rehabilitation fluctuate from year to year; and
  • information about the way in which the funds set aside for rehabilitation are managed and protected.

In its response to the CER’s letter requesting further information and clarity, Implats provided much more comprehensive information, including details about the skills and expertise of the independent experts who calculate rehabilitation costs.

Implats stated that it would consider making all of its independent assessments of financial provision for rehabilitation publicly available.

Implats does not include provision for the rehabilitation of operations which are part of joint ventures. It is unclear where stakeholders can find information on financial provision for joint ventures.

There is limited information available about the management of the Impala Pollution Control, Rehabilitation and Closure Trust Fund. Information that would assist stakeholders in assessing the level of protection afforded by this trust includes:

  • the identity of its trustees and beneficiaries;
  • the trust’s annual financial statements;
  • how funds in the trust are accessed;
  • how funds in the trust are aggregated between operations;
  • when funds from the trust have been accessed for rehabilitation and/or closure of any operations; and
  • whether the funds are used for concurrent rehabilitation or reserved exclusively for the purposes of closure.
  1. Implats 2017 Annual Financial Results, at note 18