Royal Bafokeng Platinum Limited 3

Royal Bafokeng Platinum Limited (RBPlat) 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 and the Bafokeng Rasimone Platinum JV Environmental Rehabilitation Trust are the financial vehicles used to provide for future rehabilitation obligations.
  5. One consolidated figure for financial provision for environmental rehabilitation in the annual financial statements (including its joint venture).

While RBPlats’ disclosures are in line with those of its peers, they do not, however, 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, RBPlats provided much more comprehensive information, including the CVs of the external specialists who calculate its rehabilitation costs, and the methodologies used for these calculations.

RBPlats did not commit to making its independent assessments of financial provision public unless required to do so by the conditions in its licences.

The reason provided for not disclosing information at an operational level was that the consolidated figures “sufficiently address stakeholder needs to confirm the adequacy of provisions” for all its operations.

RBPlats’ consolidated figure for financial provision for rehabilitation does include provision for rehabilitation of operations which are part of joint ventures. 100% of the provision for its joint venture with Anglo American Platinum is consolidated into the RBPlat accounts.

There is limited information available about the management of the Bafokeng Rasimone Platinum JV Environmental Rehabilitation Trust. Further 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;
  • 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. RBPlat 2017 Financial Statements, at note 21, page 37.