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Property, plant and equipment | 12 Months Ended
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Jun. 30, 2022
Property, plant and equipment. |
Property, plant and equipment | INVESTING ACTIVITIES
19 | Property, plant and equipment
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  |  | ​ |  | Building |  | Plant, |  | ​ |  | Assets | ​ | ​ |
​ | ​ | ​ | ​ | ​ | and | ​ | equipment | ​ | Mineral | ​ | under | ​ | ​ | ​
​ | ​ | Land | ​ | improvements | ​ | and vehicles | ​ | assets | ​ | construction* | ​ | Total | ​
for the year ended 30 June | ​ | Rm | ​ | Rm | ​ | Rm | ​ | Rm | ​ | Rm |  | Rm | ​
Carrying amount at 30 June 2021 |  | ​ | 3 871 |  | 11 554 |  | 128 986 |  | 27 476 |  | 26 134 | ​ | 198 021 | ​
Additions |  | ​ | 20 |  | 80 |  | 701 |  | 58 |  | 21 754 | ​ | 22 613 | ​
to sustain existing operations |  | ​ | 20 |  | 75 |  | 671 |  | 58 |  | 20 091 | ​ | 20 915 | ​
to expand operations |  | ​ | — |  | 5 |  | 30 |  | — |  | 1 663 | ​ | 1 698 | ​
Reduction in rehabilitation provisions capitalised (note 32) |  | ​ | — |  | — |  | (33) |  | (56) |  | (395) | ​ | (484) | ​
Finance costs capitalised | ​ | ​ | — | ​ | — | ​ | — | ​ | — | ​ | 740 | ​ | 740 | ​
Assets capitalised or reclassified |  | ​ | (170) |  | (445) |  | 17 482 |  | 88 |  | (17 203) | ​ | (248) | ​
Reclassification to held for sale (note 11) |  | ​ | (51) |  | (22) |  | (340) |  | — |  | (59) | ​ | (472) | ​
Translation of foreign operations |  | ​ | 407 |  | 908 |  | 13 527 |  | — |  | 195 | ​ | 15 037 | ​
Disposals and scrapping |  | ​ | (10) |  | (533) |  | (2 565) |  | (87) |  | (607) | ​ | (3 802) | ​
Current year depreciation charge |  | ​ | — |  | (434) |  | (8 599) |  | (2 499) |  | — | ​ | (11 532) | ​
Net impairment reversal of property, plant and equipment (note 9) |  | ​ | (57) |  | 13 |  | 1 416 |  | — |  | 63 | ​ | 1 435 | ​
Carrying amount at 30 June 2022 |  | ​ | 4 010 |  | 11 121 |  | 150 575 |  | 24 980 |  | 30 622 | ​ | 221 308 | ​
*Includes intangible assets under construction. ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ | ​ |  | Building |  | Plant, |  | ​ |  | Assets | ​ | ​ |
​ | ​ |  | ​ | ​ | and | ​ | equipment | ​ | Mineral | ​ | under | ​ | ​ | ​
​ | ​ | Land | ​ | improvements | ​ | and vehicles | ​ | assets | ​ | construction* | ​ | Total | ​
for the year ended 30 June | ​ | Rm | ​ | Rm | ​ | Rm | ​ | Rm | ​ | Rm |  | Rm | ​
Carrying amount at 30 June 2020 | ​ | ​ | 5 591 | ​ | 11 954 | ​ | 152 255 | ​ | 30 043 | ​ | 27 802 | ​ | 227 645 | ​
Additions | ​ | ​ | 18 | ​ | 4 | ​ | 1 063 | ​ | 43 | ​ | 14 894 | ​ | 16 022 | ​
to sustain existing operations | ​ | ​ | 18 | ​ | — | ​ | 948 | ​ | 43 | ​ | 13 792 | ​ | 14 801 | ​
to expand operations | ​ | ​ | — | ​ | 4 | ​ | 115 | ​ | – | ​ | 1 102 | ​ | 1 221 | ​
Net reclassification (to)/from other assets | ​ | ​ | (2) | ​ | 56 | ​ | (750) | ​ | 20 | ​ | 722 | ​ | 46 | ​
Reduction in rehabilitation provisions capitalised | ​ | ​ | — | ​ | (4) | ​ | (55) | ​ | (1 401) | ​ | (965) | ​ | (2 425) | ​
Establishment of joint operation1 | ​ | ​ | 325 | ​ | 1 097 | ​ | 28 079 | ​ | – | ​ | 62 | ​ | 29 563 | ​
Disposal of business2 | ​ | ​ | (1 399) | ​ | (632) | ​ | (4 544) | ​ | (1) | ​ | (31) | ​ | (6 607) | ​
Finance costs capitalised | ​ | ​ | — | ​ | — | ​ | – | ​ | – | ​ | 880 | ​ | 880 | ​
Projects capitalised | ​ | ​ | 73 | ​ | 837 | ​ | 11 918 | ​ | 2 654 | ​ | (15 952) | ​ | (470) | ​
Reclassification from/(to) held for sale (note 11) | ​ | ​ | 98 | ​ | 349 | ​ | (711) | ​ | (981) | ​ | (444) | ​ | (1 689) | ​
Translation of foreign operations | ​ | ​ | (775) | ​ | (1 457) | ​ | (18 327) | ​ | 98 | ​ | (573) | ​ | (21 034) | ​
Disposals and scrapping | ​ | ​ | (2) | ​ | (19) | ​ | (184) | ​ | (49) | ​ | (203) | ​ | (457) | ​
Current year depreciation charge | ​ | ​ | — | ​ | (537) | ​ | (11 080) | ​ | (3 303) | ​ | – | ​ | (14 920) | ​
Net impairment of property, plant and equipment (note 9) | ​ | ​ | (56) | ​ | (94) | ​ | (28 678) | ​ | 353 | ​ | (58) | ​ | (28 533) | ​
Carrying amount at 30 June 2021 | ​ | ​ | 3 871 | ​ | 11 554 | ​ | 128 986 | ​ | 27 476 | ​ | 26 134 | ​ | 198 021 | ​
* Includes intangible assets under construction. 1Refer to note 10 for details. 2Relates mainly to the disposal of our 50% equity interest in Gemini HDPE LLC. ​
19 | Property, plant and equipment continued
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ | ​ |  | Building |  | Plant, |  | ​ |  | Assets | ​ |
​ | ​ | ​ | ​ | ​ | and | ​ | equipment | ​ | Mineral | ​ | under | ​ | ​
​ |  | Land |  | improvements |  | and vehicles |  | assets |  | construction | ​ | Total
for the year ended 30 June |  | Rm |  | Rm |  | Rm |  | Rm |  | Rm | ​ | Rm
2022 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cost |  | ​ | 4 357 |  | 21 466 |  | 356 420 |  | 49 388 |  | 30 622 | ​ | 462 253
Accumulated depreciation and impairment |  | ​ | (347) |  | (10 345) |  | (205 845) |  | (24 408) |  | — | ​ | (240 945)
​ |  | ​ | 4 010 |  | 11 121 |  | 150 575 |  | 24 980 |  | 30 622 | ​ | 221 308
2021 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cost |  | ​ | 4 145 |  | 20 462 |  | 334 432 |  | 47 606 |  | 26 134 | ​ | 432 779
Accumulated depreciation and impairment |  | ​ | (274) |  | (8 908) |  | (205 446) |  | (20 130) |  | — | ​ | (234 758)
​ |  | ​ | 3 871 |  | 11 554 |  | 128 986 |  | 27 476 |  | 26 134 | ​ | 198 021
2020 |  | ​ |  |  |  |  |  |  |  |  | ​ | ​ |
Cost |  | ​ | 5 844 |  | 21 418 |  | 325 837 |  | 84 822 |  | 27 802 | ​ | 465 723
Accumulated depreciation and impairment |  | ​ | (253) |  | (9 464) |  | (173 582) |  | (54 779) |  | — | ​ | (238 078)
​ |  | ​ | 5 591 |  | 11 954 |  | 152 255 |  | 30 043 |  | 27 802 | ​ | 227 645
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | 2022 |  | 2021 |  | 2020 | ​
for the year ended 30 June | ​ | Rm | ​ | Rm | ​ | Rm |
ADDITIONS TO PROPERTY, PLANT AND EQUIPMENT (CASH FLOW) | ​ | ​ | ​ | ​ | ​ | ​ | ​
Current year additions | ​ | 22 613 |  | 16 022 |  | 38 092 | ​
Adjustments for non-cash items | ​ | (20) |  | (77) |  | (2 947) | ​
movement in environmental provisions capitalised | ​ | (20) |  | (77) |  | (2 947) | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Per the statement of cash flows | ​ | 22 593 |  | 15 945 |  | 35 145 | ​
​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | 2022 |  | 2021 |
for the year ended 30 June | ​ | Rm | ​ | Rm | ​
Capital commitments (excluding equity accounted investments) | ​ | ​ | ​ | ​ | ​ | ​
Capital commitments, excluding capitalised interest, include all projects for which specific board approval has been obtained. Projects still under investigation for which specific board approvals have not yet been obtained are excluded from the following: |  | ​ |  |  |  |
Authorised and contracted for |  | ​ | 41 892 |  | 33 196 |
Authorised but not yet contracted for |  | ​ | 35 830 |  | 33 297 |
Less expenditure to the end of year |  | ​ | (32 438) |  | (26 605) |
​ |  | ​ | 45 284 |  | 39 888 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​
to sustain existing operations |  | ​ | 30 805 |  | 25 591 |
to expand operations |  | ​ | 14 479 |  | 14 297 |
ESTIMATED EXPENDITURE |  | ​ |  |  |  |
Within one year |  | ​ | 27 719 |  | 21 393 |
One to five years |  | ​ | 17 565 |  | 18 495 |
​ |  | ​ | 45 284 |  | 39 888 | ​
​ ​ 19 Property, plant and equipment continued Significant capital commitments and expenditure at 30 June comprise mainly of:
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | Capital commitments | ​ | Capital expenditure
​ |  | ​ |  | ​ |  | 2022 | ​ | 2021 |  | 2022 | ​ | 2021
Project | ​ | Project location | ​ | Business segment | ​ | Rm | ​ | Rm | ​ | Rm | ​ | Rm
Projects to sustain operations | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Shutdown and major statutory maintenance | ​ | Various | ​ | Various | ​ | 7 963 | ​ | 6 439 | ​ | 6 082 | ​ | 2 583
Environmental projects | ​ | Various |  | Various |  | 3 449 | ​ | 3 033 |  | 1 520 | ​ | 1 806
Clean fuels II |  | Various |  | Fuels |  | 2 632 | ​ | 1 483 |  | 893 | ​ | 237
Projects to expand operations | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Environmental projects | ​ | South Africa | ​ | Fuels | ​ | 640 | ​ | — | ​ | — | ​ | —
Mozambique exploration and development |  | Mozambique |  | Gas |  | 11 448 | ​ | 10 786 |  | 1 377 | ​ | 234
Lake Charles Chemical Project |  | United States |  | Chemicals America |  | — | ​ | 798 |  | 99 | ​ | 684
​ Areas of judgement: The depreciation methods, estimated remaining useful lives and residual values are reviewed at least annually. The estimation of the useful lives of property, plant and equipment is based on historic performance as well as expectations about future use and the impact of climate change and therefore requires a significant degree of judgement to be applied by management. The remaining useful lives of property, plant and equipment have been reassessed considering the group's targeted reduction in GHG emissions and remain appropriate. The following depreciation rates apply in the group: ​
​ | ​ | ​ | ​
​ |  |  |
Buildings and improvements | ​ | 1 - 17%, units of production over life of related reserve base |
Retail convenience centres (included in buildings and improvements) | ​ | 3 – 5 | %
Plant | ​ | 2 – 50 | %
Equipment |  | 3 – 91 | %
Vehicles |  | 5 – 33 | %
Mineral assets |  | Units of production over life of related reserve base | ​
Life-of-mine coal assets (included in mineral assets) |  | Units of production over life of related reserve base | ​
​ Accounting policies: Property, plant and equipment is stated at cost less accumulated depreciation and accumulated impairment losses. Land is not depreciated. When plant and equipment comprises major components with different useful lives, these components are accounted for as separate items. Depreciation of mineral assets on producing oil and gas properties is based on the units-of-production method calculated using estimated proved developed reserves. ​
19 | Property, plant and equipment continued
Life-of-mine coal assets are depreciated using the units-of-production method and is based on proved and probable reserves assigned to that specific mine (accessible reserves) or complex which benefits from the utilisation of those assets. Other coal mining assets are depreciated on the straight-line method over their estimated useful lives. Depreciation of property acquisition costs, capitalised as part of mineral assets in property, plant and equipment, is based on the units-of-production method calculated using estimated proved reserves. Property, plant and equipment, other than mineral assets, is depreciated to its estimated residual value on a straight-line basis over its expected useful life. ASSETS UNDER CONSTRUCTION Assets under construction include land and expenditure capitalised for work in progress in respect of activities to develop, expand or enhance items of property, plant and equipment. The cost of self-constructed assets includes expenditure on materials, direct labour and an allocated proportion of project overheads. Cost also includes the estimated costs of dismantling and removing the assets and site rehabilitation costs to the extent that they relate to the construction of the asset as well as gains or losses on qualifying cash flow hedges attributable to that asset. When regular major inspections are a condition of continuing to operate an item of property, plant and equipment, and plant shutdown costs will be incurred, an estimate of these shutdown costs are included in the carrying value of the asset at initial recognition. Land acquired, as well as costs capitalised for work in progress in respect of activities to develop, expand or enhance items of property, plant and equipment are classified as part of assets under construction. Finance expenses in respect of specific and general borrowings are capitalised against qualifying assets as part of assets under construction. Where funds are borrowed specifically for the purpose of acquiring or constructing a qualifying asset, the amount of finance expenses eligible for capitalisation on that asset is the actual finance expenses incurred on the borrowing during the period less any investment income on the temporary investment of those borrowings. Where funds are made available from general borrowings and used for the purpose of acquiring or constructing qualifying assets, the amount of finance expenses eligible for capitalisation is determined by applying a capitalisation rate to the expenditures on these assets. The capitalisation rate of 4,6% (2020 – 4,9)% is calculated as the weighted average of the interest rates applicable to the borrowings of the group that are outstanding during the period, including borrowings made specifically for the purpose of obtaining qualifying assets once the specific qualifying asset is ready for its intended use. The amount of finance expenses capitalised will not exceed the amount of borrowing costs incurred. ​

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