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Property, Plant and Equipment (Tables) | 12 Months Ended
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Jun. 30, 2019
Property, plant and equipment [abstract] |
Disclosure of Property, Plant and Equipment |
| SA rand
Figures in million | 2019 |  | 2018* |
Mining assets | 20 549 |  | 24 203 |
Mining assets under construction | 2 964 |  | 2 528 |
Undeveloped properties | 3 965 |  | 3 974 |
Other non-mining assets | 271 |  | 264 |
Total property, plant and equipment | 27 749 |  | 30 969 |
* Re-presented due to the change in the final purchase price allocation related to the Moab Khotsong acquisition. Refer to note 12 for detail. The movement in the mining assets is as follows:
| SA rand
Figures in million | 2019 |  | 2018* |
Cost |  |
Balance at beginning of year | 49 741 |  | 40 570 |
Fully depreciated assets no longer in use derecognised | (302 | ) | — |
Additions 1 | 4 113 |  | 2 546 |
Acquisition of Moab Khotsong | — |  | 3 554 |
Disposals | (16 | ) | (68 | )
Scrapping of assets | (117 | ) | (2 | )
Adjustment to rehabilitation asset | (439 | ) | (175 | )
Transfers and other movements | 801 |  | 3 117 |
Translation | (152 | ) | 199 |
Balance at end of year | 53 629 |  | 49 741 |
Accumulated depreciation and impairments |  |
Balance at beginning of year | 25 538 |  | 19 263 |
Fully depreciated assets no longer in use derecognised | (302 | ) | — |
Impairment of assets | 3 880 |  | 3 460 |
Disposals | (16 | ) | (67 | )
Scrapping of assets | (96 | ) | (1 | )
Depreciation | 4 184 |  | 2 789 |
Translation | (108 | ) | 94 |
Balance at end of year | 33 080 |  | 25 538 |
Net carrying value | 20 549 |  | 24 203 |
* Relates to a change in the fair value of assets acquired - refer to note 12 for detail. 1 Included in additions for 2019 is an amount of R173 million (2018: R12 million) for capitalised depreciation associated with stripping activities at the Hidden Valley operations. The movement in the mining assets under construction is as follows:
| SA rand
Figures in million | 2019 |  | 2018 |
Cost |  |
Balance at beginning of year | 2 528 |  | 3 104 |
Additions 1 | 1 070 |  | 1 988 |
Depreciation capitalised 2 | 50 |  | 312 |
Finance costs capitalised 3 | 133 |  | 183 |
Transfers and other movements | (802 | ) | (3 123 | )
Translation | (15 | ) | 64 |
Balance at end of year | 2 964 |  | 2 528 |
1 For 2019 pre-production revenue of Rnil (2018: R1 288 million) was credited against additions. 2 Relates primarily to Hidden Valley. 3 Refer to note 9 for further detail on the capitalisation rate applied The movement in the undeveloped properties is as follows:
| SA rand
Figures in million | 2019 |  | 2018 |
Cost |  |
Balance at beginning of year | 5 446 |  | 5 442 |
Translation | (9 | ) | 4 |
Balance at end of year | 5 437 |  | 5 446 |
Accumulated depreciation and impairments |  |
Balance at beginning and end of year | 1 472 |  | 14 |
Impairment 1 | — |  | 1 458 |
Balance at end of year | 1 472 |  | 1 472 |
Net carrying value | 3 965 |  | 3 974 |
1 The impairment for 2018 year relates to Target North. The movement in the non-mining assets is as follows:
| SA rand
Figures in million | 2019 |  | 2018 |
Cost |  |
Balance at beginning of year | 609 |  | 441 |
Fully depreciated assets no longer in use derecognised | (9 | ) | — |
Additions | 59 |  | 37 |
Acquisition of Moab Khotsong | — |  | 137 |
Transfers and other movements | 1 |  | (6 | )
Translation | (2 | ) | — |
Balance at end of year | 658 |  | 609 |
13 | PROPERTY, PLANT AND EQUIPMENT continued
OTHER NON-MINING ASSETS continued
| SA rand
Figures in million | 2019 |  | 2018 |
Accumulated depreciation and impairments |  |
Balance at beginning of year | 345 |  | 236 |
Fully depreciated assets no longer in use derecognised | (9 | ) | — |
Depreciation | 39 |  | 56 |
Impairment | 12 |  | 51 |
Translation | — |  | 2 |
Balance at end of year | 387 |  | 345 |
Net carrying value | 271 |  | 264 |
Disclosure of Gold Price, Silver Price, Exchange Rates and Gold Resource Value Assumptions | During the year under review, the group calculated the recoverable amounts (generally fair value less costs to sell) based on updated life-of-mine plans and the following gold price, silver price and exchange rates assumptions:
| 2019 |  | 2018 |  | 2017 |
US$ gold price per ounce |  |  |
– Year 1 | 1 325 |  | 1 250 |  | 1 200 |
– Year 2 | 1 310 |  | 1 250 |  | 1 200 |
– Long term (year 3 onwards) | 1 290 |  | 1 250 |  | 1 200 |
US$ silver price per ounce |  |  |
– Year 1 and year 2 | 15.75 |  | 17.00 |  | 17.00 |
– Long term (year 3 onwards) | 17.00 |  | 17.00 |  | 17.00 |
Exchange rate (R/US$) |  |  |
– Year 1 | 14.43 |  | 13.30 |  | 13.61 |
– Year 2 | 14.25 |  | 13.30 |  | 13.61 |
– Long term (year 3 onwards) | 14.11 |  | 13.30 |  | 13.61 |
Exchange rate (PGK/US$) | 3.34 |  | 3.17 |  | 3.16 |
Rand gold price (R/kg) |  |  |
– Year 1 | 615 000 |  | 535 000 |  | 525 000 |
– Year 2 | 600 000 |  | 535 000 |  | 525 000 |
– Long term (year 3 onwards) | 585 000 |  | 535 000 |  | 525 000 |
The following is the attributable gold resource value assumption:
| South Africa | Hidden Valley
US dollar per ounce | 2019 |  | 2018 |  | 2017 |  | 2019 |  | 2018 |  | 2017 |
Measured | 25.00 |  | 25.00 |  | 32.69 |  | n/a |  | n/a |  | n/a |
Indicated | 8.00 |  | 8.00 |  | 18.68 |  | 8.00 |  | 5.84 |  | 5.84 |
Inferred | 2.80 |  | 2.80 |  | 4.67 |  | n/a |  | 5.84 |  | 5.84 |
Disclosure of Sensitivity Analysis - Impairment of Assets | The impairment of assets consists of the following:
| SA rand
Figures in million | 2019 |  | 2018 |  | 2017 |
Tshepong Operations | 2 254 |  | 988 |  | 255 |
Kusasalethu | 690 |  | 579 |  | 678 |
Target 1 | 312 |  | 699 |  | 785 |
Target 3 | 318 |  | — |  | — |
Joel | 198 |  | 160 |  | — |
Other mining assets | 120 |  | 319 |  | — |
Bambanani | 6 |  | — |  | — |
Doornkop | — |  | 317 |  | — |
Unisel | — |  | 487 |  | — |
Masimong | — |  | 329 |  | — |
Target North | — |  | 1 458 |  | — |
Total impairment of assets | 3 898 |  | 5 336 |  | 1 718 |
The recoverable amounts for these assets have been determined on a fair value less costs to sell basis using the assumptions per note 13 in discounted cash flow models and attributable resource values. These are fair value measurements classified as level 3. The recoverable amounts of the CGUs where impairments were recognised as at 30 June 2019 are as follows:
| SA rand
| Recoverable amount
Figures in million | Life-of-Mine plan |  | Resource base |  | Total |
Tshepong Operations |  |  |
The impairment is due to the increased costs to exploit the resource base as well as a lower expected recovered grade. The decrease in the recovery grade is as a result of the change in the dilution factors applied to the outside life of mine resources. | 3 811 |  | 2 055 |  | 5 866 |
Kusasalethu |  |  |
The decrease in grade and increased estimated costs in the resource base resulted in a lower recoverable amount. The decrease in the recovery grade is as a result of the change in the dilution factors applied to the outside life of mine resources. | 1 297 |  | — |  | 1 297 |
Target 1 |  |  |
The recoverable amount decreased as a result of increased costs and decrease in grade in the resource base together with the estimated impact of carbon tax. The increase in discount rate due to increased risk factors also negatively impacted on the recoverable amount. | 467 |  | 609 |  | 1 076 |
Target 3 |  |  |
The operation remains under care and maintenance. A change in valuation method from discounted cash flow model to resource multiple approach reduced the recoverable amount. | None |  | 182 |  | 182 |
Joel |  |  |
The increased capital costs in the resource base together with carbon tax negatively impacted the net present value of expected cash flows. | 765 |  | 87 |  | 852 |
Other mining assets |  |  |
The updated life-of-mine plans for the CGUs in Freegold and Avgold resulted in the impairment of other mining assets. | 335 |  | None |  | 335 |
Bambanani |  |  |
The impairment of goodwill reduced the carrying amount of intangible assets. As goodwill is not depreciated, it results in an impairment as the life of the operation shortens. | 763 |  | None |  | 763 |
6 | COST OF SALES continued
(f) | Impairment continued
The recoverable amounts of the CGUs where impairments were recognised as at 30 June 2018 are as follows:
| SA rand
| Recoverable amount
Figures in million | Life-of-Mine plan |  | Resource base |  | Total |
Tshepong Operations |  |  |
The impairment was mainly driven by sensitivity to fluctuations in the gold price. Furthermore the updated life-of-mine for the Tshepong operations presented a marginal decrease in recovered grade. | 4 279 |  | 3 147 |  | 7 426 |
Kusasalethu |  |  |
Kusasalethu's old section of the mine at the operation was excluded in the FY19 life-of-mine plan. | 1 019 |  | 1 119 |  | 2 138 |
Target 1 |  |  |
Exploration drilling results during the year pointed towards lower grade estimates within certain blocks that have now been excluded from the life-of-mine plans. | 471 |  | 746 |  | 1 217 |
Joel |  |  |
The updated life-of-mine for the Joel operation presented a marginal decrease in recovered grade. | 540 |  | 336 |  | 876 |
Other mining assets |  |  |
The updated life-of-mine plans for the CGUs in Freegold and Harmony resulted in the impairment of other mining assets. | 366 |  | None |  | 366 |
Doornkop |  |  |
The impairment of Doornkop is primarily as a result of a decrease in the Kimberley Reef's resource values. | 1 552 |  | 1 178 |  | 2 730 |
Unisel |  |  |
Excluded the Leader Reef from the life-of-mine plan to focus on the higher grade Basal Reef. This reduced the life-of-mine from four years to eighteen months. | 38 |  | None |  | 38 |
Masimong |  |  |
The impairment at Masimong was as a result of the depletion of the higher grade B Reef and subsequent reduced life-of-mine. | 58 |  | None |  | 58 |
Target North |  |  |
The impairment of Target North was as a result of a decrease in resource values. | None |  | 3 681 |  | 3 681 |
The recoverable amounts of the CGUs where impairments were recognised as at 30 June 2017 are as follows:
| SA rand
| Recoverable amount
Figures in million | Life-of-Mine plan |  | Resource base |  | Total |
Tshepong Operations |  |  |
The impairment was mainly driven by the restriction on hoisting capacity at Phakisa along with the general pressure on margins. | 4 931 |  | 2 849 |  | 7 780 |
Target 1 |  |  |
Information gained from the underground drilling during the year indicated that some areas of the bottom reef of the Dreyerskuil are highly channelised, which negatively impacted on the overall grade for the operation. These areas were subsequently excluded from the life-of-mine plan. This, together with the general pressure on margins, reduced the profitability of the operation over its life and contributed to the decrease in the recoverable amount. | 867 |  | 1 129 |  | 1 996 |
Kusasalethu |  |  |
The impairment was driven by a reduction in the additional attributable resource value as a result of a decrease in the ounces. The company investigated the viability of a decline to extend the life. The business case showed that the option was not feasible and therefore the resource ounces were reduced. | 1 240 |  | 1 543 |  | 2 783 |
The sensitivity scenario of a 10% decrease or increase in the commodity price used in the discounted cash flow models and the resource values used (with all other variables held constant) would have resulted in the following impairment being recorded as at 30 June 2019 and 2018:
| SA rand
Figures in million | 2019 |  | 2018 |
- 10% decrease |  |
Tshepong Operations | 7 155 |  | 5 174 |
Moab Khotsong 1 | 2 758 |  | 1 636 |
Kusasalethu | 1 962 |  | 2 716 |
Doornkop | 1 350 |  | 2 052 |
Target 1 | 1 278 |  | 1 684 |
Joel | 984 |  | 882 |
Hidden Valley | 749 |  | 752 |
Target 3 | 337 |  | 141 |
Bambanani 1 | 331 |  | 222 |
Target North | 291 |  | 1 826 |
Other surface operations | 178 |  | 540 |
Masimong | 105 |  | 386 |
Unisel | 45 |  | 525 |
Kalgold | 39 |  | — |
+ 10% increase |  |
Target 3 | 300 |  | — |
Masimong | — |  | 59 |
Target North | — |  | 1 090 |
Unisel | — |  | 433 |
1 The carrying amounts of these CGUs include goodwill and any impairment losses are allocated first to goodwill and then to the identifiable assets.

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