Property, plant and equipment

12 Months Ended

Dec. 31, 2018

Property Plant And Equipment [Abstract]

14 Property, plant and equipment

		Mining			Land			Plant			Capital
		properties			and			and			works in
		and leases ^(a)			buildings ^(b)			equipment			progress			Total
Year ended 31 December 2018	Note	US$m			US$m			US$m			US$m			US$m
Net book value
At 1 January 2018			11,488			7,376			36,285			6,944			62,093
Adjustment on currency translation ^(c)			(689	)		(548	)		(2,671	)		(249	)		(4,157	)
Adjustments to capitalised closure costs	26		486			-			-			-			486
Interest capitalised ^(d)	8		-			-			-			296			296
Additions			403			80			459			4,359			5,301
Depreciation for the year^{(a) (e)}			(664	)		(382	)		(2,836	)		-			(3,882	)
Impairment charges^(f)			(3	)		(20	)		(101	)		(6	)		(130	)
Disposals			(1	)		(54	)		(71	)		(4	)		(130	)
Subsidiaries no longer consolidated ^(g)			(1,103	)		(377	)		(1,392	)		(514	)		(3,386	)
Transfers and other movements^(h)			1,146			188			2,346			(3,810	)		(130	)
At 31 December 2018			11,063			6,263			32,019			7,016			56,361
– cost			23,318			10,601			63,051			7,324			104,294
– accumulated depreciation and impairment			(12,255	)		(4,338	)		(31,032	)		(308	)		(47,933	)

Non-current assets held under finance leases⁽ⁱ⁾			-			-			31			-			31
Non-current assets pledged as security^(j)			3,054			385			5,194			4,588			13,221

		Mining			Land			Plant			Capital
		properties			and			and			works in
		and leases ^(a)			buildings ^(b)			equipment			progress			Total
Year ended 31 December 2017	Note	US$m			US$m			US$m			US$m			US$m
Net book value
At 1 January 2017			10,848			7,316			35,706			4,985			58,855
Adjustment on currency translation ^(c)			495			461			2,242			183			3,381
Adjustments to capitalised closure costs	26		710			-			-			-			710
Interest capitalised^(d)	8		-			-			-			224			224
Additions			230			41			646			3,834			4,751
Depreciation for the year ^{(a) (e)}			(673	)		(403	)		(3,122	)		-			(4,198	)
Impairment charges^(f)			(304	)		(2	)		(128	)		(1	)		(435	)
Disposals			-			(57	)		(40	)		(26	)		(123	)
Subsidiaries no longer consolidated ^(g)			(211	)		(95	)		(417	)		(26	)		(749	)
Transfers and other movements^(h)			393			115			1,398			(2,229	)		(323	)
At 31 December 2017			11,488			7,376			36,285			6,944			62,093
– cost			24,691			12,029			71,903			7,266			115,889
– accumulated depreciation and impairment			(13,203	)		(4,653	)		(35,618	)		(322	)		(53,796	)

Non-current assets held under finance leases ⁽ⁱ⁾			-			-			37			-			37
Non-current assets pledged as security^(j)			3,307			410			5,308			3,278			12,303

(a)

At 31 December 2018, the net book value of capitalised production phase stripping costs totalled US$2,050 million, with US$1,572 million within Property, plant and equipment and a further US$478 million within Investments in equity accounted units (2017: total of US$1,815 million with US$1,374 million in Property, plant and equipment and a further US$441 million within Investments in equity accounted units). During the year capitalisation of US$526 million was partly offset by depreciation of US$274 million (including amounts recorded within equity accounted units). Depreciation of deferred stripping costs in respect of subsidiaries of US$134 million (2017: US$194 million; 2016: US$203 million) is included within “Depreciation for the year”.

(b)	At 31 December 2018, the net book value amount for land and buildings includes freehold US$6,240 million (2017: US$7,294 million) and long leasehold US$23 million (2017: US$82 million).

(c)

Adjustment on currency translation represents the impact of exchange differences arising on the translation of the assets of entities with functional currencies other than the US dollar, recognised directly in the currency translation reserve. The adjustment in 2018 arose from the strengthening of the US dollar against other currencies.

(d)	Interest is capitalised at a rate based on the Group or relevant subsidiary’s cost of borrowing or at the rate on project specific debt, where applicable. The Group’s average borrowing rate used for capitalisation of interest is 4.90% (2017: 4.45%).

(e)	Assets within operations for which production is not expected to fluctuate significantly from one year to another or which have a physical life shorter than the related mine are depreciated on a straight line basis as follows:

Land and buildings
Land: not depreciated
Buildings: five to 50 years

Plant and equipment
Other plant and equipment: three to 50 years
Power assets: 25 to 50 years
Capital work in progress: not depreciated

(f)	During 2018, impairment charges primarily related to the ISAL Smelter (see note 6). During 2017, impairment charges primarily related to Argyle Diamonds and Rössing Uranium (see note 6).

(g)	During 2018, “Subsidiaries no longer consolidated” relates primarily to the disposal of Kestrel and Hail Creek, which completed on 1 August 2018 and the disposal of Grasberg on 21 December 2018. Refer to note 37.

During 2017, “Subsidiaries no longer consolidated” relates primarily to the disposal of Coal & Allied Industries Limited, which completed on 1 September 2017.

(h)	“Transfers and other movements” includes reclassifications between categories and transfers to assets held for sale relating to Rössing Uranium and ISAL assets in 2018, and Dunkerque in 2017.

(i)	The finance leases under which these assets are held are disclosed in note 23.

(j)	Excludes assets held under finance leases. Non-current assets pledged as security represent amounts pledged as collateral against US$4,562 million (2017: US$4,677 million) of loans, which are included in note 22.