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Property, plant and equipment | 12 Months Ended
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Dec. 31, 2019
Property, plant and equipment [abstract] |
Property, plant and equipment | 14 Property, plant and equipment Property, plant and equipment comprises owned and leased assets. Refer to note 45 for additional information relating to the Group’s implementation of IFRS 16 “Leases” on 1 January 2019.
| 2019 US$m |  | 2018 US$m |
Property, plant and equipment – owned | 56,307 |  | 56,330 |
Right of use assets – leased | 1,065 |  | — |
Finance leases under IAS 17 | — |  | 31 |
Net book value | 57,372 |  | 56,361 |
Property, plant and equipment - Owned
Year ended 31 December 2019 | Note |  | Mining properties and leases(a) US$m |  | Land and buildings(b) US$m |  | Plant and equipment US$m |  | Capital works in progress US$m |  | Total US$m |
Net book value |  |  |  |  |  |
At 1 January 2019 |  | 11,063 |  | 6,263 |  | 32,019 |  | 7,016 |  | 56,361 |
Adjustment for transition to new accounting standard | 45 |  | — |  | — |  | (31 | ) | — |  | (31 | )
Restated opening balance |  |  | 11,063 |  | 6,263 |  | 31,988 |  | 7,016 |  | 56,330 |
Adjustment on currency translation(c) |  |  | 27 |  | 72 |  | 286 |  | 41 |  | 426 |
Adjustments to capitalised closure costs | 26 |  | 840 |  | — |  | — |  | — |  | 840 |
Interest capitalised(d) | 8 |  | — |  | — |  | — |  | 321 |  | 321 |
Additions |  | 433 |  | 46 |  | 616 |  | 4,435 |  | 5,530 |
Depreciation for the year(a)(e) |  | (729 | ) | (381 | ) | (2,869 | ) | — |  | (3,979 | )
Impairment charges(f) |  | (1,339 | ) | (96 | ) | (1,115 | ) | (926 | ) | (3,476 | )
Disposals |  | — |  | (9 | ) | (44 | ) | (19 | ) | (72 | )
Transfers and other movements(h) |  | 107 |  | 508 |  | 2,629 |  | (2,857 | ) | 387 |
At 31 December 2019 |  | 10,402 |  | 6,403 |  | 31,491 |  | 8,011 |  | 56,307 |
– cost |  | 24,875 |  | 11,517 |  | 66,705 |  | 9,188 |  | 112,285 |
– accumulated depreciation and impairment |  | (14,473 | ) | (5,114 | ) | (35,214 | ) | (1,177 | ) | (55,978 | )
Non-current assets pledged as security(i) |  | 1,805 |  | 571 |  | 5,111 |  | 5,271 |  | 12,758 |
Year ended 31 December 2018 | Note | Mining properties and leases(a) US$m |  | Land and buildings(b) US$m |  | Plant and equipment US$m |  | Capital works in progress US$m |  | Total US$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 |  | — |  | — |  | 31 |  | — |  | 31 |
Non-current assets pledged as security(i) |  | 3,054 |  | 385 |  | 5,194 |  | 4,588 |  | 13,221 |
(a) | At 31 December 2019, the net book value of capitalised production phase stripping costs totalled US$2,276 million, with US$1,833 million within Property, plant and equipment and a further US$443 million within Investments in equity accounted units (2018: total of US$2,050 million, with US$1,572 million in Property, plant and equipment and a further US$478 million within Investments in equity accounted units). During the year capitalisation of US$536 million was partly offset by depreciation of US$316 million (including amounts recorded within equity accounted units). Depreciation of deferred stripping costs in respect of subsidiaries of US$139 million (2018: US$134 million; 2017: US$194 million) is included within “Depreciation for the year”.
(b) | At 31 December 2019, the net book value amount for land and buildings includes freehold US$6,377 million (2018: US$6,240 million) and long leasehold US$26 million (2018: US$23 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 2019 arose from the strengthening of the Canadian dollar against US dollar partially offset by weakening of other currencies against US dollar.
(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 5.30% (2018: 4.90%).
(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 2019, impairment charges relate to the Oyu Tolgoi underground project, Yarwun alumina refinery and the ISAL Smelter (see note 6). During 2018, impairment charges primarily related to the ISAL smelter (see note 6).
(g) | During 2018, “Subsidiaries no longer consolidated” related 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.
(h) | “Transfers and other movements” includes reclassifications between categories and the transfer from assets held for sale of ISAL assets at 30 June 2019 as these assets no longer met the criteria to be classified as assets held for sale (see note 19). In 2018, the movement included transfers to assets held for sale relating to Rössing Uranium and ISAL assets.
(i) | Excludes assets held under capitalised lease arrangements. Non-current assets pledged as security represent amounts pledged as collateral against US$4,540 million (2018: US$4,562 million) of loans, which are included in note 22.
14 Property, plant and equipment continued Right-of-use assets - Leased
| Land and buildings US$m |  | Plant and equipment US$m |  | Total US$m |
Net book value |  |  |
31 December 2019 | 507 |  | 558 |  | 1,065 |
1 January 2019(a) | 463 |  | 559 |  | 1,022 |
Additions for the year |  |  |
31 December 2019 | 89 |  | 212 |  | 301 |
Depreciation for the year (included within operating costs) |  |  |
31 December 2019 | (69 | ) | (203 | ) | (272 | )
Impairment charges(b) |  |  |
31 December 2019 | (6 | ) | (4 | ) | (10 | )
(a) | The net book value of right of use assets at 1 January 2019 was US$1,022 million, comprising an adjustment upon transition to IFRS 16 of US$991 million, and assets previously held under finance leases under IAS 17 of US$31 million. Refer to note 45 for additional information relating to the Group's implementation of IFRS 16 "Leases".
(b) | Impairment charges related to the ISAL smelter (see note 6).
The leased assets of the Group comprise land and buildings (mainly office buildings) and plant and equipment, the majority of which are vessels. Lease terms are negotiated on an individual basis and contain a wide range of terms and conditions. Right of use assets are depreciated on a straight line basis over the life of the lease, taking into account any extensions that are likely to be enacted.

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- Definition The entire disclosure for property, plant and equipment. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Name IAS -Number 16 -IssueDate 2019-01-01 -Section Disclosure -URI http://eifrs.ifrs.org/eifrs/xifrs-link?type=IAS&num=16&code=ifrs-tx-2019-en-r&doctype=Standard&dita_xref=IAS16_g73-79_TI -URIDate 2019-03-27 + Details
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