Notes to the annual financial statements

for the year ended 31 December 2006


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					Cash-settled
		Environmental	Decom-	Restruc-	share-based
		rehabilitation	missioning	turing	payment	Total
		Rm	Rm	Rm	Rm	Rm
25.	PROVISIONS
	GROUP
	For the year ended
	31 December 2006
	At beginning of year	572	156	23		751
	Charge to income
	statement	210	(1)	13	5	227

	Additional provision	210		13	5	228
	Unused amounts reversed		(1)			(1)

	Interest adjustment	37	21			58
	Provisions capitalised
	to property, plant and
	equipment		10			10
	Acquisition of subsidiary	68				68
	Utilised during year	(13)		(4)	(2)	(19)
	Exchange differences	11	12			23
	Unbundling of subsidiary	(115)	(42)			(157)
	At end of year	770	156	32	3	961
	Current portion included
	in current liabilities	(21)		(9)		(30)
	Total non-current
	provisions	749	156	23	3	931
	For the year ended
	31 December 2005
	– Restated
	At beginning of year	530	123	8		661
	Charge to income
	statement	19	11	17		47
	Interest adjustment	33	9			42
	Provisions capitalised
	to property, plant and
	equipment		13			13
	Utilised during year	(10)		(2)		(12)
	At end of year	572	156	23		751
	Current portion included
	in current liabilities	(18)		(6)		(24)
	Total non-current
	provisions	554	156	17		727

	COMPANY
	For the year ended
	31 December 2006
	At beginning of year	16				16
	Charge to income
	statement – additional
	provision	1			5	6
	Interest adjustment	1				1
	Utilised during year				(2)	(2)
	At end of year	18			3	21
	Current portion
	included in current
	liabilities
	Total non-current
	provisions	18			3	21
	For the year ended
	31 December 2005
	– Restated
	At beginning of year	15				15
	Interest adjustment	1				1
	Total non-current provisions	16				16

	Environmental rehabilitation
	Provision is made for environmental rehabilitation costs where either a legal or constructive obligation is recognised as a result of past events. Estimates are based upon costs that are regularly reviewed and adjusted as appropriate for new circumstances. Decommissioning During 2005 the environmental rehabilitation provision was reclassified into two separate provisions, namely the environmental rehabilitation provision and the decommissioning provision, the opening balance was adjusted to reflect the split. The decommissioning provision relates to decommissioning of property, plant and equipment where either a legal or constructive obligation is recognised as a result of past events. Estimates are based upon costs that are regularly reviewed and adjusted as appropriate for new circumstances. Funding of environmental and decommissioning rehabilitation Contributions towards the cost of the mine closure are also made to the Kumba Rehabilitation Trust Fund and the balance of the Fund amounted to R246 million (2005: R265 million) at year-end. This amount is included in the financial assets of the group. Cash flows will take place when the mines are rehabilitated. Restructuring The liability includes accruals for plant and facility closures, including the dismantling costs thereof, and employee termination costs, in terms of the announced restructuring plans for the Durnacol Mine. Provision is made on a piecemeal basis only for those restructuring obligations supported by a formally approved plan. The restructuring will be completed within the next nine years. Cash-settled share-based payment Exxaro offered a cash-settled payment, based on the company’s share price performance, to certain individuals who were under an embargo and not entitled to accept share scheme offers, due to their involvement in the empowerment transaction. The payments will be made over the next seven years depending on the share price performance of the company and the contracts of the individuals.

Notes to the annual financial statements

for the year ended 31 December 2006

Cash-settled

Environmental

Decom-

Restruc-

share-based

rehabilitation

missioning

turing

payment

Total

Rm

Rm

Rm

Rm

Rm

25.

PROVISIONS