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| Notes to the Consolidated Financial Statements |
| 41. |
Contingent liabilities |
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Letters of comfort have been issued to financial institutions to cover certain banking facilities. There are no encumbrances of
Group assets, other than the houses held under finance leases by the Group as disclosed in note 32.
Aquarius Platinum (South Africa) (Proprietary) Limited holds a put option to put their interest in the Kroondal pooling-andsharing
arrangement (Note 17) to the Group in the case of termination of that relationship. The probability of the option
being exercised is considered remote. The amount of such an obligation is dependent on a discounted cash flow valuation
of their interest at that point in time.
The Group is the subject of various claims, which are individually immaterial. The expected outcomes of these individual claims
are varied, but on a probability weighting the amount is estimated at R70 million (2006: R73 million).
The Group has in the case of some of its mines provided the Department of Minerals and Energy with guarantees that cover
the difference between closure cost and amounts held in the environmental trusts. At 31 December 2007 these guarantees
amounted to R1,939 million (2006: R159 million) (Note 30).
The Group has provided Lexshell 36 General Trading (Pty) Limited (a company owned by the Bakgatla-Ba-Kgafela traditional
community) with a facility that covers their debt repayments should that company not be able to meet the repayments. The
facility is limited to Union Section's cash flows, and a call on this facility is considered a remote possibility.
Rustenburg Platinum Mines Limited (RPM) has granted a R2 billion loan facility to Royal Bafokeng Resources (Pty) Limited
(RBR) for the purpose of funding its contributions to the BRPM joint venture. The loan is repayable in full on
11 August 2012. The RBR has ceded and pledged its interest in the BRPM joint venture to RPM as security for the loan. RPM
also has the right to register a notarial bond and a mortgage bond over RBR's undivided share of the assets of the BRPM
joint venture. |
| 42. |
Change in accounting estimate |
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Metal inventories |
| |
During the year, the Group changed its estimate of the quantities of inventory based on the outcome of a physical count of
in-process metals. The Group runs a theoretical metal inventory system based on inputs, the results of previous physical counts
and outputs. Due to the nature of in-process inventories being contained in weirs, pipes and other vessels, physical counts
only take place once per annum.
This change in estimate has had the effect of increasing the value of inventory disclosed in the financial statements by
R148 million (2006: R102 million). This results in the recognition of an after-tax gain of R105 million
(2006: R72 million).
The amount of the effect in future periods has not been disclosed because estimation is impracticable. |
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