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Property, plant and equipment
 12 Months Ended
Dec. 31, 2020
Property, plant and equipment [abstract]  
Property, plant and equipment
14 Property, plant and equipment
Property, plant and equipment comprises owned and leased assets.
2020
US$m
2019
US$m
Property, plant and equipment – owned62,007 56,307 
Right of use assets – leased875 1,065 
Net book value62,882 57,372 
14 Property, plant and equipment continued
Property, plant and equipment – Owned
Year ended 31 December 2020Note
Mining
properties
and leases(a)
US$m
Land
and
buildings
US$m
Plant
and
equipment
US$m		Capital
works in
progress
US$m		Total
US$m
Net book value
At 1 January 202010,402 6,403 31,491 8,011 56,307 
Adjustment on currency translation(b)
457 307 1,758 366 2,888 
Adjustments to capitalised closure costs25 946 — — — 946 
Interest capitalised(c)
8 — — — 340 340 
Additions329 45 726 5,211 6,311 
Depreciation for the year(a)(d)
(666)(354)(2,776)— (3,796)
Impairment charges(e)
(327)(85)(369)(82)(863)
Disposals(2)(13)(64)(16)(95)
Transfers and other movements(f)
34 66 1,988 (2,119)(31)
At 31 December 202011,173 6,369 32,754 11,711 62,007 
– cost25,052 12,178 71,603 12,906 121,739 
– accumulated depreciation and impairment(13,879)(5,809)(38,849)(1,195)(59,732)
Non-current assets pledged as security(g)
1,712 494 5,065 6,974 14,245 

Year ended 31 December 2019Note
Mining
properties
and leases(a)
US$m
Land
and
buildings
US$m
Plant
and
equipment
US$m		Capital
works in
progress
US$m		Total
US$m
Net book value
At 1 January 201911,063 6,263 32,019 7,016 56,361 
Adjustment for transition to new accounting standard(h)
— — (31)— (31)
Restated opening balance11,063 6,263 31,988 7,016 56,330 
Adjustment on currency translation(b)
27 72 286 41 426 
Adjustments to capitalised closure costs25840 — — — 840 
Interest capitalised(c)
8— — — 321 321 
Additions433 46 616 4,435 5,530 
Depreciation for the year(a)(d)
(729)(381)(2,869)— (3,979)
Impairment charges(e)
(1,339)(96)(1,115)(926)(3,476)
Disposals— (9)(44)(19)(72)
Transfers and other movements(f)
107 508 2,629 (2,857)387 
At 31 December 201910,402 6,403 31,491 8,011 56,307 
– cost24,875 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(g)
1,805 571 5,111 5,271 12,758 
(a)At 31 December 2020, the net book value of capitalised production phase stripping costs totalled US$2,398 million, with US$2,019 million within "Property, plant and equipment" and a further US$379 million within "Investments in equity accounted units" (2019: total of US$2,276 million, with US$1,833 million in "Property, plant and equipment" and a further US$443 million within "Investments in equity accounted units"). During the year, capitalisation of US$380 million was partly offset by depreciation of US$267 million (including amounts recorded within equity accounted units). Depreciation of deferred stripping costs in respect of subsidiaries of US$145 million (2019: US$139 million; 2018: US$134 million) is included within “Depreciation for the year”.
(b)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 2020 arose from the strengthening of the Australian dollar and Canadian dollar against the US dollar.
(c)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 4.20% (2019: 5.30%).
(d)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
(e)During 2020, impairment charges relate to Pacific Aluminium smelters, the ISAL smelter in Iceland and our interest in the Diavik diamond mine (see note 6). During 2019, impairment charges primarily related to the Oyu Tolgoi underground project, Yarwun alumina refinery and the ISAL smelter (see note 6).
(f)“Transfers and other movements” includes reclassifications between categories. In 2019, "Transfers and other movements" included ISAL assets held for sale as these assets no longer met the criteria to be classified as assets held for sale.
(g)Excludes assets held under capitalised lease arrangements. Non-current assets pledged as security represent amounts pledged as collateral against US$4,518 million (2019: US$4,540 million) of loans, which are included in note 21.
(h)The impact of the transition to new accounting standard IFRS 16 “Leases” on 1 January 2019.
Right-of-use assets – Leased

Land
and
buildings
US$m		Plant
and
equipment
US$m		Total
US$m
Net book value
31 December 2020475 400 875 
31 December 2019507 558 1,065 

Additions for the year
31 December 202030 75 105 
31 December 201989 212 301 

Depreciation for the year (included within operating costs)
31 December 2020(93)(229)(322)
31 December 2019(69)(203)(272)

Impairment charges(a)
31 December 2020(6)(31)(37)
31 December 2019(6)(4)(10)
(a)Impairment charges in 2020 relate to Pacific Aluminium smelters, the ISAL smelter in Iceland and our interest in the Diavik diamond mine (see note 6). Impairment charges in 2019 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 marine 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.