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NOTES TO FINANCIAL STATEMENTS \u2013 BASIS OF PREPARATION
This section sets out the accounting policies that relate to the
consolidated financial statements of South32 Limited (referred
to as the Company) and its subsidiaries and joint arrangements
(collectively, the Group) as a whole. Where an accounting policy,
critical accounting estimate, assumption or judgement is specific
to a note, these are described within the note to which they
relate. These policies have been consistently applied to all periods
presented, except as described in note 3 New standards and
interpretations.
The consolidated financial statements of the Group for the year
ended 30 June 2023 were authorised for issue in accordance with
a resolution of the Directors on 7 September 2023.
1. Reporting entity
South32 Limited is a for-profit company limited by shares
incorporated in Australia with a primary listing on the Australian
Securities Exchange (ASX), a standard listing on the London Stock
Exchange (LSE) and a secondary listing on the Johannesburg
Stock Exchange (JSE).
The nature of the operations and principal activities of the Group
are described in note 4 Segment information.
2. Basis of preparation
The consolidated financial statements are general purpose
financial statements which:
\u2013 Have been prepared in accordance with the requirements
of the Corporations Act 2001, Australian Accounting
Standards and other authoritative pronouncements of the
Australian Accounting Standards Board (AASB), International
Financial Reporting Standards (IFRS) and other authoritative
pronouncements of the International Accounting Standards
Board (IASB);
\u2013 Have been prepared on a historical cost basis, except for
post-retirement assets and obligations, derivative financial
instruments and certain other financial assets and liabilities
which are required to be measured at fair value;
\u2013 Are presented in US dollars, with all values rounded to the
nearest million dollars (US$M or US$ million) unless otherwise
stated, in accordance with ASIC Corporations Instrument
2016/191;
\u2013 Present reclassified comparative information where required
for consistency with the current year\u2019s presentation;
\u2013 Adopt all new and amended accounting standards and
interpretations issued by the AASB and IASB that are relevant
to the operations of the Group and effective for reporting
periods beginning on or after 1 July 2022. Refer to note 3 New
standards and interpretations for further details; and
\u2013 Do not early adopt any accounting standards and
interpretations that have been issued or amended but are
not yet effective as described in note 3 New standards and
interpretations.
(a) Basis of consolidation
The consolidated financial statements comprise the financial
statements of the Group. A list of significant controlled entities
(subsidiaries) at year end is contained in note 25 Subsidiaries.
The financial statements of subsidiaries are prepared for the
same reporting period as the parent entity, using consistent
accounting policies.
Changes in the Group\u2019s interest in a subsidiary that do not result
in a loss of control are accounted for as equity transactions .
(b) Foreign currency translation
The functional currency of the majority of the Group\u2019s operations
is the US dollar, as this is assessed to be the principal currency of
the economic environments in which they operate.
Transactions denominated in foreign currencies are initially
recorded in the functional currency using the exchange rate at the
date of the underlying transaction. Monetary assets and liabilities
denominated in foreign currencies are translated using the rate of
exchange at year end. Exchange gains or losses on retranslation
are included in the Consolidated Income Statement, with the
exception of foreign exchange gains or losses on foreign currency
provisions for closure and rehabilitation which are capitalised in
property, plant and equipment for operating sites .
(c) Key estimates, assumptions and judgements
The preparation of the consolidated financial statements
has required management to apply accounting policies and
methodologies that are based on complex and subjective
estimates, assumptions and judgements. Management based
its estimates and judgements on historical experience and
assumptions it believes to be reasonable and realistic based
on the current environment. Actual results may differ from
those reported in these statements due to the uncertainties
that characterise the assumptions and conditions on which the
estimates are based.
Specific sources of uncertainty identified by the Group are set out
on the following pages and/or together with the applicable note,
as follows:
Key estimates, assumptions and judgements
Recognition of deferred taxes note 6
Uncertain tax matters note 6
Useful economic lives of assets note 11
Impairment of non-financial assets note 13
Closure and rehabilitation provisions note 15
Expected credit loss on credit-impaired financial assets note 19
In addition to the specific sources of uncertainty noted above, the
following assumptions are considered pervasive to the financial
statements as a whole:
Climate change-related risks and opportunities
The key estimates, assumptions and judgements made in these
consolidated financial statements take into account the Group\u2019s
expectations of, and approach to, climate change-related risks,
and are consistent with the Group\u2019s reporting on climate-related
matters.
These expectations may affect the Group\u2019s financial results and
financial position in a number of ways, including the following:
\u2013 The useful lives of assets, and therefore the depreciation and
amortisation charged in the Consolidated Income Statement,
may be impacted by changes in operational plans (refer to note
11 Property, plant and equipment);
\u2013 Asset recoverable amounts may be affected due to changes
in estimated future cash flows driven by, for example, changes
in forecast commodity prices, operating costs, carbon prices
and useful lives of assets (refer to note 13 Impairment of non-
financial assets and note 19(b)(iii) Credit risk: Shareholder loan
receivable from Sierra Gorda);
\u2013 The commercial viability of exploration areas of interest may
impact the recoverability of exploration and evaluation assets
(refer to note 13 Impairment of non-financial assets); and
\u2013 Timing and cost of closure and rehabilitation activities (refer to
note 15 Provisions).
The carrying amount of the associated deferred tax assets/
liabilities may change due to changes in estimates of the likely
recovery of the related tax benefits.
Global transition to a low-carbon world While we are committed to the goals of the Paris Agreement, current global signposts continue to point towards a probable trajectory of at least 2\u00b0C warming which forms our base case (1) for global transition to a low-carbon world. Our base case directly informs our commodity demand outlook, forecast commodity prices and carbon prices. Any change in our base case may in turn impact our Ore Reserve estimates, mine plans, production volumes and future costs. The Group\u2019s key estimates, assumptions and judgements with respect to transition risks and opportunities are based on the Group\u2019s expectations and assessments at the date of this report, and actual results may differ. Government policies and market developments continue to drive uncertainty in commodity and carbon price outlooks, which may impact the Group\u2019s approach to climate change and assumptions and judgements, which may in turn result in material changes to financial results and the carrying values of assets and liabilities in future reporting periods. Physical impacts of climate change The Group\u2019s operations are located in regions that may experience extreme temperatures, bushfires, flooding and droughts. The Group has performed a baseline risk assessment of the physical impacts of climate change on its operated portfolio, with the assessment based on scenarios RCP4.5 and RCP8.5 as described by the Intergovernmental Panel on Climate Change (IPCC) (2) . Longer term assets (including those that move into closure) are likely to face more significant challenges due to the expected severity of climate risks manifesting over longer timeframes. Climate change is likely to exacerbate the risks to water supply, storage and usage that we currently manage, particularly for operations in areas of water scarcity and other sensitive environmental aspects. The risk of the physical impacts of climate change were contemplated during the development of our life of operation plans (including closure estimates) and additional capital and/ or increases to operating costs have been incorporated into our forward-looking estimates when deemed appropriate. The Group\u2019s ongoing analysis of reasonable alternative assumptions with respect to future climate conditions has not identified any additional indicator that the carrying value of assets cannot be recovered or that useful lives of assets will be shortened. The Group\u2019s key estimates, assumptions and judgments with respect to the physical impacts of climate change are based on the Group\u2019s expectations and assessments as at the date of this report, and actual results may differ. The high degree of uncertainty around the nature, timing and magnitude of weather events and long-term changes in climate patterns, as well as the Group\u2019s continued physical risk assessment process and development of its direct adaptation and mitigation strategies, may result in material changes to financial results and carrying value of assets and liabilities in future reporting periods. (1) By contrast, our FY23 1.5\u00b0C scenario, which is primarily based on the International Energy Agency\u2019s Net Zero Emissions 2050 scenario (IEA NZE), is utilised by the Group to assess the resilience of our portfolio under a rapid global transition. The IEA NZE sets out one credible pathway to achieving a 1.5\u00b0C outcome by 2050, providing a set of general assumptions on commodity demand drivers, scrap availability, material efficiency and carbon prices. (2) There are four Representative Concentration Pathways (RCPs) representing possible future greenhouse gas emissions and concentration scenarios. RCP4.5 equates to between 1.1\u00b0C and 2.6\u00b0C of warming by the end of the century. RCP8.5 equates to between 2.6\u00b0C and 4.8\u00b0C of warming by the end of the century. Mineral Resources and Ore Reserves Estimating the quantity and/or grade of Mineral Resources requires the location, quantity, grade (or quality), continuity and other geological characteristics to be known, estimated or interpreted from specific geological evidence and knowledge, including sampling, in order to satisfy the requirement that there are reasonable prospects for eventual economic extraction. This process may require complex and difficult geological assessments to interpret the data. An Ore Reserve is the economically mineable part of the Measured and/or Indicated Mineral Resource that can be legally extracted, or where there is a reasonable expectation that approvals for extraction will be granted. In order to estimate Ore Reserves, consideration is required for a range of modifying factors, including mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social and governmental. When reporting Ore Reserves, the relevant studies, to at least a pre-feasibility level, must demonstrate that, at the time of reporting, extraction could be reasonably justified, including a consideration of forecast sales prices. With the exception of Sierra Gorda's mineral reserves, the Group reports Mineral Resources and Ore Reserves in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code), and the ASX Listing Rules (Chapter 5): Additional reporting on mining and oil and gas production and exploration activities. The Sierra Gorda estimates of mineral reserves are foreign estimates under the ASX Listing Rules and are not reported in accordance with the JORC Code. Refer to the Resources and Reserves section of this report for further information on the qualifying foreign estimates related to Sierra Gorda. Because the economic assumptions used to estimate the Ore Reserves change from period to period, and because additional geological data is generated during the course of operations, estimates of the Mineral Resources and Ore Reserves may change from period to period. The Group\u2019s planning processes consider the impacts of climate change on its Ore Reserves, including assessments of operating costs and the impact of extreme weather events on the expectation of economic extraction. The Group may also include Exploration Targets in determining the recoverable amount of a cash generating unit (CGU) or an exploration area of interest. Similar to climate-change related risks and opportunities, changes in the Group's estimates of Mineral Resources and Ore Reserves, including estimates of exploration potential, may affect the Group\u2019s financial results and financial position in a number of ways, including asset recoverable amounts, useful lives of assets, commercial viability of exploration areas of interest, timing and cost of closure and rehabilitation activities and the recovery of any associated deferred tax assets
3. New standards and interpretations
(a) New accounting standards and interpretations
effective from 1 July 2022
The following new accounting standards and interpretations have
been published and are effective for the year ended 30 June
2023:
\u2013 Amendments to AASB 137 \u2013 Onerous Contracts, Costs to Fulfil
a Contract;
\u2013 Amendments to AASB 3 \u2013 Updating a reference to the
Conceptual Framework;
\u2013 Amendments to AASB 116 \u2013 Property, Plant and Equipment,
Proceeds before Intended Use; and
\u2013 Amendments to AASB 112 \u2013 International Tax Reform \u2013 Pillar
Two Model Rules.
The Group has reviewed these amendments and concluded that
none have a significant impact on the Group. Refer to note 6(f)
for further details of the impact on the Group as a result of the
international tax reform and the related amendments to AASB
112.
(b) New accounting standards and interpretations
issued but not effective
The following new accounting standards and interpretations
have been published but are not yet effective for the year ended
30 June 2023:
\u2013 Amendments to AASB 101 \u2013 Classification of Liabilities as
Current or Non-current;
\u2013 Amendments to AASB 10 and AASB 128 \u2013 Sale or Contribution
of Assets between an Investor and its Associate or Joint
Venture;
\u2013 Amendments to AASB 7, AASB 101, AASB 108 and AASB 134 \u2013
Disclosure of Accounting Policies and Definition of Accounting
Estimates;
\u2013 Amendments to AASB 1 and AASB 112 \u2013 Deferred Tax related
to Assets and Liabilities arising from a Single Transaction;
\u2013 Amendments to AASB 16 \u2013 Lease Liability in a Sale and
Leaseback; and
\u2013 AASB 17 Insurance Contracts.
The Group has reviewed these amendments and improvements
and does not expect them to have a significant impact on the
Group.
The Group does not intend to early adopt any of the new
standards or interpretations. It is expected that where applicable,
these standards and interpretations will be adopted on each
respective effective date.
This section focuses on the financial performance of the
Group, covering both profitability and the resulting return to
shareholders via earnings per share.
4. Segment information
(a) Description of segments
The operating segments (also referred to as operations) are
organised and managed separately according to the nature of
products produced.
The Lead Team (the chief operating decision makers) and the
Board of Directors monitor the segment results regularly for
the purpose of making decisions about resource allocation and
assessing performance .
The principal activities of each operating segment are
summarised as follows:
Operating segment Principal activities
Worsley Alumina Integrated bauxite mine and alumina
refinery in Australia
Brazil Alumina Integrated bauxite mine and alumina
refinery in Brazil
Brazil Aluminium Aluminium smelter in Brazil
Hillside Aluminium Aluminium smelter in South Africa
Mozal Aluminium Aluminium smelter in Mozambique
Sierra Gorda Copper mine in Chile
Cannington Silver, lead and zinc mine in Australia
Hermosa Base metals exploration and development
options in the United States
Cerro Matoso Integrated laterite ferronickel mine and
smelting complex in Colombia
Illawarra Metallurgical
Coal
Metallurgical coal mines in Australia
Australia Manganese Manganese ore mine in Australia
South Africa
Manganese
Manganese ore mines in South Africa
All operations are operated by the Group except Brazil Alumina,
Brazil Aluminium and Sierra Gorda.
(b) Segment results
The segment information reflects the Group\u2019s interest in
subsidiaries and joint operations, as well as material equity
accounted joint ventures on a proportional consolidation basis.
The segment information includes non-IFRS financial measures.
Segment performance is measured by Underlying EBIT and
Underlying EBITDA. Underlying EBIT is profit before net finance
income/(costs), income tax expense, royalty related tax expense
and other earnings adjustment items. Underlying EBITDA is
Underlying EBIT before depreciation and amortisation.
Reconciliations of the underlying segment information to the
statutory information included in the Group\u2019s consolidated
financial statements are set out in note 4(b)(i) Underlying results
reconciliation, including joint venture adjustments which reconcile
the proportional consolidation of the material equity accounted
joint ventures back to their statutory equity accounting positions.
The Group\u2019s material equity accounted joint ventures are Sierra
Gorda, Australia Manganese and South Africa Manganese, refer to
note 26 Equity accounted investments.
The Group separately discloses sales of group production
from sales of third-party products and services because of the
significant difference in profit margin earned on these sales.
It is the Group\u2019s policy that inter-segment transactions are made
on an arm\u2019s length basis.
Group and unallocated items/eliminations represent group centre
functions and consolidation adjustments.
Group financing and income taxes are primarily managed on a
Group basis and are not allocated to operating segments.
Total assets and liabilities for each operating segment represent
operating assets and liabilities which predominantly exclude the
carrying amount of non-material equity accounted investments,
cash, interest bearing liabilities, tax balances and certain other
financial assets and liabilities.
Revenue recognition
Revenue is measured based on the consideration specified in
the contract with a customer and excludes amounts collected on
behalf of third parties. Revenue is not reduced for royalties and
other taxes payable from Group production.
The following is a description of the principal activities from which
the Group generates its revenue:
Revenue from the sale of commodities
The Group primarily sells the following commodities: alumina,
aluminium, copper, silver, lead, zinc, ferronickel, metallurgical
coal and manganese ore. The sales of these commodities are
considered to be performance obligations as they are the
contractual promises by the Group to transfer distinct goods to
customers.
The transaction price allocated to each performance obligation is
recognised as the performance obligation is satisfied. Satisfaction
occurs when control of the promised commodity is transferred to
the customer.
For the sale of commodities, revenue is therefore recognised
at a point in time, net of treatment and refining charges (where
applicable). The majority of the Group\u2019s sales agreements
specify that title passes on the bill of lading date (the date the
commodity is delivered to the shipping agent) and is assessed to
be the point of time in which control over the commodity passes
to the customer. For these sales, revenue is recognised on the
bill of lading date. For certain sales, title passes and revenue is
recognised when the goods have been delivered to the customer.
For certain commodities, the sales price is determined on a
provisional basis at the date of sale and adjustments to the sales
price subsequently occur based on movements in quoted market
or contractual prices up to the date of final pricing. The period
between provisional invoicing and final pricing is up to 180 days.
Revenue on provisionally priced sales is recognised based on the
estimated fair value of the total consideration receivable. The
revenue adjustment mechanism embedded within provisionally
priced sales arrangements has the characteristics of a
commodity derivative. Accordingly, the fair value of the final sales
price adjustment is re-estimated continuously and changes in fair
value are disclosed separately as \u2018other\u2019 revenue. In all cases, fair
value is estimated by reference to forward market prices.
Revenue from the provision of freight services
The Group sells most of its commodities on either Free On Board
(FOB) or Cost, Insurance, and Freight (CIF) Incoterms. In the case
of CIF Incoterms, the Group is responsible for shipping services
after the date at which control of the commodities passes to the
customer at the port of loading. The provision of shipping services
in these types of arrangements are a distinct service (and
therefore a separate performance obligation) to which a portion
of the transaction price should be allocated and recognised
over time as the shipping services are provided. The Group also
provides third party freight services which are recognised as the
shipping service is provided.
The Group does not separately disclose sales revenue from
freight services as it does not consider this necessary in order to
understand the impact of economic factors on the Group.
FY23
US$M
Worsley
Alumina Brazil Alumina
Brazil
Aluminium
Hillside
Aluminium
Mozal
Aluminium
Sierra
Gorda
(1)
Cannington Hermosa Cerro Matoso
Illawarra
Metallurgical
Coal
Australia
Manganese
(1)
South Africa
Manganese
(1)
Group and
unallocated
items/
eliminations
Group
underlying
results
(1)
Revenue from customers 1,364 456 166 1,822 888 682 554 - 698 1,664 720 369 (236) 9,147
Other
(2)
(1) - - 1 (2) 2 (12) - - (21) (32) (25) (7) (97)
Total underlying revenue 1,363 456 166 1,823 886 684 542 - 698 1,643 688 344 (243) 9,050
Comprising:
Group production 642 395 166 1,823
886 684 542 - 698 1,643 688 344 - 8,511
Third party products and services
(3)
- - - - - - - - - - - - 539 539
Inter-segment revenue 721 61 - - - - - - - - - - (782) -
Total underlying revenue 1,363 456 166 1,823 886 684 542 - 698 1,643 688 344 (243) 9,050
Underlying EBITDA 251 7 (129) 257 108 358 213 (15) 246 833 369 66 (30) 2,534
Underlying depreciation and amortisation (183) (52) (7) (66) (52) (141) (71) (4) (57) (141) (103) (21) (20) (918)
Underlying EBIT 68 (45) (136) 191 56 217 142 (19) 189 692 266 45 (50) 1,616
Comprising:
Group production 68 (51) (136) 191
56 221 148 (19) 191 696 266 46 (31) 1,646
Exploration expensed - - - - - (4) (6) - (2) (9) - (1) (42) (64)
Third party products and services
(3)
- - - - - - - - - - - - 23 23
Share of profit/(loss) of equity accounted investments - 6 - - - - - - - 5 - - - 11
Underlying EBIT 68 (45) (136) 191 56 217 142 (19) 189 692 266 45 (50) 1,616
Underlying net finance costs (188)
Underlying income tax expense (457)
Underlying royalty related tax expense (55)
Underlying earnings 916
Total adjustments to profit/(loss)
(4)
(1,089)
Profit/(loss) for the year (173)
Underlying exploration expenditure - - - - - 7 8 20 2 17 1 1 51 107
Underlying capital expenditure
(5)
82 58 9 18 17 196 61 256 38 248 58 25 3 1,069
Underlying equity accounted investments - 51 - - - - - - - 7 - - - 58
Total underlying assets
(6)
3,578 880 91 1,156 778 1,811 575 1,095 581 1,275 660 326 2,709 15,515
Total underlying liabilities
(6)
1,121 142 63 311 200 223 403 96 218 506 421 183 2,253 6,140
(1) The segment information reflects the Group\u2019s interest in material equity accounted joint ventures and is presented on a proportional consolidation basis, which is the
measure used by the Group\u2019s management to assess their performance. The Group\u2019s underlying results includes the proportional elimination of revenue and corresponding
expenses relating to freight services provided by the Group to material joint ventures of US$128 million and third party product revenue of US$33 million included in Group and
unallocated items/eliminations. Refer to note 4(b)(i) Underlying results reconciliation for the joint venture adjustments that reconcile the underlying proportional consolidation
to the statutory equity accounting positions included in the Group\u2019s consolidated financial statements.
(2) Underlying other revenue relates to fair value movements on provisionally priced contracts.
(3) Underlying revenue on third party products and services sold comprises US$86 million for aluminium, US$25 million for alumina, US$140 million for coal, US$33 million for
manganese, US$106 million for freight services and US$149 million for raw materials. Underlying EBIT on third party products and services sold comprises US$(1) million for
aluminium, US$13 million for alumina, US$11 million for coal, US$(1) million for freight services and US$1 million for raw materials.
(4) Represents the total of all adjustments made to Profit from operations, Net finance income/(costs) and Income tax expense. Refer to note 4(b)(i) Underlying results
reconciliation for further details.
(5) Underlying capital expenditure excludes the purchase of intangibles and capitalised exploration expenditure.
(6) Total underlying assets and liabilities for each operating segment represent operating assets and liabilities which predominantly exclude the carrying amount of non-material
equity accounted investments, cash, interest bearing liabilities, tax balances and certain other financial assets and liabilities .
Mozal
Aluminium
Sierra
Gorda
(1)
Cannington Hermosa Cerro Matoso
Illawarra
Metallurgical
Coal
Australia
Manganese
(1)
South Africa
Manganese
(1)
Group and
unallocated
items/
eliminations
Group
underlying
results
(1)
Revenue from customers 1,364 456 166 1,822 888 682 554 - 698 1,664 720 369 (236) 9,147
Other
(2)
(1) - - 1 (2) 2 (12) - - (21) (32) (25) (7) (97)
Total underlying revenue 1,363 456 166 1,823 886 684 542 - 698 1,643 688 344 (243) 9,050
Comprising:
Group production 642 395 166 1,823
886 684 542 - 698 1,643 688 344 - 8,511
Third party products and services
(3)
- - - - - - - - - - - - 539 539
Inter-segment revenue 721 61 - - - - - - - - - - (782) -
Total underlying revenue 1,363 456 166 1,823 886 684 542 - 698 1,643 688 344 (243) 9,050
Underlying EBITDA 251 7 (129) 257 108 358 213 (15) 246 833 369 66 (30) 2,534
Underlying depreciation and amortisation (183) (52) (7) (66) (52) (141) (71) (4) (57) (141) (103) (21) (20) (918)
Underlying EBIT 68 (45) (136) 191 56 217 142 (19) 189 692 266 45 (50) 1,616
Comprising:
Group production 68 (51) (136) 191
56 221 148 (19) 191 696 266 46 (31) 1,646
Exploration expensed - - - - - (4) (6) - (2) (9) - (1) (42) (64)
Third party products and services
(3)
- - - - - - - - - - - - 23 23
Share of profit/(loss) of equity accounted investments - 6 - - - - - - - 5 - - - 11
Underlying EBIT 68 (45) (136) 191 56 217 142 (19) 189 692 266 45 (50) 1,616
Underlying net finance costs (188)
Underlying income tax expense (457)
Underlying royalty related tax expense (55)
Underlying earnings 916
Total adjustments to profit/(loss)
(4)
(1,089)
Profit/(loss) for the year (173)
Underlying exploration expenditure - - - - - 7 8 20 2 17 1 1 51 107
Underlying capital expenditure
(5)
82 58 9 18 17 196 61 256 38 248 58 25 3 1,069
Underlying equity accounted investments - 51 - - - - - - - 7 - - - 58
Total underlying assets
(6)
3,578 880 91 1,156 778 1,811 575 1,095 581 1,275 660 326 2,709 15,515
Total underlying liabilities
(6)
1,121 142 63 311 200 223 403 96 218 506 421 183 2,253 6,140
FY22
US$M
Worsley
Alumina Brazil Alumina
Brazil
Aluminium
Hillside
Aluminium
Mozal
Aluminium Sierra Gorda
(1)
Cannington Hermosa Cerro Matoso
Illawarra
Metallurgical
Coal
Australia
Manganese
(1)
South Africa
Manganese
(1)
Group and
unallocated
items/
eliminations
Group
underlying
results
(1)
Revenue from customers 1,626 522 - 2,257 925 280 771 - 927 2,336 833 418 (205) 10,690
Other
(2)
(1) 2 - (3) (1) (39) (35) - 2 2 15 1 (3) (60)
Total underlying revenue 1,625 524 - 2,254 924 241 736 - 929 2,338 848 419 (208) 10,630
Comprising:
Group production 818 523 - 2,254
924 241 736 - 929 2,338 848 419 - 10,030
Third party products and services
(3)
- - - - - - - - - - - - 600 600
Inter-segment revenue 807 1 - - - - - - - - - - (808) -
Total underlying revenue 1,625 524 - 2,254 924 241 736 - 929 2,338 848 419 (208) 10,630
Underlying EBITDA 571 150 (43) 730 305 133 388 (12) 529 1,507 488 78 (69) 4,755
Underlying depreciation and amortisation (185) (61) (1) (64) (34) (58) (73) (2) (66) (119) (86) (20) (19) (788)
Underlying EBIT 386 89 (44) 666 271 75 315 (14) 463 1,388 402 58 (88) 3,967
Comprising:
Group production 386 92 (44) 666
271 76 317 (14) 463 1,396 402 59 (82) 3,988
Exploration expensed - - - - - (1) (2) - - (9) - (1) (26) (39)
Third party products and services
(3)
- - - - - - - - - - - - 20 20
Share of profit/(loss) of equity accounted investments - (3) - - - - - - - 1 - - - (2)
Underlying EBIT 386 89 (44) 666 271 75 315 (14) 463 1,388 402 58 (88) 3,967
Underlying net finance costs (155)
Underlying income tax expense (1,151)
Underlying royalty related tax expense (59)
Underlying earnings 2,602
Total adjustments to profit/(loss)
(4)
67
Profit/(loss) for the year 2,669
Underlying exploration expenditure - - - - - 2 3 19 - 11 1 1 37 74
Underlying capital expenditure
(5)
55 51 1 24 11 81 45 97 37 189 62 19 12 684
Underlying equity accounted investments - 40 - - - - - - - 2 - - - 42
Total underlying assets
(6)
3,571 805 67 1,284 764 1,614 555 2,098 592 1,277 645 331 3,666 17, 269
Total underlying liabilities
(6)
1,000 109 21 357 149 212 414 67 243 491 387 196 2,844 6,490
(1) The segment information reflects the Group\u2019s interest in material equity accounted joint ventures and is presented on a proportional consolidation basis, which is the
measure used by the Group\u2019s management to assess their performance. The Group\u2019s underlying results includes the proportional elimination of revenue and corresponding
expenses relating to freight services provided by the Group to material joint ventures of US$187 million and third party product revenue of US$40 million included in Group and
unallocated items/eliminations. Refer to note 4(b)(i) Underlying results reconciliation for the joint venture adjustments that reconcile the underlying proportional consolidation
to the statutory equity accounting positions included in the Group\u2019s consolidated financial statements.
(2) Underlying other revenue relates to fair value movements on provisionally priced contracts.
(3) Underlying revenue on third party products and services sold comprises US$110 million for aluminium, US$25 million for alumina, US$115 million for coal, US$40 million for
manganese, US$145 million for freight services and US$165 million for raw materials. Underlying EBIT on third party products and services sold comprises US$8 million for
aluminium, US$8 million for alumina, US$7 million for coal and US$(3) million for freight services.
(4) Represents the total of all adjustments made to Profit from operations, Net finance income/(costs) and Income tax expense. Refer to note 4(b)(i) Underlying results
reconciliation for further details.
(5) Underlying capital expenditure excludes the purchase of intangibles and capitalised exploration expenditure.
(6) Total underlying assets and liabilities for each operating segment represent operating assets and liabilities which predominantly exclude the carrying amount of non-material
equity accounted investments, cash, interest bearing liabilities, tax balances and certain other financial assets and liabilities.
Mozal Aluminium Sierra Gorda (1) Cannington Hermosa Cerro Matoso Illawarra Metallurgical Coal Australia Manganese (1) South Africa Manganese (1) Group and unallocated items/ eliminations Group underlying results (1) Revenue from customers 1,626 522 - 2,257 925 280 771 - 927 2,336 833 418 (205) 10,690 Other (2) (1) 2 - (3) (1) (39) (35) - 2 2 15 1 (3) (60) Total underlying revenue 1,625 524 - 2,254 924 241 736 - 929 2,338 848 419 (208) 10,630 Comprising: Group production 818 523 - 2,254 924 241 736 - 929 2,338 848 419 - 10,030 Third party products and services (3) - - - - - - - - - - - - 600 600 Inter-segment revenue 807 1 - - - - - - - - - - (808) - Total underlying revenue 1,625 524 - 2,254 924 241 736 - 929 2,338 848 419 (208) 10,630 Underlying EBITDA 571 150 (43) 730 305 133 388 (12) 529 1,507 488 78 (69) 4,755 Underlying depreciation and amortisation (185) (61) (1) (64) (34) (58) (73) (2) (66) (119) (86) (20) (19) (788) Underlying EBIT 386 89 (44) 666 271 75 315 (14) 463 1,388 402 58 (88) 3,967 Comprising: Group production 386 92 (44) 666 271 76 317 (14) 463 1,396 402 59 (82) 3,988 Exploration expensed - - - - - (1) (2) - - (9) - (1) (26) (39) Third party products and services (3) - - - - - - - - - - - - 20 20 Share of profit/(loss) of equity accounted investments - (3) - - - - - - - 1 - - - (2) Underlying EBIT 386 89 (44) 666 271 75 315 (14) 463 1,388 402 58 (88) 3,967 Underlying net finance costs (155) Underlying income tax expense (1,151) Underlying royalty related tax expense (59) Underlying earnings 2,602 Total adjustments to profit/(loss) (4) 67 Profit/(loss) for the year 2,669 Underlying exploration expenditure - - - - - 2 3 19 - 11 1 1 37 74 Underlying capital expenditure (5) 55 51 1 24 11 81 45 97 37 189 62 19 12 684 Underlying equity accounted investments - 40 - - - - - - - 2 - - - 42 Total underlying assets (6) 3,571 805 67 1,284 764 1,614 555 2,098 592 1,277 645 331 3,666 17, 269 Total underlying liabilities (6) 1,000 109 21 357 149 212 414 67 243 491 387 196 2,844 6,490 (i) Underlying results reconciliation The following tables reconcile the underlying segment information to the statutory information included in the Group\u2019s consolidated financial statements: US$M FY23 FY22 Underlying EBIT 1,616 3,967 Significant items (1) 186 77 Sierra Gorda joint venture adjustments (2)(3) (144) (44) Manganese joint venture adjustments (2)(4) (147) (216) Gains on the consolidation of interests in operations (5) - 9 Exchange rate gains/(losses) on restatement of monetary items (6) 62 50 Net impairment (loss)/reversal of financial assets (6)(7) (71) (26) Net impairment (loss)/reversal of non-financial assets (6)(8) (1,300) (145) Gains/(losses) on non-trading derivative instruments, contingent consideration and other investments measured at FVTPL (6) (4) 52 Profit from operations 198 3,724 Underlying net finance costs (188) (155) Sierra Gorda joint venture adjustments (2) 167 62 Manganese joint venture adjustments (2) 28 22 Exchange rate variations on net cash/(debt) 8 40 Net finance income/(costs) 15 (31) Underlying income tax expense (457) (1,151) Underlying royalty related tax expense (55) (59) Tax effect of significant items (1) (23) (26) Sierra Gorda joint venture adjustments relating to income tax expense (2) 11 1 Sierra Gorda joint venture adjustments relating to royalty related tax expense (2) 12 4 Manganese joint venture adjustments relating to income tax expense (2) 85 153 Manganese joint venture adjustments relating to royalty related tax expense (2) 43 55 Tax effect of other adjustments to Underlying EBIT (3) 32 Tax effect of other adjustments to Underlying net finance costs (3) (13) Exchange rate variations on tax balances 4 (20) Income tax expense (386) (1,024) Underlying earnings 916 2,602 Total adjustments to profit/(loss) (1,089) 67 Profit/(loss) for the year (173) 2,669 (1) Refer to note 4(b)(ii) Significant items. (2) The segment information reflects the Group\u2019s interest in material equity accounted joint ventures and is presented on a proportional consolidation basis, which is the measure used by the Group\u2019s management to assess their performance. Joint venture adjustments reconcile the proportional consolidation to the statutory equity accounting positions, recognised in share of profit/(loss) of equity accounted investments in the Consolidated Income Statement. (3) The Group\u2019s investment in the Sierra Gorda operation is represented by the carrying value of an equity accounted investment of US$101 million (FY22: US$30 million) and the carrying value of a purchased credit-impaired receivable of US$1,711 million (FY22: US$1,648 million) classified as a loan to an equity accounted investment within trade and other receivables on the Consolidated Balance Sheet. The earnings adjustments include a revaluation gain of US$71 million (FY22: gain of US$26 million) relating to the shareholder loan payable that was eliminated from the Group\u2019s Underlying EBIT upon proportional consolidation. (4) Includes earnings adjustments of US$(3) million (FY22: US$6 million) included in the Australia Manganese segment and US$12 million (FY22: US$8 million) included in the South Africa Manganese segment. (5) FY22 gain relates to the acquisition of an additional 16.6 per cent shareholding and related rights in Mozal Aluminium, recognised in other income in the Consolidated Income Statement. (6) Recognised in expenses excluding finance costs in the Consolidated Income Statement. (7) Refer to note 19 Financial assets and financial liabilities. (8) Refer to note 13 Impairment of non-financial assets (i) Underlying results reconciliation continued FY23 US$M Group underlying results Sierra Gorda joint venture adjustments Manganese joint venture adjustments Group statutory results Total revenue 9,050 (684) (937) 7, 429 Depreciation and amortisation 918 (141) (124) 653 Share of profit/(loss) of equity accounted investments 11 71 164 246 Exploration expenditure 107 (7) (2) 98 Capital expenditure 1,069 (196) (83) 790 Equity accounted investments 58 101 340 499 Total assets 15,515 (450) (501) 14,564 Total liabilities 6,140 (450) (501) 5,189 FY22 US$M Group underlying results Sierra Gorda joint venture adjustments Manganese joint venture adjustments Group statutory results Total revenue 10,630 (241) (1,120) 9,269 Depreciation and amortisation 788 (58) (106) 624 Share of profit/(loss) of equity accounted investments (2) 30 244 272 Exploration expenditure 74 (2) (2) 70 Capital expenditure 684 (81) (81) 522 Equity accounted investments 42 30 398 470 Total assets 17, 269 (452) (481) 16,336 Total liabilities 6,490 (452) (481) 5,557 (ii) Significant items Significant items are those items, not separately identified in note 4(b)(i) Underlying results reconciliation, whose nature and amount are considered material to the Group\u2019s consolidated financial statements. FY23 US$M Gross Tax Net Disposal of royalties 189 (56) 133 Assets write-off (51) 16 (35) Tax adjustments relating to the Sierra Gorda acquisition - 17 17 Vendor indemnity relating to the Sierra Gorda acquisition 48 - 48 Total significant items 186 (23) 163 Disposal of royalties On 19 July 2022, the Group divested four royalties to Ecora Resources PLC (formerly known as Anglo Pacific Group PLC) in exchange for consideration comprising an upfront cash payment of US$48 million, deferred cash consideration of US$55 million, US$78 million in equity and a variable consideration receivable valued at US$10 million. The equity in Ecora Resources PLC has been recognised as an investment in equity instruments designated at FVOCI. The variable consideration is payable if certain production and price-linked conditions are met prior to 2032, up to a maximum of US$15 million. The royalties were recognised as intangible assets with a nominal carrying value. On completion the Group recognised other income, net of transaction costs, of US$189 million (US$133 million post-tax) in the Consolidated Income Statement and was included in Group and unallocated items. Assets write-off On 23 August 2022, the Group announced that it would not proceed with an investment in the Dendrobium Next Domain project at Illawarra Metallurgical Coal following its consideration of recently completed study work and extensive analysis of alternatives considered for the complex. As a result of the decision in August 2022, the Group wrote off US$51 million (US$35 million post-tax) of costs previously capitalised in relation to the project which were recognised within expenses excluding finance costs in the Consolidated Income Statement. The write-off related to capitalised exploration and evaluation assets previously included in property, plant and equipment on the Consolidated Balance Sheet. Tax adjustments relating to the Sierra Gorda acquisition During the year, the Group recognised an income tax benefit of US$31 million relating to tax liabilities recognised on the acquisition of Sierra Gorda during FY22. The US$31 million benefit comprises a reassessment of US$17 million and a foreign exchange gain of US$14 million which is separately reported as part of exchange variations of tax balances. The tax adjustments relating to the Sierra Gorda acquisition have been excluded from the Group\u2019s Underlying income tax expense on the basis that they do not relate to assessable income earned during its ownership. Vendor indemnity relating to the Sierra Gorda acquisition On 17 May 2023, Chilean Mining Tax reforms were passed by the Chilean Congress and subsequently enacted in August 2023. As part of the Group\u2019s acquisition of Sierra Gorda during FY22, the Group has the right to claim an indemnity from the vendors for any mining tax changes enacted prior to December 2025. As a result of these changes the Group has recognised other income of US$48 million in the Group\u2019s Consolidated Income Statement and a corresponding receivable of US$48 million from the vendors on the Group\u2019s Consolidated Balance Sheet in relation to the indemnity. FY22 US$M Gross Tax Net Recognition of indirect tax assets 77 (26) 51 Total significant items 77 (26) 51 Recognition of indirect tax assets Following the Group\u2019s decision to participate in the restart of Brazil Aluminium, the Group recognised indirect tax assets of US$77 million that were previously expensed since the smelter was placed on care and maintenance in 2015. The recognition of the indirect tax assets has resulted in a significant one-off amount of US$77 million (US$51 million post-tax) being recognised as other income in the Consolidated Income Statement
(c) Geographical information
The geographical information below analyses statutory Group revenue and non-current assets by location. Revenue is primarily
presented by the geographical destination of the product and non-current assets are presented by the geographical location of the
operations.
Revenue from external customers Non-current assets
US$M FY23 FY22 FY23 FY22
Australia 765 1,013 5,239 5,099
China 728 776 - -
India 304 581 - -
Japan 434 523 - -
Middle East 326 283 - -
Mozambique 346 458 488 497
Netherlands
(1)
1,079 1,255 1,604 1,648
Brazil 192 125 765 695
Russia - 44 - -
South Africa 495 633 882 933
South Korea 411 692 - -
United States of America 419 439 1,193 2,185
Rest of Asia 850 967 100 102
Rest of Europe 776 1,079 1 1
Rest of North America 234 278 1 1
Rest of Oceania 70 92 - -
Rest of South America - 31 544 477
Unallocated assets
(2)
- - 508 458
Total 7, 429 9,269 11,325 12,096
(1) Non-current assets include the non-current portion of the shareholder loan receivable from Sierra Gorda.
(2) Comprises other financial assets and deferred tax assets.
5. Expenses excluding finance costs
US$M Note FY23 FY22
Changes in inventories of finished goods and work in progress (60) (133)
Raw materials and consumables used 2,761 2,309
Wages, salaries and redundancies 690 657
Pension and other post-retirement obligations 65 60
External services (including transportation) 1,175 1,111
Third party commodity purchases 600 718
Depreciation and amortisation 653 624
Exchange rate (gains)/losses on restatement of monetary items (62) (50)
(Gains)/losses on derivative instruments, contingent consideration and other investments
measured at FVTPL (6) (29)
Government and other royalties paid and payable 286 295
Exploration expenditure incurred and expensed 59 37
Net impairment of financial assets 19 71 26
Net impairment of non-financial assets 13 1,300 145
Short-term, low-value and variable lease rentals 69 77
All other operating expenses 221 153
Total 7,822 6,000
6. Tax Income tax expense comprises current and deferred tax and is recognised in the Consolidated Income Statement except to the extent that it relates to items recognised directly in the Consolidated Statement of Comprehensive Income. (a) Income tax expense US$M FY23 FY22 Current income tax (expense)/benefit (476) (1,006) Deferred income tax (expense)/benefit 90 (18) Total income tax expense (386) (1,024) Income tax expense Income tax expense for the period is the tax payable on the current period\u2019s taxable income based on the applicable income tax rate for each jurisdiction adjusted for changes in deferred tax assets and liabilities attributable to temporary differences and unused tax losses. Current and deferred tax is calculated using the tax rates enacted or substantively enacted at period end and includes any adjustment to tax payable in respect of previous years. (b) Reconciliation of prima facie tax expense to income tax expense US$M FY23 FY22 Profit before tax 213 3,693 Deduct: Share of profit/(loss) of equity accounted investments 246 272 Profit/(loss) subject to tax (33) 3,421 Income tax on profit/(loss) calculated at 30 per cent 10 (1,026) Tax rate differential on non-Australian income 1 72 Exchange variations and other translation adjustments 4 (20) Withholding tax on distributed earnings (36) (54) Derecognition of future tax benefits (1) (55) (7) Non-deductible impairment charges (1) (333) - Non-deductible Colombian royalty (24) - Tax adjustments relating to the Sierra Gorda acquisition (2) 31 - Change in tax rates - (3) Prior year adjustments 4 (5) Other 12 19 Total income tax expense (386) (1,024) (1) Primarily relates to the impairment of the Taylor Deposit at Hermosa, which resulted in the Group derecognising US$53 million of deferred tax assets and incurring US$315 million of non-deductible tax expenses. Refer to note 13 Impairment of non-financial assets. (2) Refer to note 4(b)(ii) Significant items. Profit from equity accounted investments has been taxed in companies other than South32 Limited, being the companies whose results are disclosed as equity accounted investments in the consolidated financial statements. Refer to note 26 Equity accounted investments for further details of the Group\u2019s equity accounted investments (c) Movement in deferred tax balances The composition of the Group\u2019s net deferred tax assets and liabilities recognised in the Consolidated Balance Sheet and the deferred tax expense (charged)/credited to the Consolidated Income Statement is as follows: Deferred tax assets Deferred tax liabilities Deferred tax (charged)/credited to the Consolidated Income Statement US$M FY23 FY22 FY23 FY22 FY23 FY22 Type of temporary difference Depreciation 253 295 261 305 2 (29) Employee benefits 49 49 (12) (11) 1 (3) Closure and rehabilitation 234 208 (59) (51) 34 27 Other provisions - - (13) (13) - (4) Deferred charges (52) (60) - - 8 7 Non tax-depreciable fair value adjustments, revaluations and mineral rights (95) (94) 11 12 - 29 Tax-effected losses 15 6 (54) (7) 57 - Brazil deferral incentive (1) - - 70 64 (6) (8) Leases (1) - (1) (1) (1) (10) Other (13) (10) 7 9 (5) (27) Total 390 394 210 307 90 (18) (1) Our Brazilian subsidiary has received a 75 per cent corporate income tax deferral due to the reinvestment of capital in the North East regions of Brazil. The tax is deferred until earnings are repatriated from Brazil. Deferred tax is provided using the balance sheet liability method, providing for the tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for tax assessment or deduction purposes. The tax effect of certain temporary differences is not recognised, principally with respect to: \u2013 Temporary differences arising on the initial recognition of assets or liabilities (other than those arising in a business combination or in a manner that initially impacted accounting or taxable profit); \u2013 Temporary differences relating to investments and undistributed earnings in subsidiaries, joint ventures and associates to the extent that the Group is able to control its reversal and it is probable that it will not reverse in the foreseeable future; and \u2013 Goodwill. To the extent that an item\u2019s tax base is solely derived from the amount deductible under capital gains tax legislation, deferred tax is determined as if such amounts are not deductible in determining future assessable income. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reviewed at each balance sheet date and amended to the extent that it is no longer probable that the related tax benefit will be realised. Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same tax authority and the Group has both the right and the intention to settle its current tax assets and liabilities on a net or simultaneous basis. (d) Unrecognised deferred tax assets and liabilities The composition of the Group\u2019s unrecognised deferred tax assets and liabilities is as follows: US$M FY23 FY22 Unrecognised deferred tax assets Tax-effected losses (1) 58 21 Mineral rights 617 589 Impairment of investments in subsidiaries 949 945 Closure and rehabilitation 48 50 Depreciable assets 32 8 Other temporary differences 1 - Total unrecognised deferred tax assets 1,705 1,613 Unrecognised deferred tax liabilities Taxable temporary differences associated with investments and undistributed earnings in subsidiaries 33 39 Total unrecognised deferred tax liabilities 33 39 (1) Represents tax losses that have no expiry .
(e) Tax consolidation
South32 Limited and its 100 per cent owned Australian resident subsidiaries have formed a tax consolidated group with effect
from 25 May 2015. South32 Limited is the head entity of the tax consolidated group. Members of the group have entered into a tax
sharing agreement in order to allocate income tax expense to the wholly-owned subsidiaries on a stand-alone basis. The tax sharing
arrangement provides for the allocation of income tax liabilities between the entities should the head entity default on its tax payment
obligations. The possibility of such a default is considered remote at the date of this report.
Members of the tax consolidated group have also entered into a tax funding agreement. The group has applied its allocation approach
in determining the appropriate amount of current taxes to allocate to members of the tax consolidated group. The tax funding
agreement provides for each member of the tax consolidated group to pay or receive a tax equivalent amount to or from the head
entity in accordance with their notional current tax liability or current tax asset. Such amounts are reflected in amounts receivable from
or payable to the head entity in their accounts and are settled as soon as practicable after lodgement of the consolidated return and
payment of the tax liability.
(f) Future tax developments
The Group continues to monitor the Organisation for Economic Co-operation and Development\u2019s Two Pillar Solution in all countries in
which the Group operates.
Pillar One measures currently apply only to multinational enterprises that have a global turnover exceeding \u20ac20 billion and profitability
exceeding 10%, and therefore does not apply to the Group. Pillar Two measures seek to introduce a 15% global minimum tax and
will apply to the Group given its annual turnover exceeds the \u20ac750 million threshold. The Group notes that the UK Government has
substantively enacted Pillar Two legislation in June 2023 and the Australian Government has committed to enacting the rules, however
draft legislation is yet to be released.
The Group has adopted the guidance contained in the IASB issued International Tax Reform - Pillar Two Model Rules, which amended
IAS 12 Income Taxes, released in May 2023 and applied the mandatory temporary exception to recognise and disclose information
about deferred tax assets and liabilities related to Pillar Two income taxes. The Group is currently evaluating the cash tax implications
and other impacts of the Pillar Two model rules, and does not expect the impact on the Group to be significant.
(g) Tax transparency report
More detail of the Group\u2019s tax outcomes, including country-by-country reporting is included in the 2023 Transparency and Payments to
Government Report.
Key estimates, assumptions and judgements
Deferred tax
Judgement is required in assessing whether deferred tax assets and certain deferred tax liabilities are recognised in the
Consolidated Balance Sheet. Deferred tax assets are recognised only where it is considered more likely than not that they will be
recovered, which is dependent on the generation of sufficient future taxable profits. Deferred tax liabilities arising from temporary
differences in investments, caused principally by retained earnings held in foreign tax jurisdictions, are recognised unless
repatriation of retained earnings can be controlled and are not expected to occur in the foreseeable future.
Assumptions about the generation of future taxable profits and repatriation of retained earnings depend on management\u2019s
estimates of future cash flows. These depend on estimates of future production and sales volumes, commodity prices, climate
change-related impacts, Mineral Resources and Ore Reserves, operating costs, closure and rehabilitation costs, capital
expenditure, dividends and other capital management transactions.
Uncertain tax matters
Judgements are required about the application of the inherently complex income tax legislation in Colombia and Brazil. These
judgements are subject to risk and uncertainty, hence there is a possibility that changes in circumstances will alter expectations,
which may impact the amount of deferred tax assets and deferred tax liabilities recognised in the Consolidated Balance Sheet
and the amount of other tax losses and temporary differences not yet recognised.
Where the final tax outcomes are different from the amounts that were initially recorded, these differences impact the current
and deferred tax provisions in the period in which the determination is made. Measurement of uncertain tax and royalty matters
considers a range of possible outcomes, including assessments received from tax authorities. Where management is of the view
that potential liabilities have a low probability of crystallising, or it is not possible to quantify them reliably, they are disclosed as
contingent liabilities .
7. Dividends US$M FY23 FY22 Prior year final dividend (1) 646 163 Prior year special dividend (1) 138 93 Interim dividend (2) 223 404 Total dividends declared and paid during the year 1,007 660 (1) On 25 August 2022, the Directors resolved to pay a fully franked final dividend of US 14.0 cents per share (US$648 million) and a fully franked special dividend of US 3.0 cents per share (US$139 million) in respect of the 2022 financial year. The dividends were paid on 13 October 2022. In addition to the ESOP Trusts receiving dividends from South32 Limited, a total of 9,665,568 shares were bought back between the declaration and the ex-dividend dates, therefore reducing the dividends paid externally to US$784 million. (2) On 16 February 2023, the Directors resolved to pay a fully-franked interim dividend of US 4.9 cents per share (US$224 million) in respect of the 2023 financial half year. The dividend was paid on 6 April 2023. In addition to the ESOP Trusts receiving dividends from South32 Limited, a total of 3,292,746 shares were bought back between the declaration and the ex-dividend dates, therefore reducing the dividend paid externally to US$223 million. Franking account US$M FY23 FY22 Restated (1) Franking credits at the beginning of the year 678 344 Credits arising from tax paid/payable by South32 Limited (2) 243 559 Credits arising from the receipt of franked dividends 68 71 Utilisation of credits arising from the payment of franked dividends (426) (266) Exchange rate variations (25) (30) Total franking credits available at the end of the year (3) 538 678 (1) FY22 comparatives have been restated to allow for foreign exchange rate variations, consistent with current year presentation. (2) Includes the Australian FY23 income tax liability of US$16 million due in December 2023. (3) The payment of the final franked FY23 dividend declared after 30 June 2023 will decrease the franking account balance by US$62 million. Refer to note 31 Subsequent events . 8. Earnings per share Basic earnings per share (EPS) amounts are calculated based on profit or loss attributable to equity holders of South32 Limited and the weighted average number of shares outstanding during the year. Dilutive EPS amounts are calculated based on profit or loss attributable to equity holders of South32 Limited and the weighted average number of shares outstanding after adjustment for the effects of all dilutive potential shares. The following reflects the profit or loss and share data used in the basic and diluted EPS computations: Profit/(loss) attributable to equity holders US$M FY23 FY22 Profit/(loss) attributable to equity holders of South32 Limited (basic) (173) 2,669 Profit/(loss) attributable to equity holders of South32 Limited (diluted) (173) 2,669 Weighted average number of shares Million FY23 FY22 Basic EPS denominator (1) 4,572 4,647 Shares contingently issuable under employee share ownership plans (2) - 32 Diluted EPS denominator 4,572 4,679 (1) The basic EPS denominator is the aggregate of the weighted average number of shares after deduction of the weighted average number of treasury shares outstanding and shares permanently cancelled through the on-market share buy-back program. (2) The diluted EPS calculation excludes 26,994,090 (FY22: nil) rights which are considered anti-dilutive and are subject to service and performance conditions. Earnings per share US cents FY23 FY22 Basic EPS (3.8) 57.4 Diluted EPS (3.8) 57.0 This section shows the assets used to generate the Group\u2019s trading performance and the liabilities incurred. Assets and liabilities relating to the Group\u2019s financing activities are addressed in the capital structure and financing section, notes 16 to 20. 9. Trade and other receivables US$M FY23 FY22 Current Trade receivables 395 643 Loans to equity accounted investments (1)(2) 114 7 Other receivables 269 194 Total current trade and other receivables (3) 778 844 Non-current Loans to equity accounted investments (1)(2) 1,790 1,793 Other receivables 133 110 Total non-current trade and other receivables (3) 1,923 1,903 (1) Refer to note 29 Related party transactions. (2) Includes a purchased credit-impaired receivable which is classified as current of US$107 million and non-current of US$1,604 million (FY22: non-current of US$1,648 million). Refer to note 19 Financial assets and financial liabilities. (3) Net of allowances for expected credit losses of US$2 million (FY22: US$2 million). Trade receivables generally have terms of up to 30 days. Trade and other receivables which are not held at FVTPL are recognised initially at fair value and subsequently at amortised cost using the effective interest method, less an allowance for expected credit losses . 10. Inventories US$M FY23 FY22 Current Raw materials and consumables 519 455 Work in progress 333 338 Finished goods 250 189 Total current inventories 1,102 982 Non-current Raw materials and consumables 57 55 Work in progress 25 21 Total non-current inventories 82 76 The value of inventories carried at net realisable value as at 30 June 2023 was US$222 million (FY22: US$31 million). Inventory write- downs of US$18 million (FY22: US$17 million) were recognised in the year. Inventories are valued at the lower of cost and net realisable value. Cost is determined primarily on the basis of average cost. For processed inventories, cost is derived on an absorption costing basis. Cost comprises the cost of purchasing raw materials and the cost of production, including attributable overheads.
11. Property, plant and equipment
Land and buildings Plant and equipment
FY23
US$M
Right-of-use
assets Owned assets
Right-of-use
assets Owned assets
Other mineral
assets
Assets under
construction
Exploration
and evaluation Total
Cost
At the beginning of the year 37 2,352 943 13,204 4,547 815 212 22,110
Additions 6 - 91 133 - 815 84 1,129
Foreign exchange
movements in closure and
rehabilitation provisions
(1)
- - - (68) - - - (68)
Disposals - (3) - (112) (140) - (51) (306)
Transfers and other
movements - 64 17 251 63 (395) - -
At the end of the year 43 2,413 1,051 13,408 4,470 1,235 245 22,865
Accumulated depreciation
and impairments
At the beginning of the year 15 1,438 316 9,239 2,050 51 13 13,122
Depreciation 3 78 64 402 94 - - 641
Net impairments
(2)
- - - - 1,049 119 132 1,300
Disposals - - - (108) (140) - - (248)
At the end of the year 18 1,516 380 9,533 3,053 170 145 14,815
Net book value at
30 June 2023
(3)
25 897 671 3,875 1,417 1,065 100 8,050
(1) Refer to note 15 Provisions.
(2) Refer to note 13 Impairment of non-financial assets.
(3) Includes US$98 million of land and buildings, US$37 million of plant and equipment, US$580 million of other mineral assets, US$328 million of assets under construction and
US$51 million of exploration and evaluation expenditure that relates to the Hermosa project.
Capital expenditure commitments as at 30 June 2023 were US$193 million (FY22: US$114 million).
Land and buildings Plant and equipment
FY22
US$M
Right-of-use
assets Owned assets
Right-of-use
assets Owned assets
Other mineral
assets
Assets under
construction
Exploration
and evaluation Total
Cost
At the beginning of the year 50 2,299 906 13,061 4,468 594 153 21,531
Additions 9 - 57 152 - 547 59 824
Acquisition of subsidiaries
and joint operations
(1)
- 22 1 95 - 5 - 123
Foreign exchange
movements in closure and
rehabilitation provisions
(2)
- - - (127) - - - (127)
Disposals (22) (2) (21) (171) (25) - - (241)
Transfers and other
movements - 33 - 194 104 (331) - -
At the end of the year 37 2,352 943 13,204 4,547 815 212 22,110
Accumulated depreciation
and impairments
At the beginning of the year 28 1,396 274 9,001 1,894 - - 12,593
Depreciation 7 67 51 415 79 - - 619
Net impairments
(3)
- (15) 7 (17) 102 51 13 141
Disposals (20) (2) (17) (167) (25) - - (231)
Transfers and other
movements - (8) 1 7 - - - -
At the end of the year 15 1,438 316 9,239 2,050 51 13 13,122
Net book value at
30 June 2022
(4)
22 914 627 3,965 2,497 764 199 8,988
(1) Relates to the acquisition of an additional 16.6 per cent shareholding and related rights in Mozal Aluminium in FY22.
(2) Refer to note 15 Provisions.
(3) Refer to note 13 Impairment of non-financial assets.
(4) Includes US$77 million of land and buildings, US$37 million of plant and equipment, US$1,629 million of other mineral assets, US$230 million of assets under construction and
US$122 million of exploration and evaluation related expenditure that relates to the Hermosa project .
(a) Property, plant and equipment Property, plant and equipment is held at cost less accumulated depreciation and impairment charges. Cost is the fair value of consideration given to acquire the asset at the time of its acquisition or construction and includes the direct cost of bringing the asset to the location and condition necessary for operation and its estimated future cost of closure and rehabilitation. (b) Assets under construction When Ore Reserves are estimated and development of commercial production is approved, capitalised exploration and evaluation expenditure is reclassified to assets under construction. All subsequent development expenditure is capitalised and classified as assets under construction, provided commercial viability conditions continue to be satisfied. All assets included in assets under construction are reclassified to other categories in property, plant and equipment when the asset is available and ready for use in the location and condition necessary for it to be capable of operating in the manner intended . (c) Exploration and evaluation expenditure Exploration is defined as the search for potential mineralisation after the Group has obtained legal rights to explore in a specific area and includes topographical, geological, geochemical and geophysical studies and exploratory drilling, trenching and sampling. Evaluation is defined as the determination of the technical feasibility and commercial viability of a particular prospect. Activities conducted during the evaluation phase include the determination of the tonnage and grade and/or quality of the deposit, examination and testing of extraction methods and metallurgical or treatment process, surveys of transportation and infrastructure requirements, and market and finance studies. Exploration and evaluation expenditure (including amortisation of capitalised licence and lease costs) is charged to the Consolidated Income Statement as incurred except in the following circumstances, in which case the expenditure may be capitalised: \u2013 The existence of a commercially viable mineral deposit has been established as a result of a reasonable prospect for the eventual economic extraction; or \u2013 The exploration and evaluation activity is within an area of interest which was previously acquired as an asset acquisition or in a business combination and was measured at fair value on acquisition. In addition, drilling costs incurred at a producing mine for the purpose of improving confidence of the existing resource may be capitalised when the following criteria are satisfied: \u2013 The drilling occurs within the existing physical boundaries of the area defined as the resource; and \u2013 The drilling costs are incurred in resources which are economically recoverable. Capitalised exploration and evaluation expenditure considered to be a tangible asset is recognised as a component of property, plant and equipment at cost less impairment charges. Otherwise, it is recognised as an intangible asset (such as certain licence and lease arrangements). In determining whether the purchase of an exploration licence or lease is an intangible asset or a component of property, plant and equipment, consideration is given to the substance of the item acquired and not its legal form. Licences or leases purchased which allow exploration over an extended period of time meet the definition of an intangible exploration lease asset where they cannot be reasonably associated with a known Mineral Resource. (d) Other mineral assets Other mineral assets comprise: \u2013 Capitalised exploration and evaluation expenditure for areas now in production; \u2013 Development expenditure for areas now in production; and \u2013 Mineral rights acquired. In underground mines, when production and development activity occur concurrently, development activity is separated from production activity, and is capitalised as development expenditure in other mineral assets. Underground mine development activity includes the cost associated with gaining access to an ore deposit which gives rise to a substantive change in the future productive capacity of the mine .
(e) Leases
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the
contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
The Group recognises a right-of-use (ROU) asset and a lease liability at the lease commencement date. The ROU asset is initially
measured at cost, which comprises the initial amount of the lease liability, plus any initial direct costs incurred and estimated future
cost of closure or rehabilitation, less any lease incentives received. The ROU asset is subsequently measured at cost less accumulated
depreciation, impairment and any adjustments for remeasurement of the lease liability.
The corresponding lease liability is included within interest bearing liabilities. The lease liability is initially measured based on the value
of lease payments not yet paid at the commencement date, discounted to present value using the interest rate implicit in the lease or,
if that rate cannot be readily determined, the lessee\u2019s incremental borrowing rate. The lessee\u2019s incremental borrowing rate is the rate of
interest that a lessee would have to pay to borrow over a similar term, and with similar security, the funds necessary to obtain an asset
of a similar value to the ROU asset in a similar economic environment.
The lease liability is subsequently measured at amortised cost using the effective interest method. It is remeasured when there is a
change in future lease payments arising from a change in a rate or an index or if the Group changes its assessment of whether it will
exercise a purchase, extension or termination option. When the lease liability is remeasured, a corresponding adjustment is made to the
carrying amount of the ROU asset, or is recognised in the Consolidated Income Statement if the carrying amount of the ROU asset has
been reduced to nil.
The nature of the Group\u2019s leases predominantly relates to mining equipment and assets supporting the operations in line with the
Group\u2019s principal activities.
Leased assets are pledged as security for the related lease liabilities.
Short-term, low-value and variable leases
The Group has elected not to recognise ROU assets and lease liabilities for short-term and low-value leases. Short-term leases are
leases with a lease term of 12 months or less, while low-value leases are leases where the underlying asset is considered low value.
Variable leases are leases with lease payments which are variable but do not depend on a rate or an index. The Group recognises the
lease payments associated with these leases as an expense in the Consolidated Income Statement on a straight-line basis over the
lease term. If variable leases have a fixed component, these would be recognised in the Consolidated Balance Sheet.
Total cash outflows for lease obligations consist of US$98 million (FY22: US$99 million) for lease liabilities recognised in the Consolidated
Balance Sheet and US$69 million (FY22: US$77 million) for short-term, low-value and variable leases recognised in the Consolidated
Income Statement.
(f) Depreciation and amortisation
The carrying amounts of property, plant and equipment are depreciated to their estimated residual values over the estimated useful
lives of the specific assets concerned. Estimates of residual values and useful lives are reassessed annually and any change in estimate
is taken into account in the determination of remaining depreciation charges. Depreciation commences on the date of commissioning.
The major categories of property, plant and equipment are depreciated on a units of production or straight-line basis using the
estimated lives indicated below. However, where assets are dedicated to an operation or lease and are not readily transferable, the
below useful lives are subject to the lesser of the asset category\u2019s useful life and the life of the operation or lease.
Category Useful life
Buildings 25 to 40 years straight-line
Land not depreciated
Plant and equipment 3 to 30 years straight-line
ROU assets based on the shorter of the useful life or the lease term (straight-line)
Mineral rights based on Ore Reserves on a units of production basis
Capitalised exploration, evaluation and development expenditure based on Ore Reserves on a units of production basis
Key estimates, assumptions and judgements
Useful economic lives of assets
The useful lives of our property, plant and equipment are often dependent, either directly or indirectly, on the reserve life of the
orebody to which they relate. Changes in economic assumptions used to estimate Ore Reserves and/or the timing of closure of
operations, including the Group\u2019s expectations with respect to climate change-related risks, may impact the estimated useful lives
of the specific assets concerned.
Refer to note 2(c) Key estimates, assumptions and judgements for further details regarding climate change-related risks and
opportunities, and Mineral Resources and Ore Reserves as sources of estimation uncertainty .
12. Intangible assets
FY23
US$M Goodwill
Other
intangibles Total
Cost
At the beginning of the year 139 284 423
Additions - 69 69
Disposals - (25) (25)
At the end of the year 139 328 467
Accumulated amortisation and impairments
At the beginning of the year - 237 237
Amortisation charge for the year - 13 13
Disposals - (25) (25)
At the end of the year - 225 225
Net book value at 30 June 2023 139 103 242
FY22
US$M Goodwill
Other
intangibles Total
Cost
At the beginning of the year 139 278 417
Additions - 4 4
Acquisition of subsidiaries and joint operations
(1)
- 2 2
At the end of the year 139 284 423
Accumulated amortisation and impairments
At the beginning of the year - 228 228
Amortisation charge for the year - 5 5
Impairments for the year - 4 4
At the end of the year - 237 237
Net book value at 30 June 2022 139 47 186
(1) Relates to the acquisition of an additional 16.6 per cent shareholding and related rights in Mozal Aluminium in FY22.
(a) Goodwill
Where the fair value of consideration paid for a business combination exceeds the fair value of the Group\u2019s share of the identifiable net
assets acquired, the difference is treated as purchased goodwill. Where the fair value of the Group\u2019s share of the identifiable net assets
acquired exceeds the fair value of consideration paid, the difference is immediately recognised in the Consolidated Income Statement.
Goodwill is not amortised, however, its carrying amount is assessed annually against its recoverable amount.
(b) Other intangible assets
Amounts paid for the acquisition of identifiable intangible assets, such as software, licences and contract based intangible assets are
capitalised at the fair value of consideration paid and are recognised at cost less accumulated amortisation and impairment charges.
Identifiable intangible assets with a finite life are amortised on a straight-line basis over their expected useful life from when the asset is
ready for use. The useful lives are as follows:
Category Useful life
Software and licences 5 years
Contract based intangible assets up to 35 years
The Group has no identifiable intangible assets for which the expected useful life is indefinite .
13. Impairment of non-financial assets
In testing for indications of impairment and performing impairment calculations, assets are considered as collective groups and referred
to as CGUs. Impairment tests are carried out annually for CGUs containing goodwill and when there is an indication of impairment or
impairment reversal for all other CGUs. The Group uses discounted cash flow valuation ranges to assess whether there is an indicator of
impairment or impairment reversal for its CGUs. For any resulting impairment testing, and for CGUs containing goodwill, the Group uses
the higher of fair value less cost of disposal (FVLCD) and its value in use to assess the recoverable amount.
If the carrying value of the CGU exceeds its recoverable amount, the CGU is impaired and an impairment loss is charged to the
Consolidated Income Statement. Previously impaired CGUs are reviewed for possible reversal of impairment at each reporting date.
Impairment reversals cannot exceed the carrying value that would have been determined (net of depreciation) had no impairment loss
been recognised for the CGU. Goodwill is not subject to impairment reversal.
For areas not yet in production, any mineral rights acquired, together with subsequent capitalised exploration and evaluation
expenditure, are reviewed to determine the appropriateness of continuing to carry forward costs in relation to that area of interest.
Once the technical feasibility and commercial viability of an area of interest are demonstrated, exploration and evaluation assets
attributable to that area of interest are tested for impairment.
The Group recognised the following net impairment for the year ended 30 June 2023:
US$M Note FY23 FY22
Impairment
Property, plant and equipment
(1)
11 1,300 176
ROU assets
(1)
11 - 7
Intangible assets 12 - 4
Impairment reversal
Property, plant and equipment
(2)
11 - (42)
Total net impairment 1,300 145
(1) FY23 relates to a US$1,300 million impairment of the Taylor Deposit within the Hermosa segment. FY22 relates to a US$183 million impairment included in Group and
unallocated items in respect of Eagle Downs. This includes a US$176 million impairment of property, plant and equipment and a US$7 million impairment of ROU assets.
(2) FY22 relates to a US$42 million impairment reversal included within the Brazil Aluminium segment.
(a) Recognised impairments - 30 June 2023
Hermosa \u2013 Taylor Deposit
In August 2018, the Group completed its acquisition of the Hermosa project located in Arizona, United States. The Hermosa project
comprises the zinc-lead-silver sulphide deposit (Taylor Deposit), the manganese-zinc-silver oxide deposit (Clark Deposit) and a land
package with the potential for further polymetallic and copper mineralisation (Land Package). In FY23, the Group advanced the
feasibility study for the Taylor Deposit, completed a pre-feasibility selection study for the Clark Deposit and announced that the US
Federal Permitting Improvement Steering Council, an independent federal agency, had confirmed the Hermosa project as the first
mining project added to the FAST-41 process. Since acquisition, the fair value of the Taylor Deposit has been negatively impacted by
delayed first production as a result of COVID-19 related restrictions and significant dewatering requirements, as well as capital cost
escalation in line with industry-wide inflation.
Recently completed study work confirmed that the Taylor Deposit and the Clark Deposit can be developed independently. As a result,
the Group identified three separate areas of interest within the Hermosa project: the Taylor Deposit, the Clark Deposit and the Regional
Land Package. On separation into three separate areas of interest, the Group allocated the carrying value of the previous single
Hermosa area of interest to each of the newly identified and separate areas of interest.
As a result of the study work to date, the Group identified an impairment indicator for the Taylor Deposit and recognised a resulting
impairment of property, plant and equipment of US$1,300 million in FY23 within expenses excluding finance costs in the Consolidated
Income Statement. The impairment of US$1,300 million includes US$1,049 million recognised in other mineral assets, US$119 million
recognised in assets under construction and US$132 million recognised in exploration and evaluation. The recoverable amount of the
Taylor Deposit was determined as US$482 million based on its FVLCD.
Hermosa \u2013 Taylor Deposit continued
The fair value measurement was categorised as a Level 3 fair value based on the inputs in the discounted cashflow valuation model
(refer to note 19 Financial assets and financial liabilities). The recoverable amount was informed by inputs from the feasibility study in
progress for the Taylor Deposit, including the expected technical performance of the deposit as well as expected capital and operating
costs for the life of the operation. The determination of FVLCD was most sensitive to:
\u2013 Zinc, lead and silver prices;
\u2013 Pre-production capital expenditure;
\u2013 Mineral Resource estimation;
\u2013 Development approvals; and
\u2013 Discount rate
Zinc, lead and silver prices - The long-run zinc, lead, and silver prices, in real terms, used in the FVLCD determinations were within the
following ranges:
FY23 Assumptions used
Zinc (US$/t) 2,700 to 3,200
Lead (US$/t) 2,000 to 2,100
Silver (US$/oz) 20 to 22
Pre-production capital expenditure \u2013 The calculation of FVLCD includes an estimate of pre-production capital to support the
development of the Taylor Deposit to its nameplate capacity of up to 4.3 million tonnes per annum. Key inputs including steel, cement
and electrical components are subject to uncertainties, including industry-wide inflation.
Mineral Resource estimation - The Mineral Resource estimate of the Taylor Deposit is reported in accordance with the JORC Code, and
the ASX Listing Rules (Chapter 5): Additional reporting on mining and oil and gas production and exploration activities. Refer to the
Mineral Resources and Ore Reserves section of note 2(c) for further information on these estimates.
Development approvals \u2013 Construction is planned to commence in late FY24, subject to a final investment decision for the Taylor
Deposit. The addition of the Hermosa project to the FAST-41 process has reduced the expected timing of Federal environmental
approvals and permits by approximately two years. A Record of Decision (RoD) to permit surface disturbance and additional tailings
storage on unpatented land will require completion of the National Environmental Policy Act process with the United States Forest
Service. The ramp-up to planned nameplate production could be impacted if the RoD is delayed as production will have to be slowed
due to tailings capacity restrictions on patented lands.
Discount rate - In determining the FVLCD, a real US$ post tax discount rate range of between 6 and 8 per cent was applied to discount
future cash flows expressed in real terms.
The following table illustrates the sensitivity of the recoverable amount of the Taylor Deposit based on a reasonably possible change
in key assumptions. Owing to the complexity of the relationships between each key assumption, the analysis was performed for each
assumption individually (all other assumptions held constant).
FY23
US$M
Change in key
assumption
Impact on profit/(loss) after tax
Favourable Unfavourable
Zinc prices 10% 235 (235)
Lead prices 10% 200 (200)
Silver prices 10% 120 (120)
Pre-production capital expenditure 10% 205 (205)
Discount rate 100 basis points 335 (275)
(b) Recognised impairments - 30 June 2022 Eagle Downs Metallurgical Coal In October 2021, the Group announced the commencement of a process to investigate the potential divestment of our interest in the Eagle Downs Metallurgical Coal development option. In December 2021, as part of the negotiation for sale, the Group received non- binding offers from external parties which, in combination with the long-term market outlook for metallurgical coal demand and prices, resulted in the recognition of an impairment of US$79 million for the Eagle Downs area of interest. The impairment was recognised within expenses excluding finance costs in the Consolidated Income Statement. In April 2022, a preferred bidder withdrew from the negotiations and the Group revised its recoverable amount of the Eagle Downs area of interest to US$nil, bringing the total impairment recognised for the Eagle Downs area of interest in FY22 to US$183 million. The long-run metallurgical coal prices and exchange rates, in real terms, used as part of the Group\u2019s FVLCD determinations at 30 June 2022 were within the following ranges as published by market commentators: FY22 Assumptions used Metallurgical coal (US$/t) 135 to 175 Foreign exchange rates (A$ to US$) 0.71 to 0.80 The fair value measurement was categorised as a Level 3 fair value based on the inputs in the discounted cashflow valuation model in combination with the use of the market approach (refer to note 19 Financial assets and financial liabilities). In determining the FVLCD, a real US$ post tax discount rate range of between six and eight per cent was applied to discount future cash flows expressed in real terms. In addition to the impairment of ROU assets of US$7 million, the impairment of US$176 million for property, plant and equipment of Eagle Downs includes US$3 million recognised in land and buildings, US$7 million recognised in plant and equipment, US$102 million recognised in other mineral assets, US$51 million recognised in assets under construction, and US$13 million recognised in exploration and evaluation. Brazil Aluminium On 6 January 2022, the Group announced its decision to participate in a restart of the Brazil Aluminium smelter. The Group assessed the implications of the restart decision and reviewed the impact on the carrying value of the Brazil Aluminium CGU as at 31 December 2021. At 31 December 2021, the Group reversed the full impairment that was recognised when the smelter was placed on care and maintenance in 2015, limited to the carrying amount that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised at such time. The recoverable amount remains significantly higher than the carrying amount recorded. The recoverable amount was based on the smelter\u2019s FVLCD and was informed by the Group\u2019s production profile and cost profile which were consistent with the Group\u2019s commitments to long-term power agreements. The key assumptions used for commodity prices were comparable to market consensus forecasts and foreign exchange rates were aligned with forward market rates. The fair value measurement was categorised as a Level 3 fair value based on the inputs in the discounted cashflow valuation model (refer to note 19 Financial assets and financial liabilities). In determining the FVLCD, a real US$ post tax discount rate range of between six and eight per cent, and a country risk premium of two per cent, was applied to discount future cash flows expressed in real terms. The impairment reversal of US$42 million includes US$18 million recognised in land and buildings and US$24 million recognised in plant and equipment, both within property, plant and equipment. The impairment reversal was recognised within expenses excluding finance costs in the Consolidated Income Statement. In addition, the Group recognised indirect tax assets of US$77 million that had been expensed since the smelter was placed on care and maintenance in 2015. Refer to note 4(b)(ii) Significant items
(c) Impairment test for CGUs containing goodwill
For the purpose of impairment testing, goodwill has been allocated to CGUs that are expected to benefit from the synergies of the
business combination and which represent the level at which management will monitor and manage the goodwill.
The carrying amount of goodwill has been allocated to the following CGU:
US$M Note FY23 FY22
Hillside Aluminium 139 139
Total goodwill 12 139 139
The goodwill arose from the acquisition of Alusaf in Hillside Aluminium (Pty) Ltd and has been allocated to the Hillside Aluminium CGU
which comprises the Hillside aluminium smelter. The recoverable amount of the Hillside Aluminium CGU was determined based on a
FVLCD calculation and was categorised as a Level 3 fair value based on the inputs in the valuation technique (refer to note 19 Financial
assets and financial liabilities). The impairment test for the Hillside Aluminium CGU indicated that no impairment was required. The
determination of FVLCD was most sensitive to:
\u2013 Production volumes;
\u2013 Aluminium and alumina prices;
\u2013 Foreign exchange rates;
\u2013 Carbon pricing and timing; and
\u2013 Discount rate.
Production volumes \u2013 estimated production volumes are based on the life of the smelter as determined by management as part of its
long-term planning process. Production volumes are influenced by production input costs such as electricity prices, jurisdiction based
carbon pricing, and the selling price of aluminium.
Aluminium and alumina prices, and foreign exchange rates \u2013 the ranges of aluminium prices, alumina prices and exchange rates, in real
terms, used in the FVLCD determinations, together with the potential effect of using reasonably possible alternative assumptions on the
recoverable amount, based on unfavourably changing these assumptions by 10 per cent whilst holding all other variables constant, are
shown in the table below:
FY23 Assumptions used
Impact on recoverable
amount (US$M)
Aluminium prices (US$/t) 2,238 to 2,510 (683)
Alumina prices (US$/t) 343 to 426 (214)
Foreign exchange rates (US$ to ZAR) 16.1 to 19.1 (304)
Carbon pricing and timing \u2013 in determining the FVLCD, the current jurisdiction enacted carbon price, in real terms, of ZAR186 to ZAR474
per tonne CO
2
-e (FY22: ZAR143 to ZAR150 per tonne CO
2
-e) is applied for the life of operation for Scope 1 and 2 emissions, net of
operation specific abatement allowances.
Discount rate \u2013 in determining the FVLCD, a real US$ post tax discount rate range of between six and eight per cent (FY22: range of
between six and eight per cent), and a country risk premium of two per cent (FY22: two per cent) was applied to discount future cash
flows expressed in real terms.
The impairment test for the Hillside Aluminium CGU indicated that no impairment was required. At 30 June 2023 the carrying value
approximates its recoverable amount. As such any material long-term unfavourable change in the aforementioned key assumptions
could lead to the carrying value exceeding the recoverable amount. The relationships between each key assumption are complex, such
that a change in one may cause a change in several other inputs.
Key estimates, assumptions and judgements
An assessment as to whether there is any indication of impairment and the calculation of a CGU\u2019s recoverable amount requires
management to make estimates and assumptions about expected production and sales volumes, commodity prices, foreign
exchange rates, Mineral Resources and Ore Reserves, regulatory approvals, operating costs, closure and rehabilitation costs,
future capital expenditure, allocation of corporate costs, jurisdiction-specific carbon prices and global carbon pricing. These
estimates and assumptions are subject to risk and uncertainty. There is a possibility that changes in circumstances will alter
these projections, which may impact the recoverable amount. In such circumstances, some or all of the carrying amount may be
impaired or a previously recognised impairment charge may be reversed with the impact recognised in the Consolidated Income
Statement.
The key estimates and assumptions used in the assessment of impairment indicators are as follows:
Future production Life of operation plans based on Mineral Resource and Ore Reserve estimates, economic life of
smelters and refineries and, in certain cases, Exploration Targets and expansion projects, including
future cost of production. Refer to note 2(c) Key estimates, assumptions and judgements for further
details regarding Mineral Resources and Ore Reserves as sources of estimation uncertainty.
Commodity prices
and market traded
consumables
Forward market and contract prices, and longer-term price estimates which includes an assessment
of the impact carbon price assumptions might have.
Exchange rates Forward market foreign exchange rates, and longer-term price protocol estimates.
Discount rates Risk-adjusted cost of capital and appropriate to the resource.
Regulatory approvals Life of operation plans include assumptions associated with the successful application, and timing
thereof, of ongoing and future regulatory approvals.
Carbon prices Actual enacted schemes less allowable abatements, where applicable, and a long-term base case
estimate of US$64 per tonne CO
2
-e (real) applied to all Scope 1 and 2 emissions from FY40 onwards.
Where impairment testing is undertaken, a range of external sources are considered as further input to the above assumptions.
Exploration and evaluation expenditure
For areas not yet in production, acquired mineral rights, together with subsequent capitalised exploration and evaluation
expenditure, require judgement to determine the likelihood of future economic benefits from future development, and whether
sufficient data exists to indicate that, although a development in the specific area is likely to proceed, the carrying amount of
the exploration and evaluation asset is unlikely to be recovered in full. When facts and circumstances suggest that the carrying
amount exceeds the recoverable amount, an impairment test is required which may result in an adjustment to the carrying value
of acquired mineral rights together with subsequent capitalised exploration and evaluation expenditure.
At or before the final investment decision for a given area of interest, and once technical feasibility and commercial viability
has been demonstrated, the Group assess the carrying value of that area of interest for impairment or, for an area of interest
previously impaired, impairment reversal.
Climate change-related risks and opportunities The Group\u2019s forecast commodity prices and other key assumptions represent management\u2019s expectations on likely outcomes, with a base case estimation of at least 2\u00b0C warming. When assessing whether there is any indication of impairment or impairment reversal, management performs a sensitivity analysis by considering a range of possible scenarios, with no one scenario being conclusive in isolation. Our sensitivity analysis shows that our FY23 1.5\u00b0C scenario would result in an increased risk of impairment at the Hillside Aluminium and Illawarra Metallurgical Coal CGUs. The full costs and benefits of decarbonisation projects are included in the Group\u2019s valuations when it has a high degree of confidence that a project will achieve an emissions reduction, which typically aligns with the related capital project being internally approved, or when it is critical for meeting regulatory licensing requirements. The Group\u2019s valuations include the cost and benefit of initiatives necessary to meet its medium-term target to halve its operational greenhouse gas (GHG) emissions by 2035 compared to its FY21 baseline. \u2018Target\u2019 is defined as an intended outcome in relation to which we have identified one or more pathways for delivery of that outcome, subject to certain assumptions or conditions. The decarbonisation pathway to meet our goal of net zero GHG emissions by 2050 is not yet fully defined and, as such, the cost and benefit of all associated initiatives are not included in the Group\u2019s valuations. \u2018Goal\u2019 is defined as an ambition to seek an outcome for which there is no current pathway(s), but for which efforts will be pursued towards addressing that challenge, subject to certain assumptions or conditions. The Group utilises an internal price on carbon to inform decision-making and valuations, based on actual enacted schemes less allowable abatements, where applicable, and a long-term base case estimate of US$64 per tonne CO 2 -e (real) applied to all Scope 1 and 2 emissions from FY40 onwards. In developing forecast global carbon prices, the Group considers policy and market-driven carbon prices as well as abatement costs, weighted across developed and developing countries. When assessing for impairment indicators, the Group has considered the sensitivity of operations to changes in carbon prices. The Group\u2019s operations are not uniformly impacted by carbon prices. The impact is influenced by the amount of Scope 1 and 2 emissions the operation generates and the jurisdiction in which it operates, in combination with the respective life of operation plans. The Group\u2019s CGUs with a higher carbon sensitivity include Worsley Alumina, Hillside Aluminium, Mozal Aluminium and Illawarra Metallurgical Coal. Previously impaired areas of interest and CGUs When assessing for impairment reversal indicators, the fundamental characteristics of previously impaired areas of interest and CGUs are relevant to their sensitivity to key estimates and assumptions. For previously impaired areas of interest and CGUs these include: \u2013 Areas of interest that are subject to ongoing study and evaluation, for example the Taylor Deposit at Hermosa; \u2013 CGUs with higher operating margins and with life of operation plans longer than 10 years which are less sensitive to short-term commodity prices and foreign exchange rates, for example Worsley Alumina; \u2013 CGUs with lower operating margins which are highly sensitive to movements in commodity prices and foreign exchange rates, for example South Africa Manganese; and \u2013 CGUs with higher operating margins, shorter life of operation plans and exposure to commodities that display greater price volatility, for example Australia Manganese. Mozal Aluminium The Group jointly controls Mozal Aluminium together with the Industrial Development Corporation of South Africa Limited and the Government of the Republic of Mozambique. Electricity supplied to Mozal Aluminium is generated by Hidroel\u00e9ctrica de Cahora Bassa, a hydro-electric power generator, and supplied via Eskom, the South African state-owned entity which owns and operates South Africa\u2019s national electricity grid. Eskom also provides back-up energy to Mozal Aluminium for periods when Hidroel\u00e9ctrica de Cahora Bassa produces less than its contractual minimum supply of hydro-electric power. The Group is working with key stakeholders to extend the supply of power from Hidroel\u00e9ctrica de Cahora Bassa for Mozal Aluminium beyond 2026. Although an extension and pricing of the existing arrangement with Eskom is uncertain, the Group has made a reasonable assumption that an extension to 2030 can be achieved on mutually acceptable commercial terms. Failure to extend the supply of power from Hidroel\u00e9ctrica de Cahora Bassa will have a material impact on the recoverable amount of Mozal Aluminium.
14. Trade and other payables
US$M FY23 FY22
Current
Trade creditors 854 813
Other creditors 131 176
Total current trade and other payables 985 989
Non-current
Trade creditors 18 7
Other creditors 1 1
Total non-current trade and other payables 19 8
Trade and other payables generally represent liabilities for goods and services provided to the Group prior to the end of the year which
were unpaid at the end of the year. These amounts are unsecured. Trade and other payables are included in current liabilities, except for
those liabilities where payment is not due within 12 months from the reporting date, which are classified as non-current liabilities.
Trade and other payables, other than financial liabilities held at FVTPL, are stated at their amortised cost and are non-interest bearing.
The carrying value of these trade and other payables is considered to approximate fair value due to the short-term nature of the
payables .
15. Provisions
US$M Note FY23 FY22
Current
Employee benefits 177 171
Closure and rehabilitation 7 8
Other 10 7
Total current provisions 194 186
Non-current
Employee benefits 6 4
Closure and rehabilitation 1,931 1,785
Post-retirement employee benefits 22 33 34
Other 16 12
Total non-current provisions 1,986 1,835
FY23 US$M Employee benefits Closure and rehabilitation Post- retirement employee benefits Other Total At the beginning of the year 175 1,793 34 19 2,021 Charge/(credit) for the year to the Consolidated Income Statement: Underlying 167 16 5 7 195 Discounting - 91 - - 91 Net interest expense - - 3 - 3 Exchange rate variations (7) (15) (3) 1 (24) Released during the year (1) (7) - - (8) Amounts capitalised for change in costs and estimates - 149 - - 149 Amounts capitalised for change in discount rate - (16) - - (16) Foreign exchange amounts capitalised - (68) - - (68) Amounts taken to retained earnings - - (3) - (3) Utilisation (151) (5) (3) (1) (160) At the end of the year 183 1,938 33 26 2,180 FY22 US$M Employee benefits Closure and rehabilitation Post- retirement employee benefits Other Total At the beginning of the year 201 1,717 41 39 1,998 Charge/(credit) for the year to the Consolidated Income Statement: Underlying 156 3 1 6 166 Discounting - 67 - - 67 Change in discount rate - (2) - - (2) Net interest expense - - 3 - 3 Exchange rate variations (14) (19) (4) (3) (40) Released during the year (8) (8) - (19) (35) Amounts capitalised for change in costs and estimates - 167 - - 167 Amounts capitalised for change in discount rate - (15) - - (15) Foreign exchange amounts capitalised - (127) - - (127) Amounts taken to retained earnings - - (3) - (3) Utilisation (160) (9) (4) (4) (177) Acquisition of subsidiaries and joint operations (1) - 19 - - 19 At the end of the year 175 1,793 34 19 2,021 (1) Relates to the acquisition of an additional 16.6 per cent shareholding and related rights in Mozal Aluminium in FY22. (a) Employee benefits Liabilities for unpaid wages and salaries are recognised in other creditors. Current entitlements to annual leave and accumulating sick leave accrued for services up to the reporting date are recognised in the provision for employee benefits and are measured at the amounts expected to be paid. Entitlements to non-accumulated sick leave are recognised when the leave is taken. The current liability for long service leave (for which settlement within 12 months of the reporting date cannot be deferred) is recognised in the current provision for employee benefits and is measured in accordance with annual leave described above . (b) Closure and rehabilitation The mining, extraction and processing activities of the Group normally give rise to obligations for site closure or rehabilitation. Closure and rehabilitation works can include facility decommissioning and dismantling, removal or treatment of waste materials, site and land rehabilitation. Provisions for the cost of each closure and rehabilitation program are recognised at the time that environmental disturbance occurs. When the extent of disturbance increases over the life of an operation, the provision is increased accordingly. Costs included in the provision encompass all closure and rehabilitation activity expected to occur progressively over the life of the operation and at, or after, the time of closure, for disturbance existing at the reporting date. Routine operating costs that may impact the ultimate closure and rehabilitation activities, such as waste material handling conducted as an integral part of a mining or production process, are not included in the provision. Costs arising from unforeseen circumstances, such as the contamination caused by unplanned discharges, are recognised as an expense and liability when the event gives rise to an obligation which is probable and capable of reliable estimation. The timing of the actual closure and rehabilitation expenditure is dependent upon a number of factors such as: the life and nature of the asset; the operating licence conditions; and the environment in which the operation operates. Expenditure may occur before and after closure, and can continue for an extended period of time depending on closure and rehabilitation requirements Closure and rehabilitation provisions are measured based on the expected value of future cash flows, discounted to their present value and determined according to the probability of alternative estimates of cash flows occurring for each operation. Discount rates used are risk-free interest rates specific to the country in which the operations are located and the expected timing of the closure and rehabilitation expenditure. Material changes in country specific risk-free interest rates may affect the discount rates applied. The Group reviews its discount rates used periodically, with any corresponding change in the provision as a result of revising discount rates capitalised as an asset in the case of open sites or charged/(credited) to the Consolidated Income Statement in the case of closed sites. When provisions for closure and rehabilitation are initially recognised, the corresponding cost is capitalised as an asset, representing part of the cost of acquiring the future economic benefits of the operation. The capitalised cost of closure and rehabilitation activities is recognised in property, plant and equipment and depreciated accordingly. The value of the provision is progressively increased over time due to the effect of discounting unwind and inflation, creating an expense recognised in finance costs. Closure and rehabilitation provisions are also adjusted for changes in costs and estimates. Those adjustments are accounted for as a change in the corresponding capitalised cost, except where a reduction in the provision is greater than the depreciated capitalised cost of the related assets, in which case the carrying value is reduced to nil and the remaining adjustment is recognised in the Consolidated Income Statement. In the case of closed sites, changes to estimated costs are recognised immediately in the Consolidated Income Statement. Changes to the capitalised cost result in an adjustment to future depreciation. Adjustments to the estimated amount and timing of future closure and rehabilitation cash flows are a normal occurrence in light of the significant judgements and estimates involved. (c) Post-retirement employee benefits This relates to the provision for post-employment defined benefit pension and medical schemes. Refer to note 22 Pension and other post-retirement obligations . Key estimates, assumptions and judgements The recognition of closure and rehabilitation provisions requires judgement and is based on significant estimates and assumptions such as: \u2013 The requirements of the relevant local legal and regulatory framework; \u2013 The magnitude of possible contamination; \u2013 The timing, extent and cost of required closure and rehabilitation activity; and \u2013 Potential changes in physical and climate conditions. These uncertainties may result in future actual expenditure differing from the amounts currently provided. The Group\u2019s expectations and approach in relation to climate change-related risks and opportunities are reflected in the estimates and assumptions noted above. For example, our base case estimation of at least 2\u00b0C climate-related warming impacts our life of operations plans, which in turn impacts assumptions regarding timing and cost of closure and rehabilitation activities. Physical impacts of climate change have been considered in the estimation of closure and rehabilitation costs, including timing of relinquishment based on the Group\u2019s assessment to date. These estimates will continue to be refined as the Group progresses its assessment of physical risks and development of direct adaptation and mitigation strategies. The provision recognised for each site is periodically reviewed and updated based on the facts and circumstances available at the time. In addition to the uncertainties noted above, certain closure and rehabilitation activities may be subject to legal disputes and depending on the ultimate resolution of these disputes, the final liability for such matters could vary. If risk-free interest rates were decreased by 0.5 per cent (in real terms), the provision would increase by approximately US$261 million .
16. Cash and cash equivalents
Cash and cash equivalents include cash at bank and on hand as well as short-term deposits.
US$M FY23 FY22
Cash 611 763
Short-term deposits 647 1,602
Cash and cash equivalents
(1)(2)
1,258 2,365
(1) Cash and cash equivalents include US$6 million (FY22: US$4 million) which is restricted by legal or contractual arrangements.
(2) Cash and cash equivalents include US$287 million (FY22: US$335 million) consisting of short-term deposits and cash managed by the Group on behalf of its equity accounted
investments. The corresponding amount payable is included in note 17 Interest bearing liabilities.
17. Interest bearing liabilities
US$M FY23 FY22
Current
Lease liabilities 51 40
Unsecured loans from equity accounted investments
(1)
287 335
Unsecured other 27 27
Total current interest bearing liabilities 365 402
Non-current
Lease liabilities 623 610
Senior unsecured notes 690 689
Unsecured other 63 126
Total non-current interest bearing liabilities 1,376 1,425
(1) Refer to note 16 Cash and cash equivalents and note 29 Related party transactions .
On 14 April 2022, the Group completed the issuance of US$700 million of senior unsecured notes pursuant to Rule 144A and Regulation
S of the United States Securities Act of 1933. The Group utilised the cash proceeds from the offering, together with cash on hand, for
the repayment in full of the amounts drawn down under its acquisition bridge facility used to partly fund the acquisition of a 45 per cent
interest in Sierra Gorda in FY22. The notes will pay interest on 14 April and 14 October each year at a rate of 4.35 per cent per annum and
mature in 2032.
All borrowings are initially recognised at their fair value net of directly attributable transaction costs. Subsequent to initial recognition,
interest bearing liabilities are measured at amortised cost using the effective interest method. Gains and losses are recognised in the
Consolidated Income Statement when the liabilities are derecognised. Interest bearing liabilities are classified as current liabilities,
except when the Group has an unconditional right to defer settlement for at least 12 months after the reporting date, in which case the
liabilities are classified as non-current .
A reconciliation of movements in interest bearing liabilities to cash flows arising from financing activities is set out below:
FY23
US$M Lease liabilities
Other interest
bearing
liabilities
Total interest
bearing
liabilities
At the beginning of the year 650 1,177 1,827
Cash movements:
Repayment of interest bearing liabilities (46) (87) (133)
Interest paid (52) (57) (109)
Non-cash movements:
Interest expense 52 59 111
Net increase/(decrease) in interest bearing liabilities
(1)
93 (41) 52
Effect of foreign exchange rate changes (23) 16 (7)
At the end of the year 674 1,067 1,741
(1) The non-cash decrease in other interest bearing liabilities relates to an agreement with a subsidiary of Seriti Resources Holdings Pty Ltd (Seriti) to settle the vendor loan
facility, previously recognised within other financial assets, against the related rehabilitation fund liability. Both facilities were originally provided to Seriti as part of the
divestment of South Africa Energy Coal. Refer to note 19(a)(iv) Measurement of fair value.
FY22
US$M Lease liabilities
Other interest
bearing
liabilities
Total interest
bearing
liabilities
At the beginning of the year 687 520 1,207
Cash movements:
Proceeds from interest bearing liabilities - 1,527 1,527
Repayment of interest bearing liabilities (46) (886) (932)
Interest paid (53) (17) (70)
Non-cash movements:
Interest expense 53 24 77
Net increase/(decrease) in interest bearing liabilities 66 - 66
Effect of foreign exchange rate changes (57) 9 (48)
At the end of the year 650 1,177 1,827
18. Net finance income/(costs)
US$M FY23 FY22
Finance income
Interest on loans to equity accounted investments 162 63
Other interest income 60 16
Total finance income 222 79
Finance costs
Interest on borrowings (68) (31)
Interest on lease liabilities (52) (53)
Discounting on provisions and other liabilities (92) (65)
Change in discount rate on closure and rehabilitation provisions - 2
Net interest expense on post-retirement employee benefits (3) (3)
Exchange rate variations on net cash/(debt) 8 40
Total finance costs (207) (110)
Net finance income/(costs) 15 (31 )
19. Financial assets and financial liabilities
The following table presents the financial assets and liabilities by class at their carrying amounts:
FY23
US$M Note Held at FVTPL
Designated
as FVOCI
Amortised
cost Total
Financial assets
Cash and cash equivalents 16 - - 1,258 1,258
Trade and other receivables
(1)
9 105 - 532 637
Other financial assets:
Derivative contracts 1 - - 1
Total current financial assets 106 - 1,790 1,896
Trade and other receivables
(1)
9 - - 1,802 1,802
Other financial assets:
Investments in equity instruments designated as FVOCI - 108 - 108
Contingent consideration receivable 10 - - 10
Total non-current financial assets 10 108 1,802 1,920
Total financial assets 116 108 3,592 3,816
Financial liabilities
Trade and other payables
(2)
14 6 - 962 968
Interest bearing liabilities 17 - - 365 365
Total current financial liabilities 6 - 1,327 1,333
Trade and other payables
(2)
14 - - 18 18
Interest bearing liabilities 17 - - 1,376 1,376
Other financial liabilities:
Contingent consideration payable 37 - - 37
Total non-current financial liabilities 37 - 1,394 1,431
Total financial liabilities 43 - 2,721 2,764
(1) Excludes current input taxes of US$141 million and non-current input and other taxes of US$121 million included in other receivables. Refer to note 9 Trade and other
receivables.
(2) Excludes current input taxes of US$17 million and non-current input and other taxes of US$1 million included in other creditors. Refer to note 14 Trade and other payables.
FY22
US$M Note Held at FVTPL
Designated
as FVOCI
Amortised
cost Total
Financial assets
Cash and cash equivalents 16 - - 2,365 2,365
Trade and other receivables
(1)
9 143 - 561 704
Other financial assets:
Derivative contracts 1 - - 1
Total current financial assets 144 - 2,926 3,070
Trade and other receivables
(1)
9 - - 1,806 1,806
Other financial assets:
Investments in equity instruments designated as FVOCI - 25 - 25
Vendor loan facility 39 - - 39
Total non-current financial assets 39 25 1,806 1,870
Total financial assets 183 25 4,732 4,940
Financial liabilities
Trade and other payables
(2)
14 20 - 929 949
Interest bearing liabilities 17 - - 402 402
Other financial liabilities:
Derivative contracts 6 - - 6
Total current financial liabilities 26 - 1,331 1,357
Trade and other payables
(2)
14 - - 7 7
Interest bearing liabilities 17 - - 1,425 1,425
Other financial liabilities:
Contingent consideration payable 84 - - 84
Total non-current financial liabilities 84 - 1,432 1,516
Total financial liabilities 110 - 2,763 2,873
(1) Excludes current input taxes of US$140 million and non-current input and other taxes of US$97 million included in other receivables. Refer to note 9 Trade and other
receivables.
(2) Excludes current input taxes of US$40 million and non-current input and other taxes of US$1 million included in other creditors. Refer to note 14 Trade and other payables .
19. Financial assets and financial liabilities continued
(a) Accounting classification and fair value
(i) Financial assets
Financial assets are held at FVTPL, amortised cost or designated as FVOCI based on the business model for managing the financial
assets and the contractual terms of the cashflows.
Classification Initial recognition and subsequent measurement
Held at FVTPL Financial assets held at FVTPL, including derivative financial assets, are initially recognised at fair value, with
transaction costs recognised immediately in the Consolidated Income Statement.
Financial assets held at FVTPL are subsequently remeasured through the Consolidated Income Statement,
including any interest income, dividend income and foreign exchange gains and losses, unless hedge
accounting is applied.
Amortised cost At initial recognition, trade receivables that do not have a significant financing component are recognised at
their transaction price. Other financial assets held at amortised cost are initially recognised at fair value plus
related transaction costs.
Financial assets subsequently measured at amortised cost are measured using the effective interest method
and reduced by any impairment losses. Interest income, foreign exchange gains and losses, impairments and
any gain or loss on derecognition, are recognised in the Consolidated Income Statement.
Designated as FVOCI For certain investments in equity instruments, the Group has made an irrevocable election to present fair
value changes in other comprehensive income.
Investments in equity instruments designated as FVOCI are subsequently remeasured through other
comprehensive income and are not reclassified to the Consolidated Income Statement. Dividends are
recognised as other income in the Consolidated Income Statement unless the dividend clearly represents a
recovery of part of the cost of the investment.
(ii) Financial liabilities
Financial liabilities are held at FVTPL or amortised cost.
Classification Initial recognition and subsequent measurement
Held at FVTPL Financial liabilities held at FVTPL, including derivative financial liabilities, are initially recognised at fair value,
with transaction costs recognised immediately in the Consolidated Income Statement.
Financial liabilities held at FVTPL are subsequently remeasured through the Consolidated Income Statement,
including any interest expense and foreign exchange gains and losses, unless hedge accounting is applied.
Amortised cost Financial liabilities held at amortised cost are recognised initially at fair value, net of transaction costs
incurred.
Financial liabilities held at amortised cost are subsequently measured using the effective interest method.
Interest expense and foreign exchange gains and losses are recognised in the Consolidated Income
Statement. Any gain or loss on derecognition is also recognised in the Consolidated Income Statement.
(iii) Embedded derivatives
A derivative embedded within a hybrid contract, with a financial liability or non-financial host, is separated from the host and accounted
for as a separate derivative if:
\u2013 the economic characteristics and risks are not closely related to the host;
\u2013 a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative; and
\u2013 the hybrid contract is not measured at FVTPL.
Embedded derivatives are measured at fair value with changes in fair value recognised in the Consolidated Income Statement.
A derivative embedded within a hybrid contract containing a financial asset host is not accounted for separately. The financial asset
host together with the embedded derivative is required to be classified in its entirety as a financial asset held at FVTPL .
(iv) Measurement of fair value
The carrying values of the Group\u2019s financial assets and liabilities measured at amortised cost are equal to or approximate their
respective fair values, except for senior unsecured notes, which have a fair value of US$617 million (FY22: US$650 million), and lease
liabilities, for which a fair value has not been determined. The fair value of the Group\u2019s senior unsecured notes is estimated based on
quoted market prices at the reporting date and are classified as Level 1 on the fair value hierarchy as shown below.
For financial assets and liabilities measured at fair value, the Group uses quoted marked prices in active markets for identical assets
where available. Where no price information is available from a quoted market source, alternative market mechanisms or recent
comparable transactions, the fair value is estimated based on the Group\u2019s views on relevant future prices, net of valuation allowances to
accommodate liquidity, modelling, credit and other risks implicit in such estimates.
The following table shows the Group\u2019s financial assets and liabilities carried at fair value with reference to the nature of valuation inputs
used:
Level 1 Valuation is based on unadjusted quoted prices in active markets for identical financial assets and liabilities.
Level 2 Valuation is based on inputs (other than quoted prices included in Level 1) that are observable for the financial asset or liability,
either directly (i.e. as unquoted prices) or indirectly (i.e. derived from prices).
Level 3 Valuation includes inputs that are not based on observable market data .
FY23
US$M Level 1 Level 2 Level 3 Total
Financial assets and liabilities
Trade and other receivables - 105 - 105
Trade and other payables - (6) - (6)
Derivative contract assets 1 - - 1
Investments in equity instruments designated as FVOCI 101 - 7 108
Contingent consideration receivable - - 10 10
Contingent consideration payable - - (37) (37)
Total 102 99 (20) 181
FY22
US$M Level 1 Level 2 Level 3 Total
Financial assets and liabilities
Trade and other receivables - 143 - 143
Trade and other payables - (20) - (20)
Derivative contract assets 1 - - 1
Derivative contract liabilities (6) - - (6)
Investments in equity instruments designated as FVOCI 25 - - 25
Vendor loan facility - - 39 39
Contingent consideration payable - - (84) (84)
Total 20 123 (45) 98
The following table shows the movements in the Group\u2019s Level 3 financial assets and liabilities:
US$M FY23 FY22
At the beginning of the year (45) 52
Addition of financial assets/(liabilities) 15 (97)
Reclassification of financial asset from level 3 to level 2
(1)
(39) -
Derecognition of financial assets/(liabilities) - (5)
Unrealised gains/(losses) recognised in the Consolidated Income Statement
(2)
47 52
Unrealised gains/(losses) recognised in the Consolidated Statement of Comprehensive Income
(3)
2 (47)
At the end of the year (20) (45)
(1) The valuation of the vendor loan facility provided to Seriti as part of the Group\u2019s divestment of South Africa Energy Coal no longer included inputs that are based on
unobservable market data. This financial asset was subsequently settled through agreement with the vendor to offset this facility against the related rehabilitation fund
liability, recognised within unsecured other interest bearing liabilities. Refer to note 17 Interest bearing liabilities.
(2) Recognised in expenses excluding finance costs in the Consolidated Income Statement.
(3) Recognised in the financial assets reserve in the Consolidated Statement of Comprehensive Income .
b) Financial risk management objectives and policies The Group is exposed to market, liquidity and credit risk. These risks are managed in accordance with the Group\u2019s portfolio risk management strategy which supports the delivery of the Group\u2019s financial targets while protecting its future financial security and flexibility by taking advantage of the natural diversification of the Group\u2019s operations and activities. A Cash Flow at Risk (CFaR) framework is used to capture the benefits of diversification and to measure the aggregate impact of financial risks on those financial targets. CFaR is measured on a portfolio basis and is defined as the expected reduction from projected business plan cash flows over a one-year horizon in a pessimistic case. In addition to the CFaR framework, deterministic analysis of a range of operational, commodity price and foreign exchange rate scenarios is also used to measure the potential impact on financial targets. (i) Market risk Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises interest rate risk, foreign currency risk and other price risk, such as equity price risk and commodity price risk. The Group\u2019s activities expose it to market risks associated with movements in interest rates, foreign currencies and commodity prices. The Group predominantly manages currency impacts, input costs and commodity prices on a floating or index basis. This strategy gives rise to a risk of variability in earnings which is measured under the CFaR framework. In executing the Group\u2019s strategy, financial instruments may be employed for risk mitigation purposes within a strict Board of Directors approved mandate, or to align the total Group exposure to the relevant index target in the case of commodity sales, operating costs or debt issuances. Interest rate risk The Group had the following exposure to interest rate risk: US$M FY23 FY22 Financial assets Cash and cash equivalents 1,218 2,306 Trade and other receivables 153 102 Other financial assets - 39 Financial liabilities Interest bearing liabilities (286) (334) Net exposure 1,085 2,113 The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of financial assets and liabilities affected. With all other variables held constant, the Group\u2019s profit/(loss) after tax would increase/(decrease) as follows: US$M Impact on profit/(loss) after tax FY23 FY22 Increase of 100 basis points 8 16 Decrease of 100 basis points (8) (13) The sensitivity analysis assumes that the change in interest rates is effective from the beginning of the year and the fixed/floating mix and balances are constant over the year. However, interest rates and the profile of the Group\u2019s financial assets and liabilities may not remain constant over the coming year and therefore such sensitivity analysis should be used with care
Foreign currency risk
The Group\u2019s potential currency exposures comprise:
\u2013 Translational exposure in respect of non-functional currency monetary items; and
\u2013 Transactional exposure in respect of non-functional currency expenditure and revenues.
The functional currency of the Group\u2019s operations is primarily the US dollar. Certain operating and capital expenditure is incurred by
operations in currencies other than their functional currency. To a lesser extent, certain sales revenue is earned in currencies other than
the functional currency of the operation, and certain exchange control restrictions may require funds to be maintained in currencies
other than the operations functional currency. When required, the Group may enter into forward exchange contracts.
The following table shows the principal foreign currency risk arising from financial assets and liabilities by currency of denomination:
US$M FY23 FY22
Australian dollar (946) (860)
Brazilian real (103) (63)
Colombian peso (70) (47)
South African rand 74 98
Based on the Group\u2019s net financial assets and liabilities as at 30 June, a weakening of the US dollar against these currencies as
illustrated in the table below, with all other variables held constant, would increase/(decrease) the Group\u2019s profit/(loss) after tax, as
follows:
US$M
Impact on profit/(loss) after tax
FY23 FY22
10% movement in Australian dollar (67) (60)
10% movement in Brazilian real (10) (6)
10% movement in Colombian peso (7) (5)
10% movement in South African rand 7 10
The Group\u2019s other comprehensive income is not exposed to any significant fluctuations as a result of foreign exchange risk arising from
financial assets and liabilities.
Commodity price risk
Contracts for the sale and physical delivery of commodities are executed whenever possible on a pricing basis intended to achieve a
relevant index target. Where pricing terms deviate from the index, the Group may choose to use derivative commodity contracts to
realise the index price. Contracts for the physical delivery of commodities are not typically financial instruments and are not recognised
in the Consolidated Balance Sheet .
Provisionally priced commodity sales and purchases contracts Provisionally priced sales or purchases contracts are those for which price finalisation, referenced to the relevant index, is outstanding at the reporting date. Provisional pricing mechanisms embedded within these sales and purchases arrangements have the character of a commodity derivative and are carried at FVTPL as part of trade receivables or trade creditors. Fair value movements on provisionally priced sale contracts are disclosed as other revenue in the Group\u2019s segment results, refer to note 4(b) Segment results. The Group\u2019s exposure at 30 June 2023 to the impact of movements in commodity prices on provisionally invoiced sale and purchase volumes was predominantly around nickel, silver, lead, zinc, metallurgical coal and aluminium. The Group had 3.7kt of nickel, 2.6Moz of silver, 24.4kt of lead, 5.4kt of zinc, 30.0kt of metallurgical coal, 10.0kt of aluminium and 31.5kt of alumina exposure at 30 June 2023 (FY22: 2.3kt of nickel, 1.8Moz of silver, 30.0kt of lead, 5.7kt of zinc, 27.1kt of aluminium) that was provisionally priced. The final price of these sales or purchases will be determined during the first half of FY24. A 10 per cent change in the realised price of these commodities, with all other factors held constant, would increase or decrease profit/(loss) after tax by US$19 million (FY22: US$18 million). The relationship between commodity prices and foreign currencies is complex and foreign exchange rates and commodity prices may move concurrently in response to market conditions. These sensitivities should therefore be used with care . (ii) Liquidity risk The Group\u2019s liquidity risk arises from the possibility that it may not be able to settle or meet its obligations as they fall due. Operational, capital and regulatory requirements are considered in the management of liquidity risk, in conjunction with short and long-term forecast information. In line with the Group\u2019s policy on counterparty credit exposure, the Group only uses counterparties of a high credit standing for the investment of any excess cash. The entities in the Group are funded by a combination of cash generated by the Group\u2019s operations, working capital facilities and intercompany loans provided by the Group. Intercompany loans may be funded by a combination of cash, short and long-term debt. Details of the Group\u2019s major standby arrangement are as follows: FY23 US$M Available Used Unused Revolving credit facility (1) 1,400 - 1,400 (1) The Group has an undrawn revolving credit facility which was extended in December 2022 by one year to December 2027, with the size of the facility in the final year reduced to US$1,200 million. Maturity profile of financial liabilities The maturity profiles of financial liabilities, based on the contractual amounts, are as follows: FY23 US$M Carrying amount Total On demand or less than 1 year 1 to 5 years More than 5 years Trade and other payables (1) 986 986 968 - 18 Senior unsecured notes 690 974 30 122 822 Lease liabilities 674 1,148 102 331 715 Other interest bearing liabilities 377 383 315 68 - Other financial liabilities \u2013 contingent consideration payable 37 48 - 48 - Total 2,764 3,539 1,415 569 1,555 (1) Excludes current input taxes of US$17 million and non-current input and other taxes of US$1 million included in other creditors. Refer to note 14 Trade and other payables. FY22 US$M Carrying amount Total On demand or less than 1 year 1 to 5 years More than 5 years Trade and other payables (1) 956 956 949 7 - Senior unsecured notes (2) 689 1,004 30 122 852 Lease liabilities 650 1,149 90 314 745 Other interest bearing liabilities 488 507 362 85 60 Other financial liabilities \u2013 contingent consideration payable 84 109 - 109 - Other financial liabilities \u2013 derivative contracts 6 6 6 - - Total 2,873 3,731 1,437 637 1,657 (1) Excludes current input taxes of US$40 million and non-current input and other taxes of US$1 million included in other creditors. Refer to note 14 Trade and other payables. (2) The maturity profile of senior unsecured notes was restated to include future coupon payments, consistent with current year presentation .
Credit risk management
The Group has credit risk management policies in place covering the credit analysis, approvals and monitoring of counterparty
exposures. As part of these processes the ongoing creditworthiness of counterparties is regularly assessed. Credit limits are
established for customers and reviewed annually or with the release of new information materially impacting the customer\u2019s
creditworthiness.
Mitigation methods are defined and implemented for higher-risk counterparties to protect revenues, with more than half of the Group\u2019s
sales of physical commodities occurring via secured payment terms including prepayments, letters of credit, guarantees and other risk
mitigation instruments. Mitigation methods include credit exposure management and overdue accounts monitoring. In addition, leading
key risk indicators are actively monitored for all customers to identify any emerging risks.
There are no material concentrations of credit risk, either with individual counterparties or groups of counterparties, by industry or
geography. The carrying amounts of financial assets represent the maximum credit exposure.
Expected credit losses
Impairment allowances are based on a forward-looking expected credit loss model. For trade receivables, the Group uses the simplified
approach to recognise impairments based on the lifetime expected credit loss. For other receivables, the Group applies the general
approach and recognises impairments based on a 12-month expected credit loss. Where there has been a significant increase in credit
risk, a loss allowance for lifetime expected credit losses is recognised.
Exposures are grouped by external credit rating and security options and an expected credit loss rate is calculated accordingly. Where
applicable, actual credit loss experience is also taken into account. For remaining receivables without an external credit rating or
security option, a rating of BB (S&P Global Ratings) is used, on the basis that there is no support that it is investment grade, nor is there
any evidence of default.
Shareholder loan receivable from Sierra Gorda
Purchased credit-impaired financial assets are initially recognised at fair value. They are subsequently measured at amortised cost
using the credit-adjusted effective interest method, less an allowance for changes in lifetime expected credit losses since initial
recognition. The credit-adjusted effective interest rate is determined at initial recognition and not amended for subsequent changes to
lifetime expected credit losses since acquisition. Changes in lifetime expected credit losses are recognised as impairment and reversals
of impairment of financials assets.
The Group\u2019s investment in the Sierra Gorda operation is represented by the carrying value of an equity accounted investment of US$101
million (FY22: US$30 million), and the carrying value of a purchased credit-impaired receivable of US$1,711 million (FY22: US$1,648
million) classified as a loan to an equity accounted investment within trade and other receivables on the Consolidated Balance Sheet.
The loan has a contractual interest rate of 8 per cent and the repayment of the loan by the Sierra Gorda operation is dependent on its
financial performance. At 30 June 2023, the Group updated its estimated timing of the loan repayments and as a result recognised
an impairment of US$71 million (FY22: impairment of US$26 million) which is included in expenses excluding finance costs in the
Consolidated Income Statement. The net present value of the expected future cash flows of the loan was determined as US$1,711
million (FY22: US$1,648 million) using a measurement methodology consistent with a Level 3 fair value based on the inputs in the
valuation technique.
The following table shows the movement in the carrying amount of this receivable:
US$M FY23 FY22
At the beginning of the financial year 1,648 -
Acquisition - 1,687
Interest accrued 148 55
Net impairment (71) (26)
Repayments (14) (68)
At the end of the financial year 1,711 1,648
The future loan repayments were informed by a production profile and costs based on management\u2019s planning processes. Refer to the
Mineral Resources and Ore Reserves section of note 2(c) for further information on the estimates which underpin the production profile.
An effective interest rate of nine per cent, as determined on the date of acquisition, was applied to discount the future loan repayments.
Determining the net present value requires management to make certain key estimates, assumptions and judgements, which are
consistent with those outlined in note 13 Impairment of non-financial assets.
Shareholder loan receivable from Sierra Gorda continued The net present value of the expected future cash flows of the loan is most sensitive to the Group\u2019s copper price assumption, with a range of US$3.81/lb to US$4.11/lb used, in real terms. The potential effect of using a reasonably possible alternative copper price assumption on the carrying value of the loan, based on changing this assumption by 10 per cent while holding all other variables constant, is shown in the following table: FY23 US$M Impact on profit/(loss) after tax Face value Carrying value Favourable Unfavourable Trade and other receivables Loans to equity accounted investments 2,185 1,711 90 (164) (c) Capital management The Group allocates capital in line with its strategy and capital management framework. The Group\u2019s priorities for cash flow are to: \u2013 Maintain safe and reliable operations and an investment grade credit rating through the cycle; \u2013 Distribute a minimum of 40 per cent of Underlying earnings as dividends to shareholders following each six-month reporting period; and \u2013 Maximise total shareholder returns through other alternatives including special dividends, share buy-backs and high return investment opportunities which compete for capital. 20. Share capital FY23 FY22 Shares US$M Shares US$M Share capital At the beginning of the year 4,628,431,584 13,469 4,674,538,013 13,597 Shares bought back and cancelled (83,017, 889) (218) (46,106,429) (128) At the end of the year 4,545,413,695 13,251 4,628,431,584 13,469 Treasury shares At the beginning of the year (11, 467,5 07) (32) (11,676,185) (22) Purchase of shares by ESOP Trusts (11,676,773) (33) (6,379,586) (22) Employee share awards vested 5,880,807 14 6,588,264 12 At the end of the year (17,263 ,473) (51) (11,467,507) (32) Shares entitle the holder to participate in dividends and the proceeds on winding up of the Group in proportion to the number of shares held. On a show of hands every holder of shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote. Incremental costs directly attributable to the issuance of shares, net of any income tax effects, are recognised as a deduction from equity. 21. Auditor\u2019s remuneration The auditor of the Group is KPMG. US$\u2019000 FY23 FY22 Fees payable to the Group\u2019s auditor for assurance services Audit and review of financial statements 4,207 4,448 Other assurance services (1) 705 625 Total auditor\u2019s remuneration 4,912 5,073 (1) Primarily comprises assurance services in respect of the Group's sustainability and tax reporting . 22. Pension and other post-retirement obligations The Group operates or participates in a number of pension and medical (including superannuation) schemes throughout the world. The funding of the schemes complies with local regulations. The assets of the schemes are generally held separate from those of the Group and are administered by trustees or management boards. Full actuarial valuations are prepared for the schemes. Defined contribution pension schemes The Group contributed US$60 million (FY22: US$59 million) to defined contribution plans and multi-employer defined contribution plans. These contributions are expensed as incurred. Defined benefit pension schemes (closed schemes) At 30 June 2023, the Group had defined benefit obligations of US$61 million (FY22: US$57 million) and defined benefit scheme assets with a fair value of US$45 million (FY22: US$46 million) with a net liability recognised in the Consolidated Balance Sheet of US$16 million (FY22: US$11 million). The fair value of scheme assets by major asset class is as follows: US$M FY23 FY22 Bonds (1) 32 31 Equities 5 6 Cash and cash equivalents 2 3 Other (2) 6 6 Total 45 46 (1) Comprises Fixed Interest Government bonds of US$7 million (FY22: US$6 million), Index Linked Government bonds of US$21 million (FY22: US$20 million) and Corporate bonds of US$4 million (FY22: US$5 million). (2) Primarily comprises property and alternative investments in Australia. Defined benefit post-retirement medical schemes (closed schemes) At 30 June 2023, the Group had post-retirement medical scheme obligations of US$17 million (FY22: US$23 million). The post-retirement medical scheme is unfunded. Weighted average maturity profile of schemes The weighted average duration of the defined benefit obligations is eight years (FY22: seven years) and nine years (FY22: 10 years) for the defined benefit pension schemes and post-retirement medical scheme respectively. Risks associated with defined benefit pension and post-retirement medical schemes The Group\u2019s defined benefit pension and post-retirement medical schemes expose the Group to the risks pertaining to asset value volatility, uncertainty in future benefit payments and uncertainty in future contribution requirements.
23. Employee share ownership plans
At 30 June 2023, the Group had the following employee share ownership plans:
Awards granted to Lead Team members
(1)
Long-Term Incentive Plan
(2)
FY20, FY21, FY22, FY23
Deferred Short-Term Incentive Plan
(3)
FY21, FY22
Executive Transitional Award Plan
(2)
FY21, FY22
Management Share Plan
(2)(4)
FY21
(1) Awards granted on 6 December 2019, 4 December 2020, 6 December 2021 and 8 December 2022.
(2) Awards subject to performance and service conditions.
(3) Awards subject to service conditions only.
(4) During FY21, Jason Economidis, as acting Chief Operating Officer, participated in the Management Share Plan and not the Long-Term Incentive Plan.
Awards granted to eligible employees
(1)
Management Share Plan
(2)
FY20, FY21, FY22, FY23
AllShare Plan
(3)
2020, 2021, 2022
Management Transitional Award Plan
(2)
FY20
(1) Awards granted on 6 December 2019, 15 May 2020, 4 December 2020, 7 December 2020, 6 May 2021, 6 December 2021, 9 May 2022, 8 December 2022 and 15 May 2023.
(2) Awards subject to performance and service conditions.
(3) Awards subject to service conditions only.
All awards take the form of rights to receive one share in South32 Limited for each right granted, subject to performance and/or service
conditions being met. Performance conditions include total shareholder return relative to peer groups and, for FY22 and FY23 Long-
Term Incentive Plan and Management Share Plan awards, climate change and portfolio management performance hurdles. Further
information on the vesting conditions of performance rights granted in FY23 is disclosed in the Remuneration report. A portion of the
2020, 2021 and 2022 AllShare Plan awards (participants located in Colombia and Mozambique) take the form of rights to receive a cash
payment equivalent to the value of South32 Limited shares at the time of payment. Employees in Africa are granted rights on the JSE
and all other employees are granted rights on the ASX.
Awards do not confer any dividend or voting rights until they convert into shares at vesting. In addition, the awards do not confer any
rights to participate in a share issue, however, there is discretion under the plans to adjust the awards in response to a variation in
South32 Limited\u2019s share capital.
The AllShare JSE plan is eligible to receive a payment equal to the dividend amount that would have been earned on the underlying
shares awarded to those participants (Dividend Equivalent Payment). The Dividend Equivalent Payment is made to participants once the
underlying shares are issued or transferred to them. No Dividend Equivalent Payment is made in respect of awards that have lapsed or
have been forfeited. No other awards are eligible for a Dividend Equivalent Payment .
23. Employee share ownership plans continued (a) Description of share-based payment arrangements (i) Recurring share-based payment plans The awards listed below are subject to the general conditions noted above and may be granted annually subject to approval by shareholders at the annual general meeting for awards to the Chief Executive Officer and by the Board of Directors for all other awards. FY20, FY21, FY22 and FY23 Long-Term Incentive Plan The Long-Term Incentive Plan is the Group\u2019s long-term incentive plan for Lead Team members. Awards have a four-year performance period from 1 July 2019 to 30 June 2023, 1 July 2020 to 30 June 2024, 1 July 2021 to 30 June 2025 and 1 July 2022 to 30 June 2026 respectively. The FY21 Long-Term Incentive Plan award granted to the Chief Executive Officer is subject to a specific vesting cap imposed by the Board of Directors. For other Lead Team members, the Board of Directors retains the discretion to apply a vesting cap to limit the value of the rights which may vest in the ordinary course. FY21 and FY22 Deferred Short-Term Incentive Plan The Deferred Short-Term Incentive Plan is the Group\u2019s short-term incentive plan for Lead Team members. Awards vest in August 2023 and August 2024 respectively, provided participants remain employed by the Group. FY20, FY21, FY22 and FY23 Management Share Plan The Management Share Plan is the Group\u2019s long-term incentive plan for eligible employees below the Lead Team. The Management Share Plan comprises two elements: \u2013 Retention rights vesting in August 2023, August 2024 and August 2025 provided participants remain employed by the Group; and \u2013 Performance rights vesting in August 2023, August 2024, August 2025 and August 2026 subject to performance conditions and provided participants remain employed by the Group. For the FY21 Management Share Plan awards, the Board of Directors retains the discretion to apply a vesting cap to limit the value of the rights which may vest in the ordinary course. 2020, 2021 and 2022 AllShare Plan The AllShare Plan is the Group\u2019s employee share plan for employees not eligible to participate in the other employee share plans. Awards to the value of at least US$1,250 per employee are granted annually. Awards will vest provided participants remain employed by the Group. The vesting period depends on the participants\u2019 location at the grant date: \u2013 Participants in Africa: August 2023, August 2024 and August 2025; and \u2013 Participants elsewhere: August 2023 and August 2024. (ii) Transitional share-based payment plans The awards listed below are subject to the general conditions noted above and are either one-off or will not be granted on an ongoing basis. FY21 and FY22 Executive Transitional Award Plan The Executive Transitional Award Plan is a one-off grant made to Lead Team members in recognition of their adjustment from the Management Share Plan (three year retention rights and four year performance rights) to the four year plan at the Group. Awards have a three year performance period from 1 July 2020 to 30 June 2023 and 1 July 2021 to 30 June 2024 respectively. FY20 Management Transitional Award Plan The Management Transitional Award Plan is a grant made to certain eligible employees to bridge the gap between their total target reward at BHP and their total target reward at the Group. The Management Transitional Award Plan has the same conditions as the Management Share Plan and comprises both service and performance conditions .
(b) Employee Share Ownership Plan Trusts
The South32 Limited Employee Incentive Plans Trust (the Australian Trust) and the South32 South African AllShare Trust (the South
African Trust) are discretionary trusts for the benefit of employees of South32 Limited and its subsidiaries.
The trustee for the Australian Trust (CPU Share Plans Pty Ltd) is an independent company, resident in Australia. The trustees for the
South African Trust are made up of employer and employee representatives per the Broad-Based Black Economic Empowerment
(B-BBEE) requirements under South African law. The Trusts use funds provided by South32 Limited and/or its subsidiaries to acquire
shares to enable awards to be made or satisfied under the Group employee share ownership plans.
The shares may be acquired by purchase in the market or by subscription at not less than nominal value.
(c) Measurement of fair values
The fair value at grant date of equity-settled share awards is charged to the Consolidated Income Statement, net of tax, over the period
for which the benefits of employee services are expected to be derived. The corresponding accrued employee entitlement is recorded
in the employee share awards reserve.
Where awards are forfeited because non-market based vesting conditions are not satisfied, the expense previously recognised is
proportionally reversed. If awards do not vest due to a market performance condition not being met, the expense is recognised in full,
and the share awards reserve is released to retained earnings. Where shares in South32 Limited are acquired by on-market purchases
prior to settling the vested entitlement, the cost of the acquired shares is carried as treasury shares and deducted from equity. Where
awards are satisfied by delivery of acquired shares, any difference between their acquisition cost and the cumulative remuneration
expense recognised is charged directly to retained earnings, net of tax.
The fair value of market-based performance rights is measured using a Monte Carlo methodology. This model considers the following:
\u2013 Expected life of the award;
\u2013 Current market price of the underlying shares;
\u2013 Expected volatility (of the individual company and of each peer group);
\u2013 Expected dividends;
\u2013 Risk-free interest rate; and
\u2013 Market based performance hurdles.
The fair value of retention and other non-market-based performance rights is measured using a Black Scholes methodology. This model
considers the following:
\u2013 Expected life of the award;
\u2013 Current market price of the underlying shares;
\u2013 Expected volatility;
\u2013 Expected dividends; and
\u2013 Risk-free interest rate .
The inputs used in the measurement of the fair values at grant date of the equity-settled share-based payments plans were as follows: FY23 Fair value at grant date (US$) Share price at grant date (US$) Expected volatility (%) Expected life (in years) Risk-free interest rate based on government bonds (%) Recurring plans FY23 Long-Term Incentive Plan 1.74 2.76 35 4 3.14 FY22 Deferred Short-Term Incentive Plan 2.68 2.76 35 2 3.09 FY23 Management Share Plan \u2013 Retention rights 2.59 \u2013 2.63 2.76 \u2013 2.85 35 3 3.12 \u2013 8.32 FY23 Management Share Plan \u2013 Performance rights 1.74 \u2013 1.77 2.76 \u2013 2.85 35 4 3.14 \u2013 8.85 2022 AllShare Plan 2.68 \u2013 2.90 2.76 \u2013 2.85 35 2 - 3 3.09 \u2013 8.32 FY22 Fair value at grant date (US$) Share price at grant date (US$) Expected volatility (%) Expected life (in years) Risk-free interest rate based on government bonds (%) Recurring plans FY22 Long-Term Incentive Plan 1.65 2.60 30 4 0.85 FY21 Deferred Short-Term Incentive Plan 2.36 2.60 30 2 0.01 FY22 Management Share Plan \u2013 Retention rights 2.25 - 2.26 2.34 - 2.60 30 3 0.43 - 5.17 FY22 Management Share Plan \u2013 Performance rights 1.65 - 1.66 2.34 - 2.60 30 4 0.85 - 5.61 2021 AllShare Plan 2.36 - 2.57 2.34 - 2.60 30 2 - 3 0.01 - 5.17 Transitional plan FY22 Executive Transitional Award Plan 1.68 2.60 30 3 0.43 The fair value at grant date, expected life, and risk-free interest rates shown represent the ranges based on the amounts of rights granted on the ASX or the JSE during the year, and the variations in offer terms and grant dates of each plan where applicable. Expected volatility is based on the historical South32 Limited share price volatility at the grant date. The risk-free interest rate and expected volatility does not materially impact service-based awards . ( d) Reconciliation of outstanding share awards None of the awards listed below have an exercise price or are exercisable at 30 June 2023. FY23 Number of rights Rights at beginning of the year Granted during the year Vested during the year Forfeited during the year Lapsed during the year Rights at end of the year Recurring plans FY19 Long-Term Incentive Plan 4,145,497 - - - (4,145,497) - FY20 Long-Term Incentive Plan 4,765,759 - - (432,477) - 4,333,282 FY21 Long-Term Incentive Plan 6,957,349 - - (673,913) - 6,283,436 FY22 Long-Term Incentive Plan 3,743,629 - - (313,351) - 3,430,278 FY23 Long-Term Incentive Plan - 2,494,503 - - - 2,494,503 FY20 Deferred Short-Term Incentive Plan 851,180 - (851,180) - - - FY21 Deferred Short-Term Incentive Plan 907, 232 - (178,242) - - 728,990 FY22 Deferred Short-Term Incentive Plan - 949,257 - - - 949,257 FY19 Management Share Plan - Performance rights 4,313,892 - - - (4,313,892) - FY20 Management Share Plan - Retention rights 1,502,428 - (1,502,428) - - - FY20 Management Share Plan - Performance rights 5,124,843 - - (224,230) - 4,900,613 FY21 Management Share Plan - Retention rights 2,702,433 - (65,227) (155,832) - 2,481,374 FY21 Management Share Plan - Performance rights 7,366,059 - - (430,437) - 6,935,622 FY22 Management Share Plan - Retention rights 2,224,932 - (26,731) (166,623) - 2,031,578 FY22 Management Share Plan - Performance rights 3,599,229 - - (290,913) - 3,308,316 FY23 Management Share Plan - Retention rights - 1,907,751 (2,947) (74,912) - 1,829,892 FY23 Management Share Plan - Performance rights - 3,198,587 - (126,329) - 3,072,258 2019 AllShare Plan 1,958,385 - (1,942,655) (15,730) - - 2020 AllShare Plan 6,115,200 - (3,695,200) (132,800) - 2,287,200 2021 AllShare Plan 4,323,740 - (59,360) (276,660) - 3 ,987,720 2022 AllShare Plan - 4,610,840 (24,440) (169,520) - 4,416,880 Transitional plans FY20 Executive Transitional Award Plan 129,283 - (43,094) - (86,189) - FY21 Executive Transitional Award Plan 154,702 - - - - 154,702 FY22 Executive Transitional Award Plan 195,128 - - - - 195,128 FY19 Management Transitional Award Plan 190,959 - - - (190,959) - FY20 Management Transitional Award Plan 89,670 - (14,209) (543) - 74,918 Total awards 61,361,529 13,160,938 (8,405,713) (3,484,270) (8,736,537) 53,895,947 24. Contingent assets and liabilities Contingent assets and liabilities not otherwise provided for in the consolidated financial statements are categorised as arising from: US$M FY23 FY22 Actual or potential litigation 519 427 Total contingent liabilities 519 427 Actual or potential litigation 143 156 Total contingent assets 143 156 Actual or potential litigation liabilities primarily relate to numerous tax assessments or matters relating to transactions in prior years in Colombia and Brazil. There are a number of legal claims or potential claims against the Group, the outcome of which cannot be foreseen at present, and for which no amounts have been disclosed. Actual or potential litigation assets primarily relate to potential recovery of pre-closing tax liabilities in respect of the Sierra Gorda acquisition, with allocation of liability for these pre-closing tax liabilities being disputed with the vendors. The Group has entered into various counter-indemnities of bank and performance guarantees related to its own future performance which are in the normal course of business. Additionally, the Group has provided indemnities against certain liabilities as part of agreements for the disposal of business operations. Having taken appropriate legal advice, the Group believes that a material liability arising from the indemnities provided is remote.
25. Subsidiaries
Significant subsidiaries of the Group, which are those with the most significant contribution to the Group\u2019s profit/(loss) after tax or net
assets, are as follows:
Effective interest %
Significant subsidiaries Country of incorporation Principal activity FY23 FY22
African Metals (Pty) Ltd South Africa Investment holding company 100 100
South32 Hermosa Inc. United States Exploration and development 100 100
Cerro Matoso SA Colombia Integrated laterite ferronickel mine and
smelting complex
99.9 99.9
Dendrobium Coal Pty Ltd Australia Metallurgical coal mine 100 100
Endeavour Coal Pty Ltd Australia Metallurgical coal mine 100 100
Hillside Aluminium (Pty) Ltd South Africa Aluminium smelter 100 100
Illawarra Coal Holdings Pty Ltd Australia Investment holding company 100 100
Illawarra Services Pty Ltd Australia Coal washery, rail and road transportation 100 100
South32 Finance 1 B.V. Netherlands Financing company 100 100
South32 Finance 2 B.V. Netherlands Financing company 100 100
South32 Aluminium (Holdings) Pty Ltd Australia Investment holding company 100 100
South32 Aluminium (RAA) Pty Ltd Australia Interest in a joint operation 100 100
South32 Aluminium (Worsley) Pty Ltd Australia Interest in a joint operation 100 100
South32 Cannington Pty Ltd Australia Silver, lead and zinc mine 100 100
South32 Eagle Downs Pty Ltd Australia Interest in a joint operation 100 100
South32 Group Operations Pty Ltd Australia Administrative, management and support
services
100 100
South32 Investment 1 B.V. Netherlands Interest in a joint operation 100 100
South32 Marketing Pte Ltd Singapore Sales, marketing and distribution 100 100
South32 Minerals SA Brazil Interest in a joint operation 100 100
South32 SA Investments Ltd United Kingdom Investment holding company 100 100
South32 SA Ltd South Africa Administrative, management and support
services
100 100
South32 Sierra Gorda SpA Chile Investment holding company 100 100
South32 Treasury Ltd Australia Financing company 100 100
South32 USA Exploration Inc. United States Exploration 100 100
Subsidiaries are entities controlled by the parent entity. Control exists where the parent entity is exposed or has rights to variable
returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. A
parent entity has power over the subsidiary when it has existing rights to direct the relevant activities of the subsidiary which are those
which significantly affect the subsidiary\u2019s returns. The financial statements of subsidiaries are included in the consolidated financial
statements for the period they are controlled.
26. Equity accounted investments The Group\u2019s interests in equity accounted investments with the most significant contribution to the Group\u2019s net profit/(loss) after tax or net assets, are as follows: Ownership interest % Significant joint ventures Country of incorporation Principal activity Acquisition date FY23 FY22 Australia Manganese (1) Australia Manganese ore mine 8 May 2015 60 60 South Africa Manganese (2) South Africa Manganese ore mines 3 February 2015 60 60 Sierra Gorda (3) Chile Copper mine 22 February 2022 45 45 (1) Australia Manganese consists of an investment in Groote Eylandt Mining Company Pty Ltd (GEMCO). (2) The Group holds a 60 per cent interest in Samancor Holdings (Pty) Ltd (Samancor). Samancor indirectly owns 74 per cent of Hotazel Manganese Mines (Pty) Ltd (HMM), which gives the Group its indirect ownership interest of 44.4 per cent. The remaining 26 per cent of HMM is owned by B-BBEE entities, of which 17 per cent of the interests were acquired using vendor finance with the loans repayable via distributions attributable to these parties, pro rata to their share in HMM. Until these loans are repaid, the Group\u2019s interest in HMM is accounted for at 54.6 per cent. (3) Sierra Gorda consists of an investment in Sierra Gorda Sociedad Contractual Minera. A reconciliation of the carrying amount of the equity accounted investments is set out below: US$M FY23 FY22 At the beginning of the year 470 380 Share of profit/(loss) 246 272 Share of other comprehensive income/(loss) 6 (3) Dividends received from equity accounted investments (223) (224) Acquisition of an equity accounted investment - 45 At the end of the year 499 470 Carrying amount of equity accounted investments US$M FY23 FY22 Australia Manganese 95 143 South Africa Manganese 173 180 Sierra Gorda 101 30 Individually immaterial (1) 130 117 Total 499 470 (1) Individually immaterial consists of investments in Samancor Marketing Pte Ltd (60 per cent), Minera\u00e7\u00e3o Rio do Norte (33 per cent) and Port Kembla Coal Terminal Ltd (16.7 per cent). Share of profit/(loss) of equity accounted investments US$M FY23 FY22 Australia Manganese 120 211 South Africa Manganese 36 31 Sierra Gorda 71 30 Individually immaterial (1) 19 - Total 246 272 (1) Individually immaterial consists of investments in Samancor Marketing Pte Ltd (60 per cent), Minera\u00e7\u00e3o Rio do Norte (33 per cent) and Port Kembla Coal Terminal Ltd (16.7 per cent) .
The following table summarises the financial information relating to each significant equity accounted investment:
Joint ventures
FY23
US$M
Australia
Manganese
South Africa
Manganese Sierra Gorda
Reconciliation of the carrying amount of equity accounted investments
Current assets 351 231 590
Non-current assets 837 514 4,437
Current liabilities (235) (94) (322)
Non-current liabilities (794) (255) (4,481)
Net assets \u2013 100% 159 396 224
Net assets \u2013 the Group\u2019s share 95 173 101
Carrying amount of equity accounted investments 95 173 101
Reconciliation of share of profit/(loss) of equity accounted investments
Revenue \u2013 100% 1,028 512 1,521
Profit/(loss) after tax \u2013 100% 200 64 158
Profit/(loss) after tax \u2013 the Group\u2019s share 120 36 71
Share of profit/(loss) of equity accounted investments 120 36 71
Other balances of equity accounted investments presented on a 100% basis
Cash and cash equivalents
(1)
- 32 180
Non-current financial liabilities (excluding trade and other payables and provisions) (263) (8) (4,331)
Depreciation and amortisation (167) (32) (314)
Interest income 4 9 3
Interest expense (39) (11) (385)
Income tax (expense)/benefit (excluding royalty related tax) (127) (37) (62)
(1) South Africa Manganese cash and cash equivalents includes US$32 million, on a 100 per cent basis, which is restricted by legal or contractual arrangements.
Joint ventures
FY22
US$M
Australia
Manganese
South Africa
Manganese Sierra Gorda
Reconciliation of the carrying amount of equity accounted investments
Current assets 328 258 485
Non-current assets 836 516 4,252
Current liabilities (260) (81) (367)
Non-current liabilities (665) (290) (4,303)
Net assets \u2013 100% 239 403 67
Net assets \u2013 the Group\u2019s share 143 180 30
Carrying amount of equity accounted investments 143 180 30
Reconciliation of share of profit/(loss) of equity accounted investments
Revenue \u2013 100% 1,239 602 535
Profit/(loss) after tax \u2013 100% 351 59 67
Profit/(loss) after tax \u2013 the Group\u2019s share 211 31 30
Share of profit/(loss) of equity accounted investments 211 31 30
Other balances of equity accounted investments presented on a 100% basis
Cash and cash equivalents
(1)
- 27 154
Non-current financial liabilities (excluding trade and other payables and provisions) (173) (19) (4,177)
Depreciation and amortisation (136) (26) (129)
Interest income - 3 -
Interest expense (20) (13) (139)
Income tax (expense)/benefit (excluding royalty related tax) (208) (63) (23)
(1) South Africa Manganese cash and cash equivalents includes US$27 million, on a 100 per cent basis, which is restricted by legal or contractual arrangements .
The Group\u2019s share of contingent liabilities and capital expenditure commitments of significant equity accounted investments as at
30 June 2023 was US$3 million (FY22: US$6 million) and US$58 million (FY22: US$27 million) respectively.
The Group uses the term \u2018equity accounted investments\u2019 to refer to associates and joint ventures collectively.
Associates are entities in which the Group holds significant influence. If the Group holds 20 per cent or more of the voting power of an
entity, it is presumed that the Group has significant influence, unless it can be clearly demonstrated that this is not the case. Significant
influence can also arise when the Group has less than 20 per cent of the voting power but it can be demonstrated that the Group has
the power to participate in the financial and operating policy decisions of the associate. Investments in associates are accounted for
using the equity method.
Joint ventures are joint arrangements in which the parties with joint control of the arrangement have rights to the net assets of the
arrangement. A separate vehicle, not the parties, will have the rights to the assets and obligations for the liabilities, relating to the
arrangement. If more than an insignificant share of output from a joint venture is sold to third parties, this indicates that the joint venture
is not dependent on the parties to the arrangement for funding and that the parties to the arrangement have no obligation for the
liabilities of the arrangement. Joint ventures are accounted for using the equity method.
Equity accounted investments are initially recorded at cost, including the value of any goodwill on acquisition. In subsequent periods, the
carrying amount of the investment is adjusted to reflect the share of post-acquisition profit or loss and other comprehensive income.
After application of the equity method, including recognising the Group\u2019s share of the investees\u2019 results, the value of the investment will
be assessed for impairment if there is objective evidence that an impairment of the investment may have occurred.
27. Interests in joint operations
Significant joint operations of the Group, which are those with the most significant contributions to the Group\u2019s net profit/(loss) after tax
or net assets, are as follows:
Effective interest %
Significant joint
operations
Country of
operation Principal activity Acquisition date FY23 FY22
Ambler Metals United States Base metals exploration and development options 11 February 2020 50 50
Brazil Alumina Brazil Integrated bauxite mine and alumina refinery 3 July 2014 36 36
Brazil Aluminium Brazil Aluminium smelter 3 July 2014 40 40
Eagle Downs
Metallurgical Coal
Australia Metallurgical coal exploration and
development option
14 September
2018
50 50
Mozal Aluminium
(1)
Mozambique Aluminium smelter 27 March 2015
(2)
63.7 63.7
Worsley Alumina
(1)
Australia Integrated bauxite mine and alumina refinery 8 May 2015 86 86
(1) While the Group holds a greater than 50 per cent interest in Worsley Alumina and Mozal Aluminium, participants jointly approve certain matters and are entitled to receive their
share of output from the arrangement.
(2) The Group initially acquired a 47.1 per cent interest on 27 March 2015 and subsequently acquired a further 16.6 per cent interest on 31 May 2022.
Joint operations are joint arrangements in which the parties with joint control have rights to the assets and obligations for the liabilities
relating to the arrangement. The activities of a joint operation are primarily designed for the provision of output to the parties to the
arrangement, indicating that:
\u2013 The parties have the rights to substantially all the output and economic benefits of the assets of the arrangement; and
\u2013 All liabilities are satisfied by the joint participants through their purchases of that output. This indicates that, in substance, the joint
participants have an obligation for the liabilities of the arrangement.
The consolidated financial statements of the Group include its share of the assets and liabilities, revenues and expenses arising jointly
or otherwise from those operations and its revenue derived from the sale of its share of the output from the joint operation. All such
amounts are measured in accordance with the terms of each arrangement, which are usually in proportion to the Group\u2019s interest in the
joint operation.
The assets in these joint operations are restricted to the extent that they are only available to be used by the joint operation itself and
not by other operations of the Group. For certain joint operations, the Group has also either pledged, mortgaged or provided a cross
charge to joint operation partners over assets within the joint operation.
28. Key management personnel (a) Key management personnel compensation US$\u2019000 FY23 FY22 Short-term employee benefits 5,419 6,321 Post-employment benefits 128 137 Other long-term benefits 276 293 Termination benefits - 428 Share-based payments 4,246 4,764 Total 10,069 11,943 (b) Transactions with key management personnel There were no transactions with key management personnel during the year ended 30 June 2023 (FY22: US$nil). (c) Loans to key management personnel On 22 June 2021, the Group made an interest free loan of US$620 thousand to Mike Fraser in relation to his South African income tax payable on his Group remuneration. The final instalment to repay the loan in full was made on 24 November 2021. There were no other loans with any key management personnel as at 30 June 2023 (FY22: US$nil). (d) Transactions with key management personnel related entities There were no transactions with entities controlled or jointly controlled by key management personnel and there were no outstanding amounts with those entities as at 30 June 2023 (FY22: US$nil) . 29. Related party transactions (a) Parent entity The ultimate parent entity of the Group is South32 Limited, which is domiciled and incorporated in Australia. (b) Subsidiaries, joint ventures and associates The interests in subsidiaries, joint ventures and associates are disclosed in note 25 Subsidiaries and note 26 Equity accounted investments. (c) Key management personnel The compensation of, and loans to, key management personnel are disclosed in note 28 Key management personnel. (d) Pension and other post-retirement obligations The pension and other post-retirement obligations are disclosed in note 22 Pension and other post-retirement obligations. (e) Transactions with related parties Transactions with related parties US$\u2019000 Joint ventures Associates FY23 FY22 FY23 FY22 Sales of goods and services 271,141 360,674 3,863 3,961 Purchases of goods and services 531 - 163,096 53,107 Interest income 160,288 60,661 - - Dividend income 223,468 224,424 - - Interest expense 14,977 2,109 - - Increase/(decrease) in short-term financing arrangements (47,726) 49,530 - - Increase/(decrease) in loans with related parties 113,587 1,619,366 (9,117) (17,237 ) Outstanding balances with related parties US$\u2019000 Joint ventures Associates FY23 FY22 FY23 FY22 Trade and sundry amounts owing to related parties 928 748 18,393 973 Other amounts owing to related parties (1) 286,804 334,530 - - Trade and sundry amounts owing from related parties 29,993 30,114 312 769 Loan amounts owing from related parties (2)(3)(4) 1,863,753 1,750,166 40,302 49,419 (1) Other amounts owing to joint ventures relate to short-term deposits and cash managed by the Group on behalf of its equity accounted investments. Interest was paid based on the three-month London Inter-Bank Offer Rate (LIBOR) less a margin of 0.05 per cent and the one-month Johannesburg Inter-Bank Agreed Rate. From 1 July 2023 the three- month LIBOR was replaced by the three-month Chicago Mercantile Exchange Term Secured Overnight Financing Rate (CME Term SOFR) plus a margin of 0.21 per cent. (2) Loan amounts owing from GEMCO include an interest bearing loan which is repayable by 2 January 2026. Interest was paid based on the three-month LIBOR plus a margin of three per cent. From 1 July 2023 the three-month LIBOR was replaced by the three-month CME Term SOFR plus a margin of 3.26 per cent. (3) Loan amounts owing from Sierra Gorda include a purchased credit-impaired loan which has a face value of US$2,185 million (FY22: US$2,073 million) and incurs interest at a contractual rate of eight per cent per annum. The loan is repayable by 15 December 2024, subject to review and agreement between the joint venture parties. Refer to note 19 Financial assets and financial liabilities. (4) Loan amounts owing from Port Kembla Coal Terminal include an interest free loan which is repayable by 30 June 2030. Sales to, and purchases from, related parties are transactions at market prices and on commercial terms, or under terms and prices that are no less favourable to the Group than those arranged with third parties. Outstanding balances at year end are unsecured and settlement mostly occurs in cash. South32 Limited has guaranteed its equivalent 45 per cent share of the repayment of a US$700 million revolving credit facility entered into by Sierra Gorda. At the end of the year, the facility was drawn down by US$400 million (FY22: US$400 million). The facility extends to 30 September 2024. No other guarantees are provided for or have been received from any related party . 30. Parent entity information (a) Summary financial information The individual financial statements for the parent entity, South32 Limited, show the following aggregate amounts: US$M FY23 FY22 Result of parent entity Profit/(loss) after tax for the year (995) 3,879 Total comprehensive income/(loss) (995) 3,879 Financial position of parent entity at year end Current assets 445 652 Total assets 12,056 13,006 Current liabilities (1,375) (100) Total liabilities (1,383) (108) Net assets 10,673 12,898 Total equity of the parent entity Share capital 13,251 13,469 Treasury shares (47) (28) Other reserves 32 24 Profit reserve (1) 3,816 4,823 Accumulated losses (6,379) (5,390) Total equity 10,673 12,898 (1) Prior year profits, net of dividends paid, have been appropriated to a profit reserve for future dividend payments. (b) Parent company guarantees The parent entity and South32 SA Investments Ltd have jointly and severally, fully and unconditionally guaranteed the payment of the principal and premium, if any, and interest, including certain additional amounts that may be payable in respect of the notes issued by South32 Treasury Ltd, a 100 per cent owned finance subsidiary of the parent entity. The parent entity and South32 SA Investments Ltd have guaranteed the payment of such amounts when they become due and payable, whether on an interest payment date, at the stated maturity of the notes, by declaration or acceleration, call for redemption or otherwise. At 30 June 2023, the guaranteed liabilities in respect of the notes amounted to US$690 million (FY22: US$689 million). The parent entity has also guaranteed a US commercial paper program and a Group revolving credit facility of US$1,400 million. The Group revolving credit facility remains undrawn as at 30 June 2023, refer to note 19 Financial assets and financial liabilities for further details. The parent entity is party to a Deed of Support with the effect that the Company guarantees debts in respect of South32 Group Operations Pty Ltd. 31. Subsequent events Capital management On 24 August 2023, the Directors resolved to pay a fully-franked final dividend of US 3 .2 cents per share (US$145 million) in respect of the 2023 financial year. The dividends will be paid on 12 October 2023. The dividends have not been provided for in the consolidated financial statements and will be recognised in the 2024 financial year. On 24 August 2023, the Group also announced an increase to the existing capital management program, announced in March 2017, of US$50 million to a total of US$2.4 billion. This leaves US$133 million expected to be returned by 1 March 2024. No other matters or circumstances have arisen since the end of the year that have significantly affected, or may significantly affect, the operations, results of operations or state of affairs of the Group in subsequent accounting periods .", "dimensions": { "concept": "ifrs-full:DisclosureOfNotesAndOtherExplanatoryInformationExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-542": { "value": "This section sets out the accounting policies that relate to the consolidated financial statements of South32 Limited (referred to as the Company) and its subsidiaries and joint arrangements (collectively, the Group) as a whole. Where an accounting policy, critical accounting estimate, assumption or judgement is specific to a note, these are described within the note to which they relate. These policies have been consistently applied to all periods presented, except as described in note 3 New standards and interpretations. The consolidated financial statements of the Group for the year ended 30 June 2023 were authorised for issue in accordance with a resolution of the Directors on 7 September 2023. 1. Reporting entity South32 Limited is a for-profit company limited by shares incorporated in Australia with a primary listing on the Australian Securities Exchange (ASX), a standard listing on the London Stock Exchange (LSE) and a secondary listing on the Johannesburg Stock Exchange (JSE). The nature of the operations and principal activities of the Group are described in note 4 Segment information. Are presented in US dollars, with all values rounded to the nearest million dollars (US$M or US$ million) unless otherwise stated, in accordance with ASIC Corporations Instrument 2016/191;", "dimensions": { "concept": "ifrs-full:DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-456": { "value": "The consolidated financial statements of the Group for the year ended 30 June 2023 were authorised for issue in accordance with a resolution of the Directors on 7 September 2023. ", "dimensions": { "concept": "ifrs-full:DisclosureOfAuthorisationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-2": { "value": "South32 Limited", "dimensions": { "concept": "ifrs-full:NameOfReportingEntityOrOtherMeansOfIdentification", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-3": { "value": "for-profit company limited by shares", "dimensions": { "concept": "ifrs-full:LegalFormOfEntity", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-4": { "value": "Australia", "dimensions": { "concept": "ifrs-full:CountryOfIncorporation", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-425": { "value": "2. Basis of preparation The consolidated financial statements are general purpose financial statements which: \u2013 Have been prepared in accordance with the requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting Standards Board (AASB), International Financial Reporting Standards (IFRS) and other authoritative pronouncements of the International Accounting Standards Board (IASB); \u2013 Have been prepared on a historical cost basis, except for post-retirement assets and obligations, derivative financial instruments and certain other financial assets and liabilities which are required to be measured at fair value; \u2013 Are presented in US dollars, with all values rounded to the nearest million dollars (US$M or US$ million) unless otherwise stated, in accordance with ASIC Corporations Instrument 2016/191; \u2013 Present reclassified comparative information where required for consistency with the current year\u2019s presentation; \u2013 Adopt all new and amended accounting standards and interpretations issued by the AASB and IASB that are relevant to the operations of the Group and effective for reporting periods beginning on or after 1 July 2022. Refer to note 3 New standards and interpretations for further details; and \u2013 Do not early adopt any accounting standards and interpretations that have been issued or amended but are not yet effective as described in note 3 New standards and interpretations. (a) Basis of consolidation The consolidated financial statements comprise the financial statements of the Group. A list of significant controlled entities (subsidiaries) at year end is contained in note 25 Subsidiaries. The financial statements of subsidiaries are prepared for the same reporting period as the parent entity, using consistent accounting policies. Changes in the Group\u2019s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions . (b) Foreign currency translation The functional currency of the majority of the Group\u2019s operations is the US dollar, as this is assessed to be the principal currency of the economic environments in which they operate. Transactions denominated in foreign currencies are initially recorded in the functional currency using the exchange rate at the date of the underlying transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the rate of exchange at year end. Exchange gains or losses on retranslation are included in the Consolidated Income Statement, with the exception of foreign exchange gains or losses on foreign currency provisions for closure and rehabilitation which are capitalised in property, plant and equipment for operating sites . (c) Key estimates, assumptions and judgements The preparation of the consolidated financial statements has required management to apply accounting policies and methodologies that are based on complex and subjective estimates, assumptions and judgements. Management based its estimates and judgements on historical experience and assumptions it believes to be reasonable and realistic based on the current environment. Actual results may differ from those reported in these statements due to the uncertainties that characterise the assumptions and conditions on which the estimates are based. Specific sources of uncertainty identified by the Group are set out on the following pages and/or together with the applicable note, as follows: Key estimates, assumptions and judgements Recognition of deferred taxes note 6 Uncertain tax matters note 6 Useful economic lives of assets note 11 Impairment of non-financial assets note 13 Closure and rehabilitation provisions note 15 Expected credit loss on credit-impaired financial assets note 19 In addition to the specific sources of uncertainty noted above, the following assumptions are considered pervasive to the financial statements as a whole: Climate change-related risks and opportunities The key estimates, assumptions and judgements made in these consolidated financial statements take into account the Group\u2019s expectations of, and approach to, climate change-related risks, and are consistent with the Group\u2019s reporting on climate-related matters. These expectations may affect the Group\u2019s financial results and financial position in a number of ways, including the following: \u2013 The useful lives of assets, and therefore the depreciation and amortisation charged in the Consolidated Income Statement, may be impacted by changes in operational plans (refer to note 11 Property, plant and equipment); \u2013 Asset recoverable amounts may be affected due to changes in estimated future cash flows driven by, for example, changes in forecast commodity prices, operating costs, carbon prices and useful lives of assets (refer to note 13 Impairment of non- financial assets and note 19(b)(iii) Credit risk: Shareholder loan receivable from Sierra Gorda); \u2013 The commercial viability of exploration areas of interest may impact the recoverability of exploration and evaluation assets (refer to note 13 Impairment of non-financial assets); and \u2013 Timing and cost of closure and rehabilitation activities (refer to note 15 Provisions). The carrying amount of the associated deferred tax assets/ liabilities may change due to changes in estimates of the likely recovery of the related tax benefits. Global transition to a low-carbon world While we are committed to the goals of the Paris Agreement, current global signposts continue to point towards a probable trajectory of at least 2\u00b0C warming which forms our base case (1) for global transition to a low-carbon world. Our base case directly informs our commodity demand outlook, forecast commodity prices and carbon prices. Any change in our base case may in turn impact our Ore Reserve estimates, mine plans, production volumes and future costs. The Group\u2019s key estimates, assumptions and judgements with respect to transition risks and opportunities are based on the Group\u2019s expectations and assessments at the date of this report, and actual results may differ. Government policies and market developments continue to drive uncertainty in commodity and carbon price outlooks, which may impact the Group\u2019s approach to climate change and assumptions and judgements, which may in turn result in material changes to financial results and the carrying values of assets and liabilities in future reporting periods. Physical impacts of climate change The Group\u2019s operations are located in regions that may experience extreme temperatures, bushfires, flooding and droughts. The Group has performed a baseline risk assessment of the physical impacts of climate change on its operated portfolio, with the assessment based on scenarios RCP4.5 and RCP8.5 as described by the Intergovernmental Panel on Climate Change (IPCC) (2) . Longer term assets (including those that move into closure) are likely to face more significant challenges due to the expected severity of climate risks manifesting over longer timeframes. Climate change is likely to exacerbate the risks to water supply, storage and usage that we currently manage, particularly for operations in areas of water scarcity and other sensitive environmental aspects. The risk of the physical impacts of climate change were contemplated during the development of our life of operation plans (including closure estimates) and additional capital and/ or increases to operating costs have been incorporated into our forward-looking estimates when deemed appropriate. The Group\u2019s ongoing analysis of reasonable alternative assumptions with respect to future climate conditions has not identified any additional indicator that the carrying value of assets cannot be recovered or that useful lives of assets will be shortened. The Group\u2019s key estimates, assumptions and judgments with respect to the physical impacts of climate change are based on the Group\u2019s expectations and assessments as at the date of this report, and actual results may differ. The high degree of uncertainty around the nature, timing and magnitude of weather events and long-term changes in climate patterns, as well as the Group\u2019s continued physical risk assessment process and development of its direct adaptation and mitigation strategies, may result in material changes to financial results and carrying value of assets and liabilities in future reporting periods. (1) By contrast, our FY23 1.5\u00b0C scenario, which is primarily based on the International Energy Agency\u2019s Net Zero Emissions 2050 scenario (IEA NZE), is utilised by the Group to assess the resilience of our portfolio under a rapid global transition. The IEA NZE sets out one credible pathway to achieving a 1.5\u00b0C outcome by 2050, providing a set of general assumptions on commodity demand drivers, scrap availability, material efficiency and carbon prices. (2) There are four Representative Concentration Pathways (RCPs) representing possible future greenhouse gas emissions and concentration scenarios. RCP4.5 equates to between 1.1\u00b0C and 2.6\u00b0C of warming by the end of the century. RCP8.5 equates to between 2.6\u00b0C and 4.8\u00b0C of warming by the end of the century. Mineral Resources and Ore Reserves Estimating the quantity and/or grade of Mineral Resources requires the location, quantity, grade (or quality), continuity and other geological characteristics to be known, estimated or interpreted from specific geological evidence and knowledge, including sampling, in order to satisfy the requirement that there are reasonable prospects for eventual economic extraction. This process may require complex and difficult geological assessments to interpret the data. An Ore Reserve is the economically mineable part of the Measured and/or Indicated Mineral Resource that can be legally extracted, or where there is a reasonable expectation that approvals for extraction will be granted. In order to estimate Ore Reserves, consideration is required for a range of modifying factors, including mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social and governmental. When reporting Ore Reserves, the relevant studies, to at least a pre-feasibility level, must demonstrate that, at the time of reporting, extraction could be reasonably justified, including a consideration of forecast sales prices. With the exception of Sierra Gorda's mineral reserves, the Group reports Mineral Resources and Ore Reserves in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code), and the ASX Listing Rules (Chapter 5): Additional reporting on mining and oil and gas production and exploration activities. The Sierra Gorda estimates of mineral reserves are foreign estimates under the ASX Listing Rules and are not reported in accordance with the JORC Code. Refer to the Resources and Reserves section of this report for further information on the qualifying foreign estimates related to Sierra Gorda. Because the economic assumptions used to estimate the Ore Reserves change from period to period, and because additional geological data is generated during the course of operations, estimates of the Mineral Resources and Ore Reserves may change from period to period. The Group\u2019s planning processes consider the impacts of climate change on its Ore Reserves, including assessments of operating costs and the impact of extreme weather events on the expectation of economic extraction. The Group may also include Exploration Targets in determining the recoverable amount of a cash generating unit (CGU) or an exploration area of interest. Similar to climate-change related risks and opportunities, changes in the Group's estimates of Mineral Resources and Ore Reserves, including estimates of exploration potential, may affect the Group\u2019s financial results and financial position in a number of ways, including asset recoverable amounts, useful lives of assets, commercial viability of exploration areas of interest, timing and cost of closure and rehabilitation activities and the recovery of any associated deferred tax assets. ", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-424": { "value": "2. Basis of preparation The consolidated financial statements are general purpose financial statements which: \u2013 Have been prepared in accordance with the requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting Standards Board (AASB), International Financial Reporting Standards (IFRS) and other authoritative pronouncements of the International Accounting Standards Board (IASB); \u2013 Have been prepared on a historical cost basis, except for post-retirement assets and obligations, derivative financial instruments and certain other financial assets and liabilities which are required to be measured at fair value; \u2013 Are presented in US dollars, with all values rounded to the nearest million dollars (US$M or US$ million) unless otherwise stated, in accordance with ASIC Corporations Instrument 2016/191; \u2013 Present reclassified comparative information where required for consistency with the current year\u2019s presentation; \u2013 Adopt all new and amended accounting standards and interpretations issued by the AASB and IASB that are relevant to the operations of the Group and effective for reporting periods beginning on or after 1 July 2022. Refer to note 3 New standards and interpretations for further details; and \u2013 Do not early adopt any accounting standards and interpretations that have been issued or amended but are not yet effective as described in note 3 New standards and interpretations. (a) Basis of consolidation The consolidated financial statements comprise the financial statements of the Group. A list of significant controlled entities (subsidiaries) at year end is contained in note 25 Subsidiaries. The financial statements of subsidiaries are prepared for the same reporting period as the parent entity, using consistent accounting policies. Changes in the Group\u2019s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions . (b) Foreign currency translation The functional currency of the majority of the Group\u2019s operations is the US dollar, as this is assessed to be the principal currency of the economic environments in which they operate. Transactions denominated in foreign currencies are initially recorded in the functional currency using the exchange rate at the date of the underlying transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the rate of exchange at year end. Exchange gains or losses on retranslation are included in the Consolidated Income Statement, with the exception of foreign exchange gains or losses on foreign currency provisions for closure and rehabilitation which are capitalised in property, plant and equipment for operating sites . (c) Key estimates, assumptions and judgements The preparation of the consolidated financial statements has required management to apply accounting policies and methodologies that are based on complex and subjective estimates, assumptions and judgements. Management based its estimates and judgements on historical experience and assumptions it believes to be reasonable and realistic based on the current environment. Actual results may differ from those reported in these statements due to the uncertainties that characterise the assumptions and conditions on which the estimates are based. Specific sources of uncertainty identified by the Group are set out on the following pages and/or together with the applicable note, as follows: Key estimates, assumptions and judgements Recognition of deferred taxes note 6 Uncertain tax matters note 6 Useful economic lives of assets note 11 Impairment of non-financial assets note 13 Closure and rehabilitation provisions note 15 Expected credit loss on credit-impaired financial assets note 19 In addition to the specific sources of uncertainty noted above, the following assumptions are considered pervasive to the financial statements as a whole: Climate change-related risks and opportunities The key estimates, assumptions and judgements made in these consolidated financial statements take into account the Group\u2019s expectations of, and approach to, climate change-related risks, and are consistent with the Group\u2019s reporting on climate-related matters. These expectations may affect the Group\u2019s financial results and financial position in a number of ways, including the following: \u2013 The useful lives of assets, and therefore the depreciation and amortisation charged in the Consolidated Income Statement, may be impacted by changes in operational plans (refer to note 11 Property, plant and equipment); \u2013 Asset recoverable amounts may be affected due to changes in estimated future cash flows driven by, for example, changes in forecast commodity prices, operating costs, carbon prices and useful lives of assets (refer to note 13 Impairment of non- financial assets and note 19(b)(iii) Credit risk: Shareholder loan receivable from Sierra Gorda); \u2013 The commercial viability of exploration areas of interest may impact the recoverability of exploration and evaluation assets (refer to note 13 Impairment of non-financial assets); and \u2013 Timing and cost of closure and rehabilitation activities (refer to note 15 Provisions). The carrying amount of the associated deferred tax assets/ liabilities may change due to changes in estimates of the likely recovery of the related tax benefits. Global transition to a low-carbon world While we are committed to the goals of the Paris Agreement, current global signposts continue to point towards a probable trajectory of at least 2\u00b0C warming which forms our base case (1) for global transition to a low-carbon world. Our base case directly informs our commodity demand outlook, forecast commodity prices and carbon prices. Any change in our base case may in turn impact our Ore Reserve estimates, mine plans, production volumes and future costs. The Group\u2019s key estimates, assumptions and judgements with respect to transition risks and opportunities are based on the Group\u2019s expectations and assessments at the date of this report, and actual results may differ. Government policies and market developments continue to drive uncertainty in commodity and carbon price outlooks, which may impact the Group\u2019s approach to climate change and assumptions and judgements, which may in turn result in material changes to financial results and the carrying values of assets and liabilities in future reporting periods. Physical impacts of climate change The Group\u2019s operations are located in regions that may experience extreme temperatures, bushfires, flooding and droughts. The Group has performed a baseline risk assessment of the physical impacts of climate change on its operated portfolio, with the assessment based on scenarios RCP4.5 and RCP8.5 as described by the Intergovernmental Panel on Climate Change (IPCC) (2) . Longer term assets (including those that move into closure) are likely to face more significant challenges due to the expected severity of climate risks manifesting over longer timeframes. Climate change is likely to exacerbate the risks to water supply, storage and usage that we currently manage, particularly for operations in areas of water scarcity and other sensitive environmental aspects. The risk of the physical impacts of climate change were contemplated during the development of our life of operation plans (including closure estimates) and additional capital and/ or increases to operating costs have been incorporated into our forward-looking estimates when deemed appropriate. The Group\u2019s ongoing analysis of reasonable alternative assumptions with respect to future climate conditions has not identified any additional indicator that the carrying value of assets cannot be recovered or that useful lives of assets will be shortened. The Group\u2019s key estimates, assumptions and judgments with respect to the physical impacts of climate change are based on the Group\u2019s expectations and assessments as at the date of this report, and actual results may differ. The high degree of uncertainty around the nature, timing and magnitude of weather events and long-term changes in climate patterns, as well as the Group\u2019s continued physical risk assessment process and development of its direct adaptation and mitigation strategies, may result in material changes to financial results and carrying value of assets and liabilities in future reporting periods. (1) By contrast, our FY23 1.5\u00b0C scenario, which is primarily based on the International Energy Agency\u2019s Net Zero Emissions 2050 scenario (IEA NZE), is utilised by the Group to assess the resilience of our portfolio under a rapid global transition. The IEA NZE sets out one credible pathway to achieving a 1.5\u00b0C outcome by 2050, providing a set of general assumptions on commodity demand drivers, scrap availability, material efficiency and carbon prices. (2) There are four Representative Concentration Pathways (RCPs) representing possible future greenhouse gas emissions and concentration scenarios. RCP4.5 equates to between 1.1\u00b0C and 2.6\u00b0C of warming by the end of the century. RCP8.5 equates to between 2.6\u00b0C and 4.8\u00b0C of warming by the end of the century. Mineral Resources and Ore Reserves Estimating the quantity and/or grade of Mineral Resources requires the location, quantity, grade (or quality), continuity and other geological characteristics to be known, estimated or interpreted from specific geological evidence and knowledge, including sampling, in order to satisfy the requirement that there are reasonable prospects for eventual economic extraction. This process may require complex and difficult geological assessments to interpret the data. An Ore Reserve is the economically mineable part of the Measured and/or Indicated Mineral Resource that can be legally extracted, or where there is a reasonable expectation that approvals for extraction will be granted. In order to estimate Ore Reserves, consideration is required for a range of modifying factors, including mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social and governmental. When reporting Ore Reserves, the relevant studies, to at least a pre-feasibility level, must demonstrate that, at the time of reporting, extraction could be reasonably justified, including a consideration of forecast sales prices. With the exception of Sierra Gorda's mineral reserves, the Group reports Mineral Resources and Ore Reserves in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code), and the ASX Listing Rules (Chapter 5): Additional reporting on mining and oil and gas production and exploration activities. The Sierra Gorda estimates of mineral reserves are foreign estimates under the ASX Listing Rules and are not reported in accordance with the JORC Code. Refer to the Resources and Reserves section of this report for further information on the qualifying foreign estimates related to Sierra Gorda. Because the economic assumptions used to estimate the Ore Reserves change from period to period, and because additional geological data is generated during the course of operations, estimates of the Mineral Resources and Ore Reserves may change from period to period. The Group\u2019s planning processes consider the impacts of climate change on its Ore Reserves, including assessments of operating costs and the impact of extreme weather events on the expectation of economic extraction. The Group may also include Exploration Targets in determining the recoverable amount of a cash generating unit (CGU) or an exploration area of interest. Similar to climate-change related risks and opportunities, changes in the Group's estimates of Mineral Resources and Ore Reserves, including estimates of exploration potential, may affect the Group\u2019s financial results and financial position in a number of ways, including asset recoverable amounts, useful lives of assets, commercial viability of exploration areas of interest, timing and cost of closure and rehabilitation activities and the recovery of any associated deferred tax assets. (a) Description of segments The operating segments (also referred to as operations) are organised and managed separately according to the nature of products produced. The Lead Team (the chief operating decision makers) and the Board of Directors monitor the segment results regularly for the purpose of making decisions about resource allocation and assessing performance . The segment information reflects the Group\u2019s interest in subsidiaries and joint operations, as well as material equity accounted joint ventures on a proportional consolidation basis. The segment information includes non-IFRS financial measures. Segment performance is measured by Underlying EBIT and Underlying EBITDA. Underlying EBIT is profit before net finance income/(costs), income tax expense, royalty related tax expense and other earnings adjustment items. Underlying EBITDA is Underlying EBIT before depreciation and amortisation. Reconciliations of the underlying segment information to the statutory information included in the Group\u2019s consolidated financial statements are set out in note 4(b)(i) Underlying results reconciliation, including joint venture adjustments which reconcile the proportional consolidation of the material equity accounted joint ventures back to their statutory equity accounting positions. The Group\u2019s material equity accounted joint ventures are Sierra Gorda, Australia Manganese and South Africa Manganese, refer to note 26 Equity accounted investments. The Group separately discloses sales of group production from sales of third-party products and services because of the significant difference in profit margin earned on these sales. It is the Group\u2019s policy that inter-segment transactions are made on an arm\u2019s length basis. Group and unallocated items/eliminations represent group centre functions and consolidation adjustments. Group financing and income taxes are primarily managed on a Group basis and are not allocated to operating segments. Total assets and liabilities for each operating segment represent operating assets and liabilities which predominantly exclude the carrying amount of non-material equity accounted investments, cash, interest bearing liabilities, tax balances and certain other financial assets and liabilities. Revenue recognition Revenue is measured based on the consideration specified in the contract with a customer and excludes amounts collected on behalf of third parties. Revenue is not reduced for royalties and other taxes payable from Group production. The following is a description of the principal activities from which the Group generates its revenue: Revenue from the sale of commodities The Group primarily sells the following commodities: alumina, aluminium, copper, silver, lead, zinc, ferronickel, metallurgical coal and manganese ore. The sales of these commodities are considered to be performance obligations as they are the contractual promises by the Group to transfer distinct goods to customers. The transaction price allocated to each performance obligation is recognised as the performance obligation is satisfied. Satisfaction occurs when control of the promised commodity is transferred to the customer. For the sale of commodities, revenue is therefore recognised at a point in time, net of treatment and refining charges (where applicable). The majority of the Group\u2019s sales agreements specify that title passes on the bill of lading date (the date the commodity is delivered to the shipping agent) and is assessed to be the point of time in which control over the commodity passes to the customer. For these sales, revenue is recognised on the bill of lading date. For certain sales, title passes and revenue is recognised when the goods have been delivered to the customer. For certain commodities, the sales price is determined on a provisional basis at the date of sale and adjustments to the sales price subsequently occur based on movements in quoted market or contractual prices up to the date of final pricing. The period between provisional invoicing and final pricing is up to 180 days. Revenue on provisionally priced sales is recognised based on the estimated fair value of the total consideration receivable. The revenue adjustment mechanism embedded within provisionally priced sales arrangements has the characteristics of a commodity derivative. Accordingly, the fair value of the final sales price adjustment is re-estimated continuously and changes in fair value are disclosed separately as \u2018other\u2019 revenue. In all cases, fair value is estimated by reference to forward market prices. Revenue from the provision of freight services The Group sells most of its commodities on either Free On Board (FOB) or Cost, Insurance, and Freight (CIF) Incoterms. In the case of CIF Incoterms, the Group is responsible for shipping services after the date at which control of the commodities passes to the customer at the port of loading. The provision of shipping services in these types of arrangements are a distinct service (and therefore a separate performance obligation) to which a portion of the transaction price should be allocated and recognised over time as the shipping services are provided. The Group also provides third party freight services which are recognised as the shipping service is provided. The Group does not separately disclose sales revenue from freight services as it does not consider this necessary in order to understand the impact of economic factors on the Group. Significant items are those items, not separately identified in note 4(b)(i) Underlying results reconciliation, whose nature and amount are considered material to the Group\u2019s consolidated financial statements. Income tax expense Income tax expense for the period is the tax payable on the current period\u2019s taxable income based on the applicable income tax rate for each jurisdiction adjusted for changes in deferred tax assets and liabilities attributable to temporary differences and unused tax losses. Current and deferred tax is calculated using the tax rates enacted or substantively enacted at period end and includes any adjustment to tax payable in respect of previous years. Deferred tax is provided using the balance sheet liability method, providing for the tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for tax assessment or deduction purposes. The tax effect of certain temporary differences is not recognised, principally with respect to: \u2013 Temporary differences arising on the initial recognition of assets or liabilities (other than those arising in a business combination or in a manner that initially impacted accounting or taxable profit); \u2013 Temporary differences relating to investments and undistributed earnings in subsidiaries, joint ventures and associates to the extent that the Group is able to control its reversal and it is probable that it will not reverse in the foreseeable future; and \u2013 Goodwill. To the extent that an item\u2019s tax base is solely derived from the amount deductible under capital gains tax legislation, deferred tax is determined as if such amounts are not deductible in determining future assessable income. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reviewed at each balance sheet date and amended to the extent that it is no longer probable that the related tax benefit will be realised. Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same tax authority and the Group has both the right and the intention to settle its current tax assets and liabilities on a net or simultaneous basis. Measurement of uncertain tax and royalty matters considers a range of possible outcomes, including assessments received from tax authorities. Where management is of the view that potential liabilities have a low probability of crystallising, or it is not possible to quantify them reliably, they are disclosed as contingent liabilities . Basic earnings per share (EPS) amounts are calculated based on profit or loss attributable to equity holders of South32 Limited and the weighted average number of shares outstanding during the year. Dilutive EPS amounts are calculated based on profit or loss attributable to equity holders of South32 Limited and the weighted average number of shares outstanding after adjustment for the effects of all dilutive potential shares. Trade receivables generally have terms of up to 30 days. Trade and other receivables which are not held at FVTPL are recognised initially at fair value and subsequently at amortised cost using the effective interest method, less an allowance for expected credit losses Inventories are valued at the lower of cost and net realisable value. Cost is determined primarily on the basis of average cost. For processed inventories, cost is derived on an absorption costing basis. Cost comprises the cost of purchasing raw materials and the cost of production, including attributable overheads. (a) Property, plant and equipment Property, plant and equipment is held at cost less accumulated depreciation and impairment charges. Cost is the fair value of consideration given to acquire the asset at the time of its acquisition or construction and includes the direct cost of bringing the asset to the location and condition necessary for operation and its estimated future cost of closure and rehabilitation. (b) Assets under construction When Ore Reserves are estimated and development of commercial production is approved, capitalised exploration and evaluation expenditure is reclassified to assets under construction. All subsequent development expenditure is capitalised and classified as assets under construction, provided commercial viability conditions continue to be satisfied. All assets included in assets under construction are reclassified to other categories in property, plant and equipment when the asset is available and ready for use in the location and condition necessary for it to be capable of operating in the manner intended . (c) Exploration and evaluation expenditure Exploration is defined as the search for potential mineralisation after the Group has obtained legal rights to explore in a specific area and includes topographical, geological, geochemical and geophysical studies and exploratory drilling, trenching and sampling. Evaluation is defined as the determination of the technical feasibility and commercial viability of a particular prospect. Activities conducted during the evaluation phase include the determination of the tonnage and grade and/or quality of the deposit, examination and testing of extraction methods and metallurgical or treatment process, surveys of transportation and infrastructure requirements, and market and finance studies. Exploration and evaluation expenditure (including amortisation of capitalised licence and lease costs) is charged to the Consolidated Income Statement as incurred except in the following circumstances, in which case the expenditure may be capitalised: \u2013 The existence of a commercially viable mineral deposit has been established as a result of a reasonable prospect for the eventual economic extraction; or \u2013 The exploration and evaluation activity is within an area of interest which was previously acquired as an asset acquisition or in a business combination and was measured at fair value on acquisition. In addition, drilling costs incurred at a producing mine for the purpose of improving confidence of the existing resource may be capitalised when the following criteria are satisfied: \u2013 The drilling occurs within the existing physical boundaries of the area defined as the resource; and \u2013 The drilling costs are incurred in resources which are economically recoverable. Capitalised exploration and evaluation expenditure considered to be a tangible asset is recognised as a component of property, plant and equipment at cost less impairment charges. Otherwise, it is recognised as an intangible asset (such as certain licence and lease arrangements). In determining whether the purchase of an exploration licence or lease is an intangible asset or a component of property, plant and equipment, consideration is given to the substance of the item acquired and not its legal form. Licences or leases purchased which allow exploration over an extended period of time meet the definition of an intangible exploration lease asset where they cannot be reasonably associated with a known Mineral Resource. (d) Other mineral assets Other mineral assets comprise: \u2013 Capitalised exploration and evaluation expenditure for areas now in production; \u2013 Development expenditure for areas now in production; and \u2013 Mineral rights acquired. In underground mines, when production and development activity occur concurrently, development activity is separated from production activity, and is capitalised as development expenditure in other mineral assets. Underground mine development activity includes the cost associated with gaining access to an ore deposit which gives rise to a substantive change in the future productive capacity of the mine . (e) Leases At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Group recognises a right-of-use (ROU) asset and a lease liability at the lease commencement date. The ROU asset is initially measured at cost, which comprises the initial amount of the lease liability, plus any initial direct costs incurred and estimated future cost of closure or rehabilitation, less any lease incentives received. The ROU asset is subsequently measured at cost less accumulated depreciation, impairment and any adjustments for remeasurement of the lease liability. The corresponding lease liability is included within interest bearing liabilities. The lease liability is initially measured based on the value of lease payments not yet paid at the commencement date, discounted to present value using the interest rate implicit in the lease or, if that rate cannot be readily determined, the lessee\u2019s incremental borrowing rate. The lessee\u2019s incremental borrowing rate is the rate of interest that a lessee would have to pay to borrow over a similar term, and with similar security, the funds necessary to obtain an asset of a similar value to the ROU asset in a similar economic environment. The lease liability is subsequently measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in a rate or an index or if the Group changes its assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured, a corresponding adjustment is made to the carrying amount of the ROU asset, or is recognised in the Consolidated Income Statement if the carrying amount of the ROU asset has been reduced to nil. The nature of the Group\u2019s leases predominantly relates to mining equipment and assets supporting the operations in line with the Group\u2019s principal activities. Leased assets are pledged as security for the related lease liabilities. Short-term, low-value and variable leases The Group has elected not to recognise ROU assets and lease liabilities for short-term and low-value leases. Short-term leases are leases with a lease term of 12 months or less, while low-value leases are leases where the underlying asset is considered low value. Variable leases are leases with lease payments which are variable but do not depend on a rate or an index. The Group recognises the lease payments associated with these leases as an expense in the Consolidated Income Statement on a straight-line basis over the lease term. If variable leases have a fixed component, these would be recognised in the Consolidated Balance Sheet. Total cash outflows for lease obligations consist of US$98 million (FY22: US$99 million) for lease liabilities recognised in the Consolidated Balance Sheet and US$69 million (FY22: US$77 million) for short-term, low-value and variable leases recognised in the Consolidated Income Statement. (f) Depreciation and amortisation The carrying amounts of property, plant and equipment are depreciated to their estimated residual values over the estimated useful lives of the specific assets concerned. Estimates of residual values and useful lives are reassessed annually and any change in estimate is taken into account in the determination of remaining depreciation charges. Depreciation commences on the date of commissioning. The major categories of property, plant and equipment are depreciated on a units of production or straight-line basis using the estimated lives indicated below. However, where assets are dedicated to an operation or lease and are not readily transferable, the below useful lives are subject to the lesser of the asset category\u2019s useful life and the life of the operation or lease. Category Useful life Buildings 25 to 40 years straight-line Land not depreciated Plant and equipment 3 to 30 years straight-line ROU assets based on the shorter of the useful life or the lease term (straight-line) Mineral rights based on Ore Reserves on a units of production basis Capitalised exploration, evaluation and development expenditure based on Ore Reserves on a units of production basis (a) Goodwill Where the fair value of consideration paid for a business combination exceeds the fair value of the Group\u2019s share of the identifiable net assets acquired, the difference is treated as purchased goodwill. Where the fair value of the Group\u2019s share of the identifiable net assets acquired exceeds the fair value of consideration paid, the difference is immediately recognised in the Consolidated Income Statement. Goodwill is not amortised, however, its carrying amount is assessed annually against its recoverable amount. (b) Other intangible assets Amounts paid for the acquisition of identifiable intangible assets, such as software, licences and contract based intangible assets are capitalised at the fair value of consideration paid and are recognised at cost less accumulated amortisation and impairment charges. Identifiable intangible assets with a finite life are amortised on a straight-line basis over their expected useful life from when the asset is ready for use. The useful lives are as follows: Category Useful life Software and licences 5 years Contract based intangible assets up to 35 years The Group has no identifiable intangible assets for which the expected useful life is indefinite . In testing for indications of impairment and performing impairment calculations, assets are considered as collective groups and referred to as CGUs. Impairment tests are carried out annually for CGUs containing goodwill and when there is an indication of impairment or impairment reversal for all other CGUs. The Group uses discounted cash flow valuation ranges to assess whether there is an indicator of impairment or impairment reversal for its CGUs. For any resulting impairment testing, and for CGUs containing goodwill, the Group uses the higher of fair value less cost of disposal (FVLCD) and its value in use to assess the recoverable amount. If the carrying value of the CGU exceeds its recoverable amount, the CGU is impaired and an impairment loss is charged to the Consolidated Income Statement. Previously impaired CGUs are reviewed for possible reversal of impairment at each reporting date. Impairment reversals cannot exceed the carrying value that would have been determined (net of depreciation) had no impairment loss been recognised for the CGU. Goodwill is not subject to impairment reversal. For areas not yet in production, any mineral rights acquired, together with subsequent capitalised exploration and evaluation expenditure, are reviewed to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. Once the technical feasibility and commercial viability of an area of interest are demonstrated, exploration and evaluation assets attributable to that area of interest are tested for impairment. Trade and other payables generally represent liabilities for goods and services provided to the Group prior to the end of the year which were unpaid at the end of the year. These amounts are unsecured. Trade and other payables are included in current liabilities, except for those liabilities where payment is not due within 12 months from the reporting date, which are classified as non-current liabilities. Trade and other payables, other than financial liabilities held at FVTPL, are stated at their amortised cost and are non-interest bearing. The carrying value of these trade and other payables is considered to approximate fair value due to the short-term nature of the payables (a) Employee benefits Liabilities for unpaid wages and salaries are recognised in other creditors. Current entitlements to annual leave and accumulating sick leave accrued for services up to the reporting date are recognised in the provision for employee benefits and are measured at the amounts expected to be paid. Entitlements to non-accumulated sick leave are recognised when the leave is taken. The current liability for long service leave (for which settlement within 12 months of the reporting date cannot be deferred) is recognised in the current provision for employee benefits and is measured in accordance with annual leave described above Closure and rehabilitation provisions are measured based on the expected value of future cash flows, discounted to their present value and determined according to the probability of alternative estimates of cash flows occurring for each operation. Discount rates used are risk-free interest rates specific to the country in which the operations are located and the expected timing of the closure and rehabilitation expenditure. Material changes in country specific risk-free interest rates may affect the discount rates applied. The Group reviews its discount rates used periodically, with any corresponding change in the provision as a result of revising discount rates capitalised as an asset in the case of open sites or charged/(credited) to the Consolidated Income Statement in the case of closed sites. When provisions for closure and rehabilitation are initially recognised, the corresponding cost is capitalised as an asset, representing part of the cost of acquiring the future economic benefits of the operation. The capitalised cost of closure and rehabilitation activities is recognised in property, plant and equipment and depreciated accordingly. The value of the provision is progressively increased over time due to the effect of discounting unwind and inflation, creating an expense recognised in finance costs. Closure and rehabilitation provisions are also adjusted for changes in costs and estimates. Those adjustments are accounted for as a change in the corresponding capitalised cost, except where a reduction in the provision is greater than the depreciated capitalised cost of the related assets, in which case the carrying value is reduced to nil and the remaining adjustment is recognised in the Consolidated Income Statement. In the case of closed sites, changes to estimated costs are recognised immediately in the Consolidated Income Statement. Changes to the capitalised cost result in an adjustment to future depreciation. Adjustments to the estimated amount and timing of future closure and rehabilitation cash flows are a normal occurrence in light of the significant judgements and estimates involved. (c) Post-retirement employee benefits This relates to the provision for post-employment defined benefit pension and medical schemes. Refer to note 22 Pension and other post-retirement obligations . Cash and cash equivalents include cash at bank and on hand as well as short-term deposits. All borrowings are initially recognised at their fair value net of directly attributable transaction costs. Subsequent to initial recognition, interest bearing liabilities are measured at amortised cost using the effective interest method. Gains and losses are recognised in the Consolidated Income Statement when the liabilities are derecognised. Interest bearing liabilities are classified as current liabilities, except when the Group has an unconditional right to defer settlement for at least 12 months after the reporting date, in which case the liabilities are classified as non-current . (a) Accounting classification and fair value (i) Financial assets Financial assets are held at FVTPL, amortised cost or designated as FVOCI based on the business model for managing the financial assets and the contractual terms of the cashflows. Classification Initial recognition and subsequent measurement Held at FVTPL Financial assets held at FVTPL, including derivative financial assets, are initially recognised at fair value, with transaction costs recognised immediately in the Consolidated Income Statement. Financial assets held at FVTPL are subsequently remeasured through the Consolidated Income Statement, including any interest income, dividend income and foreign exchange gains and losses, unless hedge accounting is applied. Amortised cost At initial recognition, trade receivables that do not have a significant financing component are recognised at their transaction price. Other financial assets held at amortised cost are initially recognised at fair value plus related transaction costs. Financial assets subsequently measured at amortised cost are measured using the effective interest method and reduced by any impairment losses. Interest income, foreign exchange gains and losses, impairments and any gain or loss on derecognition, are recognised in the Consolidated Income Statement. Designated as FVOCI For certain investments in equity instruments, the Group has made an irrevocable election to present fair value changes in other comprehensive income. Investments in equity instruments designated as FVOCI are subsequently remeasured through other comprehensive income and are not reclassified to the Consolidated Income Statement. Dividends are recognised as other income in the Consolidated Income Statement unless the dividend clearly represents a recovery of part of the cost of the investment. (ii) Financial liabilities Financial liabilities are held at FVTPL or amortised cost. Classification Initial recognition and subsequent measurement Held at FVTPL Financial liabilities held at FVTPL, including derivative financial liabilities, are initially recognised at fair value, with transaction costs recognised immediately in the Consolidated Income Statement. Financial liabilities held at FVTPL are subsequently remeasured through the Consolidated Income Statement, including any interest expense and foreign exchange gains and losses, unless hedge accounting is applied. Amortised cost Financial liabilities held at amortised cost are recognised initially at fair value, net of transaction costs incurred. Financial liabilities held at amortised cost are subsequently measured using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in the Consolidated Income Statement. Any gain or loss on derecognition is also recognised in the Consolidated Income Statement. (iii) Embedded derivatives A derivative embedded within a hybrid contract, with a financial liability or non-financial host, is separated from the host and accounted for as a separate derivative if: \u2013 the economic characteristics and risks are not closely related to the host; \u2013 a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative; and \u2013 the hybrid contract is not measured at FVTPL. Embedded derivatives are measured at fair value with changes in fair value recognised in the Consolidated Income Statement. A derivative embedded within a hybrid contract containing a financial asset host is not accounted for separately. The financial asset host together with the embedded derivative is required to be classified in its entirety as a financial asset held at FVTPL each share is entitled to one vote. Incremental costs directly attributable to the issuance of shares, net of any income tax effects, are recognised as a deduction from equity. The Group operates or participates in a number of pension and medical (including superannuation) schemes throughout the world. The funding of the schemes complies with local regulations. The assets of the schemes are generally held separate from those of the Group and are administered by trustees or management boards. Full actuarial valuations are prepared for the schemes. Defined contribution pension schemes The Group contributed US$60 million (FY22: US$59 million) to defined contribution plans and multi-employer defined contribution plans. These contributions are expensed as incurred. Defined benefit pension schemes (closed schemes) At 30 June 2023, the Group had defined benefit obligations of US$61 million (FY22: US$57 million) and defined benefit scheme assets with a fair value of US$45 million (FY22: US$46 million) with a net liability recognised in the Consolidated Balance Sheet of US$16 million (FY22: US$11 million). The fair value of scheme assets by major asset class is as follows: US$M FY23 FY22 Bonds (1) 32 31 Equities 5 6 Cash and cash equivalents 2 3 Other (2) 6 6 Total 45 46 (1) Comprises Fixed Interest Government bonds of US$7 million (FY22: US$6 million), Index Linked Government bonds of US$21 million (FY22: US$20 million) and Corporate bonds of US$4 million (FY22: US$5 million). (2) Primarily comprises property and alternative investments in Australia. Defined benefit post-retirement medical schemes (closed schemes) At 30 June 2023, the Group had post-retirement medical scheme obligations of US$17 million (FY22: US$23 million). The post-retirement medical scheme is unfunded. Weighted average maturity profile of schemes The weighted average duration of the defined benefit obligations is eight years (FY22: seven years) and nine years (FY22: 10 years) for the defined benefit pension schemes and post-retirement medical scheme respectively. Risks associated with defined benefit pension and post-retirement medical schemes The Group\u2019s defined benefit pension and post-retirement medical schemes expose the Group to the risks pertaining to asset value volatility, uncertainty in future benefit payments and uncertainty in future contribution requirements. (c) Measurement of fair values The fair value at grant date of equity-settled share awards is charged to the Consolidated Income Statement, net of tax, over the period for which the benefits of employee services are expected to be derived. The corresponding accrued employee entitlement is recorded in the employee share awards reserve. Where awards are forfeited because non-market based vesting conditions are not satisfied, the expense previously recognised is proportionally reversed. If awards do not vest due to a market performance condition not being met, the expense is recognised in full, and the share awards reserve is released to retained earnings. Where shares in South32 Limited are acquired by on-market purchases prior to settling the vested entitlement, the cost of the acquired shares is carried as treasury shares and deducted from equity. Where awards are satisfied by delivery of acquired shares, any difference between their acquisition cost and the cumulative remuneration expense recognised is charged directly to retained earnings, net of tax. The fair value of market-based performance rights is measured using a Monte Carlo methodology. This model considers the following: \u2013 Expected life of the award; \u2013 Current market price of the underlying shares; \u2013 Expected volatility (of the individual company and of each peer group); \u2013 Expected dividends; \u2013 Risk-free interest rate; and \u2013 Market based performance hurdles. The fair value of retention and other non-market-based performance rights is measured using a Black Scholes methodology. This model considers the following: \u2013 Expected life of the award; \u2013 Current market price of the underlying shares; \u2013 Expected volatility; \u2013 Expected dividends; and \u2013 Risk-free interest rate Subsidiaries are entities controlled by the parent entity. Control exists where the parent entity is exposed or has rights to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. A parent entity has power over the subsidiary when it has existing rights to direct the relevant activities of the subsidiary which are those which significantly affect the subsidiary\u2019s returns. The financial statements of subsidiaries are included in the consolidated financial statements for the period they are controlled. The Group uses the term \u2018equity accounted investments\u2019 to refer to associates and joint ventures collectively. Associates are entities in which the Group holds significant influence. If the Group holds 20 per cent or more of the voting power of an entity, it is presumed that the Group has significant influence, unless it can be clearly demonstrated that this is not the case. Significant influence can also arise when the Group has less than 20 per cent of the voting power but it can be demonstrated that the Group has the power to participate in the financial and operating policy decisions of the associate. Investments in associates are accounted for using the equity method. Joint ventures are joint arrangements in which the parties with joint control of the arrangement have rights to the net assets of the arrangement. A separate vehicle, not the parties, will have the rights to the assets and obligations for the liabilities, relating to the arrangement. If more than an insignificant share of output from a joint venture is sold to third parties, this indicates that the joint venture is not dependent on the parties to the arrangement for funding and that the parties to the arrangement have no obligation for the liabilities of the arrangement. Joint ventures are accounted for using the equity method. Equity accounted investments are initially recorded at cost, including the value of any goodwill on acquisition. In subsequent periods, the carrying amount of the investment is adjusted to reflect the share of post-acquisition profit or loss and other comprehensive income. After application of the equity method, including recognising the Group\u2019s share of the investees\u2019 results, the value of the investment will be assessed for impairment if there is objective evidence that an impairment of the investment may have occurred. Joint operations are joint arrangements in which the parties with joint control have rights to the assets and obligations for the liabilities relating to the arrangement. The activities of a joint operation are primarily designed for the provision of output to the parties to the arrangement, indicating that: \u2013 The parties have the rights to substantially all the output and economic benefits of the assets of the arrangement; and \u2013 All liabilities are satisfied by the joint participants through their purchases of that output. This indicates that, in substance, the joint participants have an obligation for the liabilities of the arrangement. The consolidated financial statements of the Group include its share of the assets and liabilities, revenues and expenses arising jointly or otherwise from those operations and its revenue derived from the sale of its share of the output from the joint operation. All such amounts are measured in accordance with the terms of each arrangement, which are usually in proportion to the Group\u2019s interest in the joint operation. The assets in these joint operations are restricted to the extent that they are only available to be used by the joint operation itself and not by other operations of the Group. For certain joint operations, the Group has also either pledged, mortgaged or provided a cross charge to joint operation partners over assets within the joint operationSales to, and purchases from, related parties are transactions at market prices and on commercial terms, or under terms and prices that are no less favourable to the Group than those arranged with third parties. ", "dimensions": { "concept": "ifrs-full:DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-457": { "value": "Have been prepared in accordance with the requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting Standards Board (AASB), International Financial Reporting Standards (IFRS) and other authoritative pronouncements of the International Accounting Standards Board (IASB);", "dimensions": { "concept": "ifrs-full:StatementOfIFRSCompliance", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-458": { "value": "Present reclassified comparative information where required for consistency with the current year\u2019s presentation; ", "dimensions": { "concept": "ifrs-full:DisclosureOfReclassificationsOrChangesInPresentationExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-459": { "value": "(a) Basis of consolidation The consolidated financial statements comprise the financial statements of the Group. A list of significant controlled entities (subsidiaries) at year end is contained in note 25 Subsidiaries. The financial statements of subsidiaries are prepared for the same reporting period as the parent entity, using consistent accounting policies. Changes in the Group\u2019s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions ", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-460": { "value": "(b) Foreign currency translation The functional currency of the majority of the Group\u2019s operations is the US dollar, as this is assessed to be the principal currency of the economic environments in which they operate. Transactions denominated in foreign currencies are initially recorded in the functional currency using the exchange rate at the date of the underlying transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the rate of exchange at year end. Exchange gains or losses on retranslation are included in the Consolidated Income Statement, with the exception of foreign exchange gains or losses on foreign currency provisions for closure and rehabilitation which are capitalised in property, plant and equipment for operating sites ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-476": { "value": "The functional currency of the majority of the Group\u2019s operations is the US dollar, as this is assessed to be the principal currency of the economic environments in which they operate. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFunctionalCurrencyExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-530": { "value": "(c) Key estimates, assumptions and judgements The preparation of the consolidated financial statements has required management to apply accounting policies and methodologies that are based on complex and subjective estimates, assumptions and judgements. Management based its estimates and judgements on historical experience and assumptions it believes to be reasonable and realistic based on the current environment. Actual results may differ from those reported in these statements due to the uncertainties that characterise the assumptions and conditions on which the estimates are based. Specific sources of uncertainty identified by the Group are set out on the following pages and/or together with the applicable note, as follows: Key estimates, assumptions and judgements Recognition of deferred taxes note 6 Uncertain tax matters note 6 Useful economic lives of assets note 11 Impairment of non-financial assets note 13 Closure and rehabilitation provisions note 15 Expected credit loss on credit-impaired financial assets note 19 In addition to the specific sources of uncertainty noted above, the following assumptions are considered pervasive to the financial statements as a whole: Climate change-related risks and opportunities The key estimates, assumptions and judgements made in these consolidated financial statements take into account the Group\u2019s expectations of, and approach to, climate change-related risks, and are consistent with the Group\u2019s reporting on climate-related matters. These expectations may affect the Group\u2019s financial results and financial position in a number of ways, including the following: \u2013 The useful lives of assets, and therefore the depreciation and amortisation charged in the Consolidated Income Statement, may be impacted by changes in operational plans (refer to note 11 Property, plant and equipment); \u2013 Asset recoverable amounts may be affected due to changes in estimated future cash flows driven by, for example, changes in forecast commodity prices, operating costs, carbon prices and useful lives of assets (refer to note 13 Impairment of non- financial assets and note 19(b)(iii) Credit risk: Shareholder loan receivable from Sierra Gorda); \u2013 The commercial viability of exploration areas of interest may impact the recoverability of exploration and evaluation assets (refer to note 13 Impairment of non-financial assets); and \u2013 Timing and cost of closure and rehabilitation activities (refer to note 15 Provisions). The carrying amount of the associated deferred tax assets/ liabilities may change due to changes in estimates of the likely recovery of the related tax benefits. Global transition to a low-carbon world While we are committed to the goals of the Paris Agreement, current global signposts continue to point towards a probable trajectory of at least 2\u00b0C warming which forms our base case (1) for global transition to a low-carbon world. Our base case directly informs our commodity demand outlook, forecast commodity prices and carbon prices. Any change in our base case may in turn impact our Ore Reserve estimates, mine plans, production volumes and future costs. The Group\u2019s key estimates, assumptions and judgements with respect to transition risks and opportunities are based on the Group\u2019s expectations and assessments at the date of this report, and actual results may differ. Government policies and market developments continue to drive uncertainty in commodity and carbon price outlooks, which may impact the Group\u2019s approach to climate change and assumptions and judgements, which may in turn result in material changes to financial results and the carrying values of assets and liabilities in future reporting periods. Physical impacts of climate change The Group\u2019s operations are located in regions that may experience extreme temperatures, bushfires, flooding and droughts. The Group has performed a baseline risk assessment of the physical impacts of climate change on its operated portfolio, with the assessment based on scenarios RCP4.5 and RCP8.5 as described by the Intergovernmental Panel on Climate Change (IPCC) (2) . Longer term assets (including those that move into closure) are likely to face more significant challenges due to the expected severity of climate risks manifesting over longer timeframes. Climate change is likely to exacerbate the risks to water supply, storage and usage that we currently manage, particularly for operations in areas of water scarcity and other sensitive environmental aspects. The risk of the physical impacts of climate change were contemplated during the development of our life of operation plans (including closure estimates) and additional capital and/ or increases to operating costs have been incorporated into our forward-looking estimates when deemed appropriate. The Group\u2019s ongoing analysis of reasonable alternative assumptions with respect to future climate conditions has not identified any additional indicator that the carrying value of assets cannot be recovered or that useful lives of assets will be shortened. The Group\u2019s key estimates, assumptions and judgments with respect to the physical impacts of climate change are based on the Group\u2019s expectations and assessments as at the date of this report, and actual results may differ. The high degree of uncertainty around the nature, timing and magnitude of weather events and long-term changes in climate patterns, as well as the Group\u2019s continued physical risk assessment process and development of its direct adaptation and mitigation strategies, may result in material changes to financial results and carrying value of assets and liabilities in future reporting periods. Mineral Resources and Ore Reserves Estimating the quantity and/or grade of Mineral Resources requires the location, quantity, grade (or quality), continuity and other geological characteristics to be known, estimated or interpreted from specific geological evidence and knowledge, including sampling, in order to satisfy the requirement that there are reasonable prospects for eventual economic extraction. This process may require complex and difficult geological assessments to interpret the data. An Ore Reserve is the economically mineable part of the Measured and/or Indicated Mineral Resource that can be legally extracted, or where there is a reasonable expectation that approvals for extraction will be granted. In order to estimate Ore Reserves, consideration is required for a range of modifying factors, including mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social and governmental. When reporting Ore Reserves, the relevant studies, to at least a pre-feasibility level, must demonstrate that, at the time of reporting, extraction could be reasonably justified, including a consideration of forecast sales prices. With the exception of Sierra Gorda's mineral reserves, the Group reports Mineral Resources and Ore Reserves in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code), and the ASX Listing Rules (Chapter 5): Additional reporting on mining and oil and gas production and exploration activities. The Sierra Gorda estimates of mineral reserves are foreign estimates under the ASX Listing Rules and are not reported in accordance with the JORC Code. Refer to the Resources and Reserves section of this report for further information on the qualifying foreign estimates related to Sierra Gorda. Because the economic assumptions used to estimate the Ore Reserves change from period to period, and because additional geological data is generated during the course of operations, estimates of the Mineral Resources and Ore Reserves may change from period to period. The Group\u2019s planning processes consider the impacts of climate change on its Ore Reserves, including assessments of operating costs and the impact of extreme weather events on the expectation of economic extraction. The Group may also include Exploration Targets in determining the recoverable amount of a cash generating unit (CGU) or an exploration area of interest. Similar to climate-change related risks and opportunities, changes in the Group's estimates of Mineral Resources and Ore Reserves, including estimates of exploration potential, may affect the Group\u2019s financial results and financial position in a number of ways, including asset recoverable amounts, useful lives of assets, commercial viability of exploration areas of interest, timing and cost of closure and rehabilitation activities and the recovery of any associated deferred tax assets. (1) By contrast, our FY23 1.5\u00b0C scenario, which is primarily based on the International Energy Agency\u2019s Net Zero Emissions 2050 scenario (IEA NZE), is utilised by the Group to assess the resilience of our portfolio under a rapid global transition. The IEA NZE sets out one credible pathway to achieving a 1.5\u00b0C outcome by 2050, providing a set of general assumptions on commodity demand drivers, scrap availability, material efficiency and carbon prices. (2) There are four Representative Concentration Pathways (RCPs) representing possible future greenhouse gas emissions and concentration scenarios. RCP4.5 equates to between 1.1\u00b0C and 2.6\u00b0C of warming by the end of the century. RCP8.5 equates to between 2.6\u00b0C and 4.8\u00b0C of warming by the end of the century. ", "dimensions": { "concept": "ifrs-full:DisclosureOfAssetsAndLiabilitiesWithSignificantRiskOfMaterialAdjustmentExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-521": { "value": "(c) Key estimates, assumptions and judgements The preparation of the consolidated financial statements has required management to apply accounting policies and methodologies that are based on complex and subjective estimates, assumptions and judgements. Management based its estimates and judgements on historical experience and assumptions it believes to be reasonable and realistic based on the current environment. Actual results may differ from those reported in these statements due to the uncertainties that characterise the assumptions and conditions on which the estimates are based. Specific sources of uncertainty identified by the Group are set out on the following pages and/or together with the applicable note, as follows: Key estimates, assumptions and judgements Recognition of deferred taxes note 6 Uncertain tax matters note 6 Useful economic lives of assets note 11 Impairment of non-financial assets note 13 Closure and rehabilitation provisions note 15 Expected credit loss on credit-impaired financial assets note 19 In addition to the specific sources of uncertainty noted above, the following assumptions are considered pervasive to the financial statements as a whole: Climate change-related risks and opportunities The key estimates, assumptions and judgements made in these consolidated financial statements take into account the Group\u2019s expectations of, and approach to, climate change-related risks, and are consistent with the Group\u2019s reporting on climate-related matters. These expectations may affect the Group\u2019s financial results and financial position in a number of ways, including the following: \u2013 The useful lives of assets, and therefore the depreciation and amortisation charged in the Consolidated Income Statement, may be impacted by changes in operational plans (refer to note 11 Property, plant and equipment); \u2013 Asset recoverable amounts may be affected due to changes in estimated future cash flows driven by, for example, changes in forecast commodity prices, operating costs, carbon prices and useful lives of assets (refer to note 13 Impairment of non- financial assets and note 19(b)(iii) Credit risk: Shareholder loan receivable from Sierra Gorda); \u2013 The commercial viability of exploration areas of interest may impact the recoverability of exploration and evaluation assets (refer to note 13 Impairment of non-financial assets); and \u2013 Timing and cost of closure and rehabilitation activities (refer to note 15 Provisions). The carrying amount of the associated deferred tax assets/ liabilities may change due to changes in estimates of the likely recovery of the related tax benefits. Global transition to a low-carbon world While we are committed to the goals of the Paris Agreement, current global signposts continue to point towards a probable trajectory of at least 2\u00b0C warming which forms our base case (1) for global transition to a low-carbon world. Our base case directly informs our commodity demand outlook, forecast commodity prices and carbon prices. Any change in our base case may in turn impact our Ore Reserve estimates, mine plans, production volumes and future costs. The Group\u2019s key estimates, assumptions and judgements with respect to transition risks and opportunities are based on the Group\u2019s expectations and assessments at the date of this report, and actual results may differ. Government policies and market developments continue to drive uncertainty in commodity and carbon price outlooks, which may impact the Group\u2019s approach to climate change and assumptions and judgements, which may in turn result in material changes to financial results and the carrying values of assets and liabilities in future reporting periods. Physical impacts of climate change The Group\u2019s operations are located in regions that may experience extreme temperatures, bushfires, flooding and droughts. The Group has performed a baseline risk assessment of the physical impacts of climate change on its operated portfolio, with the assessment based on scenarios RCP4.5 and RCP8.5 as described by the Intergovernmental Panel on Climate Change (IPCC) (2) . Longer term assets (including those that move into closure) are likely to face more significant challenges due to the expected severity of climate risks manifesting over longer timeframes. Climate change is likely to exacerbate the risks to water supply, storage and usage that we currently manage, particularly for operations in areas of water scarcity and other sensitive environmental aspects. The risk of the physical impacts of climate change were contemplated during the development of our life of operation plans (including closure estimates) and additional capital and/ or increases to operating costs have been incorporated into our forward-looking estimates when deemed appropriate. The Group\u2019s ongoing analysis of reasonable alternative assumptions with respect to future climate conditions has not identified any additional indicator that the carrying value of assets cannot be recovered or that useful lives of assets will be shortened. The Group\u2019s key estimates, assumptions and judgments with respect to the physical impacts of climate change are based on the Group\u2019s expectations and assessments as at the date of this report, and actual results may differ. The high degree of uncertainty around the nature, timing and magnitude of weather events and long-term changes in climate patterns, as well as the Group\u2019s continued physical risk assessment process and development of its direct adaptation and mitigation strategies, may result in material changes to financial results and carrying value of assets and liabilities in future reporting periods. Mineral Resources and Ore Reserves Estimating the quantity and/or grade of Mineral Resources requires the location, quantity, grade (or quality), continuity and other geological characteristics to be known, estimated or interpreted from specific geological evidence and knowledge, including sampling, in order to satisfy the requirement that there are reasonable prospects for eventual economic extraction. This process may require complex and difficult geological assessments to interpret the data. An Ore Reserve is the economically mineable part of the Measured and/or Indicated Mineral Resource that can be legally extracted, or where there is a reasonable expectation that approvals for extraction will be granted. In order to estimate Ore Reserves, consideration is required for a range of modifying factors, including mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social and governmental. When reporting Ore Reserves, the relevant studies, to at least a pre-feasibility level, must demonstrate that, at the time of reporting, extraction could be reasonably justified, including a consideration of forecast sales prices. With the exception of Sierra Gorda's mineral reserves, the Group reports Mineral Resources and Ore Reserves in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code), and the ASX Listing Rules (Chapter 5): Additional reporting on mining and oil and gas production and exploration activities. The Sierra Gorda estimates of mineral reserves are foreign estimates under the ASX Listing Rules and are not reported in accordance with the JORC Code. Refer to the Resources and Reserves section of this report for further information on the qualifying foreign estimates related to Sierra Gorda. Because the economic assumptions used to estimate the Ore Reserves change from period to period, and because additional geological data is generated during the course of operations, estimates of the Mineral Resources and Ore Reserves may change from period to period. The Group\u2019s planning processes consider the impacts of climate change on its Ore Reserves, including assessments of operating costs and the impact of extreme weather events on the expectation of economic extraction. The Group may also include Exploration Targets in determining the recoverable amount of a cash generating unit (CGU) or an exploration area of interest. Similar to climate-change related risks and opportunities, changes in the Group's estimates of Mineral Resources and Ore Reserves, including estimates of exploration potential, may affect the Group\u2019s financial results and financial position in a number of ways, including asset recoverable amounts, useful lives of assets, commercial viability of exploration areas of interest, timing and cost of closure and rehabilitation activities and the recovery of any associated deferred tax assets. (1) By contrast, our FY23 1.5\u00b0C scenario, which is primarily based on the International Energy Agency\u2019s Net Zero Emissions 2050 scenario (IEA NZE), is utilised by the Group to assess the resilience of our portfolio under a rapid global transition. The IEA NZE sets out one credible pathway to achieving a 1.5\u00b0C outcome by 2050, providing a set of general assumptions on commodity demand drivers, scrap availability, material efficiency and carbon prices. (2) There are four Representative Concentration Pathways (RCPs) representing possible future greenhouse gas emissions and concentration scenarios. RCP4.5 equates to between 1.1\u00b0C and 2.6\u00b0C of warming by the end of the century. RCP8.5 equates to between 2.6\u00b0C and 4.8\u00b0C of warming by the end of the century. ", "dimensions": { "concept": "ifrs-full:ExplanationOfAssumptionAboutFutureWithSignificantRiskOfResultingInMaterialAdjustments", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-484": { "value": "(c) Key estimates, assumptions and judgements The preparation of the consolidated financial statements has required management to apply accounting policies and methodologies that are based on complex and subjective estimates, assumptions and judgements. Management based its estimates and judgements on historical experience and assumptions it believes to be reasonable and realistic based on the current environment. Actual results may differ from those reported in these statements due to the uncertainties that characterise the assumptions and conditions on which the estimates are based. Specific sources of uncertainty identified by the Group are set out on the following pages and/or together with the applicable note, as follows: Key estimates, assumptions and judgements Recognition of deferred taxes note 6 Uncertain tax matters note 6 Useful economic lives of assets note 11 Impairment of non-financial assets note 13 Closure and rehabilitation provisions note 15 Expected credit loss on credit-impaired financial assets note 19 In addition to the specific sources of uncertainty noted above, the following assumptions are considered pervasive to the financial statements as a whole: Climate change-related risks and opportunities The key estimates, assumptions and judgements made in these consolidated financial statements take into account the Group\u2019s expectations of, and approach to, climate change-related risks, and are consistent with the Group\u2019s reporting on climate-related matters. These expectations may affect the Group\u2019s financial results and financial position in a number of ways, including the following: \u2013 The useful lives of assets, and therefore the depreciation and amortisation charged in the Consolidated Income Statement, may be impacted by changes in operational plans (refer to note 11 Property, plant and equipment); \u2013 Asset recoverable amounts may be affected due to changes in estimated future cash flows driven by, for example, changes in forecast commodity prices, operating costs, carbon prices and useful lives of assets (refer to note 13 Impairment of non- financial assets and note 19(b)(iii) Credit risk: Shareholder loan receivable from Sierra Gorda); \u2013 The commercial viability of exploration areas of interest may impact the recoverability of exploration and evaluation assets (refer to note 13 Impairment of non-financial assets); and \u2013 Timing and cost of closure and rehabilitation activities (refer to note 15 Provisions). The carrying amount of the associated deferred tax assets/ liabilities may change due to changes in estimates of the likely recovery of the related tax benefits. Global transition to a low-carbon world While we are committed to the goals of the Paris Agreement, current global signposts continue to point towards a probable trajectory of at least 2\u00b0C warming which forms our base case (1) for global transition to a low-carbon world. Our base case directly informs our commodity demand outlook, forecast commodity prices and carbon prices. Any change in our base case may in turn impact our Ore Reserve estimates, mine plans, production volumes and future costs. The Group\u2019s key estimates, assumptions and judgements with respect to transition risks and opportunities are based on the Group\u2019s expectations and assessments at the date of this report, and actual results may differ. Government policies and market developments continue to drive uncertainty in commodity and carbon price outlooks, which may impact the Group\u2019s approach to climate change and assumptions and judgements, which may in turn result in material changes to financial results and the carrying values of assets and liabilities in future reporting periods. Physical impacts of climate change The Group\u2019s operations are located in regions that may experience extreme temperatures, bushfires, flooding and droughts. The Group has performed a baseline risk assessment of the physical impacts of climate change on its operated portfolio, with the assessment based on scenarios RCP4.5 and RCP8.5 as described by the Intergovernmental Panel on Climate Change (IPCC) (2) . Longer term assets (including those that move into closure) are likely to face more significant challenges due to the expected severity of climate risks manifesting over longer timeframes. Climate change is likely to exacerbate the risks to water supply, storage and usage that we currently manage, particularly for operations in areas of water scarcity and other sensitive environmental aspects. The risk of the physical impacts of climate change were contemplated during the development of our life of operation plans (including closure estimates) and additional capital and/ or increases to operating costs have been incorporated into our forward-looking estimates when deemed appropriate. The Group\u2019s ongoing analysis of reasonable alternative assumptions with respect to future climate conditions has not identified any additional indicator that the carrying value of assets cannot be recovered or that useful lives of assets will be shortened. The Group\u2019s key estimates, assumptions and judgments with respect to the physical impacts of climate change are based on the Group\u2019s expectations and assessments as at the date of this report, and actual results may differ. The high degree of uncertainty around the nature, timing and magnitude of weather events and long-term changes in climate patterns, as well as the Group\u2019s continued physical risk assessment process and development of its direct adaptation and mitigation strategies, may result in material changes to financial results and carrying value of assets and liabilities in future reporting periods. (1) By contrast, our FY23 1.5\u00b0C scenario, which is primarily based on the International Energy Agency\u2019s Net Zero Emissions 2050 scenario (IEA NZE), is utilised by the Group to assess the resilience of our portfolio under a rapid global transition. The IEA NZE sets out one credible pathway to achieving a 1.5\u00b0C outcome by 2050, providing a set of general assumptions on commodity demand drivers, scrap availability, material efficiency and carbon prices. (2) There are four Representative Concentration Pathways (RCPs) representing possible future greenhouse gas emissions and concentration scenarios. RCP4.5 equates to between 1.1\u00b0C and 2.6\u00b0C of warming by the end of the century. RCP8.5 equates to between 2.6\u00b0C and 4.8\u00b0C of warming by the end of the century. Mineral Resources and Ore Reserves Estimating the quantity and/or grade of Mineral Resources requires the location, quantity, grade (or quality), continuity and other geological characteristics to be known, estimated or interpreted from specific geological evidence and knowledge, including sampling, in order to satisfy the requirement that there are reasonable prospects for eventual economic extraction. This process may require complex and difficult geological assessments to interpret the data. An Ore Reserve is the economically mineable part of the Measured and/or Indicated Mineral Resource that can be legally extracted, or where there is a reasonable expectation that approvals for extraction will be granted. In order to estimate Ore Reserves, consideration is required for a range of modifying factors, including mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social and governmental. When reporting Ore Reserves, the relevant studies, to at least a pre-feasibility level, must demonstrate that, at the time of reporting, extraction could be reasonably justified, including a consideration of forecast sales prices. With the exception of Sierra Gorda's mineral reserves, the Group reports Mineral Resources and Ore Reserves in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code), and the ASX Listing Rules (Chapter 5): Additional reporting on mining and oil and gas production and exploration activities. The Sierra Gorda estimates of mineral reserves are foreign estimates under the ASX Listing Rules and are not reported in accordance with the JORC Code. Refer to the Resources and Reserves section of this report for further information on the qualifying foreign estimates related to Sierra Gorda. Because the economic assumptions used to estimate the Ore Reserves change from period to period, and because additional geological data is generated during the course of operations, estimates of the Mineral Resources and Ore Reserves may change from period to period. The Group\u2019s planning processes consider the impacts of climate change on its Ore Reserves, including assessments of operating costs and the impact of extreme weather events on the expectation of economic extraction. The Group may also include Exploration Targets in determining the recoverable amount of a cash generating unit (CGU) or an exploration area of interest. Similar to climate-change related risks and opportunities, changes in the Group's estimates of Mineral Resources and Ore Reserves, including estimates of exploration potential, may affect the Group\u2019s financial results and financial position in a number of ways, including asset recoverable amounts, useful lives of assets, commercial viability of exploration areas of interest, timing and cost of closure and rehabilitation activities and the recovery of any associated deferred tax assets. Key estimates, assumptions and judgements Deferred tax Judgement is required in assessing whether deferred tax assets and certain deferred tax liabilities are recognised in the Consolidated Balance Sheet. Deferred tax assets are recognised only where it is considered more likely than not that they will be recovered, which is dependent on the generation of sufficient future taxable profits. Deferred tax liabilities arising from temporary differences in investments, caused principally by retained earnings held in foreign tax jurisdictions, are recognised unless repatriation of retained earnings can be controlled and are not expected to occur in the foreseeable future. Assumptions about the generation of future taxable profits and repatriation of retained earnings depend on management\u2019s estimates of future cash flows. These depend on estimates of future production and sales volumes, commodity prices, climate change-related impacts, Mineral Resources and Ore Reserves, operating costs, closure and rehabilitation costs, capital expenditure, dividends and other capital management transactions. Uncertain tax matters Judgements are required about the application of the inherently complex income tax legislation in Colombia and Brazil. These judgements are subject to risk and uncertainty, hence there is a possibility that changes in circumstances will alter expectations, which may impact the amount of deferred tax assets and deferred tax liabilities recognised in the Consolidated Balance Sheet and the amount of other tax losses and temporary differences not yet recognised. Where the final tax outcomes are different from the amounts that were initially recorded, these differences impact the current and deferred tax provisions in the period in which the determination is made. Measurement of uncertain tax and royalty matters considers a range of possible outcomes, including assessments received from tax authorities. Where management is of the view that potential liabilities have a low probability of crystallising, or it is not possible to quantify them reliably, they are disclosed as contingent liabilities Key estimates, assumptions and judgements Useful economic lives of assets The useful lives of our property, plant and equipment are often dependent, either directly or indirectly, on the reserve life of the orebody to which they relate. Changes in economic assumptions used to estimate Ore Reserves and/or the timing of closure of operations, including the Group\u2019s expectations with respect to climate change-related risks, may impact the estimated useful lives of the specific assets concerned. Refer to note 2(c) Key estimates, assumptions and judgements for further details regarding climate change-related risks and opportunities, and Mineral Resources and Ore Reserves as sources of estimation uncertainty Key estimates, assumptions and judgements An assessment as to whether there is any indication of impairment and the calculation of a CGU\u2019s recoverable amount requires management to make estimates and assumptions about expected production and sales volumes, commodity prices, foreign exchange rates, Mineral Resources and Ore Reserves, regulatory approvals, operating costs, closure and rehabilitation costs, future capital expenditure, allocation of corporate costs, jurisdiction-specific carbon prices and global carbon pricing. These estimates and assumptions are subject to risk and uncertainty. There is a possibility that changes in circumstances will alter these projections, which may impact the recoverable amount. In such circumstances, some or all of the carrying amount may be impaired or a previously recognised impairment charge may be reversed with the impact recognised in the Consolidated Income Statement. The key estimates and assumptions used in the assessment of impairment indicators are as follows: Future production Life of operation plans based on Mineral Resource and Ore Reserve estimates, economic life of smelters and refineries and, in certain cases, Exploration Targets and expansion projects, including future cost of production. Refer to note 2(c) Key estimates, assumptions and judgements for further details regarding Mineral Resources and Ore Reserves as sources of estimation uncertainty. Commodity prices and market traded consumables Forward market and contract prices, and longer-term price estimates which includes an assessment of the impact carbon price assumptions might have. Exchange rates Forward market foreign exchange rates, and longer-term price protocol estimates. Discount rates Risk-adjusted cost of capital and appropriate to the resource. Regulatory approvals Life of operation plans include assumptions associated with the successful application, and timing thereof, of ongoing and future regulatory approvals. Carbon prices Actual enacted schemes less allowable abatements, where applicable, and a long-term base case estimate of US$64 per tonne CO2 -e (real) applied to all Scope 1 and 2 emissions from FY40 onwards. Where impairment testing is undertaken, a range of external sources are considered as further input to the above assumptions. Exploration and evaluation expenditure For areas not yet in production, acquired mineral rights, together with subsequent capitalised exploration and evaluation expenditure, require judgement to determine the likelihood of future economic benefits from future development, and whether sufficient data exists to indicate that, although a development in the specific area is likely to proceed, the carrying amount of the exploration and evaluation asset is unlikely to be recovered in full. When facts and circumstances suggest that the carrying amount exceeds the recoverable amount, an impairment test is required which may result in an adjustment to the carrying value of acquired mineral rights together with subsequent capitalised exploration and evaluation expenditure. At or before the final investment decision for a given area of interest, and once technical feasibility and commercial viability has been demonstrated, the Group assess the carrying value of that area of interest for impairment or, for an area of interest previously impaired, impairment reversal. Climate change-related risks and opportunities The Group\u2019s forecast commodity prices and other key assumptions represent management\u2019s expectations on likely outcomes, with a base case estimation of at least 2\u00b0C warming. When assessing whether there is any indication of impairment or impairment reversal, management performs a sensitivity analysis by considering a range of possible scenarios, with no one scenario being conclusive in isolation. Our sensitivity analysis shows that our FY23 1.5\u00b0C scenario would result in an increased risk of impairment at the Hillside Aluminium and Illawarra Metallurgical Coal CGUs. The full costs and benefits of decarbonisation projects are included in the Group\u2019s valuations when it has a high degree of confidence that a project will achieve an emissions reduction, which typically aligns with the related capital project being internally approved, or when it is critical for meeting regulatory licensing requirements. The Group\u2019s valuations include the cost and benefit of initiatives necessary to meet its medium-term target to halve its operational greenhouse gas (GHG) emissions by 2035 compared to its FY21 baseline. \u2018Target\u2019 is defined as an intended outcome in relation to which we have identified one or more pathways for delivery of that outcome, subject to certain assumptions or conditions. The decarbonisation pathway to meet our goal of net zero GHG emissions by 2050 is not yet fully defined and, as such, the cost and benefit of all associated initiatives are not included in the Group\u2019s valuations. \u2018Goal\u2019 is defined as an ambition to seek an outcome for which there is no current pathway(s), but for which efforts will be pursued towards addressing that challenge, subject to certain assumptions or conditions. The Group utilises an internal price on carbon to inform decision-making and valuations, based on actual enacted schemes less allowable abatements, where applicable, and a long-term base case estimate of US$64 per tonne CO 2 -e (real) applied to all Scope 1 and 2 emissions from FY40 onwards. In developing forecast global carbon prices, the Group considers policy and market-driven carbon prices as well as abatement costs, weighted across developed and developing countries. When assessing for impairment indicators, the Group has considered the sensitivity of operations to changes in carbon prices. The Group\u2019s operations are not uniformly impacted by carbon prices. The impact is influenced by the amount of Scope 1 and 2 emissions the operation generates and the jurisdiction in which it operates, in combination with the respective life of operation plans. The Group\u2019s CGUs with a higher carbon sensitivity include Worsley Alumina, Hillside Aluminium, Mozal Aluminium and Illawarra Metallurgical Coal. Previously impaired areas of interest and CGUs When assessing for impairment reversal indicators, the fundamental characteristics of previously impaired areas of interest and CGUs are relevant to their sensitivity to key estimates and assumptions. For previously impaired areas of interest and CGUs these include: \u2013 Areas of interest that are subject to ongoing study and evaluation, for example the Taylor Deposit at Hermosa; \u2013 CGUs with higher operating margins and with life of operation plans longer than 10 years which are less sensitive to short-term commodity prices and foreign exchange rates, for example Worsley Alumina; \u2013 CGUs with lower operating margins which are highly sensitive to movements in commodity prices and foreign exchange rates, for example South Africa Manganese; and \u2013 CGUs with higher operating margins, shorter life of operation plans and exposure to commodities that display greater price volatility, for example Australia Manganese. Mozal Aluminium The Group jointly controls Mozal Aluminium together with the Industrial Development Corporation of South Africa Limited and the Government of the Republic of Mozambique. Electricity supplied to Mozal Aluminium is generated by Hidroel\u00e9ctrica de Cahora Bassa, a hydro-electric power generator, and supplied via Eskom, the South African state-owned entity which owns and operates South Africa\u2019s national electricity grid. Eskom also provides back-up energy to Mozal Aluminium for periods when Hidroel\u00e9ctrica de Cahora Bassa produces less than its contractual minimum supply of hydro-electric power. The Group is working with key stakeholders to extend the supply of power from Hidroel\u00e9ctrica de Cahora Bassa for Mozal Aluminium beyond 2026. Although an extension and pricing of the existing arrangement with Eskom is uncertain, the Group has made a reasonable assumption that an extension to 2030 can be achieved on mutually acceptable commercial terms. Failure to extend the supply of power from Hidroel\u00e9ctrica de Cahora Bassa will have a material impact on the recoverable amount of Mozal Aluminium. Key estimates, assumptions and judgements The recognition of closure and rehabilitation provisions requires judgement and is based on significant estimates and assumptions such as: \u2013 The requirements of the relevant local legal and regulatory framework; \u2013 The magnitude of possible contamination; \u2013 The timing, extent and cost of required closure and rehabilitation activity; and \u2013 Potential changes in physical and climate conditions. These uncertainties may result in future actual expenditure differing from the amounts currently provided. The Group\u2019s expectations and approach in relation to climate change-related risks and opportunities are reflected in the estimates and assumptions noted above. For example, our base case estimation of at least 2\u00b0C climate-related warming impacts our life of operations plans, which in turn impacts assumptions regarding timing and cost of closure and rehabilitation activities. Physical impacts of climate change have been considered in the estimation of closure and rehabilitation costs, including timing of relinquishment based on the Group\u2019s assessment to date. These estimates will continue to be refined as the Group progresses its assessment of physical risks and development of direct adaptation and mitigation strategies. The provision recognised for each site is periodically reviewed and updated based on the facts and circumstances available at the time. In addition to the uncertainties noted above, certain closure and rehabilitation activities may be subject to legal disputes and depending on the ultimate resolution of these disputes, the final liability for such matters could vary. If risk-free interest rates were decreased by 0.5 per cent (in real terms), the provision would increase by approximately US$261 million . ", "dimensions": { "concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-426": { "value": "3. New standards and interpretations (a) New accounting standards and interpretations effective from 1 July 2022 The following new accounting standards and interpretations have been published and are effective for the year ended 30 June 2023: \u2013 Amendments to AASB 137 \u2013 Onerous Contracts, Costs to Fulfil a Contract; \u2013 Amendments to AASB 3 \u2013 Updating a reference to the Conceptual Framework; \u2013 Amendments to AASB 116 \u2013 Property, Plant and Equipment, Proceeds before Intended Use; and \u2013 Amendments to AASB 112 \u2013 International Tax Reform \u2013 Pillar Two Model Rules. The Group has reviewed these amendments and concluded that none have a significant impact on the Group. Refer to note 6(f) for further details of the impact on the Group as a result of the international tax reform and the related amendments to AASB 112. ", "dimensions": { "concept": "ifrs-full:DescriptionOfInitialApplicationOfStandardsOrInterpretations", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-427": { "value": "(b) New accounting standards and interpretations issued but not effective The following new accounting standards and interpretations have been published but are not yet effective for the year ended 30 June 2023: \u2013 Amendments to AASB 101 \u2013 Classification of Liabilities as Current or Non-current; \u2013 Amendments to AASB 10 and AASB 128 \u2013 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture; \u2013 Amendments to AASB 7, AASB 101, AASB 108 and AASB 134 \u2013 Disclosure of Accounting Policies and Definition of Accounting Estimates; \u2013 Amendments to AASB 1 and AASB 112 \u2013 Deferred Tax related to Assets and Liabilities arising from a Single Transaction; \u2013 Amendments to AASB 16 \u2013 Lease Liability in a Sale and Leaseback; and \u2013 AASB 17 Insurance Contracts. The Group has reviewed these amendments and improvements and does not expect them to have a significant impact on the Group. The Group does not intend to early adopt any of the new standards or interpretations. It is expected that where applicable, these standards and interpretations will be adopted on each respective effective date. ", "dimensions": { "concept": "ifrs-full:DescriptionOfExpectedImpactOfInitialApplicationOfNewStandardsOrInterpretations", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-531": { "value": "4. Segment information (a) Description of segments The operating segments (also referred to as operations) are organised and managed separately according to the nature of products produced. The Lead Team (the chief operating decision makers) and the Board of Directors monitor the segment results regularly for the purpose of making decisions about resource allocation and assessing performance . The principal activities of each operating segment are summarised as follows: Operating segment Principal activities Worsley Alumina Integrated bauxite mine and alumina refinery in Australia Brazil Alumina Integrated bauxite mine and alumina refinery in Brazil Brazil Aluminium Aluminium smelter in Brazil Hillside Aluminium Aluminium smelter in South Africa Mozal Aluminium Aluminium smelter in Mozambique Sierra Gorda Copper mine in Chile Cannington Silver, lead and zinc mine in Australia Hermosa Base metals exploration and development options in the United States Cerro Matoso Integrated laterite ferronickel mine and smelting complex in Colombia Illawarra Metallurgical Coal Metallurgical coal mines in Australia Australia Manganese Manganese ore mine in Australia South Africa Manganese Manganese ore mines in South Africa All operations are operated by the Group except Brazil Alumina, Brazil Aluminium and Sierra Gorda. (b) Segment results The segment information reflects the Group\u2019s interest in subsidiaries and joint operations, as well as material equity accounted joint ventures on a proportional consolidation basis. The segment information includes non-IFRS financial measures. Segment performance is measured by Underlying EBIT and Underlying EBITDA. Underlying EBIT is profit before net finance income/(costs), income tax expense, royalty related tax expense and other earnings adjustment items. Underlying EBITDA is Underlying EBIT before depreciation and amortisation. Reconciliations of the underlying segment information to the statutory information included in the Group\u2019s consolidated financial statements are set out in note 4(b)(i) Underlying results reconciliation, including joint venture adjustments which reconcile the proportional consolidation of the material equity accounted joint ventures back to their statutory equity accounting positions. The Group\u2019s material equity accounted joint ventures are Sierra Gorda, Australia Manganese and South Africa Manganese, refer to note 26 Equity accounted investments. The Group separately discloses sales of group production from sales of third-party products and services because of the significant difference in profit margin earned on these sales. It is the Group\u2019s policy that inter-segment transactions are made on an arm\u2019s length basis. Group and unallocated items/eliminations represent group centre functions and consolidation adjustments. Group financing and income taxes are primarily managed on a Group basis and are not allocated to operating segments. Total assets and liabilities for each operating segment represent operating assets and liabilities which predominantly exclude the carrying amount of non-material equity accounted investments, cash, interest bearing liabilities, tax balances and certain other financial assets and liabilities. Revenue recognition Revenue is measured based on the consideration specified in the contract with a customer and excludes amounts collected on behalf of third parties. Revenue is not reduced for royalties and other taxes payable from Group production. The following is a description of the principal activities from which the Group generates its revenue: Revenue from the sale of commodities The Group primarily sells the following commodities: alumina, aluminium, copper, silver, lead, zinc, ferronickel, metallurgical coal and manganese ore. The sales of these commodities are considered to be performance obligations as they are the contractual promises by the Group to transfer distinct goods to customers. The transaction price allocated to each performance obligation is recognised as the performance obligation is satisfied. Satisfaction occurs when control of the promised commodity is transferred to the customer. For the sale of commodities, revenue is therefore recognised at a point in time, net of treatment and refining charges (where applicable). The majority of the Group\u2019s sales agreements specify that title passes on the bill of lading date (the date the commodity is delivered to the shipping agent) and is assessed to be the point of time in which control over the commodity passes to the customer. For these sales, revenue is recognised on the bill of lading date. For certain sales, title passes and revenue is recognised when the goods have been delivered to the customer. For certain commodities, the sales price is determined on a provisional basis at the date of sale and adjustments to the sales price subsequently occur based on movements in quoted market or contractual prices up to the date of final pricing. The period between provisional invoicing and final pricing is up to 180 days. Revenue on provisionally priced sales is recognised based on the estimated fair value of the total consideration receivable. The revenue adjustment mechanism embedded within provisionally priced sales arrangements has the characteristics of a commodity derivative. Accordingly, the fair value of the final sales price adjustment is re-estimated continuously and changes in fair value are disclosed separately as \u2018other\u2019 revenue. In all cases, fair value is estimated by reference to forward market prices. Revenue from the provision of freight services The Group sells most of its commodities on either Free On Board (FOB) or Cost, Insurance, and Freight (CIF) Incoterms. In the case of CIF Incoterms, the Group is responsible for shipping services after the date at which control of the commodities passes to the customer at the port of loading. The provision of shipping services in these types of arrangements are a distinct service (and therefore a separate performance obligation) to which a portion of the transaction price should be allocated and recognised over time as the shipping services are provided. The Group also provides third party freight services which are recognised as the shipping service is provided. The Group does not separately disclose sales revenue from freight services as it does not consider this necessary in order to understand the impact of economic factors on the Group. FY23 US$M Worsley Alumina Brazil Alumina Brazil Aluminium Hillside Aluminium Mozal Aluminium Sierra Gorda(1) Cannington Hermosa Cerro Matoso Illawarra Metallurgical Coal Australia Manganese (1) South Africa Manganese (1) Group and unallocated items/ eliminations Group underlying results (1) Revenue from customers 1,364 456 166 1,822 888 682 554 - 698 1,664 720 369 (236) 9,147 Other (2) (1) - - 1 (2) 2 (12) - - (21) (32) (25) (7) (97) Total underlying revenue 1,363 456 166 1,823 886 684 542 - 698 1,643 688 344 (243) 9,050 Comprising: Group production 642 395 166 1,823 886 684 542 - 698 1,643 688 344 - 8,511 Third party products and services(3) - - - - - - - - - - - - 539 539 Inter-segment revenue 721 61 - - - - - - - - - - (782) - Total underlying revenue 1,363 456 166 1,823 886 684 542 - 698 1,643 688 344 (243) 9,050 Underlying EBITDA 251 7 (129) 257 108 358 213 (15) 246 833 369 66 (30) 2,534 Underlying depreciation and amortisation (183) (52) (7) (66) (52) (141) (71) (4) (57) (141) (103) (21) (20) (918) Underlying EBIT 68 (45) (136) 191 56 217 142 (19) 189 692 266 45 (50) 1,616 Comprising: Group production 68 (51) (136) 191 56 221 148 (19) 191 696 266 46 (31) 1,646 Exploration expensed - - - - - (4) (6) - (2) (9) - (1) (42) (64) Third party products and services(3) - - - - - - - - - - - - 23 23 Share of profit/(loss) of equity accounted investments - 6 - - - - - - - 5 - - - 11 Underlying EBIT 68 (45) (136) 191 56 217 142 (19) 189 692 266 45 (50) 1,616 Underlying net finance costs (188) Underlying income tax expense (457) Underlying royalty related tax expense (55) Underlying earnings 916 Total adjustments to profit/(loss) (4) (1,089) Profit/(loss) for the year (173) Underlying exploration expenditure - - - - - 7 8 20 2 17 1 1 51 107 Underlying capital expenditure (5) 82 58 9 18 17 196 61 256 38 248 58 25 3 1,069 Underlying equity accounted investments - 51 - - - - - - - 7 - - - 58 Total underlying assets (6) 3,578 880 91 1,156 778 1,811 575 1,095 581 1,275 660 326 2,709 15,515 Total underlying liabilities(6) 1,121 142 63 311 200 223 403 96 218 506 421 183 2,253 6,140 (1) The segment information reflects the Group\u2019s interest in material equity accounted joint ventures and is presented on a proportional consolidation basis, which is the measure used by the Group\u2019s management to assess their performance. The Group\u2019s underlying results includes the proportional elimination of revenue and corresponding expenses relating to freight services provided by the Group to material joint ventures of US$128 million and third party product revenue of US$33 million included in Group and unallocated items/eliminations. Refer to note 4(b)(i) Underlying results reconciliation for the joint venture adjustments that reconcile the underlying proportional consolidation to the statutory equity accounting positions included in the Group\u2019s consolidated financial statements. (2) Underlying other revenue relates to fair value movements on provisionally priced contracts. (3) Underlying revenue on third party products and services sold comprises US$86 million for aluminium, US$25 million for alumina, US$140 million for coal, US$33 million for manganese, US$106 million for freight services and US$149 million for raw materials. Underlying EBIT on third party products and services sold comprises US$(1) million for aluminium, US$13 million for alumina, US$11 million for coal, US$(1) million for freight services and US$1 million for raw materials. (4) Represents the total of all adjustments made to Profit from operations, Net finance income/(costs) and Income tax expense. Refer to note 4(b)(i) Underlying results reconciliation for further details. (5) Underlying capital expenditure excludes the purchase of intangibles and capitalised exploration expenditure. (6) Total underlying assets and liabilities for each operating segment represent operating assets and liabilities which predominantly exclude the carrying amount of non-material equity accounted investments, cash, interest bearing liabilities, tax balances and certain other financial assets and liabilities . Mozal Aluminium Sierra Gorda (1) Cannington Hermosa Cerro Matoso Illawarra Metallurgical Coal Australia Manganese(1) South Africa Manganese (1) Group and unallocated items/ eliminations Group underlying results (1) Revenue from customers 1,364 456 166 1,822 888 682 554 - 698 1,664 720 369 (236) 9,147 Other (2) (1) - - 1 (2) 2 (12) - - (21) (32) (25) (7) (97) Total underlying revenue 1,363 456 166 1,823 886 684 542 - 698 1,643 688 344 (243) 9,050 Comprising: Group production 642 395 166 1,823 886 684 542 - 698 1,643 688 344 - 8,511 Third party products and services (3) - - - - - - - - - - - - 539 539 Inter-segment revenue 721 61 - - - - - - - - - - (782) - Total underlying revenue 1,363 456 166 1,823 886 684 542 - 698 1,643 688 344 (243) 9,050 Underlying EBITDA 251 7 (129) 257 108 358 213 (15) 246 833 369 66 (30) 2,534 Underlying depreciation and amortisation (183) (52) (7) (66) (52) (141) (71) (4) (57) (141) (103) (21) (20) (918) Underlying EBIT 68 (45) (136) 191 56 217 142 (19) 189 692 266 45 (50) 1,616 Comprising: Group production 68 (51) (136) 191 56 221 148 (19) 191 696 266 46 (31) 1,646 Exploration expensed - - - - - (4) (6) - (2) (9) - (1) (42) (64) Third party products and services (3) - - - - - - - - - - - - 23 23 Share of profit/(loss) of equity accounted investments - 6 - - - - - - - 5 - - - 11 Underlying EBIT 68 (45) (136) 191 56 217 142 (19) 189 692 266 45 (50) 1,616 Underlying net finance costs (188) Underlying income tax expense (457) Underlying royalty related tax expense (55) Underlying earnings 916 Total adjustments to profit/(loss) (4) (1,089) Profit/(loss) for the year (173) Underlying exploration expenditure - - - - - 7 8 20 2 17 1 1 51 107 Underlying capital expenditure(5) 82 58 9 18 17 196 61 256 38 248 58 25 3 1,069 Underlying equity accounted investments - 51 - - - - - - - 7 - - - 58 Total underlying assets (6) 3,578 880 91 1,156 778 1,811 575 1,095 581 1,275 660 326 2,709 15,515 Total underlying liabilities(6) 1,121 142 63 311 200 223 403 96 218 506 421 183 2,253 6,140 115 SOUTH32 FY22 US$M Worsley Alumina Brazil Alumina Brazil Aluminium Hillside Aluminium Mozal Aluminium Sierra Gorda (1) Cannington Hermosa Cerro Matoso Illawarra Metallurgical Coal Australia Manganese (1) South Africa Manganese (1) Group and unallocated items/ eliminations Group underlying results (1) Revenue from customers 1,626 522 - 2,257 925 280 771 - 927 2,336 833 418 (205) 10,690 Other (2) (1) 2 - (3) (1) (39) (35) - 2 2 15 1 (3) (60) Total underlying revenue 1,625 524 - 2,254 924 241 736 - 929 2,338 848 419 (208) 10,630 Comprising: Group production 818 523 - 2,254 924 241 736 - 929 2,338 848 419 - 10,030 Third party products and services(3) - - - - - - - - - - - - 600 600 Inter-segment revenue 807 1 - - - - - - - - - - (808) - Total underlying revenue 1,625 524 - 2,254 924 241 736 - 929 2,338 848 419 (208) 10,630 Underlying EBITDA 571 150 (43) 730 305 133 388 (12) 529 1,507 488 78 (69) 4,755 Underlying depreciation and amortisation (185) (61) (1) (64) (34) (58) (73) (2) (66) (119) (86) (20) (19) (788) Underlying EBIT 386 89 (44) 666 271 75 315 (14) 463 1,388 402 58 (88) 3,967 Comprising: Group production 386 92 (44) 666 271 76 317 (14) 463 1,396 402 59 (82) 3,988 Exploration expensed - - - - - (1) (2) - - (9) - (1) (26) (39) Third party products and services(3) - - - - - - - - - - - - 20 20 Share of profit/(loss) of equity accounted investments - (3) - - - - - - - 1 - - - (2) Underlying EBIT 386 89 (44) 666 271 75 315 (14) 463 1,388 402 58 (88) 3,967 Underlying net finance costs (155) Underlying income tax expense (1,151) Underlying royalty related tax expense (59) Underlying earnings 2,602 Total adjustments to profit/(loss) (4) 67 Profit/(loss) for the year 2,669 Underlying exploration expenditure - - - - - 2 3 19 - 11 1 1 37 74 Underlying capital expenditure (5) 55 51 1 24 11 81 45 97 37 189 62 19 12 684 Underlying equity accounted investments - 40 - - - - - - - 2 - - - 42 Total underlying assets (6) 3,571 805 67 1,284 764 1,614 555 2,098 592 1,277 645 331 3,666 17, 269 Total underlying liabilities(6) 1,000 109 21 357 149 212 414 67 243 491 387 196 2,844 6,490 (1) The segment information reflects the Group\u2019s interest in material equity accounted joint ventures and is presented on a proportional consolidation basis, which is the measure used by the Group\u2019s management to assess their performance. The Group\u2019s underlying results includes the proportional elimination of revenue and corresponding expenses relating to freight services provided by the Group to material joint ventures of US$187 million and third party product revenue of US$40 million included in Group and unallocated items/eliminations. Refer to note 4(b)(i) Underlying results reconciliation for the joint venture adjustments that reconcile the underlying proportional consolidation to the statutory equity accounting positions included in the Group\u2019s consolidated financial statements. (2) Underlying other revenue relates to fair value movements on provisionally priced contracts. (3) Underlying revenue on third party products and services sold comprises US$110 million for aluminium, US$25 million for alumina, US$115 million for coal, US$40 million for manganese, US$145 million for freight services and US$165 million for raw materials. Underlying EBIT on third party products and services sold comprises US$8 million for aluminium, US$8 million for alumina, US$7 million for coal and US$(3) million for freight services. (4) Represents the total of all adjustments made to Profit from operations, Net finance income/(costs) and Income tax expense. Refer to note 4(b)(i) Underlying results reconciliation for further details. (5) Underlying capital expenditure excludes the purchase of intangibles and capitalised exploration expenditure. (6) Total underlying assets and liabilities for each operating segment represent operating assets and liabilities which predominantly exclude the carrying amount of non-material equity accounted investments, cash, interest bearing liabilities, tax balances and certain other financial assets and liabilities. Mozal Aluminium Sierra Gorda (1) Cannington Hermosa Cerro Matoso Illawarra Metallurgical Coal Australia Manganese (1) South Africa Manganese (1) Group and unallocated items/ eliminations Group underlying results (1) Revenue from customers 1,626 522 - 2,257 925 280 771 - 927 2,336 833 418 (205) 10,690 Other (2) (1) 2 - (3) (1) (39) (35) - 2 2 15 1 (3) (60) Total underlying revenue 1,625 524 - 2,254 924 241 736 - 929 2,338 848 419 (208) 10,630 Comprising: Group production 818 523 - 2,254 924 241 736 - 929 2,338 848 419 - 10,030 Third party products and services (3) - - - - - - - - - - - - 600 600 Inter-segment revenue 807 1 - - - - - - - - - - (808) - Total underlying revenue 1,625 524 - 2,254 924 241 736 - 929 2,338 848 419 (208) 10,630 Underlying EBITDA 571 150 (43) 730 305 133 388 (12) 529 1,507 488 78 (69) 4,755 Underlying depreciation and amortisation (185) (61) (1) (64) (34) (58) (73) (2) (66) (119) (86) (20) (19) (788) Underlying EBIT 386 89 (44) 666 271 75 315 (14) 463 1,388 402 58 (88) 3,967 Comprising: Group production 386 92 (44) 666 271 76 317 (14) 463 1,396 402 59 (82) 3,988 Exploration expensed - - - - - (1) (2) - - (9) - (1) (26) (39) Third party products and services (3) - - - - - - - - - - - - 20 20 Share of profit/(loss) of equity accounted investments - (3) - - - - - - - 1 - - - (2) Underlying EBIT 386 89 (44) 666 271 75 315 (14) 463 1,388 402 58 (88) 3,967 Underlying net finance costs (155) Underlying income tax expense (1,151) Underlying royalty related tax expense (59) Underlying earnings 2,602 Total adjustments to profit/(loss) (4) 67 Profit/(loss) for the year 2,669 Underlying exploration expenditure - - - - - 2 3 19 - 11 1 1 37 74 Underlying capital expenditure (5) 55 51 1 24 11 81 45 97 37 189 62 19 12 684 Underlying equity accounted investments - 40 - - - - - - - 2 - - - 42 Total underlying assets (6) 3,571 805 67 1,284 764 1,614 555 2,098 592 1,277 645 331 3,666 17, 269 Total underlying liabilities (6) 1,000 109 21 357 149 212 414 67 243 491 387 196 2,844 6,490 117 SOUTH32 (i) Underlying results reconciliation The following tables reconcile the underlying segment information to the statutory information included in the Group\u2019s consolidated financial statements: US$M FY23 FY22 Underlying EBIT 1,616 3,967 Significant items (1) 186 77 Sierra Gorda joint venture adjustments (2)(3) (144) (44) Manganese joint venture adjustments (2)(4) (147) (216) Gains on the consolidation of interests in operations (5) - 9 Exchange rate gains/(losses) on restatement of monetary items (6) 62 50 Net impairment (loss)/reversal of financial assets (6)(7) (71) (26) Net impairment (loss)/reversal of non-financial assets (6)(8) (1,300) (145) Gains/(losses) on non-trading derivative instruments, contingent consideration and other investments measured at FVTPL (6) (4) 52 Profit from operations 198 3,724 Underlying net finance costs (188) (155) Sierra Gorda joint venture adjustments (2) 167 62 Manganese joint venture adjustments (2) 28 22 Exchange rate variations on net cash/(debt) 8 40 Net finance income/(costs) 15 (31) Underlying income tax expense (457) (1,151) Underlying royalty related tax expense (55) (59) Tax effect of significant items (1) (23) (26) Sierra Gorda joint venture adjustments relating to income tax expense (2) 11 1 Sierra Gorda joint venture adjustments relating to royalty related tax expense (2) 12 4 Manganese joint venture adjustments relating to income tax expense (2) 85 153 Manganese joint venture adjustments relating to royalty related tax expense (2) 43 55 Tax effect of other adjustments to Underlying EBIT (3) 32 Tax effect of other adjustments to Underlying net finance costs (3) (13) Exchange rate variations on tax balances 4 (20) Income tax expense (386) (1,024) Underlying earnings 916 2,602 Total adjustments to profit/(loss) (1,089) 67 Profit/(loss) for the year (173) 2,669 (1) Refer to note 4(b)(ii) Significant items. (2) The segment information reflects the Group\u2019s interest in material equity accounted joint ventures and is presented on a proportional consolidation basis, which is the measure used by the Group\u2019s management to assess their performance. Joint venture adjustments reconcile the proportional consolidation to the statutory equity accounting positions, recognised in share of profit/(loss) of equity accounted investments in the Consolidated Income Statement. (3) The Group\u2019s investment in the Sierra Gorda operation is represented by the carrying value of an equity accounted investment of US$101 million (FY22: US$30 million) and the carrying value of a purchased credit-impaired receivable of US$1,711 million (FY22: US$1,648 million) classified as a loan to an equity accounted investment within trade and other receivables on the Consolidated Balance Sheet. The earnings adjustments include a revaluation gain of US$71 million (FY22: gain of US$26 million) relating to the shareholder loan payable that was eliminated from the Group\u2019s Underlying EBIT upon proportional consolidation. (4) Includes earnings adjustments of US$(3) million (FY22: US$6 million) included in the Australia Manganese segment and US$12 million (FY22: US$8 million) included in the South Africa Manganese segment. (5) FY22 gain relates to the acquisition of an additional 16.6 per cent shareholding and related rights in Mozal Aluminium, recognised in other income in the Consolidated Income Statement. (6) Recognised in expenses excluding finance costs in the Consolidated Income Statement. (7) Refer to note 19 Financial assets and financial liabilities. (8) Refer to note 13 Impairment of non-financial assets . (i) Underlying results reconciliation continued FY23 US$M Group underlying results Sierra Gorda joint venture adjustments Manganese joint venture adjustments Group statutory results Total revenue 9,050 (684) (937) 7, 429 Depreciation and amortisation 918 (141) (124) 653 Share of profit/(loss) of equity accounted investments 11 71 164 246 Exploration expenditure 107 (7) (2) 98 Capital expenditure 1,069 (196) (83) 790 Equity accounted investments 58 101 340 499 Total assets 15,515 (450) (501) 14,564 Total liabilities 6,140 (450) (501) 5,189 FY22 US$M Group underlying results Sierra Gorda joint venture adjustments Manganese joint venture adjustments Group statutory results Total revenue 10,630 (241) (1,120) 9,269 Depreciation and amortisation 788 (58) (106) 624 Share of profit/(loss) of equity accounted investments (2) 30 244 272 Exploration expenditure 74 (2) (2) 70 Capital expenditure 684 (81) (81) 522 Equity accounted investments 42 30 398 470 Total assets 17, 269 (452) (481) 16,336 Total liabilities 6,490 (452) (481) 5,557 119 SOUTH32", "dimensions": { "concept": "ifrs-full:DisclosureOfRevenueFromContractsWithCustomersExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-522": { "value": "4. Segment information (a) Description of segments The operating segments (also referred to as operations) are organised and managed separately according to the nature of products produced. The Lead Team (the chief operating decision makers) and the Board of Directors monitor the segment results regularly for the purpose of making decisions about resource allocation and assessing performance . The principal activities of each operating segment are summarised as follows: Operating segment Principal activities Worsley Alumina Integrated bauxite mine and alumina refinery in Australia Brazil Alumina Integrated bauxite mine and alumina refinery in Brazil Brazil Aluminium Aluminium smelter in Brazil Hillside Aluminium Aluminium smelter in South Africa Mozal Aluminium Aluminium smelter in Mozambique Sierra Gorda Copper mine in Chile Cannington Silver, lead and zinc mine in Australia Hermosa Base metals exploration and development options in the United States Cerro Matoso Integrated laterite ferronickel mine and smelting complex in Colombia Illawarra Metallurgical Coal Metallurgical coal mines in Australia Australia Manganese Manganese ore mine in Australia South Africa Manganese Manganese ore mines in South Africa All operations are operated by the Group except Brazil Alumina, Brazil Aluminium and Sierra Gorda. (b) Segment results The segment information reflects the Group\u2019s interest in subsidiaries and joint operations, as well as material equity accounted joint ventures on a proportional consolidation basis. The segment information includes non-IFRS financial measures. Segment performance is measured by Underlying EBIT and Underlying EBITDA. Underlying EBIT is profit before net finance income/(costs), income tax expense, royalty related tax expense and other earnings adjustment items. Underlying EBITDA is Underlying EBIT before depreciation and amortisation. Reconciliations of the underlying segment information to the statutory information included in the Group\u2019s consolidated financial statements are set out in note 4(b)(i) Underlying results reconciliation, including joint venture adjustments which reconcile the proportional consolidation of the material equity accounted joint ventures back to their statutory equity accounting positions. The Group\u2019s material equity accounted joint ventures are Sierra Gorda, Australia Manganese and South Africa Manganese, refer to note 26 Equity accounted investments. The Group separately discloses sales of group production from sales of third-party products and services because of the significant difference in profit margin earned on these sales. It is the Group\u2019s policy that inter-segment transactions are made on an arm\u2019s length basis. Group and unallocated items/eliminations represent group centre functions and consolidation adjustments. Group financing and income taxes are primarily managed on a Group basis and are not allocated to operating segments. Total assets and liabilities for each operating segment represent operating assets and liabilities which predominantly exclude the carrying amount of non-material equity accounted investments, cash, interest bearing liabilities, tax balances and certain other financial assets and liabilities. Revenue recognition Revenue is measured based on the consideration specified in the contract with a customer and excludes amounts collected on behalf of third parties. Revenue is not reduced for royalties and other taxes payable from Group production. The following is a description of the principal activities from which the Group generates its revenue: Revenue from the sale of commodities The Group primarily sells the following commodities: alumina, aluminium, copper, silver, lead, zinc, ferronickel, metallurgical coal and manganese ore. The sales of these commodities are considered to be performance obligations as they are the contractual promises by the Group to transfer distinct goods to customers. The transaction price allocated to each performance obligation is recognised as the performance obligation is satisfied. Satisfaction occurs when control of the promised commodity is transferred to the customer. For the sale of commodities, revenue is therefore recognised at a point in time, net of treatment and refining charges (where applicable). The majority of the Group\u2019s sales agreements specify that title passes on the bill of lading date (the date the commodity is delivered to the shipping agent) and is assessed to be the point of time in which control over the commodity passes to the customer. For these sales, revenue is recognised on the bill of lading date. For certain sales, title passes and revenue is recognised when the goods have been delivered to the customer. For certain commodities, the sales price is determined on a provisional basis at the date of sale and adjustments to the sales price subsequently occur based on movements in quoted market or contractual prices up to the date of final pricing. The period between provisional invoicing and final pricing is up to 180 days. Revenue on provisionally priced sales is recognised based on the estimated fair value of the total consideration receivable. The revenue adjustment mechanism embedded within provisionally priced sales arrangements has the characteristics of a commodity derivative. Accordingly, the fair value of the final sales price adjustment is re-estimated continuously and changes in fair value are disclosed separately as \u2018other\u2019 revenue. In all cases, fair value is estimated by reference to forward market prices. Revenue from the provision of freight services The Group sells most of its commodities on either Free On Board (FOB) or Cost, Insurance, and Freight (CIF) Incoterms. In the case of CIF Incoterms, the Group is responsible for shipping services after the date at which control of the commodities passes to the customer at the port of loading. The provision of shipping services in these types of arrangements are a distinct service (and therefore a separate performance obligation) to which a portion of the transaction price should be allocated and recognised over time as the shipping services are provided. The Group also provides third party freight services which are recognised as the shipping service is provided. The Group does not separately disclose sales revenue from freight services as it does not consider this necessary in order to understand the impact of economic factors on the Group. FY23 US$M Worsley Alumina Brazil Alumina Brazil Aluminium Hillside Aluminium Mozal Aluminium Sierra Gorda(1) Cannington Hermosa Cerro Matoso Illawarra Metallurgical Coal Australia Manganese (1) South Africa Manganese (1) Group and unallocated items/ eliminations Group underlying results (1) Revenue from customers 1,364 456 166 1,822 888 682 554 - 698 1,664 720 369 (236) 9,147 Other (2) (1) - - 1 (2) 2 (12) - - (21) (32) (25) (7) (97) Total underlying revenue 1,363 456 166 1,823 886 684 542 - 698 1,643 688 344 (243) 9,050 Comprising: Group production 642 395 166 1,823 886 684 542 - 698 1,643 688 344 - 8,511 Third party products and services(3) - - - - - - - - - - - - 539 539 Inter-segment revenue 721 61 - - - - - - - - - - (782) - Total underlying revenue 1,363 456 166 1,823 886 684 542 - 698 1,643 688 344 (243) 9,050 Underlying EBITDA 251 7 (129) 257 108 358 213 (15) 246 833 369 66 (30) 2,534 Underlying depreciation and amortisation (183) (52) (7) (66) (52) (141) (71) (4) (57) (141) (103) (21) (20) (918) Underlying EBIT 68 (45) (136) 191 56 217 142 (19) 189 692 266 45 (50) 1,616 Comprising: Group production 68 (51) (136) 191 56 221 148 (19) 191 696 266 46 (31) 1,646 Exploration expensed - - - - - (4) (6) - (2) (9) - (1) (42) (64) Third party products and services(3) - - - - - - - - - - - - 23 23 Share of profit/(loss) of equity accounted investments - 6 - - - - - - - 5 - - - 11 Underlying EBIT 68 (45) (136) 191 56 217 142 (19) 189 692 266 45 (50) 1,616 Underlying net finance costs (188) Underlying income tax expense (457) Underlying royalty related tax expense (55) Underlying earnings 916 Total adjustments to profit/(loss) (4) (1,089) Profit/(loss) for the year (173) Underlying exploration expenditure - - - - - 7 8 20 2 17 1 1 51 107 Underlying capital expenditure (5) 82 58 9 18 17 196 61 256 38 248 58 25 3 1,069 Underlying equity accounted investments - 51 - - - - - - - 7 - - - 58 Total underlying assets (6) 3,578 880 91 1,156 778 1,811 575 1,095 581 1,275 660 326 2,709 15,515 Total underlying liabilities(6) 1,121 142 63 311 200 223 403 96 218 506 421 183 2,253 6,140 (1) The segment information reflects the Group\u2019s interest in material equity accounted joint ventures and is presented on a proportional consolidation basis, which is the measure used by the Group\u2019s management to assess their performance. The Group\u2019s underlying results includes the proportional elimination of revenue and corresponding expenses relating to freight services provided by the Group to material joint ventures of US$128 million and third party product revenue of US$33 million included in Group and unallocated items/eliminations. Refer to note 4(b)(i) Underlying results reconciliation for the joint venture adjustments that reconcile the underlying proportional consolidation to the statutory equity accounting positions included in the Group\u2019s consolidated financial statements. (2) Underlying other revenue relates to fair value movements on provisionally priced contracts. (3) Underlying revenue on third party products and services sold comprises US$86 million for aluminium, US$25 million for alumina, US$140 million for coal, US$33 million for manganese, US$106 million for freight services and US$149 million for raw materials. Underlying EBIT on third party products and services sold comprises US$(1) million for aluminium, US$13 million for alumina, US$11 million for coal, US$(1) million for freight services and US$1 million for raw materials. (4) Represents the total of all adjustments made to Profit from operations, Net finance income/(costs) and Income tax expense. Refer to note 4(b)(i) Underlying results reconciliation for further details. (5) Underlying capital expenditure excludes the purchase of intangibles and capitalised exploration expenditure. (6) Total underlying assets and liabilities for each operating segment represent operating assets and liabilities which predominantly exclude the carrying amount of non-material equity accounted investments, cash, interest bearing liabilities, tax balances and certain other financial assets and liabilities Sierra Gorda (1) Cannington Hermosa Cerro Matoso Illawarra Metallurgical Coal Australia Manganese(1) South Africa Manganese (1) Group and unallocated items/ eliminations Group underlying results (1) Revenue from customers 1,364 456 166 1,822 888 682 554 - 698 1,664 720 369 (236) 9,147 Other (2) (1) - - 1 (2) 2 (12) - - (21) (32) (25) (7) (97) Total underlying revenue 1,363 456 166 1,823 886 684 542 - 698 1,643 688 344 (243) 9,050 Comprising: Group production 642 395 166 1,823 886 684 542 - 698 1,643 688 344 - 8,511 Third party products and services (3) - - - - - - - - - - - - 539 539 Inter-segment revenue 721 61 - - - - - - - - - - (782) - Total underlying revenue 1,363 456 166 1,823 886 684 542 - 698 1,643 688 344 (243) 9,050 Underlying EBITDA 251 7 (129) 257 108 358 213 (15) 246 833 369 66 (30) 2,534 Underlying depreciation and amortisation (183) (52) (7) (66) (52) (141) (71) (4) (57) (141) (103) (21) (20) (918) Underlying EBIT 68 (45) (136) 191 56 217 142 (19) 189 692 266 45 (50) 1,616 Comprising: Group production 68 (51) (136) 191 56 221 148 (19) 191 696 266 46 (31) 1,646 Exploration expensed - - - - - (4) (6) - (2) (9) - (1) (42) (64) Third party products and services (3) - - - - - - - - - - - - 23 23 Share of profit/(loss) of equity accounted investments - 6 - - - - - - - 5 - - - 11 Underlying EBIT 68 (45) (136) 191 56 217 142 (19) 189 692 266 45 (50) 1,616 Underlying net finance costs (188) Underlying income tax expense (457) Underlying royalty related tax expense (55) Underlying earnings 916 Total adjustments to profit/(loss) (4) (1,089) Profit/(loss) for the year (173) Underlying exploration expenditure - - - - - 7 8 20 2 17 1 1 51 107 Underlying capital expenditure(5) 82 58 9 18 17 196 61 256 38 248 58 25 3 1,069 Underlying equity accounted investments - 51 - - - - - - - 7 - - - 58 Total underlying assets (6) 3,578 880 91 1,156 778 1,811 575 1,095 581 1,275 660 326 2,709 15,515 Total underlying liabilities(6) 1,121 142 63 311 200 223 403 96 218 506 421 183 2,253 6,140 FY22 US$M Worsley Alumina Brazil Alumina Brazil Aluminium Hillside Aluminium Mozal Aluminium Sierra Gorda (1) Cannington Hermosa Cerro Matoso Illawarra Metallurgical Coal Australia Manganese (1) South Africa Manganese (1) Group and unallocated items/ eliminations Group underlying results (1) Revenue from customers 1,626 522 - 2,257 925 280 771 - 927 2,336 833 418 (205) 10,690 Other (2) (1) 2 - (3) (1) (39) (35) - 2 2 15 1 (3) (60) Total underlying revenue 1,625 524 - 2,254 924 241 736 - 929 2,338 848 419 (208) 10,630 Comprising: Group production 818 523 - 2,254 924 241 736 - 929 2,338 848 419 - 10,030 Third party products and services(3) - - - - - - - - - - - - 600 600 Inter-segment revenue 807 1 - - - - - - - - - - (808) - Total underlying revenue 1,625 524 - 2,254 924 241 736 - 929 2,338 848 419 (208) 10,630 Underlying EBITDA 571 150 (43) 730 305 133 388 (12) 529 1,507 488 78 (69) 4,755 Underlying depreciation and amortisation (185) (61) (1) (64) (34) (58) (73) (2) (66) (119) (86) (20) (19) (788) Underlying EBIT 386 89 (44) 666 271 75 315 (14) 463 1,388 402 58 (88) 3,967 Comprising: Group production 386 92 (44) 666 271 76 317 (14) 463 1,396 402 59 (82) 3,988 Exploration expensed - - - - - (1) (2) - - (9) - (1) (26) (39) Third party products and services(3) - - - - - - - - - - - - 20 20 Share of profit/(loss) of equity accounted investments - (3) - - - - - - - 1 - - - (2) Underlying EBIT 386 89 (44) 666 271 75 315 (14) 463 1,388 402 58 (88) 3,967 Underlying net finance costs (155) Underlying income tax expense (1,151) Underlying royalty related tax expense (59) Underlying earnings 2,602 Total adjustments to profit/(loss) (4) 67 Profit/(loss) for the year 2,669 Underlying exploration expenditure - - - - - 2 3 19 - 11 1 1 37 74 Underlying capital expenditure (5) 55 51 1 24 11 81 45 97 37 189 62 19 12 684 Underlying equity accounted investments - 40 - - - - - - - 2 - - - 42 Total underlying assets (6) 3,571 805 67 1,284 764 1,614 555 2,098 592 1,277 645 331 3,666 17, 269 Total underlying liabilities(6) 1,000 109 21 357 149 212 414 67 243 491 387 196 2,844 6,490 (1) The segment information reflects the Group\u2019s interest in material equity accounted joint ventures and is presented on a proportional consolidation basis, which is the measure used by the Group\u2019s management to assess their performance. The Group\u2019s underlying results includes the proportional elimination of revenue and corresponding expenses relating to freight services provided by the Group to material joint ventures of US$187 million and third party product revenue of US$40 million included in Group and unallocated items/eliminations. Refer to note 4(b)(i) Underlying results reconciliation for the joint venture adjustments that reconcile the underlying proportional consolidation to the statutory equity accounting positions included in the Group\u2019s consolidated financial statements. (2) Underlying other revenue relates to fair value movements on provisionally priced contracts. (3) Underlying revenue on third party products and services sold comprises US$110 million for aluminium, US$25 million for alumina, US$115 million for coal, US$40 million for manganese, US$145 million for freight services and US$165 million for raw materials. Underlying EBIT on third party products and services sold comprises US$8 million for aluminium, US$8 million for alumina, US$7 million for coal and US$(3) million for freight services. (4) Represents the total of all adjustments made to Profit from operations, Net finance income/(costs) and Income tax expense. Refer to note 4(b)(i) Underlying results reconciliation for further details. (5) Underlying capital expenditure excludes the purchase of intangibles and capitalised exploration expenditure. (6) Total underlying assets and liabilities for each operating segment represent operating assets and liabilities which predominantly exclude the carrying amount of non-material equity accounted investments, cash, interest bearing liabilities, tax balances and certain other financial assets and liabilities. Mozal Aluminium Sierra Gorda (1) Cannington Hermosa Cerro Matoso Illawarra Metallurgical Coal Australia Manganese (1) South Africa Manganese (1) Group and unallocated items/ eliminations Group underlying results (1) Revenue from customers 1,626 522 - 2,257 925 280 771 - 927 2,336 833 418 (205) 10,690 Other (2) (1) 2 - (3) (1) (39) (35) - 2 2 15 1 (3) (60) Total underlying revenue 1,625 524 - 2,254 924 241 736 - 929 2,338 848 419 (208) 10,630 Comprising: Group production 818 523 - 2,254 924 241 736 - 929 2,338 848 419 - 10,030 Third party products and services (3) - - - - - - - - - - - - 600 600 Inter-segment revenue 807 1 - - - - - - - - - - (808) - Total underlying revenue 1,625 524 - 2,254 924 241 736 - 929 2,338 848 419 (208) 10,630 Underlying EBITDA 571 150 (43) 730 305 133 388 (12) 529 1,507 488 78 (69) 4,755 Underlying depreciation and amortisation (185) (61) (1) (64) (34) (58) (73) (2) (66) (119) (86) (20) (19) (788) Underlying EBIT 386 89 (44) 666 271 75 315 (14) 463 1,388 402 58 (88) 3,967 Comprising: Group production 386 92 (44) 666 271 76 317 (14) 463 1,396 402 59 (82) 3,988 Exploration expensed - - - - - (1) (2) - - (9) - (1) (26) (39) Third party products and services (3) - - - - - - - - - - - - 20 20 Share of profit/(loss) of equity accounted investments - (3) - - - - - - - 1 - - - (2) Underlying EBIT 386 89 (44) 666 271 75 315 (14) 463 1,388 402 58 (88) 3,967 Underlying net finance costs (155) Underlying income tax expense (1,151) Underlying royalty related tax expense (59) Underlying earnings 2,602 Total adjustments to profit/(loss) (4) 67 Profit/(loss) for the year 2,669 Underlying exploration expenditure - - - - - 2 3 19 - 11 1 1 37 74 Underlying capital expenditure (5) 55 51 1 24 11 81 45 97 37 189 62 19 12 684 Underlying equity accounted investments - 40 - - - - - - - 2 - - - 42 Total underlying assets (6) 3,571 805 67 1,284 764 1,614 555 2,098 592 1,277 645 331 3,666 17, 269 Total underlying liabilities (6) 1,000 109 21 357 149 212 414 67 243 491 387 196 2,844 6,490 (i) Underlying results reconciliation The following tables reconcile the underlying segment information to the statutory information included in the Group\u2019s consolidated financial statements: US$M FY23 FY22 Underlying EBIT 1,616 3,967 Significant items (1) 186 77 Sierra Gorda joint venture adjustments (2)(3) (144) (44) Manganese joint venture adjustments (2)(4) (147) (216) Gains on the consolidation of interests in operations (5) - 9 Exchange rate gains/(losses) on restatement of monetary items (6) 62 50 Net impairment (loss)/reversal of financial assets (6)(7) (71) (26) Net impairment (loss)/reversal of non-financial assets (6)(8) (1,300) (145) Gains/(losses) on non-trading derivative instruments, contingent consideration and other investments measured at FVTPL (6) (4) 52 Profit from operations 198 3,724 Underlying net finance costs (188) (155) Sierra Gorda joint venture adjustments (2) 167 62 Manganese joint venture adjustments (2) 28 22 Exchange rate variations on net cash/(debt) 8 40 Net finance income/(costs) 15 (31) Underlying income tax expense (457) (1,151) Underlying royalty related tax expense (55) (59) Tax effect of significant items (1) (23) (26) Sierra Gorda joint venture adjustments relating to income tax expense (2) 11 1 Sierra Gorda joint venture adjustments relating to royalty related tax expense (2) 12 4 Manganese joint venture adjustments relating to income tax expense (2) 85 153 Manganese joint venture adjustments relating to royalty related tax expense (2) 43 55 Tax effect of other adjustments to Underlying EBIT (3) 32 Tax effect of other adjustments to Underlying net finance costs (3) (13) Exchange rate variations on tax balances 4 (20) Income tax expense (386) (1,024) Underlying earnings 916 2,602 Total adjustments to profit/(loss) (1,089) 67 Profit/(loss) for the year (173) 2,669 (1) Refer to note 4(b)(ii) Significant items. (2) The segment information reflects the Group\u2019s interest in material equity accounted joint ventures and is presented on a proportional consolidation basis, which is the measure used by the Group\u2019s management to assess their performance. Joint venture adjustments reconcile the proportional consolidation to the statutory equity accounting positions, recognised in share of profit/(loss) of equity accounted investments in the Consolidated Income Statement. (3) The Group\u2019s investment in the Sierra Gorda operation is represented by the carrying value of an equity accounted investment of US$101 million (FY22: US$30 million) and the carrying value of a purchased credit-impaired receivable of US$1,711 million (FY22: US$1,648 million) classified as a loan to an equity accounted investment within trade and other receivables on the Consolidated Balance Sheet. The earnings adjustments include a revaluation gain of US$71 million (FY22: gain of US$26 million) relating to the shareholder loan payable that was eliminated from the Group\u2019s Underlying EBIT upon proportional consolidation. (4) Includes earnings adjustments of US$(3) million (FY22: US$6 million) included in the Australia Manganese segment and US$12 million (FY22: US$8 million) included in the South Africa Manganese segment. (5) FY22 gain relates to the acquisition of an additional 16.6 per cent shareholding and related rights in Mozal Aluminium, recognised in other income in the Consolidated Income Statement. (6) Recognised in expenses excluding finance costs in the Consolidated Income Statement. (7) Refer to note 19 Financial assets and financial liabilities. (8) Refer to note 13 Impairment of non-financial assets . (i) Underlying results reconciliation continued FY23 US$M Group underlying results Sierra Gorda joint venture adjustments Manganese joint venture adjustments Group statutory results Total revenue 9,050 (684) (937) 7, 429 Depreciation and amortisation 918 (141) (124) 653 Share of profit/(loss) of equity accounted investments 11 71 164 246 Exploration expenditure 107 (7) (2) 98 Capital expenditure 1,069 (196) (83) 790 Equity accounted investments 58 101 340 499 Total assets 15,515 (450) (501) 14,564 Total liabilities 6,140 (450) (501) 5,189 FY22 US$M Group underlying results Sierra Gorda joint venture adjustments Manganese joint venture adjustments Group statutory results Total revenue 10,630 (241) (1,120) 9,269 Depreciation and amortisation 788 (58) (106) 624 Share of profit/(loss) of equity accounted investments (2) 30 244 272 Exploration expenditure 74 (2) (2) 70 Capital expenditure 684 (81) (81) 522 Equity accounted investments 42 30 398 470 Total assets 17, 269 (452) (481) 16,336 Total liabilities 6,490 (452) (481) 5,557 ", "dimensions": { "concept": "ifrs-full:DisclosureOfRevenueExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-428": { "value": "4. Segment information (a) Description of segments The operating segments (also referred to as operations) are organised and managed separately according to the nature of products produced. The Lead Team (the chief operating decision makers) and the Board of Directors monitor the segment results regularly for the purpose of making decisions about resource allocation and assessing performance . The principal activities of each operating segment are summarised as follows: Operating segment Principal activities Worsley Alumina Integrated bauxite mine and alumina refinery in Australia Brazil Alumina Integrated bauxite mine and alumina refinery in Brazil Brazil Aluminium Aluminium smelter in Brazil Hillside Aluminium Aluminium smelter in South Africa Mozal Aluminium Aluminium smelter in Mozambique Sierra Gorda Copper mine in Chile Cannington Silver, lead and zinc mine in Australia Hermosa Base metals exploration and development options in the United States Cerro Matoso Integrated laterite ferronickel mine and smelting complex in Colombia Illawarra Metallurgical Coal Metallurgical coal mines in Australia Australia Manganese Manganese ore mine in Australia South Africa Manganese Manganese ore mines in South Africa All operations are operated by the Group except Brazil Alumina, Brazil Aluminium and Sierra Gorda. (b) Segment results The segment information reflects the Group\u2019s interest in subsidiaries and joint operations, as well as material equity accounted joint ventures on a proportional consolidation basis. The segment information includes non-IFRS financial measures. Segment performance is measured by Underlying EBIT and Underlying EBITDA. Underlying EBIT is profit before net finance income/(costs), income tax expense, royalty related tax expense and other earnings adjustment items. Underlying EBITDA is Underlying EBIT before depreciation and amortisation. Reconciliations of the underlying segment information to the statutory information included in the Group\u2019s consolidated financial statements are set out in note 4(b)(i) Underlying results reconciliation, including joint venture adjustments which reconcile the proportional consolidation of the material equity accounted joint ventures back to their statutory equity accounting positions. The Group\u2019s material equity accounted joint ventures are Sierra Gorda, Australia Manganese and South Africa Manganese, refer to note 26 Equity accounted investments. The Group separately discloses sales of group production from sales of third-party products and services because of the significant difference in profit margin earned on these sales. It is the Group\u2019s policy that inter-segment transactions are made on an arm\u2019s length basis. Group and unallocated items/eliminations represent group centre functions and consolidation adjustments. Group financing and income taxes are primarily managed on a Group basis and are not allocated to operating segments. Total assets and liabilities for each operating segment represent operating assets and liabilities which predominantly exclude the carrying amount of non-material equity accounted investments, cash, interest bearing liabilities, tax balances and certain other financial assets and liabilities. Revenue recognition Revenue is measured based on the consideration specified in the contract with a customer and excludes amounts collected on behalf of third parties. Revenue is not reduced for royalties and other taxes payable from Group production. The following is a description of the principal activities from which the Group generates its revenue: Revenue from the sale of commodities The Group primarily sells the following commodities: alumina, aluminium, copper, silver, lead, zinc, ferronickel, metallurgical coal and manganese ore. The sales of these commodities are considered to be performance obligations as they are the contractual promises by the Group to transfer distinct goods to customers. The transaction price allocated to each performance obligation is recognised as the performance obligation is satisfied. Satisfaction occurs when control of the promised commodity is transferred to the customer. For the sale of commodities, revenue is therefore recognised at a point in time, net of treatment and refining charges (where applicable). The majority of the Group\u2019s sales agreements specify that title passes on the bill of lading date (the date the commodity is delivered to the shipping agent) and is assessed to be the point of time in which control over the commodity passes to the customer. For these sales, revenue is recognised on the bill of lading date. For certain sales, title passes and revenue is recognised when the goods have been delivered to the customer. For certain commodities, the sales price is determined on a provisional basis at the date of sale and adjustments to the sales price subsequently occur based on movements in quoted market or contractual prices up to the date of final pricing. The period between provisional invoicing and final pricing is up to 180 days. Revenue on provisionally priced sales is recognised based on the estimated fair value of the total consideration receivable. The revenue adjustment mechanism embedded within provisionally priced sales arrangements has the characteristics of a commodity derivative. Accordingly, the fair value of the final sales price adjustment is re-estimated continuously and changes in fair value are disclosed separately as \u2018other\u2019 revenue. In all cases, fair value is estimated by reference to forward market prices. Revenue from the provision of freight services The Group sells most of its commodities on either Free On Board (FOB) or Cost, Insurance, and Freight (CIF) Incoterms. In the case of CIF Incoterms, the Group is responsible for shipping services after the date at which control of the commodities passes to the customer at the port of loading. The provision of shipping services in these types of arrangements are a distinct service (and therefore a separate performance obligation) to which a portion of the transaction price should be allocated and recognised over time as the shipping services are provided. The Group also provides third party freight services which are recognised as the shipping service is provided. The Group does not separately disclose sales revenue from freight services as it does not consider this necessary in order to understand the impact of economic factors on the Group. FY23 US$M Worsley Alumina Brazil Alumina Brazil Aluminium Hillside Aluminium Mozal Aluminium Sierra Gorda(1) Cannington Hermosa Cerro Matoso Illawarra Metallurgical Coal Australia Manganese (1) South Africa Manganese (1) Group and unallocated items/ eliminations Group underlying results (1) Revenue from customers 1,364 456 166 1,822 888 682 554 - 698 1,664 720 369 (236) 9,147 Other (2) (1) - - 1 (2) 2 (12) - - (21) (32) (25) (7) (97) Total underlying revenue 1,363 456 166 1,823 886 684 542 - 698 1,643 688 344 (243) 9,050 Comprising: Group production 642 395 166 1,823 886 684 542 - 698 1,643 688 344 - 8,511 Third party products and services(3) - - - - - - - - - - - - 539 539 Inter-segment revenue 721 61 - - - - - - - - - - (782) - Total underlying revenue 1,363 456 166 1,823 886 684 542 - 698 1,643 688 344 (243) 9,050 Underlying EBITDA 251 7 (129) 257 108 358 213 (15) 246 833 369 66 (30) 2,534 Underlying depreciation and amortisation (183) (52) (7) (66) (52) (141) (71) (4) (57) (141) (103) (21) (20) (918) Underlying EBIT 68 (45) (136) 191 56 217 142 (19) 189 692 266 45 (50) 1,616 Comprising: Group production 68 (51) (136) 191 56 221 148 (19) 191 696 266 46 (31) 1,646 Exploration expensed - - - - - (4) (6) - (2) (9) - (1) (42) (64) Third party products and services(3) - - - - - - - - - - - - 23 23 Share of profit/(loss) of equity accounted investments - 6 - - - - - - - 5 - - - 11 Underlying EBIT 68 (45) (136) 191 56 217 142 (19) 189 692 266 45 (50) 1,616 Underlying net finance costs (188) Underlying income tax expense (457) Underlying royalty related tax expense (55) Underlying earnings 916 Total adjustments to profit/(loss) (4) (1,089) Profit/(loss) for the year (173) Underlying exploration expenditure - - - - - 7 8 20 2 17 1 1 51 107 Underlying capital expenditure (5) 82 58 9 18 17 196 61 256 38 248 58 25 3 1,069 Underlying equity accounted investments - 51 - - - - - - - 7 - - - 58 Total underlying assets (6) 3,578 880 91 1,156 778 1,811 575 1,095 581 1,275 660 326 2,709 15,515 Total underlying liabilities(6) 1,121 142 63 311 200 223 403 96 218 506 421 183 2,253 6,140 (1) The segment information reflects the Group\u2019s interest in material equity accounted joint ventures and is presented on a proportional consolidation basis, which is the measure used by the Group\u2019s management to assess their performance. The Group\u2019s underlying results includes the proportional elimination of revenue and corresponding expenses relating to freight services provided by the Group to material joint ventures of US$128 million and third party product revenue of US$33 million included in Group and unallocated items/eliminations. Refer to note 4(b)(i) Underlying results reconciliation for the joint venture adjustments that reconcile the underlying proportional consolidation to the statutory equity accounting positions included in the Group\u2019s consolidated financial statements. (2) Underlying other revenue relates to fair value movements on provisionally priced contracts. (3) Underlying revenue on third party products and services sold comprises US$86 million for aluminium, US$25 million for alumina, US$140 million for coal, US$33 million for manganese, US$106 million for freight services and US$149 million for raw materials. Underlying EBIT on third party products and services sold comprises US$(1) million for aluminium, US$13 million for alumina, US$11 million for coal, US$(1) million for freight services and US$1 million for raw materials. (4) Represents the total of all adjustments made to Profit from operations, Net finance income/(costs) and Income tax expense. Refer to note 4(b)(i) Underlying results reconciliation for further details. (5) Underlying capital expenditure excludes the purchase of intangibles and capitalised exploration expenditure. (6) Total underlying assets and liabilities for each operating segment represent operating assets and liabilities which predominantly exclude the carrying amount of non-material equity accounted investments, cash, interest bearing liabilities, tax balances and certain other financial assets and liabilities . Mozal Aluminium Sierra Gorda (1) Cannington Hermosa Cerro Matoso Illawarra Metallurgical Coal Australia Manganese(1) South Africa Manganese (1) Group and unallocated items/ eliminations Group underlying results (1) Revenue from customers 1,364 456 166 1,822 888 682 554 - 698 1,664 720 369 (236) 9,147 Other (2) (1) - - 1 (2) 2 (12) - - (21) (32) (25) (7) (97) Total underlying revenue 1,363 456 166 1,823 886 684 542 - 698 1,643 688 344 (243) 9,050 Comprising: Group production 642 395 166 1,823 886 684 542 - 698 1,643 688 344 - 8,511 Third party products and services (3) - - - - - - - - - - - - 539 539 Inter-segment revenue 721 61 - - - - - - - - - - (782) - Total underlying revenue 1,363 456 166 1,823 886 684 542 - 698 1,643 688 344 (243) 9,050 Underlying EBITDA 251 7 (129) 257 108 358 213 (15) 246 833 369 66 (30) 2,534 Underlying depreciation and amortisation (183) (52) (7) (66) (52) (141) (71) (4) (57) (141) (103) (21) (20) (918) Underlying EBIT 68 (45) (136) 191 56 217 142 (19) 189 692 266 45 (50) 1,616 Comprising: Group production 68 (51) (136) 191 56 221 148 (19) 191 696 266 46 (31) 1,646 Exploration expensed - - - - - (4) (6) - (2) (9) - (1) (42) (64) Third party products and services (3) - - - - - - - - - - - - 23 23 Share of profit/(loss) of equity accounted investments - 6 - - - - - - - 5 - - - 11 Underlying EBIT 68 (45) (136) 191 56 217 142 (19) 189 692 266 45 (50) 1,616 Underlying net finance costs (188) Underlying income tax expense (457) Underlying royalty related tax expense (55) Underlying earnings 916 Total adjustments to profit/(loss) (4) (1,089) Profit/(loss) for the year (173) Underlying exploration expenditure - - - - - 7 8 20 2 17 1 1 51 107 Underlying capital expenditure(5) 82 58 9 18 17 196 61 256 38 248 58 25 3 1,069 Underlying equity accounted investments - 51 - - - - - - - 7 - - - 58 Total underlying assets (6) 3,578 880 91 1,156 778 1,811 575 1,095 581 1,275 660 326 2,709 15,515 Total underlying liabilities(6) 1,121 142 63 311 200 223 403 96 218 506 421 183 2,253 6,140 115 SOUTH32 FY22 US$M Worsley Alumina Brazil Alumina Brazil Aluminium Hillside Aluminium Mozal Aluminium Sierra Gorda (1) Cannington Hermosa Cerro Matoso Illawarra Metallurgical Coal Australia Manganese (1) South Africa Manganese (1) Group and unallocated items/ eliminations Group underlying results (1) Revenue from customers 1,626 522 - 2,257 925 280 771 - 927 2,336 833 418 (205) 10,690 Other (2) (1) 2 - (3) (1) (39) (35) - 2 2 15 1 (3) (60) Total underlying revenue 1,625 524 - 2,254 924 241 736 - 929 2,338 848 419 (208) 10,630 Comprising: Group production 818 523 - 2,254 924 241 736 - 929 2,338 848 419 - 10,030 Third party products and services(3) - - - - - - - - - - - - 600 600 Inter-segment revenue 807 1 - - - - - - - - - - (808) - Total underlying revenue 1,625 524 - 2,254 924 241 736 - 929 2,338 848 419 (208) 10,630 Underlying EBITDA 571 150 (43) 730 305 133 388 (12) 529 1,507 488 78 (69) 4,755 Underlying depreciation and amortisation (185) (61) (1) (64) (34) (58) (73) (2) (66) (119) (86) (20) (19) (788) Underlying EBIT 386 89 (44) 666 271 75 315 (14) 463 1,388 402 58 (88) 3,967 Comprising: Group production 386 92 (44) 666 271 76 317 (14) 463 1,396 402 59 (82) 3,988 Exploration expensed - - - - - (1) (2) - - (9) - (1) (26) (39) Third party products and services(3) - - - - - - - - - - - - 20 20 Share of profit/(loss) of equity accounted investments - (3) - - - - - - - 1 - - - (2) Underlying EBIT 386 89 (44) 666 271 75 315 (14) 463 1,388 402 58 (88) 3,967 Underlying net finance costs (155) Underlying income tax expense (1,151) Underlying royalty related tax expense (59) Underlying earnings 2,602 Total adjustments to profit/(loss) (4) 67 Profit/(loss) for the year 2,669 Underlying exploration expenditure - - - - - 2 3 19 - 11 1 1 37 74 Underlying capital expenditure (5) 55 51 1 24 11 81 45 97 37 189 62 19 12 684 Underlying equity accounted investments - 40 - - - - - - - 2 - - - 42 Total underlying assets (6) 3,571 805 67 1,284 764 1,614 555 2,098 592 1,277 645 331 3,666 17, 269 Total underlying liabilities(6) 1,000 109 21 357 149 212 414 67 243 491 387 196 2,844 6,490 (1) The segment information reflects the Group\u2019s interest in material equity accounted joint ventures and is presented on a proportional consolidation basis, which is the measure used by the Group\u2019s management to assess their performance. The Group\u2019s underlying results includes the proportional elimination of revenue and corresponding expenses relating to freight services provided by the Group to material joint ventures of US$187 million and third party product revenue of US$40 million included in Group and unallocated items/eliminations. Refer to note 4(b)(i) Underlying results reconciliation for the joint venture adjustments that reconcile the underlying proportional consolidation to the statutory equity accounting positions included in the Group\u2019s consolidated financial statements. (2) Underlying other revenue relates to fair value movements on provisionally priced contracts. (3) Underlying revenue on third party products and services sold comprises US$110 million for aluminium, US$25 million for alumina, US$115 million for coal, US$40 million for manganese, US$145 million for freight services and US$165 million for raw materials. Underlying EBIT on third party products and services sold comprises US$8 million for aluminium, US$8 million for alumina, US$7 million for coal and US$(3) million for freight services. (4) Represents the total of all adjustments made to Profit from operations, Net finance income/(costs) and Income tax expense. Refer to note 4(b)(i) Underlying results reconciliation for further details. (5) Underlying capital expenditure excludes the purchase of intangibles and capitalised exploration expenditure. (6) Total underlying assets and liabilities for each operating segment represent operating assets and liabilities which predominantly exclude the carrying amount of non-material equity accounted investments, cash, interest bearing liabilities, tax balances and certain other financial assets and liabilities. Mozal Aluminium Sierra Gorda (1) Cannington Hermosa Cerro Matoso Illawarra Metallurgical Coal Australia Manganese (1) South Africa Manganese (1) Group and unallocated items/ eliminations Group underlying results (1) Revenue from customers 1,626 522 - 2,257 925 280 771 - 927 2,336 833 418 (205) 10,690 Other (2) (1) 2 - (3) (1) (39) (35) - 2 2 15 1 (3) (60) Total underlying revenue 1,625 524 - 2,254 924 241 736 - 929 2,338 848 419 (208) 10,630 Comprising: Group production 818 523 - 2,254 924 241 736 - 929 2,338 848 419 - 10,030 Third party products and services (3) - - - - - - - - - - - - 600 600 Inter-segment revenue 807 1 - - - - - - - - - - (808) - Total underlying revenue 1,625 524 - 2,254 924 241 736 - 929 2,338 848 419 (208) 10,630 Underlying EBITDA 571 150 (43) 730 305 133 388 (12) 529 1,507 488 78 (69) 4,755 Underlying depreciation and amortisation (185) (61) (1) (64) (34) (58) (73) (2) (66) (119) (86) (20) (19) (788) Underlying EBIT 386 89 (44) 666 271 75 315 (14) 463 1,388 402 58 (88) 3,967 Comprising: Group production 386 92 (44) 666 271 76 317 (14) 463 1,396 402 59 (82) 3,988 Exploration expensed - - - - - (1) (2) - - (9) - (1) (26) (39) Third party products and services (3) - - - - - - - - - - - - 20 20 Share of profit/(loss) of equity accounted investments - (3) - - - - - - - 1 - - - (2) Underlying EBIT 386 89 (44) 666 271 75 315 (14) 463 1,388 402 58 (88) 3,967 Underlying net finance costs (155) Underlying income tax expense (1,151) Underlying royalty related tax expense (59) Underlying earnings 2,602 Total adjustments to profit/(loss) (4) 67 Profit/(loss) for the year 2,669 Underlying exploration expenditure - - - - - 2 3 19 - 11 1 1 37 74 Underlying capital expenditure (5) 55 51 1 24 11 81 45 97 37 189 62 19 12 684 Underlying equity accounted investments - 40 - - - - - - - 2 - - - 42 Total underlying assets (6) 3,571 805 67 1,284 764 1,614 555 2,098 592 1,277 645 331 3,666 17, 269 Total underlying liabilities (6) 1,000 109 21 357 149 212 414 67 243 491 387 196 2,844 6,490 (i) Underlying results reconciliation The following tables reconcile the underlying segment information to the statutory information included in the Group\u2019s consolidated financial statements: US$M FY23 FY22 Underlying EBIT 1,616 3,967 Significant items (1) 186 77 Sierra Gorda joint venture adjustments (2)(3) (144) (44) Manganese joint venture adjustments (2)(4) (147) (216) Gains on the consolidation of interests in operations (5) - 9 Exchange rate gains/(losses) on restatement of monetary items (6) 62 50 Net impairment (loss)/reversal of financial assets (6)(7) (71) (26) Net impairment (loss)/reversal of non-financial assets (6)(8) (1,300) (145) Gains/(losses) on non-trading derivative instruments, contingent consideration and other investments measured at FVTPL (6) (4) 52 Profit from operations 198 3,724 Underlying net finance costs (188) (155) Sierra Gorda joint venture adjustments (2) 167 62 Manganese joint venture adjustments (2) 28 22 Exchange rate variations on net cash/(debt) 8 40 Net finance income/(costs) 15 (31) Underlying income tax expense (457) (1,151) Underlying royalty related tax expense (55) (59) Tax effect of significant items (1) (23) (26) Sierra Gorda joint venture adjustments relating to income tax expense (2) 11 1 Sierra Gorda joint venture adjustments relating to royalty related tax expense (2) 12 4 Manganese joint venture adjustments relating to income tax expense (2) 85 153 Manganese joint venture adjustments relating to royalty related tax expense (2) 43 55 Tax effect of other adjustments to Underlying EBIT (3) 32 Tax effect of other adjustments to Underlying net finance costs (3) (13) Exchange rate variations on tax balances 4 (20) Income tax expense (386) (1,024) Underlying earnings 916 2,602 Total adjustments to profit/(loss) (1,089) 67 Profit/(loss) for the year (173) 2,669 (1) Refer to note 4(b)(ii) Significant items. (2) The segment information reflects the Group\u2019s interest in material equity accounted joint ventures and is presented on a proportional consolidation basis, which is the measure used by the Group\u2019s management to assess their performance. Joint venture adjustments reconcile the proportional consolidation to the statutory equity accounting positions, recognised in share of profit/(loss) of equity accounted investments in the Consolidated Income Statement. (3) The Group\u2019s investment in the Sierra Gorda operation is represented by the carrying value of an equity accounted investment of US$101 million (FY22: US$30 million) and the carrying value of a purchased credit-impaired receivable of US$1,711 million (FY22: US$1,648 million) classified as a loan to an equity accounted investment within trade and other receivables on the Consolidated Balance Sheet. The earnings adjustments include a revaluation gain of US$71 million (FY22: gain of US$26 million) relating to the shareholder loan payable that was eliminated from the Group\u2019s Underlying EBIT upon proportional consolidation. (4) Includes earnings adjustments of US$(3) million (FY22: US$6 million) included in the Australia Manganese segment and US$12 million (FY22: US$8 million) included in the South Africa Manganese segment. (5) FY22 gain relates to the acquisition of an additional 16.6 per cent shareholding and related rights in Mozal Aluminium, recognised in other income in the Consolidated Income Statement. (6) Recognised in expenses excluding finance costs in the Consolidated Income Statement. (7) Refer to note 19 Financial assets and financial liabilities. (8) Refer to note 13 Impairment of non-financial assets . (i) Underlying results reconciliation continued FY23 US$M Group underlying results Sierra Gorda joint venture adjustments Manganese joint venture adjustments Group statutory results Total revenue 9,050 (684) (937) 7, 429 Depreciation and amortisation 918 (141) (124) 653 Share of profit/(loss) of equity accounted investments 11 71 164 246 Exploration expenditure 107 (7) (2) 98 Capital expenditure 1,069 (196) (83) 790 Equity accounted investments 58 101 340 499 Total assets 15,515 (450) (501) 14,564 Total liabilities 6,140 (450) (501) 5,189 FY22 US$M Group underlying results Sierra Gorda joint venture adjustments Manganese joint venture adjustments Group statutory results Total revenue 10,630 (241) (1,120) 9,269 Depreciation and amortisation 788 (58) (106) 624 Share of profit/(loss) of equity accounted investments (2) 30 244 272 Exploration expenditure 74 (2) (2) 70 Capital expenditure 684 (81) (81) 522 Equity accounted investments 42 30 398 470 Total assets 17, 269 (452) (481) 16,336 Total liabilities 6,490 (452) (481) 5,557 (ii) Significant items Significant items are those items, not separately identified in note 4(b)(i) Underlying results reconciliation, whose nature and amount are considered material to the Group\u2019s consolidated financial statements. FY23 US$M Gross Tax Net Disposal of royalties 189 (56) 133 Assets write-off (51) 16 (35) Tax adjustments relating to the Sierra Gorda acquisition - 17 17 Vendor indemnity relating to the Sierra Gorda acquisition 48 - 48 Total significant items 186 (23) 163 Disposal of royalties On 19 July 2022, the Group divested four royalties to Ecora Resources PLC (formerly known as Anglo Pacific Group PLC) in exchange for consideration comprising an upfront cash payment of US$48 million, deferred cash consideration of US$55 million, US$78 million in equity and a variable consideration receivable valued at US$10 million. The equity in Ecora Resources PLC has been recognised as an investment in equity instruments designated at FVOCI. The variable consideration is payable if certain production and price-linked conditions are met prior to 2032, up to a maximum of US$15 million. The royalties were recognised as intangible assets with a nominal carrying value. On completion the Group recognised other income, net of transaction costs, of US$189 million (US$133 million post-tax) in the Consolidated Income Statement and was included in Group and unallocated items. Assets write-off On 23 August 2022, the Group announced that it would not proceed with an investment in the Dendrobium Next Domain project at Illawarra Metallurgical Coal following its consideration of recently completed study work and extensive analysis of alternatives considered for the complex. As a result of the decision in August 2022, the Group wrote off US$51 million (US$35 million post-tax) of costs previously capitalised in relation to the project which were recognised within expenses excluding finance costs in the Consolidated Income Statement. The write-off related to capitalised exploration and evaluation assets previously included in property, plant and equipment on the Consolidated Balance Sheet. Tax adjustments relating to the Sierra Gorda acquisition During the year, the Group recognised an income tax benefit of US$31 million relating to tax liabilities recognised on the acquisition of Sierra Gorda during FY22. The US$31 million benefit comprises a reassessment of US$17 million and a foreign exchange gain of US$14 million which is separately reported as part of exchange variations of tax balances. The tax adjustments relating to the Sierra Gorda acquisition have been excluded from the Group\u2019s Underlying income tax expense on the basis that they do not relate to assessable income earned during its ownership. Vendor indemnity relating to the Sierra Gorda acquisition On 17 May 2023, Chilean Mining Tax reforms were passed by the Chilean Congress and subsequently enacted in August 2023. As part of the Group\u2019s acquisition of Sierra Gorda during FY22, the Group has the right to claim an indemnity from the vendors for any mining tax changes enacted prior to December 2025. As a result of these changes the Group has recognised other income of US$48 million in the Group\u2019s Consolidated Income Statement and a corresponding receivable of US$48 million from the vendors on the Group\u2019s Consolidated Balance Sheet in relation to the indemnity. FY22 US$M Gross Tax Net Recognition of indirect tax assets 77 (26) 51 Total significant items 77 (26) 51 Recognition of indirect tax assets Following the Group\u2019s decision to participate in the restart of Brazil Aluminium, the Group recognised indirect tax assets of US$77 million that were previously expensed since the smelter was placed on care and maintenance in 2015. The recognition of the indirect tax assets has resulted in a significant one-off amount of US$77 million (US$51 million post-tax) being recognised as other income in the Consolidated Income Statement . (c) Geographical information The geographical information below analyses statutory Group revenue and non-current assets by location. Revenue is primarily presented by the geographical destination of the product and non-current assets are presented by the geographical location of the operations. Revenue from external customers Non-current assets US$M FY23 FY22 FY23 FY22 Australia 765 1,013 5,239 5,099 China 728 776 - - India 304 581 - - Japan 434 523 - - Middle East 326 283 - - Mozambique 346 458 488 497 Netherlands(1) 1,079 1,255 1,604 1,648 Brazil 192 125 765 695 Russia - 44 - - South Africa 495 633 882 933 South Korea 411 692 - - United States of America 419 439 1,193 2,185 Rest of Asia 850 967 100 102 Rest of Europe 776 1,079 1 1 Rest of North America 234 278 1 1 Rest of Oceania 70 92 - - Rest of South America - 31 544 477 Unallocated assets (2) - - 508 458 Total 7, 429 9,269 11,325 12,096 (1) Non-current assets include the non-current portion of the shareholder loan receivable from Sierra Gorda. (2) Comprises other financial assets and deferred tax assets. ", "dimensions": { "concept": "ifrs-full:DisclosureOfEntitysReportableSegmentsExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-485": { "value": "The operating segments (also referred to as operations) are organised and managed separately according to the nature of products produced. The Lead Team (the chief operating decision makers) and the Board of Directors monitor the segment results regularly for the purpose of making decisions about resource allocation and assessing performance The segment information reflects the Group\u2019s interest in subsidiaries and joint operations, as well as material equity accounted joint ventures on a proportional consolidation basis. The segment information includes non-IFRS financial measures. Segment performance is measured by Underlying EBIT and Underlying EBITDA. Underlying EBIT is profit before net finance income/(costs), income tax expense, royalty related tax expense and other earnings adjustment items. Underlying EBITDA is Underlying EBIT before depreciation and amortisation. Reconciliations of the underlying segment information to the statutory information included in the Group\u2019s consolidated financial statements are set out in note 4(b)(i) Underlying results reconciliation, including joint venture adjustments which reconcile the proportional consolidation of the material equity accounted joint ventures back to their statutory equity accounting positions. The Group\u2019s material equity accounted joint ventures are Sierra Gorda, Australia Manganese and South Africa Manganese, refer to note 26 Equity accounted investments. The Group separately discloses sales of group production from sales of third-party products and services because of the significant difference in profit margin earned on these sales. It is the Group\u2019s policy that inter-segment transactions are made on an arm\u2019s length basis. Group and unallocated items/eliminations represent group centre functions and consolidation adjustments. Group financing and income taxes are primarily managed on a Group basis and are not allocated to operating segments. Total assets and liabilities for each operating segment represent operating assets and liabilities which predominantly exclude the carrying amount of non-material equity accounted investments, cash, interest bearing liabilities, tax balances and certain other financial assets and liabilities. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSegmentReportingExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-486": { "value": "Revenue recognition Revenue is measured based on the consideration specified in the contract with a customer and excludes amounts collected on behalf of third parties. Revenue is not reduced for royalties and other taxes payable from Group production. The following is a description of the principal activities from which the Group generates its revenue: Revenue from the sale of commodities The Group primarily sells the following commodities: alumina, aluminium, copper, silver, lead, zinc, ferronickel, metallurgical coal and manganese ore. The sales of these commodities are considered to be performance obligations as they are the contractual promises by the Group to transfer distinct goods to customers. The transaction price allocated to each performance obligation is recognised as the performance obligation is satisfied. Satisfaction occurs when control of the promised commodity is transferred to the customer. For the sale of commodities, revenue is therefore recognised at a point in time, net of treatment and refining charges (where applicable). The majority of the Group\u2019s sales agreements specify that title passes on the bill of lading date (the date the commodity is delivered to the shipping agent) and is assessed to be the point of time in which control over the commodity passes to the customer. For these sales, revenue is recognised on the bill of lading date. For certain sales, title passes and revenue is recognised when the goods have been delivered to the customer. For certain commodities, the sales price is determined on a provisional basis at the date of sale and adjustments to the sales price subsequently occur based on movements in quoted market or contractual prices up to the date of final pricing. The period between provisional invoicing and final pricing is up to 180 days. Revenue on provisionally priced sales is recognised based on the estimated fair value of the total consideration receivable. The revenue adjustment mechanism embedded within provisionally priced sales arrangements has the characteristics of a commodity derivative. Accordingly, the fair value of the final sales price adjustment is re-estimated continuously and changes in fair value are disclosed separately as \u2018other\u2019 revenue. In all cases, fair value is estimated by reference to forward market prices. Revenue from the provision of freight services The Group sells most of its commodities on either Free On Board (FOB) or Cost, Insurance, and Freight (CIF) Incoterms. In the case of CIF Incoterms, the Group is responsible for shipping services after the date at which control of the commodities passes to the customer at the port of loading. The provision of shipping services in these types of arrangements are a distinct service (and therefore a separate performance obligation) to which a portion of the transaction price should be allocated and recognised over time as the shipping services are provided. The Group also provides third party freight services which are recognised as the shipping service is provided. The Group does not separately disclose sales revenue from freight services as it does not consider this necessary in order to understand the impact of economic factors on the Group. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognitionOfRevenue", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-5": { "value": "The Group primarily sells the following commodities: alumina, aluminium, copper, silver, lead, zinc, ferronickel, metallurgical coal and manganese ore. ", "dimensions": { "concept": "ifrs-full:DescriptionOfNatureOfEntitysOperationsAndPrincipalActivities", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-549": { "value": "Significant items are those items, not separately identified in note 4(b)(i) Underlying results reconciliation, whose nature and amount are considered material to the Group\u2019s consolidated financial statements. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForExceptionalItemsExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-461": { "value": "(c) Geographical information The geographical information below analyses statutory Group revenue and non-current assets by location. Revenue is primarily presented by the geographical destination of the product and non-current assets are presented by the geographical location of the operations. Revenue from external customers Non-current assets US$M FY23 FY22 FY23 FY22 Australia 765 1,013 5,239 5,099 China 728 776 - - India 304 581 - - Japan 434 523 - - Middle East 326 283 - - Mozambique 346 458 488 497 Netherlands(1) 1,079 1,255 1,604 1,648 Brazil 192 125 765 695 Russia - 44 - - South Africa 495 633 882 933 South Korea 411 692 - - United States of America 419 439 1,193 2,185 Rest of Asia 850 967 100 102 Rest of Europe 776 1,079 1 1 Rest of North America 234 278 1 1 Rest of Oceania 70 92 - - Rest of South America - 31 544 477 Unallocated assets (2) - - 508 458 Total 7, 429 9,269 11,325 12,096 (1) Non-current assets include the non-current portion of the shareholder loan receivable from Sierra Gorda. (2) Comprises other financial assets and deferred tax assets. ", "dimensions": { "concept": "ifrs-full:DisclosureOfGeographicalAreasExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-462": { "value": "5. Expenses excluding finance costs US$M Note FY23 FY22 Changes in inventories of finished goods and work in progress (60) (133) Raw materials and consumables used 2,761 2,309 Wages, salaries and redundancies 690 657 Pension and other post-retirement obligations 65 60 External services (including transportation) 1,175 1,111 Third party commodity purchases 600 718 Depreciation and amortisation 653 624 Exchange rate (gains)/losses on restatement of monetary items (62) (50) (Gains)/losses on derivative instruments, contingent consideration and other investments measured at FVTPL (6) (29) Government and other royalties paid and payable 286 295 Exploration expenditure incurred and expensed 59 37 Net impairment of financial assets 19 71 26 Net impairment of non-financial assets 13 1,300 145 Short-term, low-value and variable lease rentals 69 77 All other operating expenses 221 153 Total 7,822 6,000 ", "dimensions": { "concept": "ifrs-full:DisclosureOfDepreciationAndAmortisationExpenseExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-429": { "value": "5. Expenses excluding finance costs US$M Note FY23 FY22 Changes in inventories of finished goods and work in progress (60) (133) Raw materials and consumables used 2,761 2,309 Wages, salaries and redundancies 690 657 Pension and other post-retirement obligations 65 60 External services (including transportation) 1,175 1,111 Third party commodity purchases 600 718 Depreciation and amortisation 653 624 Exchange rate (gains)/losses on restatement of monetary items (62) (50) (Gains)/losses on derivative instruments, contingent consideration and other investments measured at FVTPL (6) (29) Government and other royalties paid and payable 286 295 Exploration expenditure incurred and expensed 59 37 Net impairment of financial assets 19 71 26 Net impairment of non-financial assets 13 1,300 145 Short-term, low-value and variable lease rentals 69 77 All other operating expenses 221 153 Total 7,822 6,000 ", "dimensions": { "concept": "ifrs-full:DisclosureOfExpensesExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-477": { "value": "5. Expenses excluding finance costs US$M Note FY23 FY22 Changes in inventories of finished goods and work in progress (60) (133) Raw materials and consumables used 2,761 2,309 Wages, salaries and redundancies 690 657 Pension and other post-retirement obligations 65 60 External services (including transportation) 1,175 1,111 Third party commodity purchases 600 718 Depreciation and amortisation 653 624 Exchange rate (gains)/losses on restatement of monetary items (62) (50) (Gains)/losses on derivative instruments, contingent consideration and other investments measured at FVTPL (6) (29) Government and other royalties paid and payable 286 295 Exploration expenditure incurred and expensed 59 37 Net impairment of financial assets 19 71 26 Net impairment of non-financial assets 13 1,300 145 Short-term, low-value and variable lease rentals 69 77 All other operating expenses 221 153 Total 7,822 6,000 ", "dimensions": { "concept": "ifrs-full:DisclosureOfExpensesByNatureExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-523": { "value": "5. Expenses excluding finance costs US$M Note FY23 FY22 Changes in inventories of finished goods and work in progress (60) (133) Raw materials and consumables used 2,761 2,309 Wages, salaries and redundancies 690 657 Pension and other post-retirement obligations 65 60 External services (including transportation) 1,175 1,111 Third party commodity purchases 600 718 Depreciation and amortisation 653 624 Exchange rate (gains)/losses on restatement of monetary items (62) (50) (Gains)/losses on derivative instruments, contingent consideration and other investments measured at FVTPL (6) (29) Government and other royalties paid and payable 286 295 Exploration expenditure incurred and expensed 59 37 Net impairment of financial assets 19 71 26 Net impairment of non-financial assets 13 1,300 145 Short-term, low-value and variable lease rentals 69 77 All other operating expenses 221 153 Total 7,822 6,000 ", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingExpenseExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-543": { "value": "5. Expenses excluding finance costs US$M Note FY23 FY22 Changes in inventories of finished goods and work in progress (60) (133) Raw materials and consumables used 2,761 2,309 Wages, salaries and redundancies 690 657 Pension and other post-retirement obligations 65 60 External services (including transportation) 1,175 1,111 Third party commodity purchases 600 718 Depreciation and amortisation 653 624 Exchange rate (gains)/losses on restatement of monetary items (62) (50) (Gains)/losses on derivative instruments, contingent consideration and other investments measured at FVTPL (6) (29) Government and other royalties paid and payable 286 295 Exploration expenditure incurred and expensed 59 37 Net impairment of financial assets 19 71 26 Net impairment of non-financial assets 13 1,300 145 Short-term, low-value and variable lease rentals 69 77 All other operating expenses 221 153 Total 7,822 6,000 18. Net finance income/(costs) US$M FY23 FY22 Finance income Interest on loans to equity accounted investments 162 63 Other interest income 60 16 Total finance income 222 79 Finance costs Interest on borrowings (68) (31) Interest on lease liabilities (52) (53) Discounting on provisions and other liabilities (92) (65) Change in discount rate on closure and rehabilitation provisions - 2 Net interest expense on post-retirement employee benefits (3) (3) Exchange rate variations on net cash/(debt) 8 40 Total finance costs (207) (110) Net finance income/(costs) 15 (31 ) ", "dimensions": { "concept": "ifrs-full:DisclosureOfEffectOfChangesInForeignExchangeRatesExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-430": { "value": "6. Tax Income tax expense comprises current and deferred tax and is recognised in the Consolidated Income Statement except to the extent that it relates to items recognised directly in the Consolidated Statement of Comprehensive Income. (a) Income tax expense US$M FY23 FY22 Current income tax (expense)/benefit (476) (1,006) Deferred income tax (expense)/benefit 90 (18) Total income tax expense (386) (1,024) Income tax expense Income tax expense for the period is the tax payable on the current period\u2019s taxable income based on the applicable income tax rate for each jurisdiction adjusted for changes in deferred tax assets and liabilities attributable to temporary differences and unused tax losses. Current and deferred tax is calculated using the tax rates enacted or substantively enacted at period end and includes any adjustment to tax payable in respect of previous years. (b) Reconciliation of prima facie tax expense to income tax expense US$M FY23 FY22 Profit before tax 213 3,693 Deduct: Share of profit/(loss) of equity accounted investments 246 272 Profit/(loss) subject to tax (33) 3,421 Income tax on profit/(loss) calculated at 30 per cent 10 (1,026) Tax rate differential on non-Australian income 1 72 Exchange variations and other translation adjustments 4 (20) Withholding tax on distributed earnings (36) (54) Derecognition of future tax benefits (1) (55) (7) Non-deductible impairment charges (1) (333) - Non-deductible Colombian royalty (24) - Tax adjustments relating to the Sierra Gorda acquisition (2) 31 - Change in tax rates - (3) Prior year adjustments 4 (5) Other 12 19 Total income tax expense (386) (1,024) (1) Primarily relates to the impairment of the Taylor Deposit at Hermosa, which resulted in the Group derecognising US$53 million of deferred tax assets and incurring US$315 million of non-deductible tax expenses. Refer to note 13 Impairment of non-financial assets. (2) Refer to note 4(b)(ii) Significant items. Profit from equity accounted investments has been taxed in companies other than South32 Limited, being the companies whose results are disclosed as equity accounted investments in the consolidated financial statements. Refer to note 26 Equity accounted investments for further details of the Group\u2019s equity accounted investments . (c) Movement in deferred tax balances The composition of the Group\u2019s net deferred tax assets and liabilities recognised in the Consolidated Balance Sheet and the deferred tax expense (charged)/credited to the Consolidated Income Statement is as follows: Deferred tax assets Deferred tax liabilities Deferred tax (charged)/credited to the Consolidated Income Statement US$M FY23 FY22 FY23 FY22 FY23 FY22 Type of temporary difference Depreciation 253 295 261 305 2 (29) Employee benefits 49 49 (12) (11) 1 (3) Closure and rehabilitation 234 208 (59) (51) 34 27 Other provisions - - (13) (13) - (4) Deferred charges (52) (60) - - 8 7 Non tax-depreciable fair value adjustments, revaluations and mineral rights (95) (94) 11 12 - 29 Tax-effected losses 15 6 (54) (7) 57 - Brazil deferral incentive (1) - - 70 64 (6) (8) Leases (1) - (1) (1) (1) (10) Other (13) (10) 7 9 (5) (27) Total 390 394 210 307 90 (18) (1) Our Brazilian subsidiary has received a 75 per cent corporate income tax deferral due to the reinvestment of capital in the North East regions of Brazil. The tax is deferred until earnings are repatriated from Brazil. Deferred tax is provided using the balance sheet liability method, providing for the tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for tax assessment or deduction purposes. The tax effect of certain temporary differences is not recognised, principally with respect to: \u2013 Temporary differences arising on the initial recognition of assets or liabilities (other than those arising in a business combination or in a manner that initially impacted accounting or taxable profit); \u2013 Temporary differences relating to investments and undistributed earnings in subsidiaries, joint ventures and associates to the extent that the Group is able to control its reversal and it is probable that it will not reverse in the foreseeable future; and \u2013 Goodwill. To the extent that an item\u2019s tax base is solely derived from the amount deductible under capital gains tax legislation, deferred tax is determined as if such amounts are not deductible in determining future assessable income. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reviewed at each balance sheet date and amended to the extent that it is no longer probable that the related tax benefit will be realised. Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same tax authority and the Group has both the right and the intention to settle its current tax assets and liabilities on a net or simultaneous basis. (d) Unrecognised deferred tax assets and liabilities The composition of the Group\u2019s unrecognised deferred tax assets and liabilities is as follows: US$M FY23 FY22 Unrecognised deferred tax assets Tax-effected losses (1) 58 21 Mineral rights 617 589 Impairment of investments in subsidiaries 949 945 Closure and rehabilitation 48 50 Depreciable assets 32 8 Other temporary differences 1 - Total unrecognised deferred tax assets 1,705 1,613 Unrecognised deferred tax liabilities Taxable temporary differences associated with investments and undistributed earnings in subsidiaries 33 39 Total unrecognised deferred tax liabilities 33 39 (1) Represents tax losses that have no expiry (e) Tax consolidation South32 Limited and its 100 per cent owned Australian resident subsidiaries have formed a tax consolidated group with effect from 25 May 2015. South32 Limited is the head entity of the tax consolidated group. Members of the group have entered into a tax sharing agreement in order to allocate income tax expense to the wholly-owned subsidiaries on a stand-alone basis. The tax sharing arrangement provides for the allocation of income tax liabilities between the entities should the head entity default on its tax payment obligations. The possibility of such a default is considered remote at the date of this report. Members of the tax consolidated group have also entered into a tax funding agreement. The group has applied its allocation approach in determining the appropriate amount of current taxes to allocate to members of the tax consolidated group. The tax funding agreement provides for each member of the tax consolidated group to pay or receive a tax equivalent amount to or from the head entity in accordance with their notional current tax liability or current tax asset. Such amounts are reflected in amounts receivable from or payable to the head entity in their accounts and are settled as soon as practicable after lodgement of the consolidated return and payment of the tax liability. (f) Future tax developments The Group continues to monitor the Organisation for Economic Co-operation and Development\u2019s Two Pillar Solution in all countries in which the Group operates. Pillar One measures currently apply only to multinational enterprises that have a global turnover exceeding \u20ac20 billion and profitability exceeding 10%, and therefore does not apply to the Group. Pillar Two measures seek to introduce a 15% global minimum tax and will apply to the Group given its annual turnover exceeds the \u20ac750 million threshold. The Group notes that the UK Government has substantively enacted Pillar Two legislation in June 2023 and the Australian Government has committed to enacting the rules, however draft legislation is yet to be released. The Group has adopted the guidance contained in the IASB issued International Tax Reform - Pillar Two Model Rules, which amended IAS 12 Income Taxes, released in May 2023 and applied the mandatory temporary exception to recognise and disclose information about deferred tax assets and liabilities related to Pillar Two income taxes. The Group is currently evaluating the cash tax implications and other impacts of the Pillar Two model rules, and does not expect the impact on the Group to be significant. (g) Tax transparency report More detail of the Group\u2019s tax outcomes, including country-by-country reporting is included in the 2023 Transparency and Payments to Government Report. Key estimates, assumptions and judgements Deferred tax Judgement is required in assessing whether deferred tax assets and certain deferred tax liabilities are recognised in the Consolidated Balance Sheet. Deferred tax assets are recognised only where it is considered more likely than not that they will be recovered, which is dependent on the generation of sufficient future taxable profits. Deferred tax liabilities arising from temporary differences in investments, caused principally by retained earnings held in foreign tax jurisdictions, are recognised unless repatriation of retained earnings can be controlled and are not expected to occur in the foreseeable future. Assumptions about the generation of future taxable profits and repatriation of retained earnings depend on management\u2019s estimates of future cash flows. These depend on estimates of future production and sales volumes, commodity prices, climate change-related impacts, Mineral Resources and Ore Reserves, operating costs, closure and rehabilitation costs, capital expenditure, dividends and other capital management transactions. Uncertain tax matters Judgements are required about the application of the inherently complex income tax legislation in Colombia and Brazil. These judgements are subject to risk and uncertainty, hence there is a possibility that changes in circumstances will alter expectations, which may impact the amount of deferred tax assets and deferred tax liabilities recognised in the Consolidated Balance Sheet and the amount of other tax losses and temporary differences not yet recognised. Where the final tax outcomes are different from the amounts that were initially recorded, these differences impact the current and deferred tax provisions in the period in which the determination is made. Measurement of uncertain tax and royalty matters considers a range of possible outcomes, including assessments received from tax authorities. Where management is of the view that potential liabilities have a low probability of crystallising, or it is not possible to quantify them reliably, they are disclosed as contingent liabilities . ", "dimensions": { "concept": "ifrs-full:DisclosureOfIncomeTaxExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-487": { "value": "Income tax expense Income tax expense for the period is the tax payable on the current period\u2019s taxable income based on the applicable income tax rate for each jurisdiction adjusted for changes in deferred tax assets and liabilities attributable to temporary differences and unused tax losses. Current and deferred tax is calculated using the tax rates enacted or substantively enacted at period end and includes any adjustment to tax payable in respect of previous years. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-463": { "value": "(c) Movement in deferred tax balances The composition of the Group\u2019s net deferred tax assets and liabilities recognised in the Consolidated Balance Sheet and the deferred tax expense (charged)/credited to the Consolidated Income Statement is as follows: Deferred tax assets Deferred tax liabilities Deferred tax (charged)/credited to the Consolidated Income Statement US$M FY23 FY22 FY23 FY22 FY23 FY22 Type of temporary difference Depreciation 253 295 261 305 2 (29) Employee benefits 49 49 (12) (11) 1 (3) Closure and rehabilitation 234 208 (59) (51) 34 27 Other provisions - - (13) (13) - (4) Deferred charges (52) (60) - - 8 7 Non tax-depreciable fair value adjustments, revaluations and mineral rights (95) (94) 11 12 - 29 Tax-effected losses 15 6 (54) (7) 57 - Brazil deferral incentive (1) - - 70 64 (6) (8) Leases (1) - (1) (1) (1) (10) Other (13) (10) 7 9 (5) (27) Total 390 394 210 307 90 (18) (1) Our Brazilian subsidiary has received a 75 per cent corporate income tax deferral due to the reinvestment of capital in the North East regions of Brazil. The tax is deferred until earnings are repatriated from Brazil. Deferred tax is provided using the balance sheet liability method, providing for the tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for tax assessment or deduction purposes. The tax effect of certain temporary differences is not recognised, principally with respect to: \u2013 Temporary differences arising on the initial recognition of assets or liabilities (other than those arising in a business combination or in a manner that initially impacted accounting or taxable profit); \u2013 Temporary differences relating to investments and undistributed earnings in subsidiaries, joint ventures and associates to the extent that the Group is able to control its reversal and it is probable that it will not reverse in the foreseeable future; and \u2013 Goodwill. To the extent that an item\u2019s tax base is solely derived from the amount deductible under capital gains tax legislation, deferred tax is determined as if such amounts are not deductible in determining future assessable income. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reviewed at each balance sheet date and amended to the extent that it is no longer probable that the related tax benefit will be realised. Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same tax authority and the Group has both the right and the intention to settle its current tax assets and liabilities on a net or simultaneous basis. (d) Unrecognised deferred tax assets and liabilities The composition of the Group\u2019s unrecognised deferred tax assets and liabilities is as follows: US$M FY23 FY22 Unrecognised deferred tax assets Tax-effected losses (1) 58 21 Mineral rights 617 589 Impairment of investments in subsidiaries 949 945 Closure and rehabilitation 48 50 Depreciable assets 32 8 Other temporary differences 1 - Total unrecognised deferred tax assets 1,705 1,613 Unrecognised deferred tax liabilities Taxable temporary differences associated with investments and undistributed earnings in subsidiaries 33 39 Total unrecognised deferred tax liabilities 33 39 (1) Represents tax losses that have no expiry . ", "dimensions": { "concept": "ifrs-full:DisclosureOfDeferredTaxesExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-488": { "value": "Deferred tax is provided using the balance sheet liability method, providing for the tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for tax assessment or deduction purposes. The tax effect of certain temporary differences is not recognised, principally with respect to: \u2013 Temporary differences arising on the initial recognition of assets or liabilities (other than those arising in a business combination or in a manner that initially impacted accounting or taxable profit); \u2013 Temporary differences relating to investments and undistributed earnings in subsidiaries, joint ventures and associates to the extent that the Group is able to control its reversal and it is probable that it will not reverse in the foreseeable future; and \u2013 Goodwill. To the extent that an item\u2019s tax base is solely derived from the amount deductible under capital gains tax legislation, deferred tax is determined as if such amounts are not deductible in determining future assessable income. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reviewed at each balance sheet date and amended to the extent that it is no longer probable that the related tax benefit will be realised. Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same tax authority and the Group has both the right and the intention to settle its current tax assets and liabilities on a net or simultaneous basis. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-489": { "value": "Measurement of uncertain tax and royalty matters considers a range of possible outcomes, including assessments received from tax authorities. Where management is of the view that potential liabilities have a low probability of crystallising, or it is not possible to quantify them reliably, they are disclosed as contingent liabilities . ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForContingentLiabilitiesAndContingentAssetsExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-431": { "value": "7. Dividends US$M FY23 FY22 Prior year final dividend (1) 646 163 Prior year special dividend (1) 138 93 Interim dividend (2) 223 404 Total dividends declared and paid during the year 1,007 660 (1) On 25 August 2022, the Directors resolved to pay a fully franked final dividend of US 14.0 cents per share (US$648 million) and a fully franked special dividend of US 3.0 cents per share (US$139 million) in respect of the 2022 financial year. The dividends were paid on 13 October 2022. In addition to the ESOP Trusts receiving dividends from South32 Limited, a total of 9,665,568 shares were bought back between the declaration and the ex-dividend dates, therefore reducing the dividends paid externally to US$784 million. (2) On 16 February 2023, the Directors resolved to pay a fully-franked interim dividend of US 4.9 cents per share (US$224 million) in respect of the 2023 financial half year. The dividend was paid on 6 April 2023. In addition to the ESOP Trusts receiving dividends from South32 Limited, a total of 3,292,746 shares were bought back between the declaration and the ex-dividend dates, therefore reducing the dividend paid externally to US$223 million. Franking account US$M FY23 FY22 Restated (1) Franking credits at the beginning of the year 678 344 Credits arising from tax paid/payable by South32 Limited (2) 243 559 Credits arising from the receipt of franked dividends 68 71 Utilisation of credits arising from the payment of franked dividends (426) (266) Exchange rate variations (25) (30) Total franking credits available at the end of the year (3) 538 678 (1) FY22 comparatives have been restated to allow for foreign exchange rate variations, consistent with current year presentation. (2) Includes the Australian FY23 income tax liability of US$16 million due in December 2023. (3) The payment of the final franked FY23 dividend declared after 30 June 2023 will decrease the franking account balance by US$62 million. Refer to note 31 Subsequent events ", "dimensions": { "concept": "ifrs-full:DisclosureOfDividendsExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-432": { "value": "8. Earnings per share Basic earnings per share (EPS) amounts are calculated based on profit or loss attributable to equity holders of South32 Limited and the weighted average number of shares outstanding during the year. Dilutive EPS amounts are calculated based on profit or loss attributable to equity holders of South32 Limited and the weighted average number of shares outstanding after adjustment for the effects of all dilutive potential shares. The following reflects the profit or loss and share data used in the basic and diluted EPS computations: Profit/(loss) attributable to equity holders US$M FY23 FY22 Profit/(loss) attributable to equity holders of South32 Limited (basic) (173) 2,669 Profit/(loss) attributable to equity holders of South32 Limited (diluted) (173) 2,669 Weighted average number of shares Million FY23 FY22 Basic EPS denominator (1) 4,572 4,647 Shares contingently issuable under employee share ownership plans (2) - 32 Diluted EPS denominator 4,572 4,679 (1) The basic EPS denominator is the aggregate of the weighted average number of shares after deduction of the weighted average number of treasury shares outstanding and shares permanently cancelled through the on-market share buy-back program. (2) The diluted EPS calculation excludes 26,994,090 (FY22: nil) rights which are considered anti-dilutive and are subject to service and performance conditions. Earnings per share US cents FY23 FY22 Basic EPS (3.8) 57.4 Diluted EPS (3.8) 57.0 ", "dimensions": { "concept": "ifrs-full:DisclosureOfEarningsPerShareExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-490": { "value": "Basic earnings per share (EPS) amounts are calculated based on profit or loss attributable to equity holders of South32 Limited and the weighted average number of shares outstanding during the year. Dilutive EPS amounts are calculated based on profit or loss attributable to equity holders of South32 Limited and the weighted average number of shares outstanding after adjustment for the effects of all dilutive potential shares. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEarningsPerShareExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-433": { "value": "9. Trade and other receivables US$M FY23 FY22 Current Trade receivables 395 643 Loans to equity accounted investments (1)(2) 114 7 Other receivables 269 194 Total current trade and other receivables (3) 778 844 Non-current Loans to equity accounted investments (1)(2) 1,790 1,793 Other receivables 133 110 Total non-current trade and other receivables (3) 1,923 1,903 (1) Refer to note 29 Related party transactions. (2) Includes a purchased credit-impaired receivable which is classified as current of US$107 million and non-current of US$1,604 million (FY22: non-current of US$1,648 million). Refer to note 19 Financial assets and financial liabilities. (3) Net of allowances for expected credit losses of US$2 million (FY22: US$2 million). Trade receivables generally have terms of up to 30 days. Trade and other receivables which are not held at FVTPL are recognised initially at fair value and subsequently at amortised cost using the effective interest method, less an allowance for expected credit losses . ", "dimensions": { "concept": "ifrs-full:DisclosureOfTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-464": { "value": "(3) Net of allowances for expected credit losses of US$2 million (FY22: US$2 million). ", "dimensions": { "concept": "ifrs-full:DisclosureOfAllowanceForCreditLossesExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-491": { "value": "Trade receivables generally have terms of up to 30 days. Trade and other receivables which are not held at FVTPL are recognised initially at fair value and subsequently at amortised cost using the effective interest method, less an allowance for expected credit losses . ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-434": { "value": "10. Inventories US$M FY23 FY22 Current Raw materials and consumables 519 455 Work in progress 333 338 Finished goods 250 189 Total current inventories 1,102 982 Non-current Raw materials and consumables 57 55 Work in progress 25 21 Total non-current inventories 82 76 The value of inventories carried at net realisable value as at 30 June 2023 was US$222 million (FY22: US$31 million). Inventory write- downs of US$18 million (FY22: US$17 million) were recognised in the year. Inventories are valued at the lower of cost and net realisable value. Cost is determined primarily on the basis of average cost. For processed inventories, cost is derived on an absorption costing basis. Cost comprises the cost of purchasing raw materials and the cost of production, including attributable overheads. ", "dimensions": { "concept": "ifrs-full:DisclosureOfInventoriesExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-492": { "value": "Inventories are valued at the lower of cost and net realisable value. Cost is determined primarily on the basis of average cost. For processed inventories, cost is derived on an absorption costing basis. Cost comprises the cost of purchasing raw materials and the cost of production, including attributable overheads. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForMeasuringInventories", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-478": { "value": "11. Property, plant and equipment Land and buildings Plant and equipment FY23 US$M Right-of-use assets Owned assets Right-of-use assets Owned assets Other mineral assets Assets under construction Exploration and evaluation Total Cost At the beginning of the year 37 2,352 943 13,204 4,547 815 212 22,110 Additions 6 - 91 133 - 815 84 1,129 Foreign exchange movements in closure and rehabilitation provisions (1) - - - (68) - - - (68) Disposals - (3) - (112) (140) - (51) (306) Transfers and other movements - 64 17 251 63 (395) - - At the end of the year 43 2,413 1,051 13,408 4,470 1,235 245 22,865 Accumulated depreciation and impairments At the beginning of the year 15 1,438 316 9,239 2,050 51 13 13,122 Depreciation 3 78 64 402 94 - - 641 Net impairments(2) - - - - 1,049 119 132 1,300 Disposals - - - (108) (140) - - (248) At the end of the year 18 1,516 380 9,533 3,053 170 145 14,815 Net book value at 30 June 2023 (3) 25 897 671 3,875 1,417 1,065 100 8,050 (1) Refer to note 15 Provisions. (2) Refer to note 13 Impairment of non-financial assets. (3) Includes US$98 million of land and buildings, US$37 million of plant and equipment, US$580 million of other mineral assets, US$328 million of assets under construction and US$51 million of exploration and evaluation expenditure that relates to the Hermosa project. Capital expenditure commitments as at 30 June 2023 were US$193 million (FY22: US$114 million). Land and buildings Plant and equipment FY22 US$M Right-of-use assets Owned assets Right-of-use assets Owned assets Other mineral assets Assets under construction Exploration and evaluation Total Cost At the beginning of the year 50 2,299 906 13,061 4,468 594 153 21,531 Additions 9 - 57 152 - 547 59 824 Acquisition of subsidiaries and joint operations (1) - 22 1 95 - 5 - 123 Foreign exchange movements in closure and rehabilitation provisions (2) - - - (127) - - - (127) Disposals (22) (2) (21) (171) (25) - - (241) Transfers and other movements - 33 - 194 104 (331) - - At the end of the year 37 2,352 943 13,204 4,547 815 212 22,110 Accumulated depreciation and impairments At the beginning of the year 28 1,396 274 9,001 1,894 - - 12,593 Depreciation 7 67 51 415 79 - - 619 Net impairments(3) - (15) 7 (17) 102 51 13 141 Disposals (20) (2) (17) (167) (25) - - (231) Transfers and other movements - (8) 1 7 - - - - At the end of the year 15 1,438 316 9,239 2,050 51 13 13,122 Net book value at 30 June 2022 (4) 22 914 627 3,965 2,497 764 199 8,988 (1) Relates to the acquisition of an additional 16.6 per cent shareholding and related rights in Mozal Aluminium in FY22. (2) Refer to note 15 Provisions. (3) Refer to note 13 Impairment of non-financial assets. (4) Includes US$77 million of land and buildings, US$37 million of plant and equipment, US$1,629 million of other mineral assets, US$230 million of assets under construction and US$122 million of exploration and evaluation related expenditure that relates to the Hermosa project 17. Interest bearing liabilities US$M FY23 FY22 Current Lease liabilities 51 40 Unsecured loans from equity accounted investments (1) 287 335 Unsecured other 27 27 Total current interest bearing liabilities 365 402 Non-current Lease liabilities 623 610 Senior unsecured notes 690 689 Unsecured other 63 126 Total non-current interest bearing liabilities 1,376 1,425 (1) Refer to note 16 Cash and cash equivalents and note 29 Related party transactions A reconciliation of movements in interest bearing liabilities to cash flows arising from financing activities is set out below: FY23 US$M Lease liabilities Other interest bearing liabilities Total interest bearing liabilities At the beginning of the year 650 1,177 1,827 Cash movements: Repayment of interest bearing liabilities (46) (87) (133) Interest paid (52) (57) (109) Non-cash movements: Interest expense 52 59 111 Net increase/(decrease) in interest bearing liabilities (1) 93 (41) 52 Effect of foreign exchange rate changes (23) 16 (7) At the end of the year 674 1,067 1,741 (1) The non-cash decrease in other interest bearing liabilities relates to an agreement with a subsidiary of Seriti Resources Holdings Pty Ltd (Seriti) to settle the vendor loan facility, previously recognised within other financial assets, against the related rehabilitation fund liability. Both facilities were originally provided to Seriti as part of the divestment of South Africa Energy Coal. Refer to note 19(a)(iv) Measurement of fair value. FY22 US$M Lease liabilities Other interest bearing liabilities Total interest bearing liabilities At the beginning of the year 687 520 1,207 Cash movements: Proceeds from interest bearing liabilities - 1,527 1,527 Repayment of interest bearing liabilities (46) (886) (932) Interest paid (53) (17) (70) Non-cash movements: Interest expense 53 24 77 Net increase/(decrease) in interest bearing liabilities 66 - 66 Effect of foreign exchange rate changes (57) 9 (48) At the end of the year 650 1,177 1,827 ", "dimensions": { "concept": "ifrs-full:DisclosureOfLeasesExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-465": { "value": "11. Property, plant and equipment Land and buildings Plant and equipment FY23 US$M Right-of-use assets Owned assets Right-of-use assets Owned assets Other mineral assets Assets under construction Exploration and evaluation Total Cost At the beginning of the year 37 2,352 943 13,204 4,547 815 212 22,110 Additions 6 - 91 133 - 815 84 1,129 Foreign exchange movements in closure and rehabilitation provisions (1) - - - (68) - - - (68) Disposals - (3) - (112) (140) - (51) (306) Transfers and other movements - 64 17 251 63 (395) - - At the end of the year 43 2,413 1,051 13,408 4,470 1,235 245 22,865 Accumulated depreciation and impairments At the beginning of the year 15 1,438 316 9,239 2,050 51 13 13,122 Depreciation 3 78 64 402 94 - - 641 Net impairments(2) - - - - 1,049 119 132 1,300 Disposals - - - (108) (140) - - (248) At the end of the year 18 1,516 380 9,533 3,053 170 145 14,815 Net book value at 30 June 2023 (3) 25 897 671 3,875 1,417 1,065 100 8,050 (1) Refer to note 15 Provisions. (2) Refer to note 13 Impairment of non-financial assets. (3) Includes US$98 million of land and buildings, US$37 million of plant and equipment, US$580 million of other mineral assets, US$328 million of assets under construction and US$51 million of exploration and evaluation expenditure that relates to the Hermosa project. Capital expenditure commitments as at 30 June 2023 were US$193 million (FY22: US$114 million). Land and buildings Plant and equipment FY22 US$M Right-of-use assets Owned assets Right-of-use assets Owned assets Other mineral assets Assets under construction Exploration and evaluation Total Cost At the beginning of the year 50 2,299 906 13,061 4,468 594 153 21,531 Additions 9 - 57 152 - 547 59 824 Acquisition of subsidiaries and joint operations (1) - 22 1 95 - 5 - 123 Foreign exchange movements in closure and rehabilitation provisions (2) - - - (127) - - - (127) Disposals (22) (2) (21) (171) (25) - - (241) Transfers and other movements - 33 - 194 104 (331) - - At the end of the year 37 2,352 943 13,204 4,547 815 212 22,110 Accumulated depreciation and impairments At the beginning of the year 28 1,396 274 9,001 1,894 - - 12,593 Depreciation 7 67 51 415 79 - - 619 Net impairments(3) - (15) 7 (17) 102 51 13 141 Disposals (20) (2) (17) (167) (25) - - (231) Transfers and other movements - (8) 1 7 - - - - At the end of the year 15 1,438 316 9,239 2,050 51 13 13,122 Net book value at 30 June 2022 (4) 22 914 627 3,965 2,497 764 199 8,988 (1) Relates to the acquisition of an additional 16.6 per cent shareholding and related rights in Mozal Aluminium in FY22. (2) Refer to note 15 Provisions. (3) Refer to note 13 Impairment of non-financial assets. (4) Includes US$77 million of land and buildings, US$37 million of plant and equipment, US$1,629 million of other mineral assets, US$230 million of assets under construction and US$122 million of exploration and evaluation related expenditure that relates to the Hermosa project ", "dimensions": { "concept": "ifrs-full:DisclosureOfExplorationAndEvaluationAssetsExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-435": { "value": "11. Property, plant and equipment Land and buildings Plant and equipment FY23 US$M Right-of-use assets Owned assets Right-of-use assets Owned assets Other mineral assets Assets under construction Exploration and evaluation Total Cost At the beginning of the year 37 2,352 943 13,204 4,547 815 212 22,110 Additions 6 - 91 133 - 815 84 1,129 Foreign exchange movements in closure and rehabilitation provisions (1) - - - (68) - - - (68) Disposals - (3) - (112) (140) - (51) (306) Transfers and other movements - 64 17 251 63 (395) - - At the end of the year 43 2,413 1,051 13,408 4,470 1,235 245 22,865 Accumulated depreciation and impairments At the beginning of the year 15 1,438 316 9,239 2,050 51 13 13,122 Depreciation 3 78 64 402 94 - - 641 Net impairments(2) - - - - 1,049 119 132 1,300 Disposals - - - (108) (140) - - (248) At the end of the year 18 1,516 380 9,533 3,053 170 145 14,815 Net book value at 30 June 2023 (3) 25 897 671 3,875 1,417 1,065 100 8,050 (1) Refer to note 15 Provisions. (2) Refer to note 13 Impairment of non-financial assets. (3) Includes US$98 million of land and buildings, US$37 million of plant and equipment, US$580 million of other mineral assets, US$328 million of assets under construction and US$51 million of exploration and evaluation expenditure that relates to the Hermosa project. Capital expenditure commitments as at 30 June 2023 were US$193 million (FY22: US$114 million). Land and buildings Plant and equipment FY22 US$M Right-of-use assets Owned assets Right-of-use assets Owned assets Other mineral assets Assets under construction Exploration and evaluation Total Cost At the beginning of the year 50 2,299 906 13,061 4,468 594 153 21,531 Additions 9 - 57 152 - 547 59 824 Acquisition of subsidiaries and joint operations (1) - 22 1 95 - 5 - 123 Foreign exchange movements in closure and rehabilitation provisions (2) - - - (127) - - - (127) Disposals (22) (2) (21) (171) (25) - - (241) Transfers and other movements - 33 - 194 104 (331) - - At the end of the year 37 2,352 943 13,204 4,547 815 212 22,110 Accumulated depreciation and impairments At the beginning of the year 28 1,396 274 9,001 1,894 - - 12,593 Depreciation 7 67 51 415 79 - - 619 Net impairments(3) - (15) 7 (17) 102 51 13 141 Disposals (20) (2) (17) (167) (25) - - (231) Transfers and other movements - (8) 1 7 - - - - At the end of the year 15 1,438 316 9,239 2,050 51 13 13,122 Net book value at 30 June 2022 (4) 22 914 627 3,965 2,497 764 199 8,988 (1) Relates to the acquisition of an additional 16.6 per cent shareholding and related rights in Mozal Aluminium in FY22. (2) Refer to note 15 Provisions. (3) Refer to note 13 Impairment of non-financial assets. (4) Includes US$77 million of land and buildings, US$37 million of plant and equipment, US$1,629 million of other mineral assets, US$230 million of assets under construction and US$122 million of exploration and evaluation related expenditure that relates to the Hermosa project . (a) Property, plant and equipment Property, plant and equipment is held at cost less accumulated depreciation and impairment charges. Cost is the fair value of consideration given to acquire the asset at the time of its acquisition or construction and includes the direct cost of bringing the asset to the location and condition necessary for operation and its estimated future cost of closure and rehabilitation. (b) Assets under construction When Ore Reserves are estimated and development of commercial production is approved, capitalised exploration and evaluation expenditure is reclassified to assets under construction. All subsequent development expenditure is capitalised and classified as assets under construction, provided commercial viability conditions continue to be satisfied. All assets included in assets under construction are reclassified to other categories in property, plant and equipment when the asset is available and ready for use in the location and condition necessary for it to be capable of operating in the manner intended . (c) Exploration and evaluation expenditure Exploration is defined as the search for potential mineralisation after the Group has obtained legal rights to explore in a specific area and includes topographical, geological, geochemical and geophysical studies and exploratory drilling, trenching and sampling. Evaluation is defined as the determination of the technical feasibility and commercial viability of a particular prospect. Activities conducted during the evaluation phase include the determination of the tonnage and grade and/or quality of the deposit, examination and testing of extraction methods and metallurgical or treatment process, surveys of transportation and infrastructure requirements, and market and finance studies. Exploration and evaluation expenditure (including amortisation of capitalised licence and lease costs) is charged to the Consolidated Income Statement as incurred except in the following circumstances, in which case the expenditure may be capitalised: \u2013 The existence of a commercially viable mineral deposit has been established as a result of a reasonable prospect for the eventual economic extraction; or \u2013 The exploration and evaluation activity is within an area of interest which was previously acquired as an asset acquisition or in a business combination and was measured at fair value on acquisition. In addition, drilling costs incurred at a producing mine for the purpose of improving confidence of the existing resource may be capitalised when the following criteria are satisfied: \u2013 The drilling occurs within the existing physical boundaries of the area defined as the resource; and \u2013 The drilling costs are incurred in resources which are economically recoverable. Capitalised exploration and evaluation expenditure considered to be a tangible asset is recognised as a component of property, plant and equipment at cost less impairment charges. Otherwise, it is recognised as an intangible asset (such as certain licence and lease arrangements). In determining whether the purchase of an exploration licence or lease is an intangible asset or a component of property, plant and equipment, consideration is given to the substance of the item acquired and not its legal form. Licences or leases purchased which allow exploration over an extended period of time meet the definition of an intangible exploration lease asset where they cannot be reasonably associated with a known Mineral Resource. (d) Other mineral assets Other mineral assets comprise: \u2013 Capitalised exploration and evaluation expenditure for areas now in production; \u2013 Development expenditure for areas now in production; and \u2013 Mineral rights acquired. In underground mines, when production and development activity occur concurrently, development activity is separated from production activity, and is capitalised as development expenditure in other mineral assets. Underground mine development activity includes the cost associated with gaining access to an ore deposit which gives rise to a substantive change in the future productive capacity of the mine (e) Leases At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Group recognises a right-of-use (ROU) asset and a lease liability at the lease commencement date. The ROU asset is initially measured at cost, which comprises the initial amount of the lease liability, plus any initial direct costs incurred and estimated future cost of closure or rehabilitation, less any lease incentives received. The ROU asset is subsequently measured at cost less accumulated depreciation, impairment and any adjustments for remeasurement of the lease liability. The corresponding lease liability is included within interest bearing liabilities. The lease liability is initially measured based on the value of lease payments not yet paid at the commencement date, discounted to present value using the interest rate implicit in the lease or, if that rate cannot be readily determined, the lessee\u2019s incremental borrowing rate. The lessee\u2019s incremental borrowing rate is the rate of interest that a lessee would have to pay to borrow over a similar term, and with similar security, the funds necessary to obtain an asset of a similar value to the ROU asset in a similar economic environment. The lease liability is subsequently measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in a rate or an index or if the Group changes its assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured, a corresponding adjustment is made to the carrying amount of the ROU asset, or is recognised in the Consolidated Income Statement if the carrying amount of the ROU asset has been reduced to nil. The nature of the Group\u2019s leases predominantly relates to mining equipment and assets supporting the operations in line with the Group\u2019s principal activities. Leased assets are pledged as security for the related lease liabilities. Short-term, low-value and variable leases The Group has elected not to recognise ROU assets and lease liabilities for short-term and low-value leases. Short-term leases are leases with a lease term of 12 months or less, while low-value leases are leases where the underlying asset is considered low value. Variable leases are leases with lease payments which are variable but do not depend on a rate or an index. The Group recognises the lease payments associated with these leases as an expense in the Consolidated Income Statement on a straight-line basis over the lease term. If variable leases have a fixed component, these would be recognised in the Consolidated Balance Sheet. Total cash outflows for lease obligations consist of US$98 million (FY22: US$99 million) for lease liabilities recognised in the Consolidated Balance Sheet and US$69 million (FY22: US$77 million) for short-term, low-value and variable leases recognised in the Consolidated Income Statement. (f) Depreciation and amortisation The carrying amounts of property, plant and equipment are depreciated to their estimated residual values over the estimated useful lives of the specific assets concerned. Estimates of residual values and useful lives are reassessed annually and any change in estimate is taken into account in the determination of remaining depreciation charges. Depreciation commences on the date of commissioning. The major categories of property, plant and equipment are depreciated on a units of production or straight-line basis using the estimated lives indicated below. However, where assets are dedicated to an operation or lease and are not readily transferable, the below useful lives are subject to the lesser of the asset category\u2019s useful life and the life of the operation or lease. Category Useful life Buildings 25 to 40 years straight-line Land not depreciated Plant and equipment 3 to 30 years straight-line ROU assets based on the shorter of the useful life or the lease term (straight-line) Mineral rights based on Ore Reserves on a units of production basis Capitalised exploration, evaluation and development expenditure based on Ore Reserves on a units of production basis Key estimates, assumptions and judgements Useful economic lives of assets The useful lives of our property, plant and equipment are often dependent, either directly or indirectly, on the reserve life of the orebody to which they relate. Changes in economic assumptions used to estimate Ore Reserves and/or the timing of closure of operations, including the Group\u2019s expectations with respect to climate change-related risks, may impact the estimated useful lives of the specific assets concerned. Refer to note 2(c) Key estimates, assumptions and judgements for further details regarding climate change-related risks and opportunities, and Mineral Resources and Ore Reserves as sources of estimation uncertainty . ", "dimensions": { "concept": "ifrs-full:DisclosureOfPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-532": { "value": "Capital expenditure commitments as at 30 June 2023 were US$193 million (FY22: US$114 million). 24. Contingent assets and liabilities Contingent assets and liabilities not otherwise provided for in the consolidated financial statements are categorised as arising from: US$M FY23 FY22 Actual or potential litigation 519 427 Total contingent liabilities 519 427 Actual or potential litigation 143 156 Total contingent assets 143 156 Actual or potential litigation liabilities primarily relate to numerous tax assessments or matters relating to transactions in prior years in Colombia and Brazil. There are a number of legal claims or potential claims against the Group, the outcome of which cannot be foreseen at present, and for which no amounts have been disclosed. Actual or potential litigation assets primarily relate to potential recovery of pre-closing tax liabilities in respect of the Sierra Gorda acquisition, with allocation of liability for these pre-closing tax liabilities being disputed with the vendors. The Group has entered into various counter-indemnities of bank and performance guarantees related to its own future performance which are in the normal course of business. Additionally, the Group has provided indemnities against certain liabilities as part of agreements for the disposal of business operations. Having taken appropriate legal advice, the Group believes that a material liability arising from the indemnities provided is remote. ", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsAndContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-524": { "value": "Capital expenditure commitments as at 30 June 2023 were US$193 million (FY22: US$114 million).", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-493": { "value": "(a) Property, plant and equipment Property, plant and equipment is held at cost less accumulated depreciation and impairment charges. Cost is the fair value of consideration given to acquire the asset at the time of its acquisition or construction and includes the direct cost of bringing the asset to the location and condition necessary for operation and its estimated future cost of closure and rehabilitation. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-494": { "value": "(b) Assets under construction When Ore Reserves are estimated and development of commercial production is approved, capitalised exploration and evaluation expenditure is reclassified to assets under construction. All subsequent development expenditure is capitalised and classified as assets under construction, provided commercial viability conditions continue to be satisfied. All assets included in assets under construction are reclassified to other categories in property, plant and equipment when the asset is available and ready for use in the location and condition necessary for it to be capable of operating in the manner intended ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForConstructionInProgressExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-495": { "value": "(c) Exploration and evaluation expenditure Exploration is defined as the search for potential mineralisation after the Group has obtained legal rights to explore in a specific area and includes topographical, geological, geochemical and geophysical studies and exploratory drilling, trenching and sampling. Evaluation is defined as the determination of the technical feasibility and commercial viability of a particular prospect. Activities conducted during the evaluation phase include the determination of the tonnage and grade and/or quality of the deposit, examination and testing of extraction methods and metallurgical or treatment process, surveys of transportation and infrastructure requirements, and market and finance studies. Exploration and evaluation expenditure (including amortisation of capitalised licence and lease costs) is charged to the Consolidated Income Statement as incurred except in the following circumstances, in which case the expenditure may be capitalised: \u2013 The existence of a commercially viable mineral deposit has been established as a result of a reasonable prospect for the eventual economic extraction; or \u2013 The exploration and evaluation activity is within an area of interest which was previously acquired as an asset acquisition or in a business combination and was measured at fair value on acquisition. In addition, drilling costs incurred at a producing mine for the purpose of improving confidence of the existing resource may be capitalised when the following criteria are satisfied: \u2013 The drilling occurs within the existing physical boundaries of the area defined as the resource; and \u2013 The drilling costs are incurred in resources which are economically recoverable. Capitalised exploration and evaluation expenditure considered to be a tangible asset is recognised as a component of property, plant and equipment at cost less impairment charges. Otherwise, it is recognised as an intangible asset (such as certain licence and lease arrangements). In determining whether the purchase of an exploration licence or lease is an intangible asset or a component of property, plant and equipment, consideration is given to the substance of the item acquired and not its legal form. Licences or leases purchased which allow exploration over an extended period of time meet the definition of an intangible exploration lease asset where they cannot be reasonably associated with a known Mineral Resource. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForExplorationAndEvaluationExpenditures", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-496": { "value": "(d) Other mineral assets Other mineral assets comprise: \u2013 Capitalised exploration and evaluation expenditure for areas now in production; \u2013 Development expenditure for areas now in production; and \u2013 Mineral rights acquired. In underground mines, when production and development activity occur concurrently, development activity is separated from production activity, and is capitalised as development expenditure in other mineral assets. Underground mine development activity includes the cost associated with gaining access to an ore deposit which gives rise to a substantive change in the future productive capacity of the mine ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForMiningAssetsExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-497": { "value": "(e) Leases At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Group recognises a right-of-use (ROU) asset and a lease liability at the lease commencement date. The ROU asset is initially measured at cost, which comprises the initial amount of the lease liability, plus any initial direct costs incurred and estimated future cost of closure or rehabilitation, less any lease incentives received. The ROU asset is subsequently measured at cost less accumulated depreciation, impairment and any adjustments for remeasurement of the lease liability. The corresponding lease liability is included within interest bearing liabilities. The lease liability is initially measured based on the value of lease payments not yet paid at the commencement date, discounted to present value using the interest rate implicit in the lease or, if that rate cannot be readily determined, the lessee\u2019s incremental borrowing rate. The lessee\u2019s incremental borrowing rate is the rate of interest that a lessee would have to pay to borrow over a similar term, and with similar security, the funds necessary to obtain an asset of a similar value to the ROU asset in a similar economic environment. The lease liability is subsequently measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in a rate or an index or if the Group changes its assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured, a corresponding adjustment is made to the carrying amount of the ROU asset, or is recognised in the Consolidated Income Statement if the carrying amount of the ROU asset has been reduced to nil. The nature of the Group\u2019s leases predominantly relates to mining equipment and assets supporting the operations in line with the Group\u2019s principal activities. Leased assets are pledged as security for the related lease liabilities. Short-term, low-value and variable leases The Group has elected not to recognise ROU assets and lease liabilities for short-term and low-value leases. Short-term leases are leases with a lease term of 12 months or less, while low-value leases are leases where the underlying asset is considered low value. Variable leases are leases with lease payments which are variable but do not depend on a rate or an index. The Group recognises the lease payments associated with these leases as an expense in the Consolidated Income Statement on a straight-line basis over the lease term. If variable leases have a fixed component, these would be recognised in the Consolidated Balance Sheet. Total cash outflows for lease obligations consist of US$98 million (FY22: US$99 million) for lease liabilities recognised in the Consolidated Balance Sheet and US$69 million (FY22: US$77 million) for short-term, low-value and variable leases recognised in the Consolidated Income Statement. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-498": { "value": "(f) Depreciation and amortisation The carrying amounts of property, plant and equipment are depreciated to their estimated residual values over the estimated useful lives of the specific assets concerned. Estimates of residual values and useful lives are reassessed annually and any change in estimate is taken into account in the determination of remaining depreciation charges. Depreciation commences on the date of commissioning. The major categories of property, plant and equipment are depreciated on a units of production or straight-line basis using the estimated lives indicated below. However, where assets are dedicated to an operation or lease and are not readily transferable, the below useful lives are subject to the lesser of the asset category\u2019s useful life and the life of the operation or lease. Category Useful life Buildings 25 to 40 years straight-line Land not depreciated Plant and equipment 3 to 30 years straight-line ROU assets based on the shorter of the useful life or the lease term (straight-line) Mineral rights based on Ore Reserves on a units of production basis Capitalised exploration, evaluation and development expenditure based on Ore Reserves on a units of production basis ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDepreciationExpenseExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-479": { "value": "12. Intangible assets FY23 US$M Goodwill Other intangibles Total Cost At the beginning of the year 139 284 423 Additions - 69 69 Disposals - (25) (25) At the end of the year 139 328 467 Accumulated amortisation and impairments At the beginning of the year - 237 237 Amortisation charge for the year - 13 13 Disposals - (25) (25) At the end of the year - 225 225 Net book value at 30 June 2023 139 103 242 FY22 US$M Goodwill Other intangibles Total Cost At the beginning of the year 139 278 417 Additions - 4 4 Acquisition of subsidiaries and joint operations(1) - 2 2 At the end of the year 139 284 423 Accumulated amortisation and impairments At the beginning of the year - 228 228 Amortisation charge for the year - 5 5 Impairments for the year - 4 4 At the end of the year - 237 237 Net book value at 30 June 2022 139 47 186 (1) Relates to the acquisition of an additional 16.6 per cent shareholding and related rights in Mozal Aluminium in FY22. (a) Goodwill Where the fair value of consideration paid for a business combination exceeds the fair value of the Group\u2019s share of the identifiable net assets acquired, the difference is treated as purchased goodwill. Where the fair value of the Group\u2019s share of the identifiable net assets acquired exceeds the fair value of consideration paid, the difference is immediately recognised in the Consolidated Income Statement. Goodwill is not amortised, however, its carrying amount is assessed annually against its recoverable amount. (b) Other intangible assets Amounts paid for the acquisition of identifiable intangible assets, such as software, licences and contract based intangible assets are capitalised at the fair value of consideration paid and are recognised at cost less accumulated amortisation and impairment charges. Identifiable intangible assets with a finite life are amortised on a straight-line basis over their expected useful life from when the asset is ready for use. The useful lives are as follows: Category Useful life Software and licences 5 years Contract based intangible assets up to 35 years The Group has no identifiable intangible assets for which the expected useful life is indefinite ", "dimensions": { "concept": "ifrs-full:DisclosureOfGoodwillExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-466": { "value": "12. Intangible assets FY23 US$M Goodwill Other intangibles Total Cost At the beginning of the year 139 284 423 Additions - 69 69 Disposals - (25) (25) At the end of the year 139 328 467 Accumulated amortisation and impairments At the beginning of the year - 237 237 Amortisation charge for the year - 13 13 Disposals - (25) (25) At the end of the year - 225 225 Net book value at 30 June 2023 139 103 242 FY22 US$M Goodwill Other intangibles Total Cost At the beginning of the year 139 278 417 Additions - 4 4 Acquisition of subsidiaries and joint operations(1) - 2 2 At the end of the year 139 284 423 Accumulated amortisation and impairments At the beginning of the year - 228 228 Amortisation charge for the year - 5 5 Impairments for the year - 4 4 At the end of the year - 237 237 Net book value at 30 June 2022 139 47 186 (1) Relates to the acquisition of an additional 16.6 per cent shareholding and related rights in Mozal Aluminium in FY22. (a) Goodwill Where the fair value of consideration paid for a business combination exceeds the fair value of the Group\u2019s share of the identifiable net assets acquired, the difference is treated as purchased goodwill. Where the fair value of the Group\u2019s share of the identifiable net assets acquired exceeds the fair value of consideration paid, the difference is immediately recognised in the Consolidated Income Statement. Goodwill is not amortised, however, its carrying amount is assessed annually against its recoverable amount. (b) Other intangible assets Amounts paid for the acquisition of identifiable intangible assets, such as software, licences and contract based intangible assets are capitalised at the fair value of consideration paid and are recognised at cost less accumulated amortisation and impairment charges. Identifiable intangible assets with a finite life are amortised on a straight-line basis over their expected useful life from when the asset is ready for use. The useful lives are as follows: Category Useful life Software and licences 5 years Contract based intangible assets up to 35 years The Group has no identifiable intangible assets for which the expected useful life is indefinite ", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-436": { "value": "12. Intangible assets FY23 US$M Goodwill Other intangibles Total Cost At the beginning of the year 139 284 423 Additions - 69 69 Disposals - (25) (25) At the end of the year 139 328 467 Accumulated amortisation and impairments At the beginning of the year - 237 237 Amortisation charge for the year - 13 13 Disposals - (25) (25) At the end of the year - 225 225 Net book value at 30 June 2023 139 103 242 FY22 US$M Goodwill Other intangibles Total Cost At the beginning of the year 139 278 417 Additions - 4 4 Acquisition of subsidiaries and joint operations(1) - 2 2 At the end of the year 139 284 423 Accumulated amortisation and impairments At the beginning of the year - 228 228 Amortisation charge for the year - 5 5 Impairments for the year - 4 4 At the end of the year - 237 237 Net book value at 30 June 2022 139 47 186 (1) Relates to the acquisition of an additional 16.6 per cent shareholding and related rights in Mozal Aluminium in FY22. (a) Goodwill Where the fair value of consideration paid for a business combination exceeds the fair value of the Group\u2019s share of the identifiable net assets acquired, the difference is treated as purchased goodwill. Where the fair value of the Group\u2019s share of the identifiable net assets acquired exceeds the fair value of consideration paid, the difference is immediately recognised in the Consolidated Income Statement. Goodwill is not amortised, however, its carrying amount is assessed annually against its recoverable amount. (b) Other intangible assets Amounts paid for the acquisition of identifiable intangible assets, such as software, licences and contract based intangible assets are capitalised at the fair value of consideration paid and are recognised at cost less accumulated amortisation and impairment charges. Identifiable intangible assets with a finite life are amortised on a straight-line basis over their expected useful life from when the asset is ready for use. The useful lives are as follows: Category Useful life Software and licences 5 years Contract based intangible assets up to 35 years The Group has no identifiable intangible assets for which the expected useful life is indefinite . ", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-515": { "value": "(a) Goodwill Where the fair value of consideration paid for a business combination exceeds the fair value of the Group\u2019s share of the identifiable net assets acquired, the difference is treated as purchased goodwill. Where the fair value of the Group\u2019s share of the identifiable net assets acquired exceeds the fair value of consideration paid, the difference is immediately recognised in the Consolidated Income Statement. Goodwill is not amortised, however, its carrying amount is assessed annually against its recoverable amount. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-499": { "value": "(a) Goodwill Where the fair value of consideration paid for a business combination exceeds the fair value of the Group\u2019s share of the identifiable net assets acquired, the difference is treated as purchased goodwill. Where the fair value of the Group\u2019s share of the identifiable net assets acquired exceeds the fair value of consideration paid, the difference is immediately recognised in the Consolidated Income Statement. Goodwill is not amortised, however, its carrying amount is assessed annually against its recoverable amount. (b) Other intangible assets Amounts paid for the acquisition of identifiable intangible assets, such as software, licences and contract based intangible assets are capitalised at the fair value of consideration paid and are recognised at cost less accumulated amortisation and impairment charges. Identifiable intangible assets with a finite life are amortised on a straight-line basis over their expected useful life from when the asset is ready for use. The useful lives are as follows: Category Useful life Software and licences 5 years Contract based intangible assets up to 35 years The Group has no identifiable intangible assets for which the expected useful life is indefinite ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-516": { "value": "(b) Other intangible assets Amounts paid for the acquisition of identifiable intangible assets, such as software, licences and contract based intangible assets are capitalised at the fair value of consideration paid and are recognised at cost less accumulated amortisation and impairment charges. Identifiable intangible assets with a finite life are amortised on a straight-line basis over their expected useful life from when the asset is ready for use. The useful lives are as follows: Category Useful life Software and licences 5 years Contract based intangible assets up to 35 years The Group has no identifiable intangible assets for which the expected useful life is indefinite ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-437": { "value": "13. Impairment of non-financial assets In testing for indications of impairment and performing impairment calculations, assets are considered as collective groups and referred to as CGUs. Impairment tests are carried out annually for CGUs containing goodwill and when there is an indication of impairment or impairment reversal for all other CGUs. The Group uses discounted cash flow valuation ranges to assess whether there is an indicator of impairment or impairment reversal for its CGUs. For any resulting impairment testing, and for CGUs containing goodwill, the Group uses the higher of fair value less cost of disposal (FVLCD) and its value in use to assess the recoverable amount. If the carrying value of the CGU exceeds its recoverable amount, the CGU is impaired and an impairment loss is charged to the Consolidated Income Statement. Previously impaired CGUs are reviewed for possible reversal of impairment at each reporting date. Impairment reversals cannot exceed the carrying value that would have been determined (net of depreciation) had no impairment loss been recognised for the CGU. Goodwill is not subject to impairment reversal. For areas not yet in production, any mineral rights acquired, together with subsequent capitalised exploration and evaluation expenditure, are reviewed to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. Once the technical feasibility and commercial viability of an area of interest are demonstrated, exploration and evaluation assets attributable to that area of interest are tested for impairment. The Group recognised the following net impairment for the year ended 30 June 2023: US$M Note FY23 FY22 Impairment Property, plant and equipment(1) 11 1,300 176 ROU assets(1) 11 - 7 Intangible assets 12 - 4 Impairment reversal Property, plant and equipment(2) 11 - (42) Total net impairment 1,300 145 (1) FY23 relates to a US$1,300 million impairment of the Taylor Deposit within the Hermosa segment. FY22 relates to a US$183 million impairment included in Group and unallocated items in respect of Eagle Downs. This includes a US$176 million impairment of property, plant and equipment and a US$7 million impairment of ROU assets. (2) FY22 relates to a US$42 million impairment reversal included within the Brazil Aluminium segment. (a) Recognised impairments - 30 June 2023 Hermosa \u2013 Taylor Deposit In August 2018, the Group completed its acquisition of the Hermosa project located in Arizona, United States. The Hermosa project comprises the zinc-lead-silver sulphide deposit (Taylor Deposit), the manganese-zinc-silver oxide deposit (Clark Deposit) and a land package with the potential for further polymetallic and copper mineralisation (Land Package). In FY23, the Group advanced the feasibility study for the Taylor Deposit, completed a pre-feasibility selection study for the Clark Deposit and announced that the US Federal Permitting Improvement Steering Council, an independent federal agency, had confirmed the Hermosa project as the first mining project added to the FAST-41 process. Since acquisition, the fair value of the Taylor Deposit has been negatively impacted by delayed first production as a result of COVID-19 related restrictions and significant dewatering requirements, as well as capital cost escalation in line with industry-wide inflation. Recently completed study work confirmed that the Taylor Deposit and the Clark Deposit can be developed independently. As a result, the Group identified three separate areas of interest within the Hermosa project: the Taylor Deposit, the Clark Deposit and the Regional Land Package. On separation into three separate areas of interest, the Group allocated the carrying value of the previous single Hermosa area of interest to each of the newly identified and separate areas of interest. As a result of the study work to date, the Group identified an impairment indicator for the Taylor Deposit and recognised a resulting impairment of property, plant and equipment of US$1,300 million in FY23 within expenses excluding finance costs in the Consolidated Income Statement. The impairment of US$1,300 million includes US$1,049 million recognised in other mineral assets, US$119 million recognised in assets under construction and US$132 million recognised in exploration and evaluation. The recoverable amount of the Taylor Deposit was determined as US$482 million based on its FVLCD. Hermosa \u2013 Taylor Deposit continued The fair value measurement was categorised as a Level 3 fair value based on the inputs in the discounted cashflow valuation model (refer to note 19 Financial assets and financial liabilities). The recoverable amount was informed by inputs from the feasibility study in progress for the Taylor Deposit, including the expected technical performance of the deposit as well as expected capital and operating costs for the life of the operation. The determination of FVLCD was most sensitive to: \u2013 Zinc, lead and silver prices; \u2013 Pre-production capital expenditure; \u2013 Mineral Resource estimation; \u2013 Development approvals; and \u2013 Discount rate Zinc, lead and silver prices - The long-run zinc, lead, and silver prices, in real terms, used in the FVLCD determinations were within the following ranges: FY23 Assumptions used Zinc (US$/t) 2,700 to 3,200 Lead (US$/t) 2,000 to 2,100 Silver (US$/oz) 20 to 22 Pre-production capital expenditure \u2013 The calculation of FVLCD includes an estimate of pre-production capital to support the development of the Taylor Deposit to its nameplate capacity of up to 4.3 million tonnes per annum. Key inputs including steel, cement and electrical components are subject to uncertainties, including industry-wide inflation. Mineral Resource estimation - The Mineral Resource estimate of the Taylor Deposit is reported in accordance with the JORC Code, and the ASX Listing Rules (Chapter 5): Additional reporting on mining and oil and gas production and exploration activities. Refer to the Mineral Resources and Ore Reserves section of note 2(c) for further information on these estimates. Development approvals \u2013 Construction is planned to commence in late FY24, subject to a final investment decision for the Taylor Deposit. The addition of the Hermosa project to the FAST-41 process has reduced the expected timing of Federal environmental approvals and permits by approximately two years. A Record of Decision (RoD) to permit surface disturbance and additional tailings storage on unpatented land will require completion of the National Environmental Policy Act process with the United States Forest Service. The ramp-up to planned nameplate production could be impacted if the RoD is delayed as production will have to be slowed due to tailings capacity restrictions on patented lands. Discount rate - In determining the FVLCD, a real US$ post tax discount rate range of between 6 and 8 per cent was applied to discount future cash flows expressed in real terms. The following table illustrates the sensitivity of the recoverable amount of the Taylor Deposit based on a reasonably possible change in key assumptions. Owing to the complexity of the relationships between each key assumption, the analysis was performed for each assumption individually (all other assumptions held constant). FY23 US$M Change in key assumption Impact on profit/(loss) after tax Favourable Unfavourable Zinc prices 10% 235 (235) Lead prices 10% 200 (200) Silver prices 10% 120 (120) Pre-production capital expenditure 10% 205 (205) Discount rate 100 basis points 335 (275) (b) Recognised impairments - 30 June 2022 Eagle Downs Metallurgical Coal In October 2021, the Group announced the commencement of a process to investigate the potential divestment of our interest in the Eagle Downs Metallurgical Coal development option. In December 2021, as part of the negotiation for sale, the Group received non- binding offers from external parties which, in combination with the long-term market outlook for metallurgical coal demand and prices, resulted in the recognition of an impairment of US$79 million for the Eagle Downs area of interest. The impairment was recognised within expenses excluding finance costs in the Consolidated Income Statement. In April 2022, a preferred bidder withdrew from the negotiations and the Group revised its recoverable amount of the Eagle Downs area of interest to US$nil, bringing the total impairment recognised for the Eagle Downs area of interest in FY22 to US$183 million. The long-run metallurgical coal prices and exchange rates, in real terms, used as part of the Group\u2019s FVLCD determinations at 30 June 2022 were within the following ranges as published by market commentators: FY22 Assumptions used Metallurgical coal (US$/t) 135 to 175 Foreign exchange rates (A$ to US$) 0.71 to 0.80 The fair value measurement was categorised as a Level 3 fair value based on the inputs in the discounted cashflow valuation model in combination with the use of the market approach (refer to note 19 Financial assets and financial liabilities). In determining the FVLCD, a real US$ post tax discount rate range of between six and eight per cent was applied to discount future cash flows expressed in real terms. In addition to the impairment of ROU assets of US$7 million, the impairment of US$176 million for property, plant and equipment of Eagle Downs includes US$3 million recognised in land and buildings, US$7 million recognised in plant and equipment, US$102 million recognised in other mineral assets, US$51 million recognised in assets under construction, and US$13 million recognised in exploration and evaluation. Brazil Aluminium On 6 January 2022, the Group announced its decision to participate in a restart of the Brazil Aluminium smelter. The Group assessed the implications of the restart decision and reviewed the impact on the carrying value of the Brazil Aluminium CGU as at 31 December 2021. At 31 December 2021, the Group reversed the full impairment that was recognised when the smelter was placed on care and maintenance in 2015, limited to the carrying amount that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised at such time. The recoverable amount remains significantly higher than the carrying amount recorded. The recoverable amount was based on the smelter\u2019s FVLCD and was informed by the Group\u2019s production profile and cost profile which were consistent with the Group\u2019s commitments to long-term power agreements. The key assumptions used for commodity prices were comparable to market consensus forecasts and foreign exchange rates were aligned with forward market rates. The fair value measurement was categorised as a Level 3 fair value based on the inputs in the discounted cashflow valuation model (refer to note 19 Financial assets and financial liabilities). In determining the FVLCD, a real US$ post tax discount rate range of between six and eight per cent, and a country risk premium of two per cent, was applied to discount future cash flows expressed in real terms. The impairment reversal of US$42 million includes US$18 million recognised in land and buildings and US$24 million recognised in plant and equipment, both within property, plant and equipment. The impairment reversal was recognised within expenses excluding finance costs in the Consolidated Income Statement. In addition, the Group recognised indirect tax assets of US$77 million that had been expensed since the smelter was placed on care and maintenance in 2015. Refer to note 4(b)(ii) Significant items . (c) Impairment test for CGUs containing goodwill For the purpose of impairment testing, goodwill has been allocated to CGUs that are expected to benefit from the synergies of the business combination and which represent the level at which management will monitor and manage the goodwill. The carrying amount of goodwill has been allocated to the following CGU: US$M Note FY23 FY22 Hillside Aluminium 139 139 Total goodwill 12 139 139 The goodwill arose from the acquisition of Alusaf in Hillside Aluminium (Pty) Ltd and has been allocated to the Hillside Aluminium CGU which comprises the Hillside aluminium smelter. The recoverable amount of the Hillside Aluminium CGU was determined based on a FVLCD calculation and was categorised as a Level 3 fair value based on the inputs in the valuation technique (refer to note 19 Financial assets and financial liabilities). The impairment test for the Hillside Aluminium CGU indicated that no impairment was required. The determination of FVLCD was most sensitive to: \u2013 Production volumes; \u2013 Aluminium and alumina prices; \u2013 Foreign exchange rates; \u2013 Carbon pricing and timing; and \u2013 Discount rate. Production volumes \u2013 estimated production volumes are based on the life of the smelter as determined by management as part of its long-term planning process. Production volumes are influenced by production input costs such as electricity prices, jurisdiction based carbon pricing, and the selling price of aluminium. Aluminium and alumina prices, and foreign exchange rates \u2013 the ranges of aluminium prices, alumina prices and exchange rates, in real terms, used in the FVLCD determinations, together with the potential effect of using reasonably possible alternative assumptions on the recoverable amount, based on unfavourably changing these assumptions by 10 per cent whilst holding all other variables constant, are shown in the table below: FY23 Assumptions used Impact on recoverable amount (US$M) Aluminium prices (US$/t) 2,238 to 2,510 (683) Alumina prices (US$/t) 343 to 426 (214) Foreign exchange rates (US$ to ZAR) 16.1 to 19.1 (304) Carbon pricing and timing \u2013 in determining the FVLCD, the current jurisdiction enacted carbon price, in real terms, of ZAR186 to ZAR474 per tonne CO2 -e (FY22: ZAR143 to ZAR150 per tonne CO 2 -e) is applied for the life of operation for Scope 1 and 2 emissions, net of operation specific abatement allowances. Discount rate \u2013 in determining the FVLCD, a real US$ post tax discount rate range of between six and eight per cent (FY22: range of between six and eight per cent), and a country risk premium of two per cent (FY22: two per cent) was applied to discount future cash flows expressed in real terms. The impairment test for the Hillside Aluminium CGU indicated that no impairment was required. At 30 June 2023 the carrying value approximates its recoverable amount. As such any material long-term unfavourable change in the aforementioned key assumptions could lead to the carrying value exceeding the recoverable amount. The relationships between each key assumption are complex, such that a change in one may cause a change in several other inputs. Key estimates, assumptions and judgements An assessment as to whether there is any indication of impairment and the calculation of a CGU\u2019s recoverable amount requires management to make estimates and assumptions about expected production and sales volumes, commodity prices, foreign exchange rates, Mineral Resources and Ore Reserves, regulatory approvals, operating costs, closure and rehabilitation costs, future capital expenditure, allocation of corporate costs, jurisdiction-specific carbon prices and global carbon pricing. These estimates and assumptions are subject to risk and uncertainty. There is a possibility that changes in circumstances will alter these projections, which may impact the recoverable amount. In such circumstances, some or all of the carrying amount may be impaired or a previously recognised impairment charge may be reversed with the impact recognised in the Consolidated Income Statement. The key estimates and assumptions used in the assessment of impairment indicators are as follows: Future production Life of operation plans based on Mineral Resource and Ore Reserve estimates, economic life of smelters and refineries and, in certain cases, Exploration Targets and expansion projects, including future cost of production. Refer to note 2(c) Key estimates, assumptions and judgements for further details regarding Mineral Resources and Ore Reserves as sources of estimation uncertainty. Commodity prices and market traded consumables Forward market and contract prices, and longer-term price estimates which includes an assessment of the impact carbon price assumptions might have. Exchange rates Forward market foreign exchange rates, and longer-term price protocol estimates. Discount rates Risk-adjusted cost of capital and appropriate to the resource. Regulatory approvals Life of operation plans include assumptions associated with the successful application, and timing thereof, of ongoing and future regulatory approvals. Carbon prices Actual enacted schemes less allowable abatements, where applicable, and a long-term base case estimate of US$64 per tonne CO2 -e (real) applied to all Scope 1 and 2 emissions from FY40 onwards. Where impairment testing is undertaken, a range of external sources are considered as further input to the above assumptions. Exploration and evaluation expenditure For areas not yet in production, acquired mineral rights, together with subsequent capitalised exploration and evaluation expenditure, require judgement to determine the likelihood of future economic benefits from future development, and whether sufficient data exists to indicate that, although a development in the specific area is likely to proceed, the carrying amount of the exploration and evaluation asset is unlikely to be recovered in full. When facts and circumstances suggest that the carrying amount exceeds the recoverable amount, an impairment test is required which may result in an adjustment to the carrying value of acquired mineral rights together with subsequent capitalised exploration and evaluation expenditure. At or before the final investment decision for a given area of interest, and once technical feasibility and commercial viability has been demonstrated, the Group assess the carrying value of that area of interest for impairment or, for an area of interest previously impaired, impairment reversal. Climate change-related risks and opportunities The Group\u2019s forecast commodity prices and other key assumptions represent management\u2019s expectations on likely outcomes, with a base case estimation of at least 2\u00b0C warming. When assessing whether there is any indication of impairment or impairment reversal, management performs a sensitivity analysis by considering a range of possible scenarios, with no one scenario being conclusive in isolation. Our sensitivity analysis shows that our FY23 1.5\u00b0C scenario would result in an increased risk of impairment at the Hillside Aluminium and Illawarra Metallurgical Coal CGUs. The full costs and benefits of decarbonisation projects are included in the Group\u2019s valuations when it has a high degree of confidence that a project will achieve an emissions reduction, which typically aligns with the related capital project being internally approved, or when it is critical for meeting regulatory licensing requirements. The Group\u2019s valuations include the cost and benefit of initiatives necessary to meet its medium-term target to halve its operational greenhouse gas (GHG) emissions by 2035 compared to its FY21 baseline. \u2018Target\u2019 is defined as an intended outcome in relation to which we have identified one or more pathways for delivery of that outcome, subject to certain assumptions or conditions. The decarbonisation pathway to meet our goal of net zero GHG emissions by 2050 is not yet fully defined and, as such, the cost and benefit of all associated initiatives are not included in the Group\u2019s valuations. \u2018Goal\u2019 is defined as an ambition to seek an outcome for which there is no current pathway(s), but for which efforts will be pursued towards addressing that challenge, subject to certain assumptions or conditions. The Group utilises an internal price on carbon to inform decision-making and valuations, based on actual enacted schemes less allowable abatements, where applicable, and a long-term base case estimate of US$64 per tonne CO 2 -e (real) applied to all Scope 1 and 2 emissions from FY40 onwards. In developing forecast global carbon prices, the Group considers policy and market-driven carbon prices as well as abatement costs, weighted across developed and developing countries. When assessing for impairment indicators, the Group has considered the sensitivity of operations to changes in carbon prices. The Group\u2019s operations are not uniformly impacted by carbon prices. The impact is influenced by the amount of Scope 1 and 2 emissions the operation generates and the jurisdiction in which it operates, in combination with the respective life of operation plans. The Group\u2019s CGUs with a higher carbon sensitivity include Worsley Alumina, Hillside Aluminium, Mozal Aluminium and Illawarra Metallurgical Coal. Previously impaired areas of interest and CGUs When assessing for impairment reversal indicators, the fundamental characteristics of previously impaired areas of interest and CGUs are relevant to their sensitivity to key estimates and assumptions. For previously impaired areas of interest and CGUs these include: \u2013 Areas of interest that are subject to ongoing study and evaluation, for example the Taylor Deposit at Hermosa; \u2013 CGUs with higher operating margins and with life of operation plans longer than 10 years which are less sensitive to short-term commodity prices and foreign exchange rates, for example Worsley Alumina; \u2013 CGUs with lower operating margins which are highly sensitive to movements in commodity prices and foreign exchange rates, for example South Africa Manganese; and \u2013 CGUs with higher operating margins, shorter life of operation plans and exposure to commodities that display greater price volatility, for example Australia Manganese. Mozal Aluminium The Group jointly controls Mozal Aluminium together with the Industrial Development Corporation of South Africa Limited and the Government of the Republic of Mozambique. Electricity supplied to Mozal Aluminium is generated by Hidroel\u00e9ctrica de Cahora Bassa, a hydro-electric power generator, and supplied via Eskom, the South African state-owned entity which owns and operates South Africa\u2019s national electricity grid. Eskom also provides back-up energy to Mozal Aluminium for periods when Hidroel\u00e9ctrica de Cahora Bassa produces less than its contractual minimum supply of hydro-electric power. The Group is working with key stakeholders to extend the supply of power from Hidroel\u00e9ctrica de Cahora Bassa for Mozal Aluminium beyond 2026. Although an extension and pricing of the existing arrangement with Eskom is uncertain, the Group has made a reasonable assumption that an extension to 2030 can be achieved on mutually acceptable commercial terms. Failure to extend the supply of power from Hidroel\u00e9ctrica de Cahora Bassa will have a material impact on the recoverable amount of Mozal Aluminium", "dimensions": { "concept": "ifrs-full:DisclosureOfImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-517": { "value": "In testing for indications of impairment and performing impairment calculations, assets are considered as collective groups and referred to as CGUs. Impairment tests are carried out annually for CGUs containing goodwill and when there is an indication of impairment or impairment reversal for all other CGUs. The Group uses discounted cash flow valuation ranges to assess whether there is an indicator of impairment or impairment reversal for its CGUs. For any resulting impairment testing, and for CGUs containing goodwill, the Group uses the higher of fair value less cost of disposal (FVLCD) and its value in use to assess the recoverable amount. If the carrying value of the CGU exceeds its recoverable amount, the CGU is impaired and an impairment loss is charged to the Consolidated Income Statement. Previously impaired CGUs are reviewed for possible reversal of impairment at each reporting date. Impairment reversals cannot exceed the carrying value that would have been determined (net of depreciation) had no impairment loss been recognised for the CGU. Goodwill is not subject to impairment reversal. For areas not yet in production, any mineral rights acquired, together with subsequent capitalised exploration and evaluation expenditure, are reviewed to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. Once the technical feasibility and commercial viability of an area of interest are demonstrated, exploration and evaluation assets attributable to that area of interest are tested for impairment. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-500": { "value": "In testing for indications of impairment and performing impairment calculations, assets are considered as collective groups and referred to as CGUs. Impairment tests are carried out annually for CGUs containing goodwill and when there is an indication of impairment or impairment reversal for all other CGUs. The Group uses discounted cash flow valuation ranges to assess whether there is an indicator of impairment or impairment reversal for its CGUs. For any resulting impairment testing, and for CGUs containing goodwill, the Group uses the higher of fair value less cost of disposal (FVLCD) and its value in use to assess the recoverable amount. If the carrying value of the CGU exceeds its recoverable amount, the CGU is impaired and an impairment loss is charged to the Consolidated Income Statement. Previously impaired CGUs are reviewed for possible reversal of impairment at each reporting date. Impairment reversals cannot exceed the carrying value that would have been determined (net of depreciation) had no impairment loss been recognised for the CGU. Goodwill is not subject to impairment reversal. For areas not yet in production, any mineral rights acquired, together with subsequent capitalised exploration and evaluation expenditure, are reviewed to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. Once the technical feasibility and commercial viability of an area of interest are demonstrated, exploration and evaluation assets attributable to that area of interest are tested for impairment. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-438": { "value": "14. Trade and other payables US$M FY23 FY22 Current Trade creditors 854 813 Other creditors 131 176 Total current trade and other payables 985 989 Non-current Trade creditors 18 7 Other creditors 1 1 Total non-current trade and other payables 19 8 Trade and other payables generally represent liabilities for goods and services provided to the Group prior to the end of the year which were unpaid at the end of the year. These amounts are unsecured. Trade and other payables are included in current liabilities, except for those liabilities where payment is not due within 12 months from the reporting date, which are classified as non-current liabilities. Trade and other payables, other than financial liabilities held at FVTPL, are stated at their amortised cost and are non-interest bearing. The carrying value of these trade and other payables is considered to approximate fair value due to the short-term nature of the payables ", "dimensions": { "concept": "ifrs-full:DisclosureOfTradeAndOtherPayablesExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-501": { "value": "Trade and other payables generally represent liabilities for goods and services provided to the Group prior to the end of the year which were unpaid at the end of the year. These amounts are unsecured. Trade and other payables are included in current liabilities, except for those liabilities where payment is not due within 12 months from the reporting date, which are classified as non-current liabilities. Trade and other payables, other than financial liabilities held at FVTPL, are stated at their amortised cost and are non-interest bearing. The carrying value of these trade and other payables is considered to approximate fair value due to the short-term nature of the payables ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherPayablesExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-439": { "value": "15. Provisions US$M Note FY23 FY22 Current Employee benefits 177 171 Closure and rehabilitation 7 8 Other 10 7 Total current provisions 194 186 Non-current Employee benefits 6 4 Closure and rehabilitation 1,931 1,785 Post-retirement employee benefits 22 33 34 Other 16 12 Total non-current provisions 1,986 1,835 FY23 US$M Employee benefits Closure and rehabilitation Post- retirement employee benefits Other Total At the beginning of the year 175 1,793 34 19 2,021 Charge/(credit) for the year to the Consolidated Income Statement: Underlying 167 16 5 7 195 Discounting - 91 - - 91 Net interest expense - - 3 - 3 Exchange rate variations (7) (15) (3) 1 (24) Released during the year (1) (7) - - (8) Amounts capitalised for change in costs and estimates - 149 - - 149 Amounts capitalised for change in discount rate - (16) - - (16) Foreign exchange amounts capitalised - (68) - - (68) Amounts taken to retained earnings - - (3) - (3) Utilisation (151) (5) (3) (1) (160) At the end of the year 183 1,938 33 26 2,180 FY22 US$M Employee benefits Closure and rehabilitation Post- retirement employee benefits Other Total At the beginning of the year 201 1,717 41 39 1,998 Charge/(credit) for the year to the Consolidated Income Statement: Underlying 156 3 1 6 166 Discounting - 67 - - 67 Change in discount rate - (2) - - (2) Net interest expense - - 3 - 3 Exchange rate variations (14) (19) (4) (3) (40) Released during the year (8) (8) - (19) (35) Amounts capitalised for change in costs and estimates - 167 - - 167 Amounts capitalised for change in discount rate - (15) - - (15) Foreign exchange amounts capitalised - (127) - - (127) Amounts taken to retained earnings - - (3) - (3) Utilisation (160) (9) (4) (4) (177) Acquisition of subsidiaries and joint operations (1) - 19 - - 19 At the end of the year 175 1,793 34 19 2,021 (1) Relates to the acquisition of an additional 16.6 per cent shareholding and related rights in Mozal Aluminium in FY22. (a) Employee benefits Liabilities for unpaid wages and salaries are recognised in other creditors. Current entitlements to annual leave and accumulating sick leave accrued for services up to the reporting date are recognised in the provision for employee benefits and are measured at the amounts expected to be paid. Entitlements to non-accumulated sick leave are recognised when the leave is taken. The current liability for long service leave (for which settlement within 12 months of the reporting date cannot be deferred) is recognised in the current provision for employee benefits and is measured in accordance with annual leave described above . (b) Closure and rehabilitation The mining, extraction and processing activities of the Group normally give rise to obligations for site closure or rehabilitation. Closure and rehabilitation works can include facility decommissioning and dismantling, removal or treatment of waste materials, site and land rehabilitation. Provisions for the cost of each closure and rehabilitation program are recognised at the time that environmental disturbance occurs. When the extent of disturbance increases over the life of an operation, the provision is increased accordingly. Costs included in the provision encompass all closure and rehabilitation activity expected to occur progressively over the life of the operation and at, or after, the time of closure, for disturbance existing at the reporting date. Routine operating costs that may impact the ultimate closure and rehabilitation activities, such as waste material handling conducted as an integral part of a mining or production process, are not included in the provision. Costs arising from unforeseen circumstances, such as the contamination caused by unplanned discharges, are recognised as an expense and liability when the event gives rise to an obligation which is probable and capable of reliable estimation. The timing of the actual closure and rehabilitation expenditure is dependent upon a number of factors such as: the life and nature of the asset; the operating licence conditions; and the environment in which the operation operates. Expenditure may occur before and after closure, and can continue for an extended period of time depending on closure and rehabilitation requirements . Closure and rehabilitation provisions are measured based on the expected value of future cash flows, discounted to their present value and determined according to the probability of alternative estimates of cash flows occurring for each operation. Discount rates used are risk-free interest rates specific to the country in which the operations are located and the expected timing of the closure and rehabilitation expenditure. Material changes in country specific risk-free interest rates may affect the discount rates applied. The Group reviews its discount rates used periodically, with any corresponding change in the provision as a result of revising discount rates capitalised as an asset in the case of open sites or charged/(credited) to the Consolidated Income Statement in the case of closed sites. When provisions for closure and rehabilitation are initially recognised, the corresponding cost is capitalised as an asset, representing part of the cost of acquiring the future economic benefits of the operation. The capitalised cost of closure and rehabilitation activities is recognised in property, plant and equipment and depreciated accordingly. The value of the provision is progressively increased over time due to the effect of discounting unwind and inflation, creating an expense recognised in finance costs. Closure and rehabilitation provisions are also adjusted for changes in costs and estimates. Those adjustments are accounted for as a change in the corresponding capitalised cost, except where a reduction in the provision is greater than the depreciated capitalised cost of the related assets, in which case the carrying value is reduced to nil and the remaining adjustment is recognised in the Consolidated Income Statement. In the case of closed sites, changes to estimated costs are recognised immediately in the Consolidated Income Statement. Changes to the capitalised cost result in an adjustment to future depreciation. Adjustments to the estimated amount and timing of future closure and rehabilitation cash flows are a normal occurrence in light of the significant judgements and estimates involved. (c) Post-retirement employee benefits This relates to the provision for post-employment defined benefit pension and medical schemes. Refer to note 22 Pension and other post-retirement obligations . Key estimates, assumptions and judgements The recognition of closure and rehabilitation provisions requires judgement and is based on significant estimates and assumptions such as: \u2013 The requirements of the relevant local legal and regulatory framework; \u2013 The magnitude of possible contamination; \u2013 The timing, extent and cost of required closure and rehabilitation activity; and \u2013 Potential changes in physical and climate conditions. These uncertainties may result in future actual expenditure differing from the amounts currently provided. The Group\u2019s expectations and approach in relation to climate change-related risks and opportunities are reflected in the estimates and assumptions noted above. For example, our base case estimation of at least 2\u00b0C climate-related warming impacts our life of operations plans, which in turn impacts assumptions regarding timing and cost of closure and rehabilitation activities. Physical impacts of climate change have been considered in the estimation of closure and rehabilitation costs, including timing of relinquishment based on the Group\u2019s assessment to date. These estimates will continue to be refined as the Group progresses its assessment of physical risks and development of direct adaptation and mitigation strategies. The provision recognised for each site is periodically reviewed and updated based on the facts and circumstances available at the time. In addition to the uncertainties noted above, certain closure and rehabilitation activities may be subject to legal disputes and depending on the ultimate resolution of these disputes, the final liability for such matters could vary. If risk-free interest rates were decreased by 0.5 per cent (in real terms), the provision would increase by approximately US$261 million ", "dimensions": { "concept": "ifrs-full:DisclosureOfProvisionsExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-518": { "value": "(a) Employee benefits Liabilities for unpaid wages and salaries are recognised in other creditors. Current entitlements to annual leave and accumulating sick leave accrued for services up to the reporting date are recognised in the provision for employee benefits and are measured at the amounts expected to be paid. Entitlements to non-accumulated sick leave are recognised when the leave is taken. The current liability for long service leave (for which settlement within 12 months of the reporting date cannot be deferred) is recognised in the current provision for employee benefits and is measured in accordance with annual leave described above . (b) Closure and rehabilitation The mining, extraction and processing activities of the Group normally give rise to obligations for site closure or rehabilitation. Closure and rehabilitation works can include facility decommissioning and dismantling, removal or treatment of waste materials, site and land rehabilitation. Provisions for the cost of each closure and rehabilitation program are recognised at the time that environmental disturbance occurs. When the extent of disturbance increases over the life of an operation, the provision is increased accordingly. Costs included in the provision encompass all closure and rehabilitation activity expected to occur progressively over the life of the operation and at, or after, the time of closure, for disturbance existing at the reporting date. Routine operating costs that may impact the ultimate closure and rehabilitation activities, such as waste material handling conducted as an integral part of a mining or production process, are not included in the provision. Costs arising from unforeseen circumstances, such as the contamination caused by unplanned discharges, are recognised as an expense and liability when the event gives rise to an obligation which is probable and capable of reliable estimation. The timing of the actual closure and rehabilitation expenditure is dependent upon a number of factors such as: the life and nature of the asset; the operating licence conditions; and the environment in which the operation operates. Expenditure may occur before and after closure, and can continue for an extended period of time depending on closure and rehabilitation requirements . Closure and rehabilitation provisions are measured based on the expected value of future cash flows, discounted to their present value and determined according to the probability of alternative estimates of cash flows occurring for each operation. Discount rates used are risk-free interest rates specific to the country in which the operations are located and the expected timing of the closure and rehabilitation expenditure. Material changes in country specific risk-free interest rates may affect the discount rates applied. The Group reviews its discount rates used periodically, with any corresponding change in the provision as a result of revising discount rates capitalised as an asset in the case of open sites or charged/(credited) to the Consolidated Income Statement in the case of closed sites. When provisions for closure and rehabilitation are initially recognised, the corresponding cost is capitalised as an asset, representing part of the cost of acquiring the future economic benefits of the operation. The capitalised cost of closure and rehabilitation activities is recognised in property, plant and equipment and depreciated accordingly. The value of the provision is progressively increased over time due to the effect of discounting unwind and inflation, creating an expense recognised in finance costs. Closure and rehabilitation provisions are also adjusted for changes in costs and estimates. Those adjustments are accounted for as a change in the corresponding capitalised cost, except where a reduction in the provision is greater than the depreciated capitalised cost of the related assets, in which case the carrying value is reduced to nil and the remaining adjustment is recognised in the Consolidated Income Statement. In the case of closed sites, changes to estimated costs are recognised immediately in the Consolidated Income Statement. Changes to the capitalised cost result in an adjustment to future depreciation. Adjustments to the estimated amount and timing of future closure and rehabilitation cash flows are a normal occurrence in light of the significant judgements and estimates involved. (c) Post-retirement employee benefits This relates to the provision for post-employment defined benefit pension and medical schemes. Refer to note 22 Pension and other post-retirement obligations ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForProvisionsExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-502": { "value": "(a) Employee benefits Liabilities for unpaid wages and salaries are recognised in other creditors. Current entitlements to annual leave and accumulating sick leave accrued for services up to the reporting date are recognised in the provision for employee benefits and are measured at the amounts expected to be paid. Entitlements to non-accumulated sick leave are recognised when the leave is taken. The current liability for long service leave (for which settlement within 12 months of the reporting date cannot be deferred) is recognised in the current provision for employee benefits and is measured in accordance with annual leave described above . (c) Post-retirement employee benefits This relates to the provision for post-employment defined benefit pension and medical schemes. Refer to note 22 Pension and other post-retirement obligations The Group operates or participates in a number of pension and medical (including superannuation) schemes throughout the world. The funding of the schemes complies with local regulations. The assets of the schemes are generally held separate from those of the Group and are administered by trustees or management boards. Full actuarial valuations are prepared for the schemes. Defined contribution pension schemes The Group contributed US$60 million (FY22: US$59 million) to defined contribution plans and multi-employer defined contribution plans. These contributions are expensed as incurred. Defined benefit pension schemes (closed schemes) At 30 June 2023, the Group had defined benefit obligations of US$61 million (FY22: US$57 million) and defined benefit scheme assets with a fair value of US$45 million (FY22: US$46 million) with a net liability recognised in the Consolidated Balance Sheet of US$16 million (FY22: US$11 million). ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-503": { "value": "(b) Closure and rehabilitation The mining, extraction and processing activities of the Group normally give rise to obligations for site closure or rehabilitation. Closure and rehabilitation works can include facility decommissioning and dismantling, removal or treatment of waste materials, site and land rehabilitation. Provisions for the cost of each closure and rehabilitation program are recognised at the time that environmental disturbance occurs. When the extent of disturbance increases over the life of an operation, the provision is increased accordingly. Costs included in the provision encompass all closure and rehabilitation activity expected to occur progressively over the life of the operation and at, or after, the time of closure, for disturbance existing at the reporting date. Routine operating costs that may impact the ultimate closure and rehabilitation activities, such as waste material handling conducted as an integral part of a mining or production process, are not included in the provision. Costs arising from unforeseen circumstances, such as the contamination caused by unplanned discharges, are recognised as an expense and liability when the event gives rise to an obligation which is probable and capable of reliable estimation. The timing of the actual closure and rehabilitation expenditure is dependent upon a number of factors such as: the life and nature of the asset; the operating licence conditions; and the environment in which the operation operates. Expenditure may occur before and after closure, and can continue for an extended period of time depending on closure and rehabilitation requirements . Closure and rehabilitation provisions are measured based on the expected value of future cash flows, discounted to their present value and determined according to the probability of alternative estimates of cash flows occurring for each operation. Discount rates used are risk-free interest rates specific to the country in which the operations are located and the expected timing of the closure and rehabilitation expenditure. Material changes in country specific risk-free interest rates may affect the discount rates applied. The Group reviews its discount rates used periodically, with any corresponding change in the provision as a result of revising discount rates capitalised as an asset in the case of open sites or charged/(credited) to the Consolidated Income Statement in the case of closed sites. When provisions for closure and rehabilitation are initially recognised, the corresponding cost is capitalised as an asset, representing part of the cost of acquiring the future economic benefits of the operation. The capitalised cost of closure and rehabilitation activities is recognised in property, plant and equipment and depreciated accordingly. The value of the provision is progressively increased over time due to the effect of discounting unwind and inflation, creating an expense recognised in finance costs. Closure and rehabilitation provisions are also adjusted for changes in costs and estimates. Those adjustments are accounted for as a change in the corresponding capitalised cost, except where a reduction in the provision is greater than the depreciated capitalised cost of the related assets, in which case the carrying value is reduced to nil and the remaining adjustment is recognised in the Consolidated Income Statement. In the case of closed sites, changes to estimated costs are recognised immediately in the Consolidated Income Statement. Changes to the capitalised cost result in an adjustment to future depreciation. Adjustments to the estimated amount and timing of future closure and rehabilitation cash flows are a normal occurrence in light of the significant judgements and estimates involved. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDecommissioningRestorationAndRehabilitationProvisionsExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-440": { "value": "16. Cash and cash equivalents Cash and cash equivalents include cash at bank and on hand as well as short-term deposits. US$M FY23 FY22 Cash 611 763 Short-term deposits 647 1,602 Cash and cash equivalents(1)(2) 1,258 2,365 (1) Cash and cash equivalents include US$6 million (FY22: US$4 million) which is restricted by legal or contractual arrangements. (2) Cash and cash equivalents include US$287 million (FY22: US$335 million) consisting of short-term deposits and cash managed by the Group on behalf of its equity accounted investments. The corresponding amount payable is included in note 17 Interest bearing liabilities. ", "dimensions": { "concept": "ifrs-full:DisclosureOfCashAndCashEquivalentsExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-505": { "value": "Cash and cash equivalents include cash at bank and on hand as well as short-term deposits. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyToDetermineComponentsOfCashAndCashEquivalents", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-467": { "value": "(1) Cash and cash equivalents include US$6 million (FY22: US$4 million) which is restricted by legal or contractual arrangements. ", "dimensions": { "concept": "ifrs-full:DisclosureOfRestrictedCashAndCashEquivalentsExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-468": { "value": "17. Interest bearing liabilities US$M FY23 FY22 Current Lease liabilities 51 40 Unsecured loans from equity accounted investments (1) 287 335 Unsecured other 27 27 Total current interest bearing liabilities 365 402 Non-current Lease liabilities 623 610 Senior unsecured notes 690 689 Unsecured other 63 126 Total non-current interest bearing liabilities 1,376 1,425 (1) Refer to note 16 Cash and cash equivalents and note 29 Related party transactions . On 14 April 2022, the Group completed the issuance of US$700 million of senior unsecured notes pursuant to Rule 144A and Regulation S of the United States Securities Act of 1933. The Group utilised the cash proceeds from the offering, together with cash on hand, for the repayment in full of the amounts drawn down under its acquisition bridge facility used to partly fund the acquisition of a 45 per cent interest in Sierra Gorda in FY22. The notes will pay interest on 14 April and 14 October each year at a rate of 4.35 per cent per annum and mature in 2032. All borrowings are initially recognised at their fair value net of directly attributable transaction costs. Subsequent to initial recognition, interest bearing liabilities are measured at amortised cost using the effective interest method. Gains and losses are recognised in the Consolidated Income Statement when the liabilities are derecognised. Interest bearing liabilities are classified as current liabilities, except when the Group has an unconditional right to defer settlement for at least 12 months after the reporting date, in which case the liabilities are classified as non-current A reconciliation of movements in interest bearing liabilities to cash flows arising from financing activities is set out below: FY23 US$M Lease liabilities Other interest bearing liabilities Total interest bearing liabilities At the beginning of the year 650 1,177 1,827 Cash movements: Repayment of interest bearing liabilities (46) (87) (133) Interest paid (52) (57) (109) Non-cash movements: Interest expense 52 59 111 Net increase/(decrease) in interest bearing liabilities (1) 93 (41) 52 Effect of foreign exchange rate changes (23) 16 (7) At the end of the year 674 1,067 1,741 (1) The non-cash decrease in other interest bearing liabilities relates to an agreement with a subsidiary of Seriti Resources Holdings Pty Ltd (Seriti) to settle the vendor loan facility, previously recognised within other financial assets, against the related rehabilitation fund liability. Both facilities were originally provided to Seriti as part of the divestment of South Africa Energy Coal. Refer to note 19(a)(iv) Measurement of fair value. FY22 US$M Lease liabilities Other interest bearing liabilities Total interest bearing liabilities At the beginning of the year 687 520 1,207 Cash movements: Proceeds from interest bearing liabilities - 1,527 1,527 Repayment of interest bearing liabilities (46) (886) (932) Interest paid (53) (17) (70) Non-cash movements: Interest expense 53 24 77 Net increase/(decrease) in interest bearing liabilities 66 - 66 Effect of foreign exchange rate changes (57) 9 (48) At the end of the year 650 1,177 1,827 ", "dimensions": { "concept": "ifrs-full:DisclosureOfDebtSecuritiesExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-441": { "value": "17. Interest bearing liabilities US$M FY23 FY22 Current Lease liabilities 51 40 Unsecured loans from equity accounted investments (1) 287 335 Unsecured other 27 27 Total current interest bearing liabilities 365 402 Non-current Lease liabilities 623 610 Senior unsecured notes 690 689 Unsecured other 63 126 Total non-current interest bearing liabilities 1,376 1,425 (1) Refer to note 16 Cash and cash equivalents and note 29 Related party transactions . On 14 April 2022, the Group completed the issuance of US$700 million of senior unsecured notes pursuant to Rule 144A and Regulation S of the United States Securities Act of 1933. The Group utilised the cash proceeds from the offering, together with cash on hand, for the repayment in full of the amounts drawn down under its acquisition bridge facility used to partly fund the acquisition of a 45 per cent interest in Sierra Gorda in FY22. The notes will pay interest on 14 April and 14 October each year at a rate of 4.35 per cent per annum and mature in 2032. All borrowings are initially recognised at their fair value net of directly attributable transaction costs. Subsequent to initial recognition, interest bearing liabilities are measured at amortised cost using the effective interest method. Gains and losses are recognised in the Consolidated Income Statement when the liabilities are derecognised. Interest bearing liabilities are classified as current liabilities, except when the Group has an unconditional right to defer settlement for at least 12 months after the reporting date, in which case the liabilities are classified as non-current A reconciliation of movements in interest bearing liabilities to cash flows arising from financing activities is set out below: FY23 US$M Lease liabilities Other interest bearing liabilities Total interest bearing liabilities At the beginning of the year 650 1,177 1,827 Cash movements: Repayment of interest bearing liabilities (46) (87) (133) Interest paid (52) (57) (109) Non-cash movements: Interest expense 52 59 111 Net increase/(decrease) in interest bearing liabilities (1) 93 (41) 52 Effect of foreign exchange rate changes (23) 16 (7) At the end of the year 674 1,067 1,741 (1) The non-cash decrease in other interest bearing liabilities relates to an agreement with a subsidiary of Seriti Resources Holdings Pty Ltd (Seriti) to settle the vendor loan facility, previously recognised within other financial assets, against the related rehabilitation fund liability. Both facilities were originally provided to Seriti as part of the divestment of South Africa Energy Coal. Refer to note 19(a)(iv) Measurement of fair value. FY22 US$M Lease liabilities Other interest bearing liabilities Total interest bearing liabilities At the beginning of the year 687 520 1,207 Cash movements: Proceeds from interest bearing liabilities - 1,527 1,527 Repayment of interest bearing liabilities (46) (886) (932) Interest paid (53) (17) (70) Non-cash movements: Interest expense 53 24 77 Net increase/(decrease) in interest bearing liabilities 66 - 66 Effect of foreign exchange rate changes (57) 9 (48) At the end of the year 650 1,177 1,827 ", "dimensions": { "concept": "ifrs-full:DisclosureOfBorrowingsExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-504": { "value": "All borrowings are initially recognised at their fair value net of directly attributable transaction costs. Subsequent to initial recognition, interest bearing liabilities are measured at amortised cost using the effective interest method. Gains and losses are recognised in the Consolidated Income Statement when the liabilities are derecognised. Interest bearing liabilities are classified as current liabilities, except when the Group has an unconditional right to defer settlement for at least 12 months after the reporting date, in which case the liabilities are classified as non-current . ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBorrowingsExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-546": { "value": "18. Net finance income/(costs) US$M FY23 FY22 Finance income Interest on loans to equity accounted investments 162 63 Other interest income 60 16 Total finance income 222 79 Finance costs Interest on borrowings (68) (31) Interest on lease liabilities (52) (53) Discounting on provisions and other liabilities (92) (65) Change in discount rate on closure and rehabilitation provisions - 2 Net interest expense on post-retirement employee benefits (3) (3) Exchange rate variations on net cash/(debt) 8 40 Total finance costs (207) (110) Net finance income/(costs) 15 (31 ) ", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestIncomeExpenseExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-533": { "value": "18. Net finance income/(costs) US$M FY23 FY22 Finance income Interest on loans to equity accounted investments 162 63 Other interest income 60 16 Total finance income 222 79 Finance costs Interest on borrowings (68) (31) Interest on lease liabilities (52) (53) Discounting on provisions and other liabilities (92) (65) Change in discount rate on closure and rehabilitation provisions - 2 Net interest expense on post-retirement employee benefits (3) (3) Exchange rate variations on net cash/(debt) 8 40 Total finance costs (207) (110) Net finance income/(costs) 15 (31 ", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestIncomeExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-525": { "value": "18. Net finance income/(costs) US$M FY23 FY22 Finance income Interest on loans to equity accounted investments 162 63 Other interest income 60 16 Total finance income 222 79 Finance costs Interest on borrowings (68) (31) Interest on lease liabilities (52) (53) Discounting on provisions and other liabilities (92) (65) Change in discount rate on closure and rehabilitation provisions - 2 Net interest expense on post-retirement employee benefits (3) (3) Exchange rate variations on net cash/(debt) 8 40 Total finance costs (207) (110) Net finance income/(costs) 15 (31 ) ", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestExpenseExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-480": { "value": "18. Net finance income/(costs) US$M FY23 FY22 Finance income Interest on loans to equity accounted investments 162 63 Other interest income 60 16 Total finance income 222 79 Finance costs Interest on borrowings (68) (31) Interest on lease liabilities (52) (53) Discounting on provisions and other liabilities (92) (65) Change in discount rate on closure and rehabilitation provisions - 2 Net interest expense on post-retirement employee benefits (3) (3) Exchange rate variations on net cash/(debt) 8 40 Total finance costs (207) (110) Net finance income/(costs) 15 (31 ) ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceCostExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-469": { "value": "18. Net finance income/(costs) US$M FY23 FY22 Finance income Interest on loans to equity accounted investments 162 63 Other interest income 60 16 Total finance income 222 79 Finance costs Interest on borrowings (68) (31) Interest on lease liabilities (52) (53) Discounting on provisions and other liabilities (92) (65) Change in discount rate on closure and rehabilitation provisions - 2 Net interest expense on post-retirement employee benefits (3) (3) Exchange rate variations on net cash/(debt) 8 40 Total finance costs (207) (110) Net finance income/(costs) 15 (31 ) ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceIncomeExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-442": { "value": "18. Net finance income/(costs) US$M FY23 FY22 Finance income Interest on loans to equity accounted investments 162 63 Other interest income 60 16 Total finance income 222 79 Finance costs Interest on borrowings (68) (31) Interest on lease liabilities (52) (53) Discounting on provisions and other liabilities (92) (65) Change in discount rate on closure and rehabilitation provisions - 2 Net interest expense on post-retirement employee benefits (3) (3) Exchange rate variations on net cash/(debt) 8 40 Total finance costs (207) (110) Net finance income/(costs) 15 (31 ) ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceIncomeExpenseExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-547": { "value": "19. Financial assets and financial liabilities The following table presents the financial assets and liabilities by class at their carrying amounts: FY23 US$M Note Held at FVTPL Designated as FVOCI Amortised cost Total Financial assets Cash and cash equivalents 16 - - 1,258 1,258 Trade and other receivables(1) 9 105 - 532 637 Other financial assets: Derivative contracts 1 - - 1 Total current financial assets 106 - 1,790 1,896 Trade and other receivables (1) 9 - - 1,802 1,802 Other financial assets: Investments in equity instruments designated as FVOCI - 108 - 108 Contingent consideration receivable 10 - - 10 Total non-current financial assets 10 108 1,802 1,920 Total financial assets 116 108 3,592 3,816 Financial liabilities Trade and other payables(2) 14 6 - 962 968 Interest bearing liabilities 17 - - 365 365 Total current financial liabilities 6 - 1,327 1,333 Trade and other payables(2) 14 - - 18 18 Interest bearing liabilities 17 - - 1,376 1,376 Other financial liabilities: Contingent consideration payable 37 - - 37 Total non-current financial liabilities 37 - 1,394 1,431 Total financial liabilities 43 - 2,721 2,764 (1) Excludes current input taxes of US$141 million and non-current input and other taxes of US$121 million included in other receivables. Refer to note 9 Trade and other receivables. (2) Excludes current input taxes of US$17 million and non-current input and other taxes of US$1 million included in other creditors. Refer to note 14 Trade and other payables. FY22 US$M Note Held at FVTPL Designated as FVOCI Amortised cost Total Financial assets Cash and cash equivalents 16 - - 2,365 2,365 Trade and other receivables (1) 9 143 - 561 704 Other financial assets: Derivative contracts 1 - - 1 Total current financial assets 144 - 2,926 3,070 Trade and other receivables (1) 9 - - 1,806 1,806 Other financial assets: Investments in equity instruments designated as FVOCI - 25 - 25 Vendor loan facility 39 - - 39 Total non-current financial assets 39 25 1,806 1,870 Total financial assets 183 25 4,732 4,940 Financial liabilities Trade and other payables(2) 14 20 - 929 949 Interest bearing liabilities 17 - - 402 402 Other financial liabilities: Derivative contracts 6 - - 6 Total current financial liabilities 26 - 1,331 1,357 Trade and other payables(2) 14 - - 7 7 Interest bearing liabilities 17 - - 1,425 1,425 Other financial liabilities: Contingent consideration payable 84 - - 84 Total non-current financial liabilities 84 - 1,432 1,516 Total financial liabilities 110 - 2,763 2,873 (1) Excludes current input taxes of US$140 million and non-current input and other taxes of US$97 million included in other receivables. Refer to note 9 Trade and other receivables. (2) Excludes current input taxes of US$40 million and non-current input and other taxes of US$1 million included in other creditors. Refer to note 14 Trade and other payables . (a) Accounting classification and fair value (i) Financial assets Financial assets are held at FVTPL, amortised cost or designated as FVOCI based on the business model for managing the financial assets and the contractual terms of the cashflows. Classification Initial recognition and subsequent measurement Held at FVTPL Financial assets held at FVTPL, including derivative financial assets, are initially recognised at fair value, with transaction costs recognised immediately in the Consolidated Income Statement. Financial assets held at FVTPL are subsequently remeasured through the Consolidated Income Statement, including any interest income, dividend income and foreign exchange gains and losses, unless hedge accounting is applied. Amortised cost At initial recognition, trade receivables that do not have a significant financing component are recognised at their transaction price. Other financial assets held at amortised cost are initially recognised at fair value plus related transaction costs. Financial assets subsequently measured at amortised cost are measured using the effective interest method and reduced by any impairment losses. Interest income, foreign exchange gains and losses, impairments and any gain or loss on derecognition, are recognised in the Consolidated Income Statement. Designated as FVOCI For certain investments in equity instruments, the Group has made an irrevocable election to present fair value changes in other comprehensive income. Investments in equity instruments designated as FVOCI are subsequently remeasured through other comprehensive income and are not reclassified to the Consolidated Income Statement. Dividends are recognised as other income in the Consolidated Income Statement unless the dividend clearly represents a recovery of part of the cost of the investment. (ii) Financial liabilities Financial liabilities are held at FVTPL or amortised cost. Classification Initial recognition and subsequent measurement Held at FVTPL Financial liabilities held at FVTPL, including derivative financial liabilities, are initially recognised at fair value, with transaction costs recognised immediately in the Consolidated Income Statement. Financial liabilities held at FVTPL are subsequently remeasured through the Consolidated Income Statement, including any interest expense and foreign exchange gains and losses, unless hedge accounting is applied. Amortised cost Financial liabilities held at amortised cost are recognised initially at fair value, net of transaction costs incurred. Financial liabilities held at amortised cost are subsequently measured using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in the Consolidated Income Statement. Any gain or loss on derecognition is also recognised in the Consolidated Income Statement. (iii) Embedded derivatives A derivative embedded within a hybrid contract, with a financial liability or non-financial host, is separated from the host and accounted for as a separate derivative if: \u2013 the economic characteristics and risks are not closely related to the host; \u2013 a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative; and \u2013 the hybrid contract is not measured at FVTPL. Embedded derivatives are measured at fair value with changes in fair value recognised in the Consolidated Income Statement. A derivative embedded within a hybrid contract containing a financial asset host is not accounted for separately. The financial asset host together with the embedded derivative is required to be classified in its entirety as a financial asset held at FVTPL (iv) Measurement of fair value The carrying values of the Group\u2019s financial assets and liabilities measured at amortised cost are equal to or approximate their respective fair values, except for senior unsecured notes, which have a fair value of US$617 million (FY22: US$650 million), and lease liabilities, for which a fair value has not been determined. The fair value of the Group\u2019s senior unsecured notes is estimated based on quoted market prices at the reporting date and are classified as Level 1 on the fair value hierarchy as shown below. For financial assets and liabilities measured at fair value, the Group uses quoted marked prices in active markets for identical assets where available. Where no price information is available from a quoted market source, alternative market mechanisms or recent comparable transactions, the fair value is estimated based on the Group\u2019s views on relevant future prices, net of valuation allowances to accommodate liquidity, modelling, credit and other risks implicit in such estimates. The following table shows the Group\u2019s financial assets and liabilities carried at fair value with reference to the nature of valuation inputs used: Level 1 Valuation is based on unadjusted quoted prices in active markets for identical financial assets and liabilities. Level 2 Valuation is based on inputs (other than quoted prices included in Level 1) that are observable for the financial asset or liability, either directly (i.e. as unquoted prices) or indirectly (i.e. derived from prices). Level 3 Valuation includes inputs that are not based on observable market data . FY23 US$M Level 1 Level 2 Level 3 Total Financial assets and liabilities Trade and other receivables - 105 - 105 Trade and other payables - (6) - (6) Derivative contract assets 1 - - 1 Investments in equity instruments designated as FVOCI 101 - 7 108 Contingent consideration receivable - - 10 10 Contingent consideration payable - - (37) (37) Total 102 99 (20) 181 FY22 US$M Level 1 Level 2 Level 3 Total Financial assets and liabilities Trade and other receivables - 143 - 143 Trade and other payables - (20) - (20) Derivative contract assets 1 - - 1 Derivative contract liabilities (6) - - (6) Investments in equity instruments designated as FVOCI 25 - - 25 Vendor loan facility - - 39 39 Contingent consideration payable - - (84) (84) Total 20 123 (45) 98 The following table shows the movements in the Group\u2019s Level 3 financial assets and liabilities: US$M FY23 FY22 At the beginning of the year (45) 52 Addition of financial assets/(liabilities) 15 (97) Reclassification of financial asset from level 3 to level 2(1) (39) - Derecognition of financial assets/(liabilities) - (5) Unrealised gains/(losses) recognised in the Consolidated Income Statement(2) 47 52 Unrealised gains/(losses) recognised in the Consolidated Statement of Comprehensive Income (3) 2 (47) At the end of the year (20) (45) (1) The valuation of the vendor loan facility provided to Seriti as part of the Group\u2019s divestment of South Africa Energy Coal no longer included inputs that are based on unobservable market data. This financial asset was subsequently settled through agreement with the vendor to offset this facility against the related rehabilitation fund liability, recognised within unsecured other interest bearing liabilities. Refer to note 17 Interest bearing liabilities. (2) Recognised in expenses excluding finance costs in the Consolidated Income Statement. (3) Recognised in the financial assets reserve in the Consolidated Statement of Comprehensive Income . ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-544": { "value": "19. Financial assets and financial liabilities The following table presents the financial assets and liabilities by class at their carrying amounts: FY23 US$M Note Held at FVTPL Designated as FVOCI Amortised cost Total Financial assets Cash and cash equivalents 16 - - 1,258 1,258 Trade and other receivables(1) 9 105 - 532 637 Other financial assets: Derivative contracts 1 - - 1 Total current financial assets 106 - 1,790 1,896 Trade and other receivables (1) 9 - - 1,802 1,802 Other financial assets: Investments in equity instruments designated as FVOCI - 108 - 108 Contingent consideration receivable 10 - - 10 Total non-current financial assets 10 108 1,802 1,920 Total financial assets 116 108 3,592 3,816 Financial liabilities Trade and other payables(2) 14 6 - 962 968 Interest bearing liabilities 17 - - 365 365 Total current financial liabilities 6 - 1,327 1,333 Trade and other payables(2) 14 - - 18 18 Interest bearing liabilities 17 - - 1,376 1,376 Other financial liabilities: Contingent consideration payable 37 - - 37 Total non-current financial liabilities 37 - 1,394 1,431 Total financial liabilities 43 - 2,721 2,764 (1) Excludes current input taxes of US$141 million and non-current input and other taxes of US$121 million included in other receivables. Refer to note 9 Trade and other receivables. (2) Excludes current input taxes of US$17 million and non-current input and other taxes of US$1 million included in other creditors. Refer to note 14 Trade and other payables. FY22 US$M Note Held at FVTPL Designated as FVOCI Amortised cost Total Financial assets Cash and cash equivalents 16 - - 2,365 2,365 Trade and other receivables (1) 9 143 - 561 704 Other financial assets: Derivative contracts 1 - - 1 Total current financial assets 144 - 2,926 3,070 Trade and other receivables (1) 9 - - 1,806 1,806 Other financial assets: Investments in equity instruments designated as FVOCI - 25 - 25 Vendor loan facility 39 - - 39 Total non-current financial assets 39 25 1,806 1,870 Total financial assets 183 25 4,732 4,940 Financial liabilities Trade and other payables(2) 14 20 - 929 949 Interest bearing liabilities 17 - - 402 402 Other financial liabilities: Derivative contracts 6 - - 6 Total current financial liabilities 26 - 1,331 1,357 Trade and other payables(2) 14 - - 7 7 Interest bearing liabilities 17 - - 1,425 1,425 Other financial liabilities: Contingent consideration payable 84 - - 84 Total non-current financial liabilities 84 - 1,432 1,516 Total financial liabilities 110 - 2,763 2,873 (1) Excludes current input taxes of US$140 million and non-current input and other taxes of US$97 million included in other receivables. Refer to note 9 Trade and other receivables. (2) Excludes current input taxes of US$40 million and non-current input and other taxes of US$1 million included in other creditors. Refer to note 14 Trade and other payables (i) Financial assets Financial assets are held at FVTPL, amortised cost or designated as FVOCI based on the business model for managing the financial assets and the contractual terms of the cashflows. Classification Initial recognition and subsequent measurement Held at FVTPL Financial assets held at FVTPL, including derivative financial assets, are initially recognised at fair value, with transaction costs recognised immediately in the Consolidated Income Statement. Financial assets held at FVTPL are subsequently remeasured through the Consolidated Income Statement, including any interest income, dividend income and foreign exchange gains and losses, unless hedge accounting is applied. Amortised cost At initial recognition, trade receivables that do not have a significant financing component are recognised at their transaction price. Other financial assets held at amortised cost are initially recognised at fair value plus related transaction costs. Financial assets subsequently measured at amortised cost are measured using the effective interest method and reduced by any impairment losses. Interest income, foreign exchange gains and losses, impairments and any gain or loss on derecognition, are recognised in the Consolidated Income Statement. Designated as FVOCI For certain investments in equity instruments, the Group has made an irrevocable election to present fair value changes in other comprehensive income. Investments in equity instruments designated as FVOCI are subsequently remeasured through other comprehensive income and are not reclassified to the Consolidated Income Statement. Dividends are recognised as other income in the Consolidated Income Statement unless the dividend clearly represents a recovery of part of the cost of the investment. (ii) Financial liabilities Financial liabilities are held at FVTPL or amortised cost. Classification Initial recognition and subsequent measurement Held at FVTPL Financial liabilities held at FVTPL, including derivative financial liabilities, are initially recognised at fair value, with transaction costs recognised immediately in the Consolidated Income Statement. Financial liabilities held at FVTPL are subsequently remeasured through the Consolidated Income Statement, including any interest expense and foreign exchange gains and losses, unless hedge accounting is applied. Amortised cost Financial liabilities held at amortised cost are recognised initially at fair value, net of transaction costs incurred. Financial liabilities held at amortised cost are subsequently measured using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in the Consolidated Income Statement. Any gain or loss on derecognition is also recognised in the Consolidated Income Statement. (iii) Embedded derivatives A derivative embedded within a hybrid contract, with a financial liability or non-financial host, is separated from the host and accounted for as a separate derivative if: \u2013 the economic characteristics and risks are not closely related to the host; \u2013 a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative; and \u2013 the hybrid contract is not measured at FVTPL. Embedded derivatives are measured at fair value with changes in fair value recognised in the Consolidated Income Statement. A derivative embedded within a hybrid contract containing a financial asset host is not accounted for separately. The financial asset host together with the embedded derivative is required to be classified in its entirety as a financial asset held at FVTPL ", "dimensions": { "concept": "ifrs-full:DisclosureOfDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-526": { "value": "19. Financial assets and financial liabilities The following table presents the financial assets and liabilities by class at their carrying amounts: FY23 US$M Note Held at FVTPL Designated as FVOCI Amortised cost Total Financial assets Cash and cash equivalents 16 - - 1,258 1,258 Trade and other receivables(1) 9 105 - 532 637 Other financial assets: Derivative contracts 1 - - 1 Total current financial assets 106 - 1,790 1,896 Trade and other receivables (1) 9 - - 1,802 1,802 Other financial assets: Investments in equity instruments designated as FVOCI - 108 - 108 Contingent consideration receivable 10 - - 10 Total non-current financial assets 10 108 1,802 1,920 Total financial assets 116 108 3,592 3,816 Financial liabilities Trade and other payables(2) 14 6 - 962 968 Interest bearing liabilities 17 - - 365 365 Total current financial liabilities 6 - 1,327 1,333 Trade and other payables(2) 14 - - 18 18 Interest bearing liabilities 17 - - 1,376 1,376 Other financial liabilities: Contingent consideration payable 37 - - 37 Total non-current financial liabilities 37 - 1,394 1,431 Total financial liabilities 43 - 2,721 2,764 (1) Excludes current input taxes of US$141 million and non-current input and other taxes of US$121 million included in other receivables. Refer to note 9 Trade and other receivables. (2) Excludes current input taxes of US$17 million and non-current input and other taxes of US$1 million included in other creditors. Refer to note 14 Trade and other payables. FY22 US$M Note Held at FVTPL Designated as FVOCI Amortised cost Total Financial assets Cash and cash equivalents 16 - - 2,365 2,365 Trade and other receivables (1) 9 143 - 561 704 Other financial assets: Derivative contracts 1 - - 1 Total current financial assets 144 - 2,926 3,070 Trade and other receivables (1) 9 - - 1,806 1,806 Other financial assets: Investments in equity instruments designated as FVOCI - 25 - 25 Vendor loan facility 39 - - 39 Total non-current financial assets 39 25 1,806 1,870 Total financial assets 183 25 4,732 4,940 Financial liabilities Trade and other payables(2) 14 20 - 929 949 Interest bearing liabilities 17 - - 402 402 Other financial liabilities: Derivative contracts 6 - - 6 Total current financial liabilities 26 - 1,331 1,357 Trade and other payables(2) 14 - - 7 7 Interest bearing liabilities 17 - - 1,425 1,425 Other financial liabilities: Contingent consideration payable 84 - - 84 Total non-current financial liabilities 84 - 1,432 1,516 Total financial liabilities 110 - 2,763 2,873 (1) Excludes current input taxes of US$140 million and non-current input and other taxes of US$97 million included in other receivables. Refer to note 9 Trade and other receivables. (2) Excludes current input taxes of US$40 million and non-current input and other taxes of US$1 million included in other creditors. Refer to note 14 Trade and other payables . (b) Financial risk management objectives and policies The Group is exposed to market, liquidity and credit risk. These risks are managed in accordance with the Group\u2019s portfolio risk management strategy which supports the delivery of the Group\u2019s financial targets while protecting its future financial security and flexibility by taking advantage of the natural diversification of the Group\u2019s operations and activities. A Cash Flow at Risk (CFaR) framework is used to capture the benefits of diversification and to measure the aggregate impact of financial risks on those financial targets. CFaR is measured on a portfolio basis and is defined as the expected reduction from projected business plan cash flows over a one-year horizon in a pessimistic case. In addition to the CFaR framework, deterministic analysis of a range of operational, commodity price and foreign exchange rate scenarios is also used to measure the potential impact on financial targets. (i) Market risk Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises interest rate risk, foreign currency risk and other price risk, such as equity price risk and commodity price risk. The Group\u2019s activities expose it to market risks associated with movements in interest rates, foreign currencies and commodity prices. The Group predominantly manages currency impacts, input costs and commodity prices on a floating or index basis. This strategy gives rise to a risk of variability in earnings which is measured under the CFaR framework. In executing the Group\u2019s strategy, financial instruments may be employed for risk mitigation purposes within a strict Board of Directors approved mandate, or to align the total Group exposure to the relevant index target in the case of commodity sales, operating costs or debt issuances. Interest rate risk The Group had the following exposure to interest rate risk: US$M FY23 FY22 Financial assets Cash and cash equivalents 1,218 2,306 Trade and other receivables 153 102 Other financial assets - 39 Financial liabilities Interest bearing liabilities (286) (334) Net exposure 1,085 2,113 The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of financial assets and liabilities affected. With all other variables held constant, the Group\u2019s profit/(loss) after tax would increase/(decrease) as follows: US$M Impact on profit/(loss) after tax FY23 FY22 Increase of 100 basis points 8 16 Decrease of 100 basis points (8) (13) The sensitivity analysis assumes that the change in interest rates is effective from the beginning of the year and the fixed/floating mix and balances are constant over the year. However, interest rates and the profile of the Group\u2019s financial assets and liabilities may not remain constant over the coming year and therefore such sensitivity analysis should be used with care . Foreign currency risk The Group\u2019s potential currency exposures comprise: \u2013 Translational exposure in respect of non-functional currency monetary items; and \u2013 Transactional exposure in respect of non-functional currency expenditure and revenues. The functional currency of the Group\u2019s operations is primarily the US dollar. Certain operating and capital expenditure is incurred by operations in currencies other than their functional currency. To a lesser extent, certain sales revenue is earned in currencies other than the functional currency of the operation, and certain exchange control restrictions may require funds to be maintained in currencies other than the operations functional currency. When required, the Group may enter into forward exchange contracts. The following table shows the principal foreign currency risk arising from financial assets and liabilities by currency of denomination: US$M FY23 FY22 Australian dollar (946) (860) Brazilian real (103) (63) Colombian peso (70) (47) South African rand 74 98 Based on the Group\u2019s net financial assets and liabilities as at 30 June, a weakening of the US dollar against these currencies as illustrated in the table below, with all other variables held constant, would increase/(decrease) the Group\u2019s profit/(loss) after tax, as follows: US$M Impact on profit/(loss) after tax FY23 FY22 10% movement in Australian dollar (67) (60) 10% movement in Brazilian real (10) (6) 10% movement in Colombian peso (7) (5) 10% movement in South African rand 7 10 The Group\u2019s other comprehensive income is not exposed to any significant fluctuations as a result of foreign exchange risk arising from financial assets and liabilities. Commodity price risk Contracts for the sale and physical delivery of commodities are executed whenever possible on a pricing basis intended to achieve a relevant index target. Where pricing terms deviate from the index, the Group may choose to use derivative commodity contracts to realise the index price. Contracts for the physical delivery of commodities are not typically financial instruments and are not recognised in the Consolidated Balance Sheet . Provisionally priced commodity sales and purchases contracts Provisionally priced sales or purchases contracts are those for which price finalisation, referenced to the relevant index, is outstanding at the reporting date. Provisional pricing mechanisms embedded within these sales and purchases arrangements have the character of a commodity derivative and are carried at FVTPL as part of trade receivables or trade creditors. Fair value movements on provisionally priced sale contracts are disclosed as other revenue in the Group\u2019s segment results, refer to note 4(b) Segment results. The Group\u2019s exposure at 30 June 2023 to the impact of movements in commodity prices on provisionally invoiced sale and purchase volumes was predominantly around nickel, silver, lead, zinc, metallurgical coal and aluminium. The Group had 3.7kt of nickel, 2.6Moz of silver, 24.4kt of lead, 5.4kt of zinc, 30.0kt of metallurgical coal, 10.0kt of aluminium and 31.5kt of alumina exposure at 30 June 2023 (FY22: 2.3kt of nickel, 1.8Moz of silver, 30.0kt of lead, 5.7kt of zinc, 27.1kt of aluminium) that was provisionally priced. The final price of these sales or purchases will be determined during the first half of FY24. A 10 per cent change in the realised price of these commodities, with all other factors held constant, would increase or decrease profit/(loss) after tax by US$19 million (FY22: US$18 million). The relationship between commodity prices and foreign currencies is complex and foreign exchange rates and commodity prices may move concurrently in response to market conditions. These sensitivities should therefore be used with care . (ii) Liquidity risk The Group\u2019s liquidity risk arises from the possibility that it may not be able to settle or meet its obligations as they fall due. Operational, capital and regulatory requirements are considered in the management of liquidity risk, in conjunction with short and long-term forecast information. In line with the Group\u2019s policy on counterparty credit exposure, the Group only uses counterparties of a high credit standing for the investment of any excess cash. The entities in the Group are funded by a combination of cash generated by the Group\u2019s operations, working capital facilities and intercompany loans provided by the Group. Intercompany loans may be funded by a combination of cash, short and long-term debt. Details of the Group\u2019s major standby arrangement are as follows: FY23 US$M Available Used Unused Revolving credit facility (1) 1,400 - 1,400 (1) The Group has an undrawn revolving credit facility which was extended in December 2022 by one year to December 2027, with the size of the facility in the final year reduced to US$1,200 million. Maturity profile of financial liabilities The maturity profiles of financial liabilities, based on the contractual amounts, are as follows: FY23 US$M Carrying amount Total On demand or less than 1 year 1 to 5 years More than 5 years Trade and other payables (1) 986 986 968 - 18 Senior unsecured notes 690 974 30 122 822 Lease liabilities 674 1,148 102 331 715 Other interest bearing liabilities 377 383 315 68 - Other financial liabilities \u2013 contingent consideration payable 37 48 - 48 - Total 2,764 3,539 1,415 569 1,555 (1) Excludes current input taxes of US$17 million and non-current input and other taxes of US$1 million included in other creditors. Refer to note 14 Trade and other payables. FY22 US$M Carrying amount Total On demand or less than 1 year 1 to 5 years More than 5 years Trade and other payables (1) 956 956 949 7 - Senior unsecured notes (2) 689 1,004 30 122 852 Lease liabilities 650 1,149 90 314 745 Other interest bearing liabilities 488 507 362 85 60 Other financial liabilities \u2013 contingent consideration payable 84 109 - 109 - Other financial liabilities \u2013 derivative contracts 6 6 6 - - Total 2,873 3,731 1,437 637 1,657 (1) Excludes current input taxes of US$40 million and non-current input and other taxes of US$1 million included in other creditors. Refer to note 14 Trade and other payables. (2) The maturity profile of senior unsecured notes was restated to include future coupon payments, consistent with current year presentation . (iii) Credit risk Credit risk management The Group has credit risk management policies in place covering the credit analysis, approvals and monitoring of counterparty exposures. As part of these processes the ongoing creditworthiness of counterparties is regularly assessed. Credit limits are established for customers and reviewed annually or with the release of new information materially impacting the customer\u2019s creditworthiness. Mitigation methods are defined and implemented for higher-risk counterparties to protect revenues, with more than half of the Group\u2019s sales of physical commodities occurring via secured payment terms including prepayments, letters of credit, guarantees and other risk mitigation instruments. Mitigation methods include credit exposure management and overdue accounts monitoring. In addition, leading key risk indicators are actively monitored for all customers to identify any emerging risks. There are no material concentrations of credit risk, either with individual counterparties or groups of counterparties, by industry or geography. The carrying amounts of financial assets represent the maximum credit exposure. Expected credit losses Impairment allowances are based on a forward-looking expected credit loss model. For trade receivables, the Group uses the simplified approach to recognise impairments based on the lifetime expected credit loss. For other receivables, the Group applies the general approach and recognises impairments based on a 12-month expected credit loss. Where there has been a significant increase in credit risk, a loss allowance for lifetime expected credit losses is recognised. Exposures are grouped by external credit rating and security options and an expected credit loss rate is calculated accordingly. Where applicable, actual credit loss experience is also taken into account. For remaining receivables without an external credit rating or security option, a rating of BB (S&P Global Ratings) is used, on the basis that there is no support that it is investment grade, nor is there any evidence of default. Shareholder loan receivable from Sierra Gorda Purchased credit-impaired financial assets are initially recognised at fair value. They are subsequently measured at amortised cost using the credit-adjusted effective interest method, less an allowance for changes in lifetime expected credit losses since initial recognition. The credit-adjusted effective interest rate is determined at initial recognition and not amended for subsequent changes to lifetime expected credit losses since acquisition. Changes in lifetime expected credit losses are recognised as impairment and reversals of impairment of financials assets. The Group\u2019s investment in the Sierra Gorda operation is represented by the carrying value of an equity accounted investment of US$101 million (FY22: US$30 million), and the carrying value of a purchased credit-impaired receivable of US$1,711 million (FY22: US$1,648 million) classified as a loan to an equity accounted investment within trade and other receivables on the Consolidated Balance Sheet. The loan has a contractual interest rate of 8 per cent and the repayment of the loan by the Sierra Gorda operation is dependent on its financial performance. At 30 June 2023, the Group updated its estimated timing of the loan repayments and as a result recognised an impairment of US$71 million (FY22: impairment of US$26 million) which is included in expenses excluding finance costs in the Consolidated Income Statement. The net present value of the expected future cash flows of the loan was determined as US$1,711 million (FY22: US$1,648 million) using a measurement methodology consistent with a Level 3 fair value based on the inputs in the valuation technique. The following table shows the movement in the carrying amount of this receivable: US$M FY23 FY22 At the beginning of the financial year 1,648 - Acquisition - 1,687 Interest accrued 148 55 Net impairment (71) (26) Repayments (14) (68) At the end of the financial year 1,711 1,648 The future loan repayments were informed by a production profile and costs based on management\u2019s planning processes. Refer to the Mineral Resources and Ore Reserves section of note 2(c) for further information on the estimates which underpin the production profile. An effective interest rate of nine per cent, as determined on the date of acquisition, was applied to discount the future loan repayments. Determining the net present value requires management to make certain key estimates, assumptions and judgements, which are consistent with those outlined in note 13 Impairment of non-financial assets. The net present value of the expected future cash flows of the loan is most sensitive to the Group\u2019s copper price assumption, with a range of US$3.81/lb to US$4.11/lb used, in real terms. The potential effect of using a reasonably possible alternative copper price assumption on the carrying value of the loan, based on changing this assumption by 10 per cent while holding all other variables constant, is shown in the following table: FY23 US$M Impact on profit/(loss) after tax Face value Carrying value Favourable Unfavourable Trade and other receivables Loans to equity accounted investments 2,185 1,711 90 (164) (c) Capital management The Group allocates capital in line with its strategy and capital management framework. The Group\u2019s priorities for cash flow are to: \u2013 Maintain safe and reliable operations and an investment grade credit rating through the cycle; \u2013 Distribute a minimum of 40 per cent of Underlying earnings as dividends to shareholders following each six-month reporting period; and \u2013 Maximise total shareholder returns through other alternatives including special dividends, share buy-backs and high return investment opportunities which compete for capital. ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialRiskManagementExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-481": { "value": "19. Financial assets and financial liabilities The following table presents the financial assets and liabilities by class at their carrying amounts: FY23 US$M Note Held at FVTPL Designated as FVOCI Amortised cost Total Financial assets Cash and cash equivalents 16 - - 1,258 1,258 Trade and other receivables(1) 9 105 - 532 637 Other financial assets: Derivative contracts 1 - - 1 Total current financial assets 106 - 1,790 1,896 Trade and other receivables (1) 9 - - 1,802 1,802 Other financial assets: Investments in equity instruments designated as FVOCI - 108 - 108 Contingent consideration receivable 10 - - 10 Total non-current financial assets 10 108 1,802 1,920 Total financial assets 116 108 3,592 3,816 Financial liabilities Trade and other payables(2) 14 6 - 962 968 Interest bearing liabilities 17 - - 365 365 Total current financial liabilities 6 - 1,327 1,333 Trade and other payables(2) 14 - - 18 18 Interest bearing liabilities 17 - - 1,376 1,376 Other financial liabilities: Contingent consideration payable 37 - - 37 Total non-current financial liabilities 37 - 1,394 1,431 Total financial liabilities 43 - 2,721 2,764 (1) Excludes current input taxes of US$141 million and non-current input and other taxes of US$121 million included in other receivables. Refer to note 9 Trade and other receivables. (2) Excludes current input taxes of US$17 million and non-current input and other taxes of US$1 million included in other creditors. Refer to note 14 Trade and other payables. FY22 US$M Note Held at FVTPL Designated as FVOCI Amortised cost Total Financial assets Cash and cash equivalents 16 - - 2,365 2,365 Trade and other receivables (1) 9 143 - 561 704 Other financial assets: Derivative contracts 1 - - 1 Total current financial assets 144 - 2,926 3,070 Trade and other receivables (1) 9 - - 1,806 1,806 Other financial assets: Investments in equity instruments designated as FVOCI - 25 - 25 Vendor loan facility 39 - - 39 Total non-current financial assets 39 25 1,806 1,870 Total financial assets 183 25 4,732 4,940 Financial liabilities Trade and other payables(2) 14 20 - 929 949 Interest bearing liabilities 17 - - 402 402 Other financial liabilities: Derivative contracts 6 - - 6 Total current financial liabilities 26 - 1,331 1,357 Trade and other payables(2) 14 - - 7 7 Interest bearing liabilities 17 - - 1,425 1,425 Other financial liabilities: Contingent consideration payable 84 - - 84 Total non-current financial liabilities 84 - 1,432 1,516 Total financial liabilities 110 - 2,763 2,873 (1) Excludes current input taxes of US$140 million and non-current input and other taxes of US$97 million included in other receivables. Refer to note 9 Trade and other receivables. (2) Excludes current input taxes of US$40 million and non-current input and other taxes of US$1 million included in other creditors. Refer to note 14 Trade and other payables (a) Accounting classification and fair value (i) Financial assets Financial assets are held at FVTPL, amortised cost or designated as FVOCI based on the business model for managing the financial assets and the contractual terms of the cashflows. Classification Initial recognition and subsequent measurement Held at FVTPL Financial assets held at FVTPL, including derivative financial assets, are initially recognised at fair value, with transaction costs recognised immediately in the Consolidated Income Statement. Financial assets held at FVTPL are subsequently remeasured through the Consolidated Income Statement, including any interest income, dividend income and foreign exchange gains and losses, unless hedge accounting is applied. Amortised cost At initial recognition, trade receivables that do not have a significant financing component are recognised at their transaction price. Other financial assets held at amortised cost are initially recognised at fair value plus related transaction costs. Financial assets subsequently measured at amortised cost are measured using the effective interest method and reduced by any impairment losses. Interest income, foreign exchange gains and losses, impairments and any gain or loss on derecognition, are recognised in the Consolidated Income Statement. Designated as FVOCI For certain investments in equity instruments, the Group has made an irrevocable election to present fair value changes in other comprehensive income. Investments in equity instruments designated as FVOCI are subsequently remeasured through other comprehensive income and are not reclassified to the Consolidated Income Statement. Dividends are recognised as other income in the Consolidated Income Statement unless the dividend clearly represents a recovery of part of the cost of the investment. (ii) Financial liabilities Financial liabilities are held at FVTPL or amortised cost. Classification Initial recognition and subsequent measurement Held at FVTPL Financial liabilities held at FVTPL, including derivative financial liabilities, are initially recognised at fair value, with transaction costs recognised immediately in the Consolidated Income Statement. Financial liabilities held at FVTPL are subsequently remeasured through the Consolidated Income Statement, including any interest expense and foreign exchange gains and losses, unless hedge accounting is applied. Amortised cost Financial liabilities held at amortised cost are recognised initially at fair value, net of transaction costs incurred. Financial liabilities held at amortised cost are subsequently measured using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in the Consolidated Income Statement. Any gain or loss on derecognition is also recognised in the Consolidated Income Statement. (iii) Embedded derivatives A derivative embedded within a hybrid contract, with a financial liability or non-financial host, is separated from the host and accounted for as a separate derivative if: \u2013 the economic characteristics and risks are not closely related to the host; \u2013 a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative; and \u2013 the hybrid contract is not measured at FVTPL. Embedded derivatives are measured at fair value with changes in fair value recognised in the Consolidated Income Statement. A derivative embedded within a hybrid contract containing a financial asset host is not accounted for separately. The financial asset host together with the embedded derivative is required to be classified in its entirety as a financial asset held at FVTPL (iv) Measurement of fair value The carrying values of the Group\u2019s financial assets and liabilities measured at amortised cost are equal to or approximate their respective fair values, except for senior unsecured notes, which have a fair value of US$617 million (FY22: US$650 million), and lease liabilities, for which a fair value has not been determined. The fair value of the Group\u2019s senior unsecured notes is estimated based on quoted market prices at the reporting date and are classified as Level 1 on the fair value hierarchy as shown below. For financial assets and liabilities measured at fair value, the Group uses quoted marked prices in active markets for identical assets where available. Where no price information is available from a quoted market source, alternative market mechanisms or recent comparable transactions, the fair value is estimated based on the Group\u2019s views on relevant future prices, net of valuation allowances to accommodate liquidity, modelling, credit and other risks implicit in such estimates. The following table shows the Group\u2019s financial assets and liabilities carried at fair value with reference to the nature of valuation inputs used: Level 1 Valuation is based on unadjusted quoted prices in active markets for identical financial assets and liabilities. Level 2 Valuation is based on inputs (other than quoted prices included in Level 1) that are observable for the financial asset or liability, either directly (i.e. as unquoted prices) or indirectly (i.e. derived from prices). Level 3 Valuation includes inputs that are not based on observable market data . FY23 US$M Level 1 Level 2 Level 3 Total Financial assets and liabilities Trade and other receivables - 105 - 105 Trade and other payables - (6) - (6) Derivative contract assets 1 - - 1 Investments in equity instruments designated as FVOCI 101 - 7 108 Contingent consideration receivable - - 10 10 Contingent consideration payable - - (37) (37) Total 102 99 (20) 181 FY22 US$M Level 1 Level 2 Level 3 Total Financial assets and liabilities Trade and other receivables - 143 - 143 Trade and other payables - (20) - (20) Derivative contract assets 1 - - 1 Derivative contract liabilities (6) - - (6) Investments in equity instruments designated as FVOCI 25 - - 25 Vendor loan facility - - 39 39 Contingent consideration payable - - (84) (84) Total 20 123 (45) 98 The following table shows the movements in the Group\u2019s Level 3 financial assets and liabilities: US$M FY23 FY22 At the beginning of the year (45) 52 Addition of financial assets/(liabilities) 15 (97) Reclassification of financial asset from level 3 to level 2(1) (39) - Derecognition of financial assets/(liabilities) - (5) Unrealised gains/(losses) recognised in the Consolidated Income Statement(2) 47 52 Unrealised gains/(losses) recognised in the Consolidated Statement of Comprehensive Income (3) 2 (47) At the end of the year (20) (45) (1) The valuation of the vendor loan facility provided to Seriti as part of the Group\u2019s divestment of South Africa Energy Coal no longer included inputs that are based on unobservable market data. This financial asset was subsequently settled through agreement with the vendor to offset this facility against the related rehabilitation fund liability, recognised within unsecured other interest bearing liabilities. Refer to note 17 Interest bearing liabilities. (2) Recognised in expenses excluding finance costs in the Consolidated Income Statement. (3) Recognised in the financial assets reserve in the Consolidated Statement of Comprehensive Income (b) Financial risk management objectives and policies The Group is exposed to market, liquidity and credit risk. These risks are managed in accordance with the Group\u2019s portfolio risk management strategy which supports the delivery of the Group\u2019s financial targets while protecting its future financial security and flexibility by taking advantage of the natural diversification of the Group\u2019s operations and activities. A Cash Flow at Risk (CFaR) framework is used to capture the benefits of diversification and to measure the aggregate impact of financial risks on those financial targets. CFaR is measured on a portfolio basis and is defined as the expected reduction from projected business plan cash flows over a one-year horizon in a pessimistic case. In addition to the CFaR framework, deterministic analysis of a range of operational, commodity price and foreign exchange rate scenarios is also used to measure the potential impact on financial targets. (i) Market risk Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises interest rate risk, foreign currency risk and other price risk, such as equity price risk and commodity price risk. The Group\u2019s activities expose it to market risks associated with movements in interest rates, foreign currencies and commodity prices. The Group predominantly manages currency impacts, input costs and commodity prices on a floating or index basis. This strategy gives rise to a risk of variability in earnings which is measured under the CFaR framework. In executing the Group\u2019s strategy, financial instruments may be employed for risk mitigation purposes within a strict Board of Directors approved mandate, or to align the total Group exposure to the relevant index target in the case of commodity sales, operating costs or debt issuances. Interest rate risk The Group had the following exposure to interest rate risk: US$M FY23 FY22 Financial assets Cash and cash equivalents 1,218 2,306 Trade and other receivables 153 102 Other financial assets - 39 Financial liabilities Interest bearing liabilities (286) (334) Net exposure 1,085 2,113 The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of financial assets and liabilities affected. With all other variables held constant, the Group\u2019s profit/(loss) after tax would increase/(decrease) as follows: US$M Impact on profit/(loss) after tax FY23 FY22 Increase of 100 basis points 8 16 Decrease of 100 basis points (8) (13) The sensitivity analysis assumes that the change in interest rates is effective from the beginning of the year and the fixed/floating mix and balances are constant over the year. However, interest rates and the profile of the Group\u2019s financial assets and liabilities may not remain constant over the coming year and therefore such sensitivity analysis should be used with care . Foreign currency risk The Group\u2019s potential currency exposures comprise: \u2013 Translational exposure in respect of non-functional currency monetary items; and \u2013 Transactional exposure in respect of non-functional currency expenditure and revenues. The functional currency of the Group\u2019s operations is primarily the US dollar. Certain operating and capital expenditure is incurred by operations in currencies other than their functional currency. To a lesser extent, certain sales revenue is earned in currencies other than the functional currency of the operation, and certain exchange control restrictions may require funds to be maintained in currencies other than the operations functional currency. When required, the Group may enter into forward exchange contracts. The following table shows the principal foreign currency risk arising from financial assets and liabilities by currency of denomination: US$M FY23 FY22 Australian dollar (946) (860) Brazilian real (103) (63) Colombian peso (70) (47) South African rand 74 98 Based on the Group\u2019s net financial assets and liabilities as at 30 June, a weakening of the US dollar against these currencies as illustrated in the table below, with all other variables held constant, would increase/(decrease) the Group\u2019s profit/(loss) after tax, as follows: US$M Impact on profit/(loss) after tax FY23 FY22 10% movement in Australian dollar (67) (60) 10% movement in Brazilian real (10) (6) 10% movement in Colombian peso (7) (5) 10% movement in South African rand 7 10 The Group\u2019s other comprehensive income is not exposed to any significant fluctuations as a result of foreign exchange risk arising from financial assets and liabilities. Commodity price risk Contracts for the sale and physical delivery of commodities are executed whenever possible on a pricing basis intended to achieve a relevant index target. Where pricing terms deviate from the index, the Group may choose to use derivative commodity contracts to realise the index price. Contracts for the physical delivery of commodities are not typically financial instruments and are not recognised in the Consolidated Balance Sheet . Provisionally priced commodity sales and purchases contracts Provisionally priced sales or purchases contracts are those for which price finalisation, referenced to the relevant index, is outstanding at the reporting date. Provisional pricing mechanisms embedded within these sales and purchases arrangements have the character of a commodity derivative and are carried at FVTPL as part of trade receivables or trade creditors. Fair value movements on provisionally priced sale contracts are disclosed as other revenue in the Group\u2019s segment results, refer to note 4(b) Segment results. The Group\u2019s exposure at 30 June 2023 to the impact of movements in commodity prices on provisionally invoiced sale and purchase volumes was predominantly around nickel, silver, lead, zinc, metallurgical coal and aluminium. The Group had 3.7kt of nickel, 2.6Moz of silver, 24.4kt of lead, 5.4kt of zinc, 30.0kt of metallurgical coal, 10.0kt of aluminium and 31.5kt of alumina exposure at 30 June 2023 (FY22: 2.3kt of nickel, 1.8Moz of silver, 30.0kt of lead, 5.7kt of zinc, 27.1kt of aluminium) that was provisionally priced. The final price of these sales or purchases will be determined during the first half of FY24. A 10 per cent change in the realised price of these commodities, with all other factors held constant, would increase or decrease profit/(loss) after tax by US$19 million (FY22: US$18 million). The relationship between commodity prices and foreign currencies is complex and foreign exchange rates and commodity prices may move concurrently in response to market conditions. These sensitivities should therefore be used with care . (ii) Liquidity risk The Group\u2019s liquidity risk arises from the possibility that it may not be able to settle or meet its obligations as they fall due. Operational, capital and regulatory requirements are considered in the management of liquidity risk, in conjunction with short and long-term forecast information. In line with the Group\u2019s policy on counterparty credit exposure, the Group only uses counterparties of a high credit standing for the investment of any excess cash. The entities in the Group are funded by a combination of cash generated by the Group\u2019s operations, working capital facilities and intercompany loans provided by the Group. Intercompany loans may be funded by a combination of cash, short and long-term debt. Details of the Group\u2019s major standby arrangement are as follows: FY23 US$M Available Used Unused Revolving credit facility (1) 1,400 - 1,400 (1) The Group has an undrawn revolving credit facility which was extended in December 2022 by one year to December 2027, with the size of the facility in the final year reduced to US$1,200 million. Maturity profile of financial liabilities The maturity profiles of financial liabilities, based on the contractual amounts, are as follows: FY23 US$M Carrying amount Total On demand or less than 1 year 1 to 5 years More than 5 years Trade and other payables (1) 986 986 968 - 18 Senior unsecured notes 690 974 30 122 822 Lease liabilities 674 1,148 102 331 715 Other interest bearing liabilities 377 383 315 68 - Other financial liabilities \u2013 contingent consideration payable 37 48 - 48 - Total 2,764 3,539 1,415 569 1,555 (1) Excludes current input taxes of US$17 million and non-current input and other taxes of US$1 million included in other creditors. Refer to note 14 Trade and other payables. FY22 US$M Carrying amount Total On demand or less than 1 year 1 to 5 years More than 5 years Trade and other payables (1) 956 956 949 7 - Senior unsecured notes (2) 689 1,004 30 122 852 Lease liabilities 650 1,149 90 314 745 Other interest bearing liabilities 488 507 362 85 60 Other financial liabilities \u2013 contingent consideration payable 84 109 - 109 - Other financial liabilities \u2013 derivative contracts 6 6 6 - - Total 2,873 3,731 1,437 637 1,657 (1) Excludes current input taxes of US$40 million and non-current input and other taxes of US$1 million included in other creditors. Refer to note 14 Trade and other payables. (2) The maturity profile of senior unsecured notes was restated to include future coupon payments, consistent with current year presentation . (iii) Credit risk Credit risk management The Group has credit risk management policies in place covering the credit analysis, approvals and monitoring of counterparty exposures. As part of these processes the ongoing creditworthiness of counterparties is regularly assessed. Credit limits are established for customers and reviewed annually or with the release of new information materially impacting the customer\u2019s creditworthiness. Mitigation methods are defined and implemented for higher-risk counterparties to protect revenues, with more than half of the Group\u2019s sales of physical commodities occurring via secured payment terms including prepayments, letters of credit, guarantees and other risk mitigation instruments. Mitigation methods include credit exposure management and overdue accounts monitoring. In addition, leading key risk indicators are actively monitored for all customers to identify any emerging risks. There are no material concentrations of credit risk, either with individual counterparties or groups of counterparties, by industry or geography. The carrying amounts of financial assets represent the maximum credit exposure. Expected credit losses Impairment allowances are based on a forward-looking expected credit loss model. For trade receivables, the Group uses the simplified approach to recognise impairments based on the lifetime expected credit loss. For other receivables, the Group applies the general approach and recognises impairments based on a 12-month expected credit loss. Where there has been a significant increase in credit risk, a loss allowance for lifetime expected credit losses is recognised. Exposures are grouped by external credit rating and security options and an expected credit loss rate is calculated accordingly. Where applicable, actual credit loss experience is also taken into account. For remaining receivables without an external credit rating or security option, a rating of BB (S&P Global Ratings) is used, on the basis that there is no support that it is investment grade, nor is there any evidence of default. Shareholder loan receivable from Sierra Gorda Purchased credit-impaired financial assets are initially recognised at fair value. They are subsequently measured at amortised cost using the credit-adjusted effective interest method, less an allowance for changes in lifetime expected credit losses since initial recognition. The credit-adjusted effective interest rate is determined at initial recognition and not amended for subsequent changes to lifetime expected credit losses since acquisition. Changes in lifetime expected credit losses are recognised as impairment and reversals of impairment of financials assets. The Group\u2019s investment in the Sierra Gorda operation is represented by the carrying value of an equity accounted investment of US$101 million (FY22: US$30 million), and the carrying value of a purchased credit-impaired receivable of US$1,711 million (FY22: US$1,648 million) classified as a loan to an equity accounted investment within trade and other receivables on the Consolidated Balance Sheet. The loan has a contractual interest rate of 8 per cent and the repayment of the loan by the Sierra Gorda operation is dependent on its financial performance. At 30 June 2023, the Group updated its estimated timing of the loan repayments and as a result recognised an impairment of US$71 million (FY22: impairment of US$26 million) which is included in expenses excluding finance costs in the Consolidated Income Statement. The net present value of the expected future cash flows of the loan was determined as US$1,711 million (FY22: US$1,648 million) using a measurement methodology consistent with a Level 3 fair value based on the inputs in the valuation technique. The following table shows the movement in the carrying amount of this receivable: US$M FY23 FY22 At the beginning of the financial year 1,648 - Acquisition - 1,687 Interest accrued 148 55 Net impairment (71) (26) Repayments (14) (68) At the end of the financial year 1,711 1,648 The future loan repayments were informed by a production profile and costs based on management\u2019s planning processes. Refer to the Mineral Resources and Ore Reserves section of note 2(c) for further information on the estimates which underpin the production profile. An effective interest rate of nine per cent, as determined on the date of acquisition, was applied to discount the future loan repayments. Determining the net present value requires management to make certain key estimates, assumptions and judgements, which are consistent with those outlined in note 13 Impairment of non-financial assets. The net present value of the expected future cash flows of the loan is most sensitive to the Group\u2019s copper price assumption, with a range of US$3.81/lb to US$4.11/lb used, in real terms. The potential effect of using a reasonably possible alternative copper price assumption on the carrying value of the loan, based on changing this assumption by 10 per cent while holding all other variables constant, is shown in the following table: FY23 US$M Impact on profit/(loss) after tax Face value Carrying value Favourable Unfavourable Trade and other receivables Loans to equity accounted investments 2,185 1,711 90 (164) (c) Capital management The Group allocates capital in line with its strategy and capital management framework. The Group\u2019s priorities for cash flow are to: \u2013 Maintain safe and reliable operations and an investment grade credit rating through the cycle; \u2013 Distribute a minimum of 40 per cent of Underlying earnings as dividends to shareholders following each six-month reporting period; and \u2013 Maximise total shareholder returns through other alternatives including special dividends, share buy-backs and high return investment opportunities which compete for capital. ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-470": { "value": "19. Financial assets and financial liabilities The following table presents the financial assets and liabilities by class at their carrying amounts: FY23 US$M Note Held at FVTPL Designated as FVOCI Amortised cost Total Financial assets Cash and cash equivalents 16 - - 1,258 1,258 Trade and other receivables(1) 9 105 - 532 637 Other financial assets: Derivative contracts 1 - - 1 Total current financial assets 106 - 1,790 1,896 Trade and other receivables (1) 9 - - 1,802 1,802 Other financial assets: Investments in equity instruments designated as FVOCI - 108 - 108 Contingent consideration receivable 10 - - 10 Total non-current financial assets 10 108 1,802 1,920 Total financial assets 116 108 3,592 3,816 Financial liabilities Trade and other payables(2) 14 6 - 962 968 Interest bearing liabilities 17 - - 365 365 Total current financial liabilities 6 - 1,327 1,333 Trade and other payables(2) 14 - - 18 18 Interest bearing liabilities 17 - - 1,376 1,376 Other financial liabilities: Contingent consideration payable 37 - - 37 Total non-current financial liabilities 37 - 1,394 1,431 Total financial liabilities 43 - 2,721 2,764 (1) Excludes current input taxes of US$141 million and non-current input and other taxes of US$121 million included in other receivables. Refer to note 9 Trade and other receivables. (2) Excludes current input taxes of US$17 million and non-current input and other taxes of US$1 million included in other creditors. Refer to note 14 Trade and other payables. FY22 US$M Note Held at FVTPL Designated as FVOCI Amortised cost Total Financial assets Cash and cash equivalents 16 - - 2,365 2,365 Trade and other receivables (1) 9 143 - 561 704 Other financial assets: Derivative contracts 1 - - 1 Total current financial assets 144 - 2,926 3,070 Trade and other receivables (1) 9 - - 1,806 1,806 Other financial assets: Investments in equity instruments designated as FVOCI - 25 - 25 Vendor loan facility 39 - - 39 Total non-current financial assets 39 25 1,806 1,870 Total financial assets 183 25 4,732 4,940 Financial liabilities Trade and other payables(2) 14 20 - 929 949 Interest bearing liabilities 17 - - 402 402 Other financial liabilities: Derivative contracts 6 - - 6 Total current financial liabilities 26 - 1,331 1,357 Trade and other payables(2) 14 - - 7 7 Interest bearing liabilities 17 - - 1,425 1,425 Other financial liabilities: Contingent consideration payable 84 - - 84 Total non-current financial liabilities 84 - 1,432 1,516 Total financial liabilities 110 - 2,763 2,873 (1) Excludes current input taxes of US$140 million and non-current input and other taxes of US$97 million included in other receivables. Refer to note 9 Trade and other receivables. (2) Excludes current input taxes of US$40 million and non-current input and other taxes of US$1 million included in other creditors. Refer to note 14 Trade and other payables (a) Accounting classification and fair value (i) Financial assets Financial assets are held at FVTPL, amortised cost or designated as FVOCI based on the business model for managing the financial assets and the contractual terms of the cashflows. Classification Initial recognition and subsequent measurement Held at FVTPL Financial assets held at FVTPL, including derivative financial assets, are initially recognised at fair value, with transaction costs recognised immediately in the Consolidated Income Statement. Financial assets held at FVTPL are subsequently remeasured through the Consolidated Income Statement, including any interest income, dividend income and foreign exchange gains and losses, unless hedge accounting is applied. Amortised cost At initial recognition, trade receivables that do not have a significant financing component are recognised at their transaction price. Other financial assets held at amortised cost are initially recognised at fair value plus related transaction costs. Financial assets subsequently measured at amortised cost are measured using the effective interest method and reduced by any impairment losses. Interest income, foreign exchange gains and losses, impairments and any gain or loss on derecognition, are recognised in the Consolidated Income Statement. Designated as FVOCI For certain investments in equity instruments, the Group has made an irrevocable election to present fair value changes in other comprehensive income. Investments in equity instruments designated as FVOCI are subsequently remeasured through other comprehensive income and are not reclassified to the Consolidated Income Statement. Dividends are recognised as other income in the Consolidated Income Statement unless the dividend clearly represents a recovery of part of the cost of the investment. (ii) Financial liabilities Financial liabilities are held at FVTPL or amortised cost. Classification Initial recognition and subsequent measurement Held at FVTPL Financial liabilities held at FVTPL, including derivative financial liabilities, are initially recognised at fair value, with transaction costs recognised immediately in the Consolidated Income Statement. Financial liabilities held at FVTPL are subsequently remeasured through the Consolidated Income Statement, including any interest expense and foreign exchange gains and losses, unless hedge accounting is applied. Amortised cost Financial liabilities held at amortised cost are recognised initially at fair value, net of transaction costs incurred. Financial liabilities held at amortised cost are subsequently measured using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in the Consolidated Income Statement. Any gain or loss on derecognition is also recognised in the Consolidated Income Statement. (iii) Embedded derivatives A derivative embedded within a hybrid contract, with a financial liability or non-financial host, is separated from the host and accounted for as a separate derivative if: \u2013 the economic characteristics and risks are not closely related to the host; \u2013 a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative; and \u2013 the hybrid contract is not measured at FVTPL. Embedded derivatives are measured at fair value with changes in fair value recognised in the Consolidated Income Statement. A derivative embedded within a hybrid contract containing a financial asset host is not accounted for separately. The financial asset host together with the embedded derivative is required to be classified in its entirety as a financial asset held at FVTPL (iv) Measurement of fair value The carrying values of the Group\u2019s financial assets and liabilities measured at amortised cost are equal to or approximate their respective fair values, except for senior unsecured notes, which have a fair value of US$617 million (FY22: US$650 million), and lease liabilities, for which a fair value has not been determined. The fair value of the Group\u2019s senior unsecured notes is estimated based on quoted market prices at the reporting date and are classified as Level 1 on the fair value hierarchy as shown below. For financial assets and liabilities measured at fair value, the Group uses quoted marked prices in active markets for identical assets where available. Where no price information is available from a quoted market source, alternative market mechanisms or recent comparable transactions, the fair value is estimated based on the Group\u2019s views on relevant future prices, net of valuation allowances to accommodate liquidity, modelling, credit and other risks implicit in such estimates. The following table shows the Group\u2019s financial assets and liabilities carried at fair value with reference to the nature of valuation inputs used: Level 1 Valuation is based on unadjusted quoted prices in active markets for identical financial assets and liabilities. Level 2 Valuation is based on inputs (other than quoted prices included in Level 1) that are observable for the financial asset or liability, either directly (i.e. as unquoted prices) or indirectly (i.e. derived from prices). Level 3 Valuation includes inputs that are not based on observable market data . FY23 US$M Level 1 Level 2 Level 3 Total Financial assets and liabilities Trade and other receivables - 105 - 105 Trade and other payables - (6) - (6) Derivative contract assets 1 - - 1 Investments in equity instruments designated as FVOCI 101 - 7 108 Contingent consideration receivable - - 10 10 Contingent consideration payable - - (37) (37) Total 102 99 (20) 181 FY22 US$M Level 1 Level 2 Level 3 Total Financial assets and liabilities Trade and other receivables - 143 - 143 Trade and other payables - (20) - (20) Derivative contract assets 1 - - 1 Derivative contract liabilities (6) - - (6) Investments in equity instruments designated as FVOCI 25 - - 25 Vendor loan facility - - 39 39 Contingent consideration payable - - (84) (84) Total 20 123 (45) 98 The following table shows the movements in the Group\u2019s Level 3 financial assets and liabilities: US$M FY23 FY22 At the beginning of the year (45) 52 Addition of financial assets/(liabilities) 15 (97) Reclassification of financial asset from level 3 to level 2(1) (39) - Derecognition of financial assets/(liabilities) - (5) Unrealised gains/(losses) recognised in the Consolidated Income Statement(2) 47 52 Unrealised gains/(losses) recognised in the Consolidated Statement of Comprehensive Income (3) 2 (47) At the end of the year (20) (45) (1) The valuation of the vendor loan facility provided to Seriti as part of the Group\u2019s divestment of South Africa Energy Coal no longer included inputs that are based on unobservable market data. This financial asset was subsequently settled through agreement with the vendor to offset this facility against the related rehabilitation fund liability, recognised within unsecured other interest bearing liabilities. Refer to note 17 Interest bearing liabilities. (2) Recognised in expenses excluding finance costs in the Consolidated Income Statement. (3) Recognised in the financial assets reserve in the Consolidated Statement of Comprehensive Income . (b) Financial risk management objectives and policies The Group is exposed to market, liquidity and credit risk. These risks are managed in accordance with the Group\u2019s portfolio risk management strategy which supports the delivery of the Group\u2019s financial targets while protecting its future financial security and flexibility by taking advantage of the natural diversification of the Group\u2019s operations and activities. A Cash Flow at Risk (CFaR) framework is used to capture the benefits of diversification and to measure the aggregate impact of financial risks on those financial targets. CFaR is measured on a portfolio basis and is defined as the expected reduction from projected business plan cash flows over a one-year horizon in a pessimistic case. In addition to the CFaR framework, deterministic analysis of a range of operational, commodity price and foreign exchange rate scenarios is also used to measure the potential impact on financial targets. (i) Market risk Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises interest rate risk, foreign currency risk and other price risk, such as equity price risk and commodity price risk. The Group\u2019s activities expose it to market risks associated with movements in interest rates, foreign currencies and commodity prices. The Group predominantly manages currency impacts, input costs and commodity prices on a floating or index basis. This strategy gives rise to a risk of variability in earnings which is measured under the CFaR framework. In executing the Group\u2019s strategy, financial instruments may be employed for risk mitigation purposes within a strict Board of Directors approved mandate, or to align the total Group exposure to the relevant index target in the case of commodity sales, operating costs or debt issuances. Interest rate risk The Group had the following exposure to interest rate risk: US$M FY23 FY22 Financial assets Cash and cash equivalents 1,218 2,306 Trade and other receivables 153 102 Other financial assets - 39 Financial liabilities Interest bearing liabilities (286) (334) Net exposure 1,085 2,113 The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of financial assets and liabilities affected. With all other variables held constant, the Group\u2019s profit/(loss) after tax would increase/(decrease) as follows: US$M Impact on profit/(loss) after tax FY23 FY22 Increase of 100 basis points 8 16 Decrease of 100 basis points (8) (13) The sensitivity analysis assumes that the change in interest rates is effective from the beginning of the year and the fixed/floating mix and balances are constant over the year. However, interest rates and the profile of the Group\u2019s financial assets and liabilities may not remain constant over the coming year and therefore such sensitivity analysis should be used with care . Foreign currency risk The Group\u2019s potential currency exposures comprise: \u2013 Translational exposure in respect of non-functional currency monetary items; and \u2013 Transactional exposure in respect of non-functional currency expenditure and revenues. The functional currency of the Group\u2019s operations is primarily the US dollar. Certain operating and capital expenditure is incurred by operations in currencies other than their functional currency. To a lesser extent, certain sales revenue is earned in currencies other than the functional currency of the operation, and certain exchange control restrictions may require funds to be maintained in currencies other than the operations functional currency. When required, the Group may enter into forward exchange contracts. The following table shows the principal foreign currency risk arising from financial assets and liabilities by currency of denomination: US$M FY23 FY22 Australian dollar (946) (860) Brazilian real (103) (63) Colombian peso (70) (47) South African rand 74 98 Based on the Group\u2019s net financial assets and liabilities as at 30 June, a weakening of the US dollar against these currencies as illustrated in the table below, with all other variables held constant, would increase/(decrease) the Group\u2019s profit/(loss) after tax, as follows: US$M Impact on profit/(loss) after tax FY23 FY22 10% movement in Australian dollar (67) (60) 10% movement in Brazilian real (10) (6) 10% movement in Colombian peso (7) (5) 10% movement in South African rand 7 10 The Group\u2019s other comprehensive income is not exposed to any significant fluctuations as a result of foreign exchange risk arising from financial assets and liabilities. Commodity price risk Contracts for the sale and physical delivery of commodities are executed whenever possible on a pricing basis intended to achieve a relevant index target. Where pricing terms deviate from the index, the Group may choose to use derivative commodity contracts to realise the index price. Contracts for the physical delivery of commodities are not typically financial instruments and are not recognised in the Consolidated Balance Sheet . Provisionally priced commodity sales and purchases contracts Provisionally priced sales or purchases contracts are those for which price finalisation, referenced to the relevant index, is outstanding at the reporting date. Provisional pricing mechanisms embedded within these sales and purchases arrangements have the character of a commodity derivative and are carried at FVTPL as part of trade receivables or trade creditors. Fair value movements on provisionally priced sale contracts are disclosed as other revenue in the Group\u2019s segment results, refer to note 4(b) Segment results. The Group\u2019s exposure at 30 June 2023 to the impact of movements in commodity prices on provisionally invoiced sale and purchase volumes was predominantly around nickel, silver, lead, zinc, metallurgical coal and aluminium. The Group had 3.7kt of nickel, 2.6Moz of silver, 24.4kt of lead, 5.4kt of zinc, 30.0kt of metallurgical coal, 10.0kt of aluminium and 31.5kt of alumina exposure at 30 June 2023 (FY22: 2.3kt of nickel, 1.8Moz of silver, 30.0kt of lead, 5.7kt of zinc, 27.1kt of aluminium) that was provisionally priced. The final price of these sales or purchases will be determined during the first half of FY24. A 10 per cent change in the realised price of these commodities, with all other factors held constant, would increase or decrease profit/(loss) after tax by US$19 million (FY22: US$18 million). The relationship between commodity prices and foreign currencies is complex and foreign exchange rates and commodity prices may move concurrently in response to market conditions. These sensitivities should therefore be used with care . (ii) Liquidity risk The Group\u2019s liquidity risk arises from the possibility that it may not be able to settle or meet its obligations as they fall due. Operational, capital and regulatory requirements are considered in the management of liquidity risk, in conjunction with short and long-term forecast information. In line with the Group\u2019s policy on counterparty credit exposure, the Group only uses counterparties of a high credit standing for the investment of any excess cash. The entities in the Group are funded by a combination of cash generated by the Group\u2019s operations, working capital facilities and intercompany loans provided by the Group. Intercompany loans may be funded by a combination of cash, short and long-term debt. Details of the Group\u2019s major standby arrangement are as follows: FY23 US$M Available Used Unused Revolving credit facility (1) 1,400 - 1,400 (1) The Group has an undrawn revolving credit facility which was extended in December 2022 by one year to December 2027, with the size of the facility in the final year reduced to US$1,200 million. Maturity profile of financial liabilities The maturity profiles of financial liabilities, based on the contractual amounts, are as follows: FY23 US$M Carrying amount Total On demand or less than 1 year 1 to 5 years More than 5 years Trade and other payables (1) 986 986 968 - 18 Senior unsecured notes 690 974 30 122 822 Lease liabilities 674 1,148 102 331 715 Other interest bearing liabilities 377 383 315 68 - Other financial liabilities \u2013 contingent consideration payable 37 48 - 48 - Total 2,764 3,539 1,415 569 1,555 (1) Excludes current input taxes of US$17 million and non-current input and other taxes of US$1 million included in other creditors. Refer to note 14 Trade and other payables. FY22 US$M Carrying amount Total On demand or less than 1 year 1 to 5 years More than 5 years Trade and other payables (1) 956 956 949 7 - Senior unsecured notes (2) 689 1,004 30 122 852 Lease liabilities 650 1,149 90 314 745 Other interest bearing liabilities 488 507 362 85 60 Other financial liabilities \u2013 contingent consideration payable 84 109 - 109 - Other financial liabilities \u2013 derivative contracts 6 6 6 - - Total 2,873 3,731 1,437 637 1,657 (1) Excludes current input taxes of US$40 million and non-current input and other taxes of US$1 million included in other creditors. Refer to note 14 Trade and other payables. (2) The maturity profile of senior unsecured notes was restated to include future coupon payments, consistent with current year presentation (iii) Credit risk Credit risk management The Group has credit risk management policies in place covering the credit analysis, approvals and monitoring of counterparty exposures. As part of these processes the ongoing creditworthiness of counterparties is regularly assessed. Credit limits are established for customers and reviewed annually or with the release of new information materially impacting the customer\u2019s creditworthiness. Mitigation methods are defined and implemented for higher-risk counterparties to protect revenues, with more than half of the Group\u2019s sales of physical commodities occurring via secured payment terms including prepayments, letters of credit, guarantees and other risk mitigation instruments. Mitigation methods include credit exposure management and overdue accounts monitoring. In addition, leading key risk indicators are actively monitored for all customers to identify any emerging risks. There are no material concentrations of credit risk, either with individual counterparties or groups of counterparties, by industry or geography. The carrying amounts of financial assets represent the maximum credit exposure. Expected credit losses Impairment allowances are based on a forward-looking expected credit loss model. For trade receivables, the Group uses the simplified approach to recognise impairments based on the lifetime expected credit loss. For other receivables, the Group applies the general approach and recognises impairments based on a 12-month expected credit loss. Where there has been a significant increase in credit risk, a loss allowance for lifetime expected credit losses is recognised. Exposures are grouped by external credit rating and security options and an expected credit loss rate is calculated accordingly. Where applicable, actual credit loss experience is also taken into account. For remaining receivables without an external credit rating or security option, a rating of BB (S&P Global Ratings) is used, on the basis that there is no support that it is investment grade, nor is there any evidence of default. Shareholder loan receivable from Sierra Gorda Purchased credit-impaired financial assets are initially recognised at fair value. They are subsequently measured at amortised cost using the credit-adjusted effective interest method, less an allowance for changes in lifetime expected credit losses since initial recognition. The credit-adjusted effective interest rate is determined at initial recognition and not amended for subsequent changes to lifetime expected credit losses since acquisition. Changes in lifetime expected credit losses are recognised as impairment and reversals of impairment of financials assets. The Group\u2019s investment in the Sierra Gorda operation is represented by the carrying value of an equity accounted investment of US$101 million (FY22: US$30 million), and the carrying value of a purchased credit-impaired receivable of US$1,711 million (FY22: US$1,648 million) classified as a loan to an equity accounted investment within trade and other receivables on the Consolidated Balance Sheet. The loan has a contractual interest rate of 8 per cent and the repayment of the loan by the Sierra Gorda operation is dependent on its financial performance. At 30 June 2023, the Group updated its estimated timing of the loan repayments and as a result recognised an impairment of US$71 million (FY22: impairment of US$26 million) which is included in expenses excluding finance costs in the Consolidated Income Statement. The net present value of the expected future cash flows of the loan was determined as US$1,711 million (FY22: US$1,648 million) using a measurement methodology consistent with a Level 3 fair value based on the inputs in the valuation technique. The following table shows the movement in the carrying amount of this receivable: US$M FY23 FY22 At the beginning of the financial year 1,648 - Acquisition - 1,687 Interest accrued 148 55 Net impairment (71) (26) Repayments (14) (68) At the end of the financial year 1,711 1,648 The future loan repayments were informed by a production profile and costs based on management\u2019s planning processes. Refer to the Mineral Resources and Ore Reserves section of note 2(c) for further information on the estimates which underpin the production profile. An effective interest rate of nine per cent, as determined on the date of acquisition, was applied to discount the future loan repayments. Determining the net present value requires management to make certain key estimates, assumptions and judgements, which are consistent with those outlined in note 13 Impairment of non-financial assets. The net present value of the expected future cash flows of the loan is most sensitive to the Group\u2019s copper price assumption, with a range of US$3.81/lb to US$4.11/lb used, in real terms. The potential effect of using a reasonably possible alternative copper price assumption on the carrying value of the loan, based on changing this assumption by 10 per cent while holding all other variables constant, is shown in the following table: FY23 US$M Impact on profit/(loss) after tax Face value Carrying value Favourable Unfavourable Trade and other receivables Loans to equity accounted investments 2,185 1,711 90 (164) (c) Capital management The Group allocates capital in line with its strategy and capital management framework. The Group\u2019s priorities for cash flow are to: \u2013 Maintain safe and reliable operations and an investment grade credit rating through the cycle; \u2013 Distribute a minimum of 40 per cent of Underlying earnings as dividends to shareholders following each six-month reporting period; and \u2013 Maximise total shareholder returns through other alternatives including special dividends, share buy-backs and high return investment opportunities which compete for capital. ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialAssetsExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-443": { "value": "19. Financial assets and financial liabilities The following table presents the financial assets and liabilities by class at their carrying amounts: FY23 US$M Note Held at FVTPL Designated as FVOCI Amortised cost Total Financial assets Cash and cash equivalents 16 - - 1,258 1,258 Trade and other receivables(1) 9 105 - 532 637 Other financial assets: Derivative contracts 1 - - 1 Total current financial assets 106 - 1,790 1,896 Trade and other receivables (1) 9 - - 1,802 1,802 Other financial assets: Investments in equity instruments designated as FVOCI - 108 - 108 Contingent consideration receivable 10 - - 10 Total non-current financial assets 10 108 1,802 1,920 Total financial assets 116 108 3,592 3,816 Financial liabilities Trade and other payables(2) 14 6 - 962 968 Interest bearing liabilities 17 - - 365 365 Total current financial liabilities 6 - 1,327 1,333 Trade and other payables(2) 14 - - 18 18 Interest bearing liabilities 17 - - 1,376 1,376 Other financial liabilities: Contingent consideration payable 37 - - 37 Total non-current financial liabilities 37 - 1,394 1,431 Total financial liabilities 43 - 2,721 2,764 (1) Excludes current input taxes of US$141 million and non-current input and other taxes of US$121 million included in other receivables. Refer to note 9 Trade and other receivables. (2) Excludes current input taxes of US$17 million and non-current input and other taxes of US$1 million included in other creditors. Refer to note 14 Trade and other payables. FY22 US$M Note Held at FVTPL Designated as FVOCI Amortised cost Total Financial assets Cash and cash equivalents 16 - - 2,365 2,365 Trade and other receivables (1) 9 143 - 561 704 Other financial assets: Derivative contracts 1 - - 1 Total current financial assets 144 - 2,926 3,070 Trade and other receivables (1) 9 - - 1,806 1,806 Other financial assets: Investments in equity instruments designated as FVOCI - 25 - 25 Vendor loan facility 39 - - 39 Total non-current financial assets 39 25 1,806 1,870 Total financial assets 183 25 4,732 4,940 Financial liabilities Trade and other payables(2) 14 20 - 929 949 Interest bearing liabilities 17 - - 402 402 Other financial liabilities: Derivative contracts 6 - - 6 Total current financial liabilities 26 - 1,331 1,357 Trade and other payables(2) 14 - - 7 7 Interest bearing liabilities 17 - - 1,425 1,425 Other financial liabilities: Contingent consideration payable 84 - - 84 Total non-current financial liabilities 84 - 1,432 1,516 Total financial liabilities 110 - 2,763 2,873 (1) Excludes current input taxes of US$140 million and non-current input and other taxes of US$97 million included in other receivables. Refer to note 9 Trade and other receivables. (2) Excludes current input taxes of US$40 million and non-current input and other taxes of US$1 million included in other creditors. Refer to note 14 Trade and other payables . (a) Accounting classification and fair value (i) Financial assets Financial assets are held at FVTPL, amortised cost or designated as FVOCI based on the business model for managing the financial assets and the contractual terms of the cashflows. Classification Initial recognition and subsequent measurement Held at FVTPL Financial assets held at FVTPL, including derivative financial assets, are initially recognised at fair value, with transaction costs recognised immediately in the Consolidated Income Statement. Financial assets held at FVTPL are subsequently remeasured through the Consolidated Income Statement, including any interest income, dividend income and foreign exchange gains and losses, unless hedge accounting is applied. Amortised cost At initial recognition, trade receivables that do not have a significant financing component are recognised at their transaction price. Other financial assets held at amortised cost are initially recognised at fair value plus related transaction costs. Financial assets subsequently measured at amortised cost are measured using the effective interest method and reduced by any impairment losses. Interest income, foreign exchange gains and losses, impairments and any gain or loss on derecognition, are recognised in the Consolidated Income Statement. Designated as FVOCI For certain investments in equity instruments, the Group has made an irrevocable election to present fair value changes in other comprehensive income. Investments in equity instruments designated as FVOCI are subsequently remeasured through other comprehensive income and are not reclassified to the Consolidated Income Statement. Dividends are recognised as other income in the Consolidated Income Statement unless the dividend clearly represents a recovery of part of the cost of the investment. (ii) Financial liabilities Financial liabilities are held at FVTPL or amortised cost. Classification Initial recognition and subsequent measurement Held at FVTPL Financial liabilities held at FVTPL, including derivative financial liabilities, are initially recognised at fair value, with transaction costs recognised immediately in the Consolidated Income Statement. Financial liabilities held at FVTPL are subsequently remeasured through the Consolidated Income Statement, including any interest expense and foreign exchange gains and losses, unless hedge accounting is applied. Amortised cost Financial liabilities held at amortised cost are recognised initially at fair value, net of transaction costs incurred. Financial liabilities held at amortised cost are subsequently measured using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in the Consolidated Income Statement. Any gain or loss on derecognition is also recognised in the Consolidated Income Statement. (iii) Embedded derivatives A derivative embedded within a hybrid contract, with a financial liability or non-financial host, is separated from the host and accounted for as a separate derivative if: \u2013 the economic characteristics and risks are not closely related to the host; \u2013 a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative; and \u2013 the hybrid contract is not measured at FVTPL. Embedded derivatives are measured at fair value with changes in fair value recognised in the Consolidated Income Statement. A derivative embedded within a hybrid contract containing a financial asset host is not accounted for separately. The financial asset host together with the embedded derivative is required to be classified in its entirety as a financial asset held at FVTPL (iv) Measurement of fair value The carrying values of the Group\u2019s financial assets and liabilities measured at amortised cost are equal to or approximate their respective fair values, except for senior unsecured notes, which have a fair value of US$617 million (FY22: US$650 million), and lease liabilities, for which a fair value has not been determined. The fair value of the Group\u2019s senior unsecured notes is estimated based on quoted market prices at the reporting date and are classified as Level 1 on the fair value hierarchy as shown below. For financial assets and liabilities measured at fair value, the Group uses quoted marked prices in active markets for identical assets where available. Where no price information is available from a quoted market source, alternative market mechanisms or recent comparable transactions, the fair value is estimated based on the Group\u2019s views on relevant future prices, net of valuation allowances to accommodate liquidity, modelling, credit and other risks implicit in such estimates. The following table shows the Group\u2019s financial assets and liabilities carried at fair value with reference to the nature of valuation inputs used: Level 1 Valuation is based on unadjusted quoted prices in active markets for identical financial assets and liabilities. Level 2 Valuation is based on inputs (other than quoted prices included in Level 1) that are observable for the financial asset or liability, either directly (i.e. as unquoted prices) or indirectly (i.e. derived from prices). Level 3 Valuation includes inputs that are not based on observable market data . FY23 US$M Level 1 Level 2 Level 3 Total Financial assets and liabilities Trade and other receivables - 105 - 105 Trade and other payables - (6) - (6) Derivative contract assets 1 - - 1 Investments in equity instruments designated as FVOCI 101 - 7 108 Contingent consideration receivable - - 10 10 Contingent consideration payable - - (37) (37) Total 102 99 (20) 181 FY22 US$M Level 1 Level 2 Level 3 Total Financial assets and liabilities Trade and other receivables - 143 - 143 Trade and other payables - (20) - (20) Derivative contract assets 1 - - 1 Derivative contract liabilities (6) - - (6) Investments in equity instruments designated as FVOCI 25 - - 25 Vendor loan facility - - 39 39 Contingent consideration payable - - (84) (84) Total 20 123 (45) 98 The following table shows the movements in the Group\u2019s Level 3 financial assets and liabilities: US$M FY23 FY22 At the beginning of the year (45) 52 Addition of financial assets/(liabilities) 15 (97) Reclassification of financial asset from level 3 to level 2(1) (39) - Derecognition of financial assets/(liabilities) - (5) Unrealised gains/(losses) recognised in the Consolidated Income Statement(2) 47 52 Unrealised gains/(losses) recognised in the Consolidated Statement of Comprehensive Income (3) 2 (47) At the end of the year (20) (45) (1) The valuation of the vendor loan facility provided to Seriti as part of the Group\u2019s divestment of South Africa Energy Coal no longer included inputs that are based on unobservable market data. This financial asset was subsequently settled through agreement with the vendor to offset this facility against the related rehabilitation fund liability, recognised within unsecured other interest bearing liabilities. Refer to note 17 Interest bearing liabilities. (2) Recognised in expenses excluding finance costs in the Consolidated Income Statement. (3) Recognised in the financial assets reserve in the Consolidated Statement of Comprehensive Income
(b) Financial risk management objectives and policies
The Group is exposed to market, liquidity and credit risk. These risks are managed in accordance with the Group\u2019s portfolio risk
management strategy which supports the delivery of the Group\u2019s financial targets while protecting its future financial security
and flexibility by taking advantage of the natural diversification of the Group\u2019s operations and activities. A Cash Flow at Risk (CFaR)
framework is used to capture the benefits of diversification and to measure the aggregate impact of financial risks on those financial
targets. CFaR is measured on a portfolio basis and is defined as the expected reduction from projected business plan cash flows over a
one-year horizon in a pessimistic case. In addition to the CFaR framework, deterministic analysis of a range of operational, commodity
price and foreign exchange rate scenarios is also used to measure the potential impact on financial targets.
(i) Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices.
Market risk comprises interest rate risk, foreign currency risk and other price risk, such as equity price risk and commodity price risk.
The Group\u2019s activities expose it to market risks associated with movements in interest rates, foreign currencies and commodity prices.
The Group predominantly manages currency impacts, input costs and commodity prices on a floating or index basis. This strategy gives
rise to a risk of variability in earnings which is measured under the CFaR framework.
In executing the Group\u2019s strategy, financial instruments may be employed for risk mitigation purposes within a strict Board of Directors
approved mandate, or to align the total Group exposure to the relevant index target in the case of commodity sales, operating costs or
debt issuances.
Interest rate risk
The Group had the following exposure to interest rate risk:
US$M FY23 FY22
Financial assets
Cash and cash equivalents 1,218 2,306
Trade and other receivables 153 102
Other financial assets - 39
Financial liabilities
Interest bearing liabilities (286) (334)
Net exposure 1,085 2,113
The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of financial assets and
liabilities affected. With all other variables held constant, the Group\u2019s profit/(loss) after tax would increase/(decrease) as follows:
US$M
Impact on profit/(loss) after tax
FY23 FY22
Increase of 100 basis points 8 16
Decrease of 100 basis points (8) (13)
The sensitivity analysis assumes that the change in interest rates is effective from the beginning of the year and the fixed/floating mix
and balances are constant over the year. However, interest rates and the profile of the Group\u2019s financial assets and liabilities may not
remain constant over the coming year and therefore such sensitivity analysis should be used with care .
Foreign currency risk The Group\u2019s potential currency exposures comprise: \u2013 Translational exposure in respect of non-functional currency monetary items; and \u2013 Transactional exposure in respect of non-functional currency expenditure and revenues. The functional currency of the Group\u2019s operations is primarily the US dollar. Certain operating and capital expenditure is incurred by operations in currencies other than their functional currency. To a lesser extent, certain sales revenue is earned in currencies other than the functional currency of the operation, and certain exchange control restrictions may require funds to be maintained in currencies other than the operations functional currency. When required, the Group may enter into forward exchange contracts. The following table shows the principal foreign currency risk arising from financial assets and liabilities by currency of denomination: US$M FY23 FY22 Australian dollar (946) (860) Brazilian real (103) (63) Colombian peso (70) (47) South African rand 74 98 Based on the Group\u2019s net financial assets and liabilities as at 30 June, a weakening of the US dollar against these currencies as illustrated in the table below, with all other variables held constant, would increase/(decrease) the Group\u2019s profit/(loss) after tax, as follows: US$M Impact on profit/(loss) after tax FY23 FY22 10% movement in Australian dollar (67) (60) 10% movement in Brazilian real (10) (6) 10% movement in Colombian peso (7) (5) 10% movement in South African rand 7 10 The Group\u2019s other comprehensive income is not exposed to any significant fluctuations as a result of foreign exchange risk arising from financial assets and liabilities. Commodity price risk Contracts for the sale and physical delivery of commodities are executed whenever possible on a pricing basis intended to achieve a relevant index target. Where pricing terms deviate from the index, the Group may choose to use derivative commodity contracts to realise the index price. Contracts for the physical delivery of commodities are not typically financial instruments and are not recognised in the Consolidated Balance Sheet
Provisionally priced commodity sales and purchases contracts
Provisionally priced sales or purchases contracts are those for which price finalisation, referenced to the relevant index, is outstanding
at the reporting date. Provisional pricing mechanisms embedded within these sales and purchases arrangements have the character of
a commodity derivative and are carried at FVTPL as part of trade receivables or trade creditors. Fair value movements on provisionally
priced sale contracts are disclosed as other revenue in the Group\u2019s segment results, refer to note 4(b) Segment results. The Group\u2019s
exposure at 30 June 2023 to the impact of movements in commodity prices on provisionally invoiced sale and purchase volumes was
predominantly around nickel, silver, lead, zinc, metallurgical coal and aluminium.
The Group had 3.7kt of nickel, 2.6Moz of silver, 24.4kt of lead, 5.4kt of zinc, 30.0kt of metallurgical coal, 10.0kt of aluminium and 31.5kt
of alumina exposure at 30 June 2023 (FY22: 2.3kt of nickel, 1.8Moz of silver, 30.0kt of lead, 5.7kt of zinc, 27.1kt of aluminium) that was
provisionally priced. The final price of these sales or purchases will be determined during the first half of FY24. A 10 per cent change in
the realised price of these commodities, with all other factors held constant, would increase or decrease profit/(loss) after tax by US$19
million (FY22: US$18 million). The relationship between commodity prices and foreign currencies is complex and foreign exchange rates
and commodity prices may move concurrently in response to market conditions. These sensitivities should therefore be used with care .
(ii) Liquidity risk
The Group\u2019s liquidity risk arises from the possibility that it may not be able to settle or meet its obligations as they fall due. Operational,
capital and regulatory requirements are considered in the management of liquidity risk, in conjunction with short and long-term
forecast information.
In line with the Group\u2019s policy on counterparty credit exposure, the Group only uses counterparties of a high credit standing for the
investment of any excess cash.
The entities in the Group are funded by a combination of cash generated by the Group\u2019s operations, working capital facilities and
intercompany loans provided by the Group. Intercompany loans may be funded by a combination of cash, short and long-term debt.
Details of the Group\u2019s major standby arrangement are as follows:
FY23
US$M Available Used Unused
Revolving credit facility
(1)
1,400 - 1,400
(1) The Group has an undrawn revolving credit facility which was extended in December 2022 by one year to December 2027, with the size of the facility in the final year reduced to
US$1,200 million.
Maturity profile of financial liabilities
The maturity profiles of financial liabilities, based on the contractual amounts, are as follows:
FY23
US$M
Carrying
amount Total
On demand
or less than
1 year 1 to 5 years
More than
5 years
Trade and other payables
(1)
986 986 968 - 18
Senior unsecured notes 690 974 30 122 822
Lease liabilities 674 1,148 102 331 715
Other interest bearing liabilities 377 383 315 68 -
Other financial liabilities \u2013 contingent consideration payable 37 48 - 48 -
Total 2,764 3,539 1,415 569 1,555
(1) Excludes current input taxes of US$17 million and non-current input and other taxes of US$1 million included in other creditors. Refer to note 14 Trade and other payables.
FY22
US$M
Carrying
amount Total
On demand
or less than
1 year 1 to 5 years
More than
5 years
Trade and other payables
(1)
956 956 949 7 -
Senior unsecured notes
(2)
689 1,004 30 122 852
Lease liabilities 650 1,149 90 314 745
Other interest bearing liabilities 488 507 362 85 60
Other financial liabilities \u2013 contingent consideration payable 84 109 - 109 -
Other financial liabilities \u2013 derivative contracts 6 6 6 - -
Total 2,873 3,731 1,437 637 1,657
(1) Excludes current input taxes of US$40 million and non-current input and other taxes of US$1 million included in other creditors. Refer to note 14 Trade and other payables.
(2) The maturity profile of senior unsecured notes was restated to include future coupon payments, consistent with current year presentation .
(iii) Credit risk Credit risk management The Group has credit risk management policies in place covering the credit analysis, approvals and monitoring of counterparty exposures. As part of these processes the ongoing creditworthiness of counterparties is regularly assessed. Credit limits are established for customers and reviewed annually or with the release of new information materially impacting the customer\u2019s creditworthiness. Mitigation methods are defined and implemented for higher-risk counterparties to protect revenues, with more than half of the Group\u2019s sales of physical commodities occurring via secured payment terms including prepayments, letters of credit, guarantees and other risk mitigation instruments. Mitigation methods include credit exposure management and overdue accounts monitoring. In addition, leading key risk indicators are actively monitored for all customers to identify any emerging risks. There are no material concentrations of credit risk, either with individual counterparties or groups of counterparties, by industry or geography. The carrying amounts of financial assets represent the maximum credit exposure. Expected credit losses Impairment allowances are based on a forward-looking expected credit loss model. For trade receivables, the Group uses the simplified approach to recognise impairments based on the lifetime expected credit loss. For other receivables, the Group applies the general approach and recognises impairments based on a 12-month expected credit loss. Where there has been a significant increase in credit risk, a loss allowance for lifetime expected credit losses is recognised. Exposures are grouped by external credit rating and security options and an expected credit loss rate is calculated accordingly. Where applicable, actual credit loss experience is also taken into account. For remaining receivables without an external credit rating or security option, a rating of BB (S&P Global Ratings) is used, on the basis that there is no support that it is investment grade, nor is there any evidence of default. Shareholder loan receivable from Sierra Gorda Purchased credit-impaired financial assets are initially recognised at fair value. They are subsequently measured at amortised cost using the credit-adjusted effective interest method, less an allowance for changes in lifetime expected credit losses since initial recognition. The credit-adjusted effective interest rate is determined at initial recognition and not amended for subsequent changes to lifetime expected credit losses since acquisition. Changes in lifetime expected credit losses are recognised as impairment and reversals of impairment of financials assets. The Group\u2019s investment in the Sierra Gorda operation is represented by the carrying value of an equity accounted investment of US$101 million (FY22: US$30 million), and the carrying value of a purchased credit-impaired receivable of US$1,711 million (FY22: US$1,648 million) classified as a loan to an equity accounted investment within trade and other receivables on the Consolidated Balance Sheet. The loan has a contractual interest rate of 8 per cent and the repayment of the loan by the Sierra Gorda operation is dependent on its financial performance. At 30 June 2023, the Group updated its estimated timing of the loan repayments and as a result recognised an impairment of US$71 million (FY22: impairment of US$26 million) which is included in expenses excluding finance costs in the Consolidated Income Statement. The net present value of the expected future cash flows of the loan was determined as US$1,711 million (FY22: US$1,648 million) using a measurement methodology consistent with a Level 3 fair value based on the inputs in the valuation technique. The following table shows the movement in the carrying amount of this receivable: US$M FY23 FY22 At the beginning of the financial year 1,648 - Acquisition - 1,687 Interest accrued 148 55 Net impairment (71) (26) Repayments (14) (68) At the end of the financial year 1,711 1,648 The future loan repayments were informed by a production profile and costs based on management\u2019s planning processes. Refer to the Mineral Resources and Ore Reserves section of note 2(c) for further information on the estimates which underpin the production profile. An effective interest rate of nine per cent, as determined on the date of acquisition, was applied to discount the future loan repayments. Determining the net present value requires management to make certain key estimates, assumptions and judgements, which are consistent with those outlined in note 13 Impairment of non-financial assets.
Shareholder loan receivable from Sierra Gorda continued
The net present value of the expected future cash flows of the loan is most sensitive to the Group\u2019s copper price assumption, with
a range of US$3.81/lb to US$4.11/lb used, in real terms. The potential effect of using a reasonably possible alternative copper price
assumption on the carrying value of the loan, based on changing this assumption by 10 per cent while holding all other variables
constant, is shown in the following table:
FY23
US$M
Impact on profit/(loss) after tax
Face value Carrying value Favourable Unfavourable
Trade and other receivables
Loans to equity accounted investments 2,185 1,711 90 (164)
(c) Capital management
The Group allocates capital in line with its strategy and capital management framework. The Group\u2019s priorities for cash flow are to:
\u2013 Maintain safe and reliable operations and an investment grade credit rating through the cycle;
\u2013 Distribute a minimum of 40 per cent of Underlying earnings as dividends to shareholders following each six-month reporting period;
and
\u2013 Maximise total shareholder returns through other alternatives including special dividends, share buy-backs and high return
investment opportunities which compete for capital.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-527": { "value": "(a) Accounting classification and fair value (i) Financial assets Financial assets are held at FVTPL, amortised cost or designated as FVOCI based on the business model for managing the financial assets and the contractual terms of the cashflows. Classification Initial recognition and subsequent measurement Held at FVTPL Financial assets held at FVTPL, including derivative financial assets, are initially recognised at fair value, with transaction costs recognised immediately in the Consolidated Income Statement. Financial assets held at FVTPL are subsequently remeasured through the Consolidated Income Statement, including any interest income, dividend income and foreign exchange gains and losses, unless hedge accounting is applied. Amortised cost At initial recognition, trade receivables that do not have a significant financing component are recognised at their transaction price. Other financial assets held at amortised cost are initially recognised at fair value plus related transaction costs. Financial assets subsequently measured at amortised cost are measured using the effective interest method and reduced by any impairment losses. Interest income, foreign exchange gains and losses, impairments and any gain or loss on derecognition, are recognised in the Consolidated Income Statement. Designated as FVOCI For certain investments in equity instruments, the Group has made an irrevocable election to present fair value changes in other comprehensive income. Investments in equity instruments designated as FVOCI are subsequently remeasured through other comprehensive income and are not reclassified to the Consolidated Income Statement. Dividends are recognised as other income in the Consolidated Income Statement unless the dividend clearly represents a recovery of part of the cost of the investment. (ii) Financial liabilities Financial liabilities are held at FVTPL or amortised cost. Classification Initial recognition and subsequent measurement Held at FVTPL Financial liabilities held at FVTPL, including derivative financial liabilities, are initially recognised at fair value, with transaction costs recognised immediately in the Consolidated Income Statement. Financial liabilities held at FVTPL are subsequently remeasured through the Consolidated Income Statement, including any interest expense and foreign exchange gains and losses, unless hedge accounting is applied. Amortised cost Financial liabilities held at amortised cost are recognised initially at fair value, net of transaction costs incurred. Financial liabilities held at amortised cost are subsequently measured using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in the Consolidated Income Statement. Any gain or loss on derecognition is also recognised in the Consolidated Income Statement. (iii) Embedded derivatives A derivative embedded within a hybrid contract, with a financial liability or non-financial host, is separated from the host and accounted for as a separate derivative if: \u2013 the economic characteristics and risks are not closely related to the host; \u2013 a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative; and \u2013 the hybrid contract is not measured at FVTPL. Embedded derivatives are measured at fair value with changes in fair value recognised in the Consolidated Income Statement. A derivative embedded within a hybrid contract containing a financial asset host is not accounted for separately. The financial asset host together with the embedded derivative is required to be classified in its entirety as a financial asset held at FVTPL . ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-550": { "value": "(a) Accounting classification and fair value (i) Financial assets Financial assets are held at FVTPL, amortised cost or designated as FVOCI based on the business model for managing the financial assets and the contractual terms of the cashflows. Classification Initial recognition and subsequent measurement Held at FVTPL Financial assets held at FVTPL, including derivative financial assets, are initially recognised at fair value, with transaction costs recognised immediately in the Consolidated Income Statement. Financial assets held at FVTPL are subsequently remeasured through the Consolidated Income Statement, including any interest income, dividend income and foreign exchange gains and losses, unless hedge accounting is applied. Amortised cost At initial recognition, trade receivables that do not have a significant financing component are recognised at their transaction price. Other financial assets held at amortised cost are initially recognised at fair value plus related transaction costs. Financial assets subsequently measured at amortised cost are measured using the effective interest method and reduced by any impairment losses. Interest income, foreign exchange gains and losses, impairments and any gain or loss on derecognition, are recognised in the Consolidated Income Statement. Designated as FVOCI For certain investments in equity instruments, the Group has made an irrevocable election to present fair value changes in other comprehensive income. Investments in equity instruments designated as FVOCI are subsequently remeasured through other comprehensive income and are not reclassified to the Consolidated Income Statement. Dividends are recognised as other income in the Consolidated Income Statement unless the dividend clearly represents a recovery of part of the cost of the investment. (ii) Financial liabilities Financial liabilities are held at FVTPL or amortised cost. Classification Initial recognition and subsequent measurement Held at FVTPL Financial liabilities held at FVTPL, including derivative financial liabilities, are initially recognised at fair value, with transaction costs recognised immediately in the Consolidated Income Statement. Financial liabilities held at FVTPL are subsequently remeasured through the Consolidated Income Statement, including any interest expense and foreign exchange gains and losses, unless hedge accounting is applied. Amortised cost Financial liabilities held at amortised cost are recognised initially at fair value, net of transaction costs incurred. Financial liabilities held at amortised cost are subsequently measured using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in the Consolidated Income Statement. Any gain or loss on derecognition is also recognised in the Consolidated Income Statement. (iii) Embedded derivatives A derivative embedded within a hybrid contract, with a financial liability or non-financial host, is separated from the host and accounted for as a separate derivative if: \u2013 the economic characteristics and risks are not closely related to the host; \u2013 a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative; and \u2013 the hybrid contract is not measured at FVTPL. Embedded derivatives are measured at fair value with changes in fair value recognised in the Consolidated Income Statement. A derivative embedded within a hybrid contract containing a financial asset host is not accounted for separately. The financial asset host together with the embedded derivative is required to be classified in its entirety as a financial asset held at FVTPL . ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-506": { "value": "(a) Accounting classification and fair value (i) Financial assets Financial assets are held at FVTPL, amortised cost or designated as FVOCI based on the business model for managing the financial assets and the contractual terms of the cashflows. Classification Initial recognition and subsequent measurement Held at FVTPL Financial assets held at FVTPL, including derivative financial assets, are initially recognised at fair value, with transaction costs recognised immediately in the Consolidated Income Statement. Financial assets held at FVTPL are subsequently remeasured through the Consolidated Income Statement, including any interest income, dividend income and foreign exchange gains and losses, unless hedge accounting is applied. Amortised cost At initial recognition, trade receivables that do not have a significant financing component are recognised at their transaction price. Other financial assets held at amortised cost are initially recognised at fair value plus related transaction costs. Financial assets subsequently measured at amortised cost are measured using the effective interest method and reduced by any impairment losses. Interest income, foreign exchange gains and losses, impairments and any gain or loss on derecognition, are recognised in the Consolidated Income Statement. Designated as FVOCI For certain investments in equity instruments, the Group has made an irrevocable election to present fair value changes in other comprehensive income. Investments in equity instruments designated as FVOCI are subsequently remeasured through other comprehensive income and are not reclassified to the Consolidated Income Statement. Dividends are recognised as other income in the Consolidated Income Statement unless the dividend clearly represents a recovery of part of the cost of the investment. (ii) Financial liabilities Financial liabilities are held at FVTPL or amortised cost. Classification Initial recognition and subsequent measurement Held at FVTPL Financial liabilities held at FVTPL, including derivative financial liabilities, are initially recognised at fair value, with transaction costs recognised immediately in the Consolidated Income Statement. Financial liabilities held at FVTPL are subsequently remeasured through the Consolidated Income Statement, including any interest expense and foreign exchange gains and losses, unless hedge accounting is applied. Amortised cost Financial liabilities held at amortised cost are recognised initially at fair value, net of transaction costs incurred. Financial liabilities held at amortised cost are subsequently measured using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in the Consolidated Income Statement. Any gain or loss on derecognition is also recognised in the Consolidated Income Statement. (iii) Embedded derivatives A derivative embedded within a hybrid contract, with a financial liability or non-financial host, is separated from the host and accounted for as a separate derivative if: \u2013 the economic characteristics and risks are not closely related to the host; \u2013 a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative; and \u2013 the hybrid contract is not measured at FVTPL. Embedded derivatives are measured at fair value with changes in fair value recognised in the Consolidated Income Statement. A derivative embedded within a hybrid contract containing a financial asset host is not accounted for separately. The financial asset host together with the embedded derivative is required to be classified in its entirety as a financial asset held at FVTPL . ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-519": { "value": "(i) Financial assets Financial assets are held at FVTPL, amortised cost or designated as FVOCI based on the business model for managing the financial assets and the contractual terms of the cashflows. Classification Initial recognition and subsequent measurement Held at FVTPL Financial assets held at FVTPL, including derivative financial assets, are initially recognised at fair value, with transaction costs recognised immediately in the Consolidated Income Statement. Financial assets held at FVTPL are subsequently remeasured through the Consolidated Income Statement, including any interest income, dividend income and foreign exchange gains and losses, unless hedge accounting is applied. Amortised cost At initial recognition, trade receivables that do not have a significant financing component are recognised at their transaction price. Other financial assets held at amortised cost are initially recognised at fair value plus related transaction costs. Financial assets subsequently measured at amortised cost are measured using the effective interest method and reduced by any impairment losses. Interest income, foreign exchange gains and losses, impairments and any gain or loss on derecognition, are recognised in the Consolidated Income Statement. Designated as FVOCI For certain investments in equity instruments, the Group has made an irrevocable election to present fair value changes in other comprehensive income. Investments in equity instruments designated as FVOCI are subsequently remeasured through other comprehensive income and are not reclassified to the Consolidated Income Statement. Dividends are recognised as other income in the Consolidated Income Statement unless the dividend clearly represents a recovery of part of the cost of the investment. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialAssetsExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-534": { "value": "(ii) Financial liabilities Financial liabilities are held at FVTPL or amortised cost. Classification Initial recognition and subsequent measurement Held at FVTPL Financial liabilities held at FVTPL, including derivative financial liabilities, are initially recognised at fair value, with transaction costs recognised immediately in the Consolidated Income Statement. Financial liabilities held at FVTPL are subsequently remeasured through the Consolidated Income Statement, including any interest expense and foreign exchange gains and losses, unless hedge accounting is applied. Amortised cost Financial liabilities held at amortised cost are recognised initially at fair value, net of transaction costs incurred. Financial liabilities held at amortised cost are subsequently measured using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in the Consolidated Income Statement. Any gain or loss on derecognition is also recognised in the Consolidated Income Statement. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-528": { "value": "(iv) Measurement of fair value The carrying values of the Group\u2019s financial assets and liabilities measured at amortised cost are equal to or approximate their respective fair values, except for senior unsecured notes, which have a fair value of US$617 million (FY22: US$650 million), and lease liabilities, for which a fair value has not been determined. The fair value of the Group\u2019s senior unsecured notes is estimated based on quoted market prices at the reporting date and are classified as Level 1 on the fair value hierarchy as shown below. For financial assets and liabilities measured at fair value, the Group uses quoted marked prices in active markets for identical assets where available. Where no price information is available from a quoted market source, alternative market mechanisms or recent comparable transactions, the fair value is estimated based on the Group\u2019s views on relevant future prices, net of valuation allowances to accommodate liquidity, modelling, credit and other risks implicit in such estimates. The following table shows the Group\u2019s financial assets and liabilities carried at fair value with reference to the nature of valuation inputs used: Level 1 Valuation is based on unadjusted quoted prices in active markets for identical financial assets and liabilities. Level 2 Valuation is based on inputs (other than quoted prices included in Level 1) that are observable for the financial asset or liability, either directly (i.e. as unquoted prices) or indirectly (i.e. derived from prices). Level 3 Valuation includes inputs that are not based on observable market data . FY23 US$M Level 1 Level 2 Level 3 Total Financial assets and liabilities Trade and other receivables - 105 - 105 Trade and other payables - (6) - (6) Derivative contract assets 1 - - 1 Investments in equity instruments designated as FVOCI 101 - 7 108 Contingent consideration receivable - - 10 10 Contingent consideration payable - - (37) (37) Total 102 99 (20) 181 FY22 US$M Level 1 Level 2 Level 3 Total Financial assets and liabilities Trade and other receivables - 143 - 143 Trade and other payables - (20) - (20) Derivative contract assets 1 - - 1 Derivative contract liabilities (6) - - (6) Investments in equity instruments designated as FVOCI 25 - - 25 Vendor loan facility - - 39 39 Contingent consideration payable - - (84) (84) Total 20 123 (45) 98 The following table shows the movements in the Group\u2019s Level 3 financial assets and liabilities: US$M FY23 FY22 At the beginning of the year (45) 52 Addition of financial assets/(liabilities) 15 (97) Reclassification of financial asset from level 3 to level 2(1) (39) - Derecognition of financial assets/(liabilities) - (5) Unrealised gains/(losses) recognised in the Consolidated Income Statement(2) 47 52 Unrealised gains/(losses) recognised in the Consolidated Statement of Comprehensive Income (3) 2 (47) At the end of the year (20) (45) (1) The valuation of the vendor loan facility provided to Seriti as part of the Group\u2019s divestment of South Africa Energy Coal no longer included inputs that are based on unobservable market data. This financial asset was subsequently settled through agreement with the vendor to offset this facility against the related rehabilitation fund liability, recognised within unsecured other interest bearing liabilities. Refer to note 17 Interest bearing liabilities. (2) Recognised in expenses excluding finance costs in the Consolidated Income Statement. (3) Recognised in the financial assets reserve in the Consolidated Statement of Comprehensive Income ", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-535": { "value": "(iv) Measurement of fair value The carrying values of the Group\u2019s financial assets and liabilities measured at amortised cost are equal to or approximate their respective fair values, except for senior unsecured notes, which have a fair value of US$617 million (FY22: US$650 million), and lease liabilities, for which a fair value has not been determined. The fair value of the Group\u2019s senior unsecured notes is estimated based on quoted market prices at the reporting date and are classified as Level 1 on the fair value hierarchy as shown below. For financial assets and liabilities measured at fair value, the Group uses quoted marked prices in active markets for identical assets where available. Where no price information is available from a quoted market source, alternative market mechanisms or recent comparable transactions, the fair value is estimated based on the Group\u2019s views on relevant future prices, net of valuation allowances to accommodate liquidity, modelling, credit and other risks implicit in such estimates. The following table shows the Group\u2019s financial assets and liabilities carried at fair value with reference to the nature of valuation inputs used: Level 1 Valuation is based on unadjusted quoted prices in active markets for identical financial assets and liabilities. Level 2 Valuation is based on inputs (other than quoted prices included in Level 1) that are observable for the financial asset or liability, either directly (i.e. as unquoted prices) or indirectly (i.e. derived from prices). Level 3 Valuation includes inputs that are not based on observable market data . FY23 US$M Level 1 Level 2 Level 3 Total Financial assets and liabilities Trade and other receivables - 105 - 105 Trade and other payables - (6) - (6) Derivative contract assets 1 - - 1 Investments in equity instruments designated as FVOCI 101 - 7 108 Contingent consideration receivable - - 10 10 Contingent consideration payable - - (37) (37) Total 102 99 (20) 181 FY22 US$M Level 1 Level 2 Level 3 Total Financial assets and liabilities Trade and other receivables - 143 - 143 Trade and other payables - (20) - (20) Derivative contract assets 1 - - 1 Derivative contract liabilities (6) - - (6) Investments in equity instruments designated as FVOCI 25 - - 25 Vendor loan facility - - 39 39 Contingent consideration payable - - (84) (84) Total 20 123 (45) 98 The following table shows the movements in the Group\u2019s Level 3 financial assets and liabilities: US$M FY23 FY22 At the beginning of the year (45) 52 Addition of financial assets/(liabilities) 15 (97) Reclassification of financial asset from level 3 to level 2(1) (39) - Derecognition of financial assets/(liabilities) - (5) Unrealised gains/(losses) recognised in the Consolidated Income Statement(2) 47 52 Unrealised gains/(losses) recognised in the Consolidated Statement of Comprehensive Income (3) 2 (47) At the end of the year (20) (45) (1) The valuation of the vendor loan facility provided to Seriti as part of the Group\u2019s divestment of South Africa Energy Coal no longer included inputs that are based on unobservable market data. This financial asset was subsequently settled through agreement with the vendor to offset this facility against the related rehabilitation fund liability, recognised within unsecured other interest bearing liabilities. Refer to note 17 Interest bearing liabilities. (2) Recognised in expenses excluding finance costs in the Consolidated Income Statement. (3) Recognised in the financial assets reserve in the Consolidated Statement of Comprehensive Income . ", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-507": { "value": "(iv) Measurement of fair value The carrying values of the Group\u2019s financial assets and liabilities measured at amortised cost are equal to or approximate their respective fair values, except for senior unsecured notes, which have a fair value of US$617 million (FY22: US$650 million), and lease liabilities, for which a fair value has not been determined. The fair value of the Group\u2019s senior unsecured notes is estimated based on quoted market prices at the reporting date and are classified as Level 1 on the fair value hierarchy as shown below. For financial assets and liabilities measured at fair value, the Group uses quoted marked prices in active markets for identical assets where available. Where no price information is available from a quoted market source, alternative market mechanisms or recent comparable transactions, the fair value is estimated based on the Group\u2019s views on relevant future prices, net of valuation allowances to accommodate liquidity, modelling, credit and other risks implicit in such estimates. The following table shows the Group\u2019s financial assets and liabilities carried at fair value with reference to the nature of valuation inputs used: Level 1 Valuation is based on unadjusted quoted prices in active markets for identical financial assets and liabilities. Level 2 Valuation is based on inputs (other than quoted prices included in Level 1) that are observable for the financial asset or liability, either directly (i.e. as unquoted prices) or indirectly (i.e. derived from prices). Level 3 Valuation includes inputs that are not based on observable market data (c) Measurement of fair values The fair value at grant date of equity-settled share awards is charged to the Consolidated Income Statement, net of tax, over the period for which the benefits of employee services are expected to be derived. The corresponding accrued employee entitlement is recorded in the employee share awards reserve. Where awards are forfeited because non-market based vesting conditions are not satisfied, the expense previously recognised is proportionally reversed. If awards do not vest due to a market performance condition not being met, the expense is recognised in full, and the share awards reserve is released to retained earnings. Where shares in South32 Limited are acquired by on-market purchases prior to settling the vested entitlement, the cost of the acquired shares is carried as treasury shares and deducted from equity. Where awards are satisfied by delivery of acquired shares, any difference between their acquisition cost and the cumulative remuneration expense recognised is charged directly to retained earnings, net of tax. The fair value of market-based performance rights is measured using a Monte Carlo methodology. This model considers the following: \u2013 Expected life of the award; \u2013 Current market price of the underlying shares; \u2013 Expected volatility (of the individual company and of each peer group); \u2013 Expected dividends; \u2013 Risk-free interest rate; and \u2013 Market based performance hurdles. The fair value of retention and other non-market-based performance rights is measured using a Black Scholes methodology. This model considers the following: \u2013 Expected life of the award; \u2013 Current market price of the underlying shares; \u2013 Expected volatility; \u2013 Expected dividends; and \u2013 Risk-free interest rate . ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-536": { "value": "(i) Market risk Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises interest rate risk, foreign currency risk and other price risk, such as equity price risk and commodity price risk. The Group\u2019s activities expose it to market risks associated with movements in interest rates, foreign currencies and commodity prices. The Group predominantly manages currency impacts, input costs and commodity prices on a floating or index basis. This strategy gives rise to a risk of variability in earnings which is measured under the CFaR framework. In executing the Group\u2019s strategy, financial instruments may be employed for risk mitigation purposes within a strict Board of Directors approved mandate, or to align the total Group exposure to the relevant index target in the case of commodity sales, operating costs or debt issuances. Interest rate risk The Group had the following exposure to interest rate risk: US$M FY23 FY22 Financial assets Cash and cash equivalents 1,218 2,306 Trade and other receivables 153 102 Other financial assets - 39 Financial liabilities Interest bearing liabilities (286) (334) Net exposure 1,085 2,113 The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of financial assets and liabilities affected. With all other variables held constant, the Group\u2019s profit/(loss) after tax would increase/(decrease) as follows: US$M Impact on profit/(loss) after tax FY23 FY22 Increase of 100 basis points 8 16 Decrease of 100 basis points (8) (13) The sensitivity analysis assumes that the change in interest rates is effective from the beginning of the year and the fixed/floating mix and balances are constant over the year. However, interest rates and the profile of the Group\u2019s financial assets and liabilities may not remain constant over the coming year and therefore such sensitivity analysis should be used with care . Foreign currency risk The Group\u2019s potential currency exposures comprise: \u2013 Translational exposure in respect of non-functional currency monetary items; and \u2013 Transactional exposure in respect of non-functional currency expenditure and revenues. The functional currency of the Group\u2019s operations is primarily the US dollar. Certain operating and capital expenditure is incurred by operations in currencies other than their functional currency. To a lesser extent, certain sales revenue is earned in currencies other than the functional currency of the operation, and certain exchange control restrictions may require funds to be maintained in currencies other than the operations functional currency. When required, the Group may enter into forward exchange contracts. The following table shows the principal foreign currency risk arising from financial assets and liabilities by currency of denomination: US$M FY23 FY22 Australian dollar (946) (860) Brazilian real (103) (63) Colombian peso (70) (47) South African rand 74 98 Based on the Group\u2019s net financial assets and liabilities as at 30 June, a weakening of the US dollar against these currencies as illustrated in the table below, with all other variables held constant, would increase/(decrease) the Group\u2019s profit/(loss) after tax, as follows: US$M Impact on profit/(loss) after tax FY23 FY22 10% movement in Australian dollar (67) (60) 10% movement in Brazilian real (10) (6) 10% movement in Colombian peso (7) (5) 10% movement in South African rand 7 10 The Group\u2019s other comprehensive income is not exposed to any significant fluctuations as a result of foreign exchange risk arising from financial assets and liabilities. Commodity price risk Contracts for the sale and physical delivery of commodities are executed whenever possible on a pricing basis intended to achieve a relevant index target. Where pricing terms deviate from the index, the Group may choose to use derivative commodity contracts to realise the index price. Contracts for the physical delivery of commodities are not typically financial instruments and are not recognised in the Consolidated Balance Sheet . Provisionally priced commodity sales and purchases contracts Provisionally priced sales or purchases contracts are those for which price finalisation, referenced to the relevant index, is outstanding at the reporting date. Provisional pricing mechanisms embedded within these sales and purchases arrangements have the character of a commodity derivative and are carried at FVTPL as part of trade receivables or trade creditors. Fair value movements on provisionally priced sale contracts are disclosed as other revenue in the Group\u2019s segment results, refer to note 4(b) Segment results. The Group\u2019s exposure at 30 June 2023 to the impact of movements in commodity prices on provisionally invoiced sale and purchase volumes was predominantly around nickel, silver, lead, zinc, metallurgical coal and aluminium. The Group had 3.7kt of nickel, 2.6Moz of silver, 24.4kt of lead, 5.4kt of zinc, 30.0kt of metallurgical coal, 10.0kt of aluminium and 31.5kt of alumina exposure at 30 June 2023 (FY22: 2.3kt of nickel, 1.8Moz of silver, 30.0kt of lead, 5.7kt of zinc, 27.1kt of aluminium) that was provisionally priced. The final price of these sales or purchases will be determined during the first half of FY24. A 10 per cent change in the realised price of these commodities, with all other factors held constant, would increase or decrease profit/(loss) after tax by US$19 million (FY22: US$18 million). The relationship between commodity prices and foreign currencies is complex and foreign exchange rates and commodity prices may move concurrently in response to market conditions. These sensitivities should therefore be used with care ", "dimensions": { "concept": "ifrs-full:DisclosureOfMarketRiskExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-537": { "value": "(ii) Liquidity risk The Group\u2019s liquidity risk arises from the possibility that it may not be able to settle or meet its obligations as they fall due. Operational, capital and regulatory requirements are considered in the management of liquidity risk, in conjunction with short and long-term forecast information. In line with the Group\u2019s policy on counterparty credit exposure, the Group only uses counterparties of a high credit standing for the investment of any excess cash. The entities in the Group are funded by a combination of cash generated by the Group\u2019s operations, working capital facilities and intercompany loans provided by the Group. Intercompany loans may be funded by a combination of cash, short and long-term debt. Details of the Group\u2019s major standby arrangement are as follows: FY23 US$M Available Used Unused Revolving credit facility (1) 1,400 - 1,400 (1) The Group has an undrawn revolving credit facility which was extended in December 2022 by one year to December 2027, with the size of the facility in the final year reduced to US$1,200 million. Maturity profile of financial liabilities The maturity profiles of financial liabilities, based on the contractual amounts, are as follows: FY23 US$M Carrying amount Total On demand or less than 1 year 1 to 5 years More than 5 years Trade and other payables (1) 986 986 968 - 18 Senior unsecured notes 690 974 30 122 822 Lease liabilities 674 1,148 102 331 715 Other interest bearing liabilities 377 383 315 68 - Other financial liabilities \u2013 contingent consideration payable 37 48 - 48 - Total 2,764 3,539 1,415 569 1,555 (1) Excludes current input taxes of US$17 million and non-current input and other taxes of US$1 million included in other creditors. Refer to note 14 Trade and other payables. FY22 US$M Carrying amount Total On demand or less than 1 year 1 to 5 years More than 5 years Trade and other payables (1) 956 956 949 7 - Senior unsecured notes (2) 689 1,004 30 122 852 Lease liabilities 650 1,149 90 314 745 Other interest bearing liabilities 488 507 362 85 60 Other financial liabilities \u2013 contingent consideration payable 84 109 - 109 - Other financial liabilities \u2013 derivative contracts 6 6 6 - - Total 2,873 3,731 1,437 637 1,657 (1) Excludes current input taxes of US$40 million and non-current input and other taxes of US$1 million included in other creditors. Refer to note 14 Trade and other payables. (2) The maturity profile of senior unsecured notes was restated to include future coupon payments, consistent with current year presentation ", "dimensions": { "concept": "ifrs-full:DisclosureOfLiquidityRiskExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-538": { "value": "(iii) Credit risk Credit risk management The Group has credit risk management policies in place covering the credit analysis, approvals and monitoring of counterparty exposures. As part of these processes the ongoing creditworthiness of counterparties is regularly assessed. Credit limits are established for customers and reviewed annually or with the release of new information materially impacting the customer\u2019s creditworthiness. Mitigation methods are defined and implemented for higher-risk counterparties to protect revenues, with more than half of the Group\u2019s sales of physical commodities occurring via secured payment terms including prepayments, letters of credit, guarantees and other risk mitigation instruments. Mitigation methods include credit exposure management and overdue accounts monitoring. In addition, leading key risk indicators are actively monitored for all customers to identify any emerging risks. There are no material concentrations of credit risk, either with individual counterparties or groups of counterparties, by industry or geography. The carrying amounts of financial assets represent the maximum credit exposure. Expected credit losses Impairment allowances are based on a forward-looking expected credit loss model. For trade receivables, the Group uses the simplified approach to recognise impairments based on the lifetime expected credit loss. For other receivables, the Group applies the general approach and recognises impairments based on a 12-month expected credit loss. Where there has been a significant increase in credit risk, a loss allowance for lifetime expected credit losses is recognised. Exposures are grouped by external credit rating and security options and an expected credit loss rate is calculated accordingly. Where applicable, actual credit loss experience is also taken into account. For remaining receivables without an external credit rating or security option, a rating of BB (S&P Global Ratings) is used, on the basis that there is no support that it is investment grade, nor is there any evidence of default. Shareholder loan receivable from Sierra Gorda Purchased credit-impaired financial assets are initially recognised at fair value. They are subsequently measured at amortised cost using the credit-adjusted effective interest method, less an allowance for changes in lifetime expected credit losses since initial recognition. The credit-adjusted effective interest rate is determined at initial recognition and not amended for subsequent changes to lifetime expected credit losses since acquisition. Changes in lifetime expected credit losses are recognised as impairment and reversals of impairment of financials assets. The Group\u2019s investment in the Sierra Gorda operation is represented by the carrying value of an equity accounted investment of US$101 million (FY22: US$30 million), and the carrying value of a purchased credit-impaired receivable of US$1,711 million (FY22: US$1,648 million) classified as a loan to an equity accounted investment within trade and other receivables on the Consolidated Balance Sheet. The loan has a contractual interest rate of 8 per cent and the repayment of the loan by the Sierra Gorda operation is dependent on its financial performance. At 30 June 2023, the Group updated its estimated timing of the loan repayments and as a result recognised an impairment of US$71 million (FY22: impairment of US$26 million) which is included in expenses excluding finance costs in the Consolidated Income Statement. The net present value of the expected future cash flows of the loan was determined as US$1,711 million (FY22: US$1,648 million) using a measurement methodology consistent with a Level 3 fair value based on the inputs in the valuation technique. The following table shows the movement in the carrying amount of this receivable: US$M FY23 FY22 At the beginning of the financial year 1,648 - Acquisition - 1,687 Interest accrued 148 55 Net impairment (71) (26) Repayments (14) (68) At the end of the financial year 1,711 1,648 The future loan repayments were informed by a production profile and costs based on management\u2019s planning processes. Refer to the Mineral Resources and Ore Reserves section of note 2(c) for further information on the estimates which underpin the production profile. An effective interest rate of nine per cent, as determined on the date of acquisition, was applied to discount the future loan repayments. Determining the net present value requires management to make certain key estimates, assumptions and judgements, which are consistent with those outlined in note 13 Impairment of non-financial assets. The net present value of the expected future cash flows of the loan is most sensitive to the Group\u2019s copper price assumption, with a range of US$3.81/lb to US$4.11/lb used, in real terms. The potential effect of using a reasonably possible alternative copper price assumption on the carrying value of the loan, based on changing this assumption by 10 per cent while holding all other variables constant, is shown in the following table: FY23 US$M Impact on profit/(loss) after tax Face value Carrying value Favourable Unfavourable Trade and other receivables Loans to equity accounted investments 2,185 1,711 90 (164) ", "dimensions": { "concept": "ifrs-full:DisclosureOfCreditRiskExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-508": { "value": "Impairment allowances are based on a forward-looking expected credit loss model. For trade receivables, the Group uses the simplified approach to recognise impairments based on the lifetime expected credit loss. For other receivables, the Group applies the general approach and recognises impairments based on a 12-month expected credit loss. Where there has been a significant increase in credit risk, a loss allowance for lifetime expected credit losses is recognised. Exposures are grouped by external credit rating and security options and an expected credit loss rate is calculated accordingly. Where applicable, actual credit loss experience is also taken into account. For remaining receivables without an external credit rating or security option, a rating of BB (S&P Global Ratings) is used, on the basis that there is no support that it is investment grade, nor is there any evidence of default. Shareholder loan receivable from Sierra Gorda Purchased credit-impaired financial assets are initially recognised at fair value. They are subsequently measured at amortised cost using the credit-adjusted effective interest method, less an allowance for changes in lifetime expected credit losses since initial recognition. The credit-adjusted effective interest rate is determined at initial recognition and not amended for subsequent changes to lifetime expected credit losses since acquisition. Changes in lifetime expected credit losses are recognised as impairment and reversals of impairment of financials assets. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfFinancialAssetsExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-539": { "value": "(c) Capital management The Group allocates capital in line with its strategy and capital management framework. The Group\u2019s priorities for cash flow are to: \u2013 Maintain safe and reliable operations and an investment grade credit rating through the cycle; \u2013 Distribute a minimum of 40 per cent of Underlying earnings as dividends to shareholders following each six-month reporting period; and \u2013 Maximise total shareholder returns through other alternatives including special dividends, share buy-backs and high return investment opportunities which compete for capital. ", "dimensions": { "concept": "ifrs-full:DisclosureOfObjectivesPoliciesAndProcessesForManagingCapitalExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-482": { "value": "20. Share capital FY23 FY22 Shares US$M Shares US$M Share capital At the beginning of the year 4,628,431,584 13,469 4,674,538,013 13,597 Shares bought back and cancelled (83,017, 889) (218) (46,106,429) (128) At the end of the year 4,545,413,695 13,251 4,628,431,584 13,469 Treasury shares At the beginning of the year (11, 467,5 07) (32) (11,676,185) (22) Purchase of shares by ESOP Trusts (11,676,773) (33) (6,379,586) (22) Employee share awards vested 5,880,807 14 6,588,264 12 At the end of the year (17,263 ,473) (51) (11,467,507) (32) Shares entitle the holder to participate in dividends and the proceeds on winding up of the Group in proportion to the number of shares held. On a show of hands every holder of shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote. Incremental costs directly attributable to the issuance of shares, net of any income tax effects, are recognised as a deduction from equity. ", "dimensions": { "concept": "ifrs-full:DisclosureOfTreasurySharesExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-444": { "value": "20. Share capital FY23 FY22 Shares US$M Shares US$M Share capital At the beginning of the year 4,628,431,584 13,469 4,674,538,013 13,597 Shares bought back and cancelled (83,017, 889) (218) (46,106,429) (128) At the end of the year 4,545,413,695 13,251 4,628,431,584 13,469 Treasury shares At the beginning of the year (11, 467,5 07) (32) (11,676,185) (22) Purchase of shares by ESOP Trusts (11,676,773) (33) (6,379,586) (22) Employee share awards vested 5,880,807 14 6,588,264 12 At the end of the year (17,263 ,473) (51) (11,467,507) (32) Shares entitle the holder to participate in dividends and the proceeds on winding up of the Group in proportion to the number of shares held. On a show of hands every holder of shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote. Incremental costs directly attributable to the issuance of shares, net of any income tax effects, are recognised as a deduction from equity. ", "dimensions": { "concept": "ifrs-full:DisclosureOfIssuedCapitalExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-509": { "value": "Incremental costs directly attributable to the issuance of shares, net of any income tax effects, are recognised as a deduction from equity. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIssuedCapitalExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-445": { "value": "21. Auditor\u2019s remuneration The auditor of the Group is KPMG. US$\u2019000 FY23 FY22 Fees payable to the Group\u2019s auditor for assurance services Audit and review of financial statements 4,207 4,448 Other assurance services (1) 705 625 Total auditor\u2019s remuneration 4,912 5,073 (1) Primarily comprises assurance services in respect of the Group's sustainability and tax reporting ", "dimensions": { "concept": "ifrs-full:DisclosureOfAuditorsRemunerationExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-446": { "value": "22. Pension and other post-retirement obligations The Group operates or participates in a number of pension and medical (including superannuation) schemes throughout the world. The funding of the schemes complies with local regulations. The assets of the schemes are generally held separate from those of the Group and are administered by trustees or management boards. Full actuarial valuations are prepared for the schemes. Defined contribution pension schemes The Group contributed US$60 million (FY22: US$59 million) to defined contribution plans and multi-employer defined contribution plans. These contributions are expensed as incurred. Defined benefit pension schemes (closed schemes) At 30 June 2023, the Group had defined benefit obligations of US$61 million (FY22: US$57 million) and defined benefit scheme assets with a fair value of US$45 million (FY22: US$46 million) with a net liability recognised in the Consolidated Balance Sheet of US$16 million (FY22: US$11 million). The fair value of scheme assets by major asset class is as follows: US$M FY23 FY22 Bonds (1) 32 31 Equities 5 6 Cash and cash equivalents 2 3 Other (2) 6 6 Total 45 46 (1) Comprises Fixed Interest Government bonds of US$7 million (FY22: US$6 million), Index Linked Government bonds of US$21 million (FY22: US$20 million) and Corporate bonds of US$4 million (FY22: US$5 million). (2) Primarily comprises property and alternative investments in Australia. Defined benefit post-retirement medical schemes (closed schemes) At 30 June 2023, the Group had post-retirement medical scheme obligations of US$17 million (FY22: US$23 million). The post-retirement medical scheme is unfunded. Weighted average maturity profile of schemes The weighted average duration of the defined benefit obligations is eight years (FY22: seven years) and nine years (FY22: 10 years) for the defined benefit pension schemes and post-retirement medical scheme respectively. Risks associated with defined benefit pension and post-retirement medical schemes The Group\u2019s defined benefit pension and post-retirement medical schemes expose the Group to the risks pertaining to asset value volatility, uncertainty in future benefit payments and uncertainty in future contribution requirements. ", "dimensions": { "concept": "ifrs-full:DisclosureOfEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-471": { "value": "Defined contribution pension schemes The Group contributed US$60 million (FY22: US$59 million) to defined contribution plans and multi-employer defined contribution plans. These contributions are expensed as incurred. ", "dimensions": { "concept": "ifrs-full:DisclosureOfDefinedContributionPlansExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-472": { "value": "Defined benefit pension schemes (closed schemes) At 30 June 2023, the Group had defined benefit obligations of US$61 million (FY22: US$57 million) and defined benefit scheme assets with a fair value of US$45 million (FY22: US$46 million) with a net liability recognised in the Consolidated Balance Sheet of US$16 million (FY22: US$11 million). The fair value of scheme assets by major asset class is as follows: US$M FY23 FY22 Bonds (1) 32 31 Equities 5 6 Cash and cash equivalents 2 3 Other (2) 6 6 Total 45 46 (1) Comprises Fixed Interest Government bonds of US$7 million (FY22: US$6 million), Index Linked Government bonds of US$21 million (FY22: US$20 million) and Corporate bonds of US$4 million (FY22: US$5 million). (2) Primarily comprises property and alternative investments in Australia. Defined benefit post-retirement medical schemes (closed schemes) At 30 June 2023, the Group had post-retirement medical scheme obligations of US$17 million (FY22: US$23 million). The post-retirement medical scheme is unfunded. Weighted average maturity profile of schemes The weighted average duration of the defined benefit obligations is eight years (FY22: seven years) and nine years (FY22: 10 years) for the defined benefit pension schemes and post-retirement medical scheme respectively. Risks associated with defined benefit pension and post-retirement medical schemes The Group\u2019s defined benefit pension and post-retirement medical schemes expose the Group to the risks pertaining to asset value volatility, uncertainty in future benefit payments and uncertainty in future contribution requirements. ", "dimensions": { "concept": "ifrs-full:DisclosureOfDefinedBenefitPlansExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-447": { "value": "23. Employee share ownership plans At 30 June 2023, the Group had the following employee share ownership plans: Awards granted to Lead Team members (1) Long-Term Incentive Plan(2) FY20, FY21, FY22, FY23 Deferred Short-Term Incentive Plan(3) FY21, FY22 Executive Transitional Award Plan (2) FY21, FY22 Management Share Plan(2)(4) FY21 (1) Awards granted on 6 December 2019, 4 December 2020, 6 December 2021 and 8 December 2022. (2) Awards subject to performance and service conditions. (3) Awards subject to service conditions only. (4) During FY21, Jason Economidis, as acting Chief Operating Officer, participated in the Management Share Plan and not the Long-Term Incentive Plan. Awards granted to eligible employees (1) Management Share Plan(2) FY20, FY21, FY22, FY23 AllShare Plan (3) 2020, 2021, 2022 Management Transitional Award Plan(2) FY20 (1) Awards granted on 6 December 2019, 15 May 2020, 4 December 2020, 7 December 2020, 6 May 2021, 6 December 2021, 9 May 2022, 8 December 2022 and 15 May 2023. (2) Awards subject to performance and service conditions. (3) Awards subject to service conditions only. All awards take the form of rights to receive one share in South32 Limited for each right granted, subject to performance and/or service conditions being met. Performance conditions include total shareholder return relative to peer groups and, for FY22 and FY23 Long- Term Incentive Plan and Management Share Plan awards, climate change and portfolio management performance hurdles. Further information on the vesting conditions of performance rights granted in FY23 is disclosed in the Remuneration report. A portion of the 2020, 2021 and 2022 AllShare Plan awards (participants located in Colombia and Mozambique) take the form of rights to receive a cash payment equivalent to the value of South32 Limited shares at the time of payment. Employees in Africa are granted rights on the JSE and all other employees are granted rights on the ASX. Awards do not confer any dividend or voting rights until they convert into shares at vesting. In addition, the awards do not confer any rights to participate in a share issue, however, there is discretion under the plans to adjust the awards in response to a variation in South32 Limited\u2019s share capital. The AllShare JSE plan is eligible to receive a payment equal to the dividend amount that would have been earned on the underlying shares awarded to those participants (Dividend Equivalent Payment). The Dividend Equivalent Payment is made to participants once the underlying shares are issued or transferred to them. No Dividend Equivalent Payment is made in respect of awards that have lapsed or have been forfeited. No other awards are eligible for a Dividend Equivalent Payment (a) Description of share-based payment arrangements (i) Recurring share-based payment plans The awards listed below are subject to the general conditions noted above and may be granted annually subject to approval by shareholders at the annual general meeting for awards to the Chief Executive Officer and by the Board of Directors for all other awards. FY20, FY21, FY22 and FY23 Long-Term Incentive Plan The Long-Term Incentive Plan is the Group\u2019s long-term incentive plan for Lead Team members. Awards have a four-year performance period from 1 July 2019 to 30 June 2023, 1 July 2020 to 30 June 2024, 1 July 2021 to 30 June 2025 and 1 July 2022 to 30 June 2026 respectively. The FY21 Long-Term Incentive Plan award granted to the Chief Executive Officer is subject to a specific vesting cap imposed by the Board of Directors. For other Lead Team members, the Board of Directors retains the discretion to apply a vesting cap to limit the value of the rights which may vest in the ordinary course. FY21 and FY22 Deferred Short-Term Incentive Plan The Deferred Short-Term Incentive Plan is the Group\u2019s short-term incentive plan for Lead Team members. Awards vest in August 2023 and August 2024 respectively, provided participants remain employed by the Group. FY20, FY21, FY22 and FY23 Management Share Plan The Management Share Plan is the Group\u2019s long-term incentive plan for eligible employees below the Lead Team. The Management Share Plan comprises two elements: \u2013 Retention rights vesting in August 2023, August 2024 and August 2025 provided participants remain employed by the Group; and \u2013 Performance rights vesting in August 2023, August 2024, August 2025 and August 2026 subject to performance conditions and provided participants remain employed by the Group. For the FY21 Management Share Plan awards, the Board of Directors retains the discretion to apply a vesting cap to limit the value of the rights which may vest in the ordinary course. 2020, 2021 and 2022 AllShare Plan The AllShare Plan is the Group\u2019s employee share plan for employees not eligible to participate in the other employee share plans. Awards to the value of at least US$1,250 per employee are granted annually. Awards will vest provided participants remain employed by the Group. The vesting period depends on the participants\u2019 location at the grant date: \u2013 Participants in Africa: August 2023, August 2024 and August 2025; and \u2013 Participants elsewhere: August 2023 and August 2024. (ii) Transitional share-based payment plans The awards listed below are subject to the general conditions noted above and are either one-off or will not be granted on an ongoing basis. FY21 and FY22 Executive Transitional Award Plan The Executive Transitional Award Plan is a one-off grant made to Lead Team members in recognition of their adjustment from the Management Share Plan (three year retention rights and four year performance rights) to the four year plan at the Group. Awards have a three year performance period from 1 July 2020 to 30 June 2023 and 1 July 2021 to 30 June 2024 respectively. FY20 Management Transitional Award Plan The Management Transitional Award Plan is a grant made to certain eligible employees to bridge the gap between their total target reward at BHP and their total target reward at the Group. The Management Transitional Award Plan has the same conditions as the Management Share Plan and comprises both service and performance conditions (b) Employee Share Ownership Plan Trusts The South32 Limited Employee Incentive Plans Trust (the Australian Trust) and the South32 South African AllShare Trust (the South African Trust) are discretionary trusts for the benefit of employees of South32 Limited and its subsidiaries. The trustee for the Australian Trust (CPU Share Plans Pty Ltd) is an independent company, resident in Australia. The trustees for the South African Trust are made up of employer and employee representatives per the Broad-Based Black Economic Empowerment (B-BBEE) requirements under South African law. The Trusts use funds provided by South32 Limited and/or its subsidiaries to acquire shares to enable awards to be made or satisfied under the Group employee share ownership plans. The shares may be acquired by purchase in the market or by subscription at not less than nominal value. (c) Measurement of fair values The fair value at grant date of equity-settled share awards is charged to the Consolidated Income Statement, net of tax, over the period for which the benefits of employee services are expected to be derived. The corresponding accrued employee entitlement is recorded in the employee share awards reserve. Where awards are forfeited because non-market based vesting conditions are not satisfied, the expense previously recognised is proportionally reversed. If awards do not vest due to a market performance condition not being met, the expense is recognised in full, and the share awards reserve is released to retained earnings. Where shares in South32 Limited are acquired by on-market purchases prior to settling the vested entitlement, the cost of the acquired shares is carried as treasury shares and deducted from equity. Where awards are satisfied by delivery of acquired shares, any difference between their acquisition cost and the cumulative remuneration expense recognised is charged directly to retained earnings, net of tax. The fair value of market-based performance rights is measured using a Monte Carlo methodology. This model considers the following: \u2013 Expected life of the award; \u2013 Current market price of the underlying shares; \u2013 Expected volatility (of the individual company and of each peer group); \u2013 Expected dividends; \u2013 Risk-free interest rate; and \u2013 Market based performance hurdles. The fair value of retention and other non-market-based performance rights is measured using a Black Scholes methodology. This model considers the following: \u2013 Expected life of the award; \u2013 Current market price of the underlying shares; \u2013 Expected volatility; \u2013 Expected dividends; and \u2013 Risk-free interest rate The inputs used in the measurement of the fair values at grant date of the equity-settled share-based payments plans were as follows: FY23 Fair value at grant date (US$) Share price at grant date (US$) Expected volatility (%) Expected life (in years) Risk-free interest rate based on government bonds (%) Recurring plans FY23 Long-Term Incentive Plan 1.74 2.76 35 4 3.14 FY22 Deferred Short-Term Incentive Plan 2.68 2.76 35 2 3.09 FY23 Management Share Plan \u2013 Retention rights 2.59 \u2013 2.63 2.76 \u2013 2.85 35 3 3.12 \u2013 8.32 FY23 Management Share Plan \u2013 Performance rights 1.74 \u2013 1.77 2.76 \u2013 2.85 35 4 3.14 \u2013 8.85 2022 AllShare Plan 2.68 \u2013 2.90 2.76 \u2013 2.85 35 2 - 3 3.09 \u2013 8.32 FY22 Fair value at grant date (US$) Share price at grant date (US$) Expected volatility (%) Expected life (in years) Risk-free interest rate based on government bonds (%) Recurring plans FY22 Long-Term Incentive Plan 1.65 2.60 30 4 0.85 FY21 Deferred Short-Term Incentive Plan 2.36 2.60 30 2 0.01 FY22 Management Share Plan \u2013 Retention rights 2.25 - 2.26 2.34 - 2.60 30 3 0.43 - 5.17 FY22 Management Share Plan \u2013 Performance rights 1.65 - 1.66 2.34 - 2.60 30 4 0.85 - 5.61 2021 AllShare Plan 2.36 - 2.57 2.34 - 2.60 30 2 - 3 0.01 - 5.17 Transitional plan FY22 Executive Transitional Award Plan 1.68 2.60 30 3 0.43 The fair value at grant date, expected life, and risk-free interest rates shown represent the ranges based on the amounts of rights granted on the ASX or the JSE during the year, and the variations in offer terms and grant dates of each plan where applicable. Expected volatility is based on the historical South32 Limited share price volatility at the grant date. The risk-free interest rate and expected volatility does not materially impact service-based awards d) Reconciliation of outstanding share awards None of the awards listed below have an exercise price or are exercisable at 30 June 2023. FY23 Number of rights Rights at beginning of the year Granted during the year Vested during the year Forfeited during the year Lapsed during the year Rights at end of the year Recurring plans FY19 Long-Term Incentive Plan 4,145,497 - - - (4,145,497) - FY20 Long-Term Incentive Plan 4,765,759 - - (432,477) - 4,333,282 FY21 Long-Term Incentive Plan 6,957,349 - - (673,913) - 6,283,436 FY22 Long-Term Incentive Plan 3,743,629 - - (313,351) - 3,430,278 FY23 Long-Term Incentive Plan - 2,494,503 - - - 2,494,503 FY20 Deferred Short-Term Incentive Plan 851,180 - (851,180) - - - FY21 Deferred Short-Term Incentive Plan 907, 232 - (178,242) - - 728,990 FY22 Deferred Short-Term Incentive Plan - 949,257 - - - 949,257 FY19 Management Share Plan - Performance rights 4,313,892 - - - (4,313,892) - FY20 Management Share Plan - Retention rights 1,502,428 - (1,502,428) - - - FY20 Management Share Plan - Performance rights 5,124,843 - - (224,230) - 4,900,613 FY21 Management Share Plan - Retention rights 2,702,433 - (65,227) (155,832) - 2,481,374 FY21 Management Share Plan - Performance rights 7,366,059 - - (430,437) - 6,935,622 FY22 Management Share Plan - Retention rights 2,224,932 - (26,731) (166,623) - 2,031,578 FY22 Management Share Plan - Performance rights 3,599,229 - - (290,913) - 3,308,316 FY23 Management Share Plan - Retention rights - 1,907,751 (2,947) (74,912) - 1,829,892 FY23 Management Share Plan - Performance rights - 3,198,587 - (126,329) - 3,072,258 2019 AllShare Plan 1,958,385 - (1,942,655) (15,730) - - 2020 AllShare Plan 6,115,200 - (3,695,200) (132,800) - 2,287,200 2021 AllShare Plan 4,323,740 - (59,360) (276,660) - 3 ,987,720 2022 AllShare Plan - 4,610,840 (24,440) (169,520) - 4,416,880 Transitional plans FY20 Executive Transitional Award Plan 129,283 - (43,094) - (86,189) - FY21 Executive Transitional Award Plan 154,702 - - - - 154,702 FY22 Executive Transitional Award Plan 195,128 - - - - 195,128 FY19 Management Transitional Award Plan 190,959 - - - (190,959) - FY20 Management Transitional Award Plan 89,670 - (14,209) (543) - 74,918 Total awards 61,361,529 13,160,938 (8,405,713) (3,484,270) (8,736,537) 53,895,947 ", "dimensions": { "concept": "ifrs-full:DisclosureOfSharebasedPaymentArrangementsExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-520": { "value": "(c) Measurement of fair values The fair value at grant date of equity-settled share awards is charged to the Consolidated Income Statement, net of tax, over the period for which the benefits of employee services are expected to be derived. The corresponding accrued employee entitlement is recorded in the employee share awards reserve. Where awards are forfeited because non-market based vesting conditions are not satisfied, the expense previously recognised is proportionally reversed. If awards do not vest due to a market performance condition not being met, the expense is recognised in full, and the share awards reserve is released to retained earnings. Where shares in South32 Limited are acquired by on-market purchases prior to settling the vested entitlement, the cost of the acquired shares is carried as treasury shares and deducted from equity. Where awards are satisfied by delivery of acquired shares, any difference between their acquisition cost and the cumulative remuneration expense recognised is charged directly to retained earnings, net of tax. The fair value of market-based performance rights is measured using a Monte Carlo methodology. This model considers the following: \u2013 Expected life of the award; \u2013 Current market price of the underlying shares; \u2013 Expected volatility (of the individual company and of each peer group); \u2013 Expected dividends; \u2013 Risk-free interest rate; and \u2013 Market based performance hurdles. The fair value of retention and other non-market-based performance rights is measured using a Black Scholes methodology. This model considers the following: \u2013 Expected life of the award; \u2013 Current market price of the underlying shares; \u2013 Expected volatility; \u2013 Expected dividends; and \u2013 Risk-free interest rate . ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSharebasedPaymentTransactionsExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-448": { "value": "24. Contingent assets and liabilities Contingent assets and liabilities not otherwise provided for in the consolidated financial statements are categorised as arising from: US$M FY23 FY22 Actual or potential litigation 519 427 Total contingent liabilities 519 427 Actual or potential litigation 143 156 Total contingent assets 143 156 Actual or potential litigation liabilities primarily relate to numerous tax assessments or matters relating to transactions in prior years in Colombia and Brazil. There are a number of legal claims or potential claims against the Group, the outcome of which cannot be foreseen at present, and for which no amounts have been disclosed. Actual or potential litigation assets primarily relate to potential recovery of pre-closing tax liabilities in respect of the Sierra Gorda acquisition, with allocation of liability for these pre-closing tax liabilities being disputed with the vendors. The Group has entered into various counter-indemnities of bank and performance guarantees related to its own future performance which are in the normal course of business. Additionally, the Group has provided indemnities against certain liabilities as part of agreements for the disposal of business operations. Having taken appropriate legal advice, the Group believes that a material liability arising from the indemnities provided is remote. ", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherProvisionsContingentLiabilitiesAndContingentAssetsExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-473": { "value": "24. Contingent assets and liabilities Contingent assets and liabilities not otherwise provided for in the consolidated financial statements are categorised as arising from: US$M FY23 FY22 Actual or potential litigation 519 427 Total contingent liabilities 519 427 Actual or potential litigation 143 156 Total contingent assets 143 156 Actual or potential litigation liabilities primarily relate to numerous tax assessments or matters relating to transactions in prior years in Colombia and Brazil. There are a number of legal claims or potential claims against the Group, the outcome of which cannot be foreseen at present, and for which no amounts have been disclosed. Actual or potential litigation assets primarily relate to potential recovery of pre-closing tax liabilities in respect of the Sierra Gorda acquisition, with allocation of liability for these pre-closing tax liabilities being disputed with the vendors. The Group has entered into various counter-indemnities of bank and performance guarantees related to its own future performance which are in the normal course of business. Additionally, the Group has provided indemnities against certain liabilities as part of agreements for the disposal of business operations. Having taken appropriate legal advice, the Group believes that a material liability arising from the indemnities provided is remote. ", "dimensions": { "concept": "ifrs-full:DisclosureOfContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-548": { "value": "25. Subsidiaries Significant subsidiaries of the Group, which are those with the most significant contribution to the Group\u2019s profit/(loss) after tax or net assets, are as follows: Effective interest % Significant subsidiaries Country of incorporation Principal activity FY23 FY22 African Metals (Pty) Ltd South Africa Investment holding company 100 100 South32 Hermosa Inc. United States Exploration and development 100 100 Cerro Matoso SA Colombia Integrated laterite ferronickel mine and smelting complex 99.9 99.9 Dendrobium Coal Pty Ltd Australia Metallurgical coal mine 100 100 Endeavour Coal Pty Ltd Australia Metallurgical coal mine 100 100 Hillside Aluminium (Pty) Ltd South Africa Aluminium smelter 100 100 Illawarra Coal Holdings Pty Ltd Australia Investment holding company 100 100 Illawarra Services Pty Ltd Australia Coal washery, rail and road transportation 100 100 South32 Finance 1 B.V. Netherlands Financing company 100 100 South32 Finance 2 B.V. Netherlands Financing company 100 100 South32 Aluminium (Holdings) Pty Ltd Australia Investment holding company 100 100 South32 Aluminium (RAA) Pty Ltd Australia Interest in a joint operation 100 100 South32 Aluminium (Worsley) Pty Ltd Australia Interest in a joint operation 100 100 South32 Cannington Pty Ltd Australia Silver, lead and zinc mine 100 100 South32 Eagle Downs Pty Ltd Australia Interest in a joint operation 100 100 South32 Group Operations Pty Ltd Australia Administrative, management and support services 100 100 South32 Investment 1 B.V. Netherlands Interest in a joint operation 100 100 South32 Marketing Pte Ltd Singapore Sales, marketing and distribution 100 100 South32 Minerals SA Brazil Interest in a joint operation 100 100 South32 SA Investments Ltd United Kingdom Investment holding company 100 100 South32 SA Ltd South Africa Administrative, management and support services 100 100 South32 Sierra Gorda SpA Chile Investment holding company 100 100 South32 Treasury Ltd Australia Financing company 100 100 South32 USA Exploration Inc. United States Exploration 100 100 Subsidiaries are entities controlled by the parent entity. Control exists where the parent entity is exposed or has rights to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. A parent entity has power over the subsidiary when it has existing rights to direct the relevant activities of the subsidiary which are those which significantly affect the subsidiary\u2019s returns. The financial statements of subsidiaries are included in the consolidated financial statements for the period they are controlled. 26. Equity accounted investments The Group\u2019s interests in equity accounted investments with the most significant contribution to the Group\u2019s net profit/(loss) after tax or net assets, are as follows: Ownership interest % Significant joint ventures Country of incorporation Principal activity Acquisition date FY23 FY22 Australia Manganese (1) Australia Manganese ore mine 8 May 2015 60 60 South Africa Manganese (2) South Africa Manganese ore mines 3 February 2015 60 60 Sierra Gorda (3) Chile Copper mine 22 February 2022 45 45 (1) Australia Manganese consists of an investment in Groote Eylandt Mining Company Pty Ltd (GEMCO). (2) The Group holds a 60 per cent interest in Samancor Holdings (Pty) Ltd (Samancor). Samancor indirectly owns 74 per cent of Hotazel Manganese Mines (Pty) Ltd (HMM), which gives the Group its indirect ownership interest of 44.4 per cent. The remaining 26 per cent of HMM is owned by B-BBEE entities, of which 17 per cent of the interests were acquired using vendor finance with the loans repayable via distributions attributable to these parties, pro rata to their share in HMM. Until these loans are repaid, the Group\u2019s interest in HMM is accounted for at 54.6 per cent. (3) Sierra Gorda consists of an investment in Sierra Gorda Sociedad Contractual Minera. A reconciliation of the carrying amount of the equity accounted investments is set out below: US$M FY23 FY22 At the beginning of the year 470 380 Share of profit/(loss) 246 272 Share of other comprehensive income/(loss) 6 (3) Dividends received from equity accounted investments (223) (224) Acquisition of an equity accounted investment - 45 At the end of the year 499 470 Carrying amount of equity accounted investments US$M FY23 FY22 Australia Manganese 95 143 South Africa Manganese 173 180 Sierra Gorda 101 30 Individually immaterial (1) 130 117 Total 499 470 (1) Individually immaterial consists of investments in Samancor Marketing Pte Ltd (60 per cent), Minera\u00e7\u00e3o Rio do Norte (33 per cent) and Port Kembla Coal Terminal Ltd (16.7 per cent). Share of profit/(loss) of equity accounted investments US$M FY23 FY22 Australia Manganese 120 211 South Africa Manganese 36 31 Sierra Gorda 71 30 Individually immaterial (1) 19 - Total 246 272 (1) Individually immaterial consists of investments in Samancor Marketing Pte Ltd (60 per cent), Minera\u00e7\u00e3o Rio do Norte (33 per cent) and Port Kembla Coal Terminal Ltd (16.7 per cent) . The following table summarises the financial information relating to each significant equity accounted investment: Joint ventures FY23 US$M Australia Manganese South Africa Manganese Sierra Gorda Reconciliation of the carrying amount of equity accounted investments Current assets 351 231 590 Non-current assets 837 514 4,437 Current liabilities (235) (94) (322) Non-current liabilities (794) (255) (4,481) Net assets \u2013 100% 159 396 224 Net assets \u2013 the Group\u2019s share 95 173 101 Carrying amount of equity accounted investments 95 173 101 Reconciliation of share of profit/(loss) of equity accounted investments Revenue \u2013 100% 1,028 512 1,521 Profit/(loss) after tax \u2013 100% 200 64 158 Profit/(loss) after tax \u2013 the Group\u2019s share 120 36 71 Share of profit/(loss) of equity accounted investments 120 36 71 Other balances of equity accounted investments presented on a 100% basis Cash and cash equivalents(1) - 32 180 Non-current financial liabilities (excluding trade and other payables and provisions) (263) (8) (4,331) Depreciation and amortisation (167) (32) (314) Interest income 4 9 3 Interest expense (39) (11) (385) Income tax (expense)/benefit (excluding royalty related tax) (127) (37) (62) (1) South Africa Manganese cash and cash equivalents includes US$32 million, on a 100 per cent basis, which is restricted by legal or contractual arrangements. Joint ventures FY22 US$M Australia Manganese South Africa Manganese Sierra Gorda Reconciliation of the carrying amount of equity accounted investments Current assets 328 258 485 Non-current assets 836 516 4,252 Current liabilities (260) (81) (367) Non-current liabilities (665) (290) (4,303) Net assets \u2013 100% 239 403 67 Net assets \u2013 the Group\u2019s share 143 180 30 Carrying amount of equity accounted investments 143 180 30 Reconciliation of share of profit/(loss) of equity accounted investments Revenue \u2013 100% 1,239 602 535 Profit/(loss) after tax \u2013 100% 351 59 67 Profit/(loss) after tax \u2013 the Group\u2019s share 211 31 30 Share of profit/(loss) of equity accounted investments 211 31 30 Other balances of equity accounted investments presented on a 100% basis Cash and cash equivalents(1) - 27 154 Non-current financial liabilities (excluding trade and other payables and provisions) (173) (19) (4,177) Depreciation and amortisation (136) (26) (129) Interest income - 3 - Interest expense (20) (13) (139) Income tax (expense)/benefit (excluding royalty related tax) (208) (63) (23) (1) South Africa Manganese cash and cash equivalents includes US$27 million, on a 100 per cent basis, which is restricted by legal or contractual arrangements The Group\u2019s share of contingent liabilities and capital expenditure commitments of significant equity accounted investments as at 30 June 2023 was US$3 million (FY22: US$6 million) and US$58 million (FY22: US$27 million) respectively. The Group uses the term \u2018equity accounted investments\u2019 to refer to associates and joint ventures collectively. Associates are entities in which the Group holds significant influence. If the Group holds 20 per cent or more of the voting power of an entity, it is presumed that the Group has significant influence, unless it can be clearly demonstrated that this is not the case. Significant influence can also arise when the Group has less than 20 per cent of the voting power but it can be demonstrated that the Group has the power to participate in the financial and operating policy decisions of the associate. Investments in associates are accounted for using the equity method. Joint ventures are joint arrangements in which the parties with joint control of the arrangement have rights to the net assets of the arrangement. A separate vehicle, not the parties, will have the rights to the assets and obligations for the liabilities, relating to the arrangement. If more than an insignificant share of output from a joint venture is sold to third parties, this indicates that the joint venture is not dependent on the parties to the arrangement for funding and that the parties to the arrangement have no obligation for the liabilities of the arrangement. Joint ventures are accounted for using the equity method. Equity accounted investments are initially recorded at cost, including the value of any goodwill on acquisition. In subsequent periods, the carrying amount of the investment is adjusted to reflect the share of post-acquisition profit or loss and other comprehensive income. After application of the equity method, including recognising the Group\u2019s share of the investees\u2019 results, the value of the investment will be assessed for impairment if there is objective evidence that an impairment of the investment may have occurred. 27. Interests in joint operations Significant joint operations of the Group, which are those with the most significant contributions to the Group\u2019s net profit/(loss) after tax or net assets, are as follows: Effective interest % Significant joint operations Country of operation Principal activity Acquisition date FY23 FY22 Ambler Metals United States Base metals exploration and development options 11 February 2020 50 50 Brazil Alumina Brazil Integrated bauxite mine and alumina refinery 3 July 2014 36 36 Brazil Aluminium Brazil Aluminium smelter 3 July 2014 40 40 Eagle Downs Metallurgical Coal Australia Metallurgical coal exploration and development option 14 September 2018 50 50 Mozal Aluminium (1) Mozambique Aluminium smelter 27 March 2015 (2) 63.7 63.7 Worsley Alumina(1) Australia Integrated bauxite mine and alumina refinery 8 May 2015 86 86 (1) While the Group holds a greater than 50 per cent interest in Worsley Alumina and Mozal Aluminium, participants jointly approve certain matters and are entitled to receive their share of output from the arrangement. (2) The Group initially acquired a 47.1 per cent interest on 27 March 2015 and subsequently acquired a further 16.6 per cent interest on 31 May 2022. Joint operations are joint arrangements in which the parties with joint control have rights to the assets and obligations for the liabilities relating to the arrangement. The activities of a joint operation are primarily designed for the provision of output to the parties to the arrangement, indicating that: \u2013 The parties have the rights to substantially all the output and economic benefits of the assets of the arrangement; and \u2013 All liabilities are satisfied by the joint participants through their purchases of that output. This indicates that, in substance, the joint participants have an obligation for the liabilities of the arrangement. The consolidated financial statements of the Group include its share of the assets and liabilities, revenues and expenses arising jointly or otherwise from those operations and its revenue derived from the sale of its share of the output from the joint operation. All such amounts are measured in accordance with the terms of each arrangement, which are usually in proportion to the Group\u2019s interest in the joint operation. The assets in these joint operations are restricted to the extent that they are only available to be used by the joint operation itself and not by other operations of the Group. For certain joint operations, the Group has also either pledged, mortgaged or provided a cross charge to joint operation partners over assets within the joint operation", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestsInOtherEntitiesExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-449": { "value": "25. Subsidiaries Significant subsidiaries of the Group, which are those with the most significant contribution to the Group\u2019s profit/(loss) after tax or net assets, are as follows: Effective interest % Significant subsidiaries Country of incorporation Principal activity FY23 FY22 African Metals (Pty) Ltd South Africa Investment holding company 100 100 South32 Hermosa Inc. United States Exploration and development 100 100 Cerro Matoso SA Colombia Integrated laterite ferronickel mine and smelting complex 99.9 99.9 Dendrobium Coal Pty Ltd Australia Metallurgical coal mine 100 100 Endeavour Coal Pty Ltd Australia Metallurgical coal mine 100 100 Hillside Aluminium (Pty) Ltd South Africa Aluminium smelter 100 100 Illawarra Coal Holdings Pty Ltd Australia Investment holding company 100 100 Illawarra Services Pty Ltd Australia Coal washery, rail and road transportation 100 100 South32 Finance 1 B.V. Netherlands Financing company 100 100 South32 Finance 2 B.V. Netherlands Financing company 100 100 South32 Aluminium (Holdings) Pty Ltd Australia Investment holding company 100 100 South32 Aluminium (RAA) Pty Ltd Australia Interest in a joint operation 100 100 South32 Aluminium (Worsley) Pty Ltd Australia Interest in a joint operation 100 100 South32 Cannington Pty Ltd Australia Silver, lead and zinc mine 100 100 South32 Eagle Downs Pty Ltd Australia Interest in a joint operation 100 100 South32 Group Operations Pty Ltd Australia Administrative, management and support services 100 100 South32 Investment 1 B.V. Netherlands Interest in a joint operation 100 100 South32 Marketing Pte Ltd Singapore Sales, marketing and distribution 100 100 South32 Minerals SA Brazil Interest in a joint operation 100 100 South32 SA Investments Ltd United Kingdom Investment holding company 100 100 South32 SA Ltd South Africa Administrative, management and support services 100 100 South32 Sierra Gorda SpA Chile Investment holding company 100 100 South32 Treasury Ltd Australia Financing company 100 100 South32 USA Exploration Inc. United States Exploration 100 100 Subsidiaries are entities controlled by the parent entity. Control exists where the parent entity is exposed or has rights to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. A parent entity has power over the subsidiary when it has existing rights to direct the relevant activities of the subsidiary which are those which significantly affect the subsidiary\u2019s returns. The financial statements of subsidiaries are included in the consolidated financial statements for the period they are controlled. ", "dimensions": { "concept": "ifrs-full:DisclosureOfSignificantInvestmentsInSubsidiariesExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-510": { "value": "Subsidiaries are entities controlled by the parent entity. Control exists where the parent entity is exposed or has rights to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. A parent entity has power over the subsidiary when it has existing rights to direct the relevant activities of the subsidiary which are those which significantly affect the subsidiary\u2019s returns. The financial statements of subsidiaries are included in the consolidated financial statements for the period they are controlled. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSubsidiariesExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-450": { "value": "26. Equity accounted investments The Group\u2019s interests in equity accounted investments with the most significant contribution to the Group\u2019s net profit/(loss) after tax or net assets, are as follows: Ownership interest % Significant joint ventures Country of incorporation Principal activity Acquisition date FY23 FY22 Australia Manganese (1) Australia Manganese ore mine 8 May 2015 60 60 South Africa Manganese (2) South Africa Manganese ore mines 3 February 2015 60 60 Sierra Gorda (3) Chile Copper mine 22 February 2022 45 45 (1) Australia Manganese consists of an investment in Groote Eylandt Mining Company Pty Ltd (GEMCO). (2) The Group holds a 60 per cent interest in Samancor Holdings (Pty) Ltd (Samancor). Samancor indirectly owns 74 per cent of Hotazel Manganese Mines (Pty) Ltd (HMM), which gives the Group its indirect ownership interest of 44.4 per cent. The remaining 26 per cent of HMM is owned by B-BBEE entities, of which 17 per cent of the interests were acquired using vendor finance with the loans repayable via distributions attributable to these parties, pro rata to their share in HMM. Until these loans are repaid, the Group\u2019s interest in HMM is accounted for at 54.6 per cent. (3) Sierra Gorda consists of an investment in Sierra Gorda Sociedad Contractual Minera. A reconciliation of the carrying amount of the equity accounted investments is set out below: US$M FY23 FY22 At the beginning of the year 470 380 Share of profit/(loss) 246 272 Share of other comprehensive income/(loss) 6 (3) Dividends received from equity accounted investments (223) (224) Acquisition of an equity accounted investment - 45 At the end of the year 499 470 Carrying amount of equity accounted investments US$M FY23 FY22 Australia Manganese 95 143 South Africa Manganese 173 180 Sierra Gorda 101 30 Individually immaterial (1) 130 117 Total 499 470 (1) Individually immaterial consists of investments in Samancor Marketing Pte Ltd (60 per cent), Minera\u00e7\u00e3o Rio do Norte (33 per cent) and Port Kembla Coal Terminal Ltd (16.7 per cent). Share of profit/(loss) of equity accounted investments US$M FY23 FY22 Australia Manganese 120 211 South Africa Manganese 36 31 Sierra Gorda 71 30 Individually immaterial (1) 19 - Total 246 272 (1) Individually immaterial consists of investments in Samancor Marketing Pte Ltd (60 per cent), Minera\u00e7\u00e3o Rio do Norte (33 per cent) and Port Kembla Coal Terminal Ltd (16.7 per cent) . The following table summarises the financial information relating to each significant equity accounted investment: Joint ventures FY23 US$M Australia Manganese South Africa Manganese Sierra Gorda Reconciliation of the carrying amount of equity accounted investments Current assets 351 231 590 Non-current assets 837 514 4,437 Current liabilities (235) (94) (322) Non-current liabilities (794) (255) (4,481) Net assets \u2013 100% 159 396 224 Net assets \u2013 the Group\u2019s share 95 173 101 Carrying amount of equity accounted investments 95 173 101 Reconciliation of share of profit/(loss) of equity accounted investments Revenue \u2013 100% 1,028 512 1,521 Profit/(loss) after tax \u2013 100% 200 64 158 Profit/(loss) after tax \u2013 the Group\u2019s share 120 36 71 Share of profit/(loss) of equity accounted investments 120 36 71 Other balances of equity accounted investments presented on a 100% basis Cash and cash equivalents(1) - 32 180 Non-current financial liabilities (excluding trade and other payables and provisions) (263) (8) (4,331) Depreciation and amortisation (167) (32) (314) Interest income 4 9 3 Interest expense (39) (11) (385) Income tax (expense)/benefit (excluding royalty related tax) (127) (37) (62) (1) South Africa Manganese cash and cash equivalents includes US$32 million, on a 100 per cent basis, which is restricted by legal or contractual arrangements. Joint ventures FY22 US$M Australia Manganese South Africa Manganese Sierra Gorda Reconciliation of the carrying amount of equity accounted investments Current assets 328 258 485 Non-current assets 836 516 4,252 Current liabilities (260) (81) (367) Non-current liabilities (665) (290) (4,303) Net assets \u2013 100% 239 403 67 Net assets \u2013 the Group\u2019s share 143 180 30 Carrying amount of equity accounted investments 143 180 30 Reconciliation of share of profit/(loss) of equity accounted investments Revenue \u2013 100% 1,239 602 535 Profit/(loss) after tax \u2013 100% 351 59 67 Profit/(loss) after tax \u2013 the Group\u2019s share 211 31 30 Share of profit/(loss) of equity accounted investments 211 31 30 Other balances of equity accounted investments presented on a 100% basis Cash and cash equivalents(1) - 27 154 Non-current financial liabilities (excluding trade and other payables and provisions) (173) (19) (4,177) Depreciation and amortisation (136) (26) (129) Interest income - 3 - Interest expense (20) (13) (139) Income tax (expense)/benefit (excluding royalty related tax) (208) (63) (23) (1) South Africa Manganese cash and cash equivalents includes US$27 million, on a 100 per cent basis, which is restricted by legal or contractual arrangements The Group\u2019s share of contingent liabilities and capital expenditure commitments of significant equity accounted investments as at 30 June 2023 was US$3 million (FY22: US$6 million) and US$58 million (FY22: US$27 million) respectively. The Group uses the term \u2018equity accounted investments\u2019 to refer to associates and joint ventures collectively. Associates are entities in which the Group holds significant influence. If the Group holds 20 per cent or more of the voting power of an entity, it is presumed that the Group has significant influence, unless it can be clearly demonstrated that this is not the case. Significant influence can also arise when the Group has less than 20 per cent of the voting power but it can be demonstrated that the Group has the power to participate in the financial and operating policy decisions of the associate. Investments in associates are accounted for using the equity method. Joint ventures are joint arrangements in which the parties with joint control of the arrangement have rights to the net assets of the arrangement. A separate vehicle, not the parties, will have the rights to the assets and obligations for the liabilities, relating to the arrangement. If more than an insignificant share of output from a joint venture is sold to third parties, this indicates that the joint venture is not dependent on the parties to the arrangement for funding and that the parties to the arrangement have no obligation for the liabilities of the arrangement. Joint ventures are accounted for using the equity method. Equity accounted investments are initially recorded at cost, including the value of any goodwill on acquisition. In subsequent periods, the carrying amount of the investment is adjusted to reflect the share of post-acquisition profit or loss and other comprehensive income. After application of the equity method, including recognising the Group\u2019s share of the investees\u2019 results, the value of the investment will be assessed for impairment if there is objective evidence that an impairment of the investment may have occurred. ", "dimensions": { "concept": "ifrs-full:DisclosureOfInvestmentsAccountedForUsingEquityMethodExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-474": { "value": "26. Equity accounted investments The Group\u2019s interests in equity accounted investments with the most significant contribution to the Group\u2019s net profit/(loss) after tax or net assets, are as follows: Ownership interest % Significant joint ventures Country of incorporation Principal activity Acquisition date FY23 FY22 Australia Manganese (1) Australia Manganese ore mine 8 May 2015 60 60 South Africa Manganese (2) South Africa Manganese ore mines 3 February 2015 60 60 Sierra Gorda (3) Chile Copper mine 22 February 2022 45 45 (1) Australia Manganese consists of an investment in Groote Eylandt Mining Company Pty Ltd (GEMCO). (2) The Group holds a 60 per cent interest in Samancor Holdings (Pty) Ltd (Samancor). Samancor indirectly owns 74 per cent of Hotazel Manganese Mines (Pty) Ltd (HMM), which gives the Group its indirect ownership interest of 44.4 per cent. The remaining 26 per cent of HMM is owned by B-BBEE entities, of which 17 per cent of the interests were acquired using vendor finance with the loans repayable via distributions attributable to these parties, pro rata to their share in HMM. Until these loans are repaid, the Group\u2019s interest in HMM is accounted for at 54.6 per cent. (3) Sierra Gorda consists of an investment in Sierra Gorda Sociedad Contractual Minera. A reconciliation of the carrying amount of the equity accounted investments is set out below: US$M FY23 FY22 At the beginning of the year 470 380 Share of profit/(loss) 246 272 Share of other comprehensive income/(loss) 6 (3) Dividends received from equity accounted investments (223) (224) Acquisition of an equity accounted investment - 45 At the end of the year 499 470 Carrying amount of equity accounted investments US$M FY23 FY22 Australia Manganese 95 143 South Africa Manganese 173 180 Sierra Gorda 101 30 Individually immaterial (1) 130 117 Total 499 470 (1) Individually immaterial consists of investments in Samancor Marketing Pte Ltd (60 per cent), Minera\u00e7\u00e3o Rio do Norte (33 per cent) and Port Kembla Coal Terminal Ltd (16.7 per cent). Share of profit/(loss) of equity accounted investments US$M FY23 FY22 Australia Manganese 120 211 South Africa Manganese 36 31 Sierra Gorda 71 30 Individually immaterial (1) 19 - Total 246 272 (1) Individually immaterial consists of investments in Samancor Marketing Pte Ltd (60 per cent), Minera\u00e7\u00e3o Rio do Norte (33 per cent) and Port Kembla Coal Terminal Ltd (16.7 per cent) . The following table summarises the financial information relating to each significant equity accounted investment: Joint ventures FY23 US$M Australia Manganese South Africa Manganese Sierra Gorda Reconciliation of the carrying amount of equity accounted investments Current assets 351 231 590 Non-current assets 837 514 4,437 Current liabilities (235) (94) (322) Non-current liabilities (794) (255) (4,481) Net assets \u2013 100% 159 396 224 Net assets \u2013 the Group\u2019s share 95 173 101 Carrying amount of equity accounted investments 95 173 101 Reconciliation of share of profit/(loss) of equity accounted investments Revenue \u2013 100% 1,028 512 1,521 Profit/(loss) after tax \u2013 100% 200 64 158 Profit/(loss) after tax \u2013 the Group\u2019s share 120 36 71 Share of profit/(loss) of equity accounted investments 120 36 71 Other balances of equity accounted investments presented on a 100% basis Cash and cash equivalents(1) - 32 180 Non-current financial liabilities (excluding trade and other payables and provisions) (263) (8) (4,331) Depreciation and amortisation (167) (32) (314) Interest income 4 9 3 Interest expense (39) (11) (385) Income tax (expense)/benefit (excluding royalty related tax) (127) (37) (62) (1) South Africa Manganese cash and cash equivalents includes US$32 million, on a 100 per cent basis, which is restricted by legal or contractual arrangements. Joint ventures FY22 US$M Australia Manganese South Africa Manganese Sierra Gorda Reconciliation of the carrying amount of equity accounted investments Current assets 328 258 485 Non-current assets 836 516 4,252 Current liabilities (260) (81) (367) Non-current liabilities (665) (290) (4,303) Net assets \u2013 100% 239 403 67 Net assets \u2013 the Group\u2019s share 143 180 30 Carrying amount of equity accounted investments 143 180 30 Reconciliation of share of profit/(loss) of equity accounted investments Revenue \u2013 100% 1,239 602 535 Profit/(loss) after tax \u2013 100% 351 59 67 Profit/(loss) after tax \u2013 the Group\u2019s share 211 31 30 Share of profit/(loss) of equity accounted investments 211 31 30 Other balances of equity accounted investments presented on a 100% basis Cash and cash equivalents(1) - 27 154 Non-current financial liabilities (excluding trade and other payables and provisions) (173) (19) (4,177) Depreciation and amortisation (136) (26) (129) Interest income - 3 - Interest expense (20) (13) (139) Income tax (expense)/benefit (excluding royalty related tax) (208) (63) (23) (1) South Africa Manganese cash and cash equivalents includes US$27 million, on a 100 per cent basis, which is restricted by legal or contractual arrangements The Group\u2019s share of contingent liabilities and capital expenditure commitments of significant equity accounted investments as at 30 June 2023 was US$3 million (FY22: US$6 million) and US$58 million (FY22: US$27 million) respectively. The Group uses the term \u2018equity accounted investments\u2019 to refer to associates and joint ventures collectively. Associates are entities in which the Group holds significant influence. If the Group holds 20 per cent or more of the voting power of an entity, it is presumed that the Group has significant influence, unless it can be clearly demonstrated that this is not the case. Significant influence can also arise when the Group has less than 20 per cent of the voting power but it can be demonstrated that the Group has the power to participate in the financial and operating policy decisions of the associate. Investments in associates are accounted for using the equity method. Joint ventures are joint arrangements in which the parties with joint control of the arrangement have rights to the net assets of the arrangement. A separate vehicle, not the parties, will have the rights to the assets and obligations for the liabilities, relating to the arrangement. If more than an insignificant share of output from a joint venture is sold to third parties, this indicates that the joint venture is not dependent on the parties to the arrangement for funding and that the parties to the arrangement have no obligation for the liabilities of the arrangement. Joint ventures are accounted for using the equity method. Equity accounted investments are initially recorded at cost, including the value of any goodwill on acquisition. In subsequent periods, the carrying amount of the investment is adjusted to reflect the share of post-acquisition profit or loss and other comprehensive income. After application of the equity method, including recognising the Group\u2019s share of the investees\u2019 results, the value of the investment will be assessed for impairment if there is objective evidence that an impairment of the investment may have occurred. ", "dimensions": { "concept": "ifrs-full:DisclosureOfSignificantInvestmentsInAssociatesExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-483": { "value": "26. Equity accounted investments The Group\u2019s interests in equity accounted investments with the most significant contribution to the Group\u2019s net profit/(loss) after tax or net assets, are as follows: Ownership interest % Significant joint ventures Country of incorporation Principal activity Acquisition date FY23 FY22 Australia Manganese (1) Australia Manganese ore mine 8 May 2015 60 60 South Africa Manganese (2) South Africa Manganese ore mines 3 February 2015 60 60 Sierra Gorda (3) Chile Copper mine 22 February 2022 45 45 (1) Australia Manganese consists of an investment in Groote Eylandt Mining Company Pty Ltd (GEMCO). (2) The Group holds a 60 per cent interest in Samancor Holdings (Pty) Ltd (Samancor). Samancor indirectly owns 74 per cent of Hotazel Manganese Mines (Pty) Ltd (HMM), which gives the Group its indirect ownership interest of 44.4 per cent. The remaining 26 per cent of HMM is owned by B-BBEE entities, of which 17 per cent of the interests were acquired using vendor finance with the loans repayable via distributions attributable to these parties, pro rata to their share in HMM. Until these loans are repaid, the Group\u2019s interest in HMM is accounted for at 54.6 per cent. (3) Sierra Gorda consists of an investment in Sierra Gorda Sociedad Contractual Minera. A reconciliation of the carrying amount of the equity accounted investments is set out below: US$M FY23 FY22 At the beginning of the year 470 380 Share of profit/(loss) 246 272 Share of other comprehensive income/(loss) 6 (3) Dividends received from equity accounted investments (223) (224) Acquisition of an equity accounted investment - 45 At the end of the year 499 470 Carrying amount of equity accounted investments US$M FY23 FY22 Australia Manganese 95 143 South Africa Manganese 173 180 Sierra Gorda 101 30 Individually immaterial (1) 130 117 Total 499 470 (1) Individually immaterial consists of investments in Samancor Marketing Pte Ltd (60 per cent), Minera\u00e7\u00e3o Rio do Norte (33 per cent) and Port Kembla Coal Terminal Ltd (16.7 per cent). Share of profit/(loss) of equity accounted investments US$M FY23 FY22 Australia Manganese 120 211 South Africa Manganese 36 31 Sierra Gorda 71 30 Individually immaterial (1) 19 - Total 246 272 (1) Individually immaterial consists of investments in Samancor Marketing Pte Ltd (60 per cent), Minera\u00e7\u00e3o Rio do Norte (33 per cent) and Port Kembla Coal Terminal Ltd (16.7 per cent) The following table summarises the financial information relating to each significant equity accounted investment: Joint ventures FY23 US$M Australia Manganese South Africa Manganese Sierra Gorda Reconciliation of the carrying amount of equity accounted investments Current assets 351 231 590 Non-current assets 837 514 4,437 Current liabilities (235) (94) (322) Non-current liabilities (794) (255) (4,481) Net assets \u2013 100% 159 396 224 Net assets \u2013 the Group\u2019s share 95 173 101 Carrying amount of equity accounted investments 95 173 101 Reconciliation of share of profit/(loss) of equity accounted investments Revenue \u2013 100% 1,028 512 1,521 Profit/(loss) after tax \u2013 100% 200 64 158 Profit/(loss) after tax \u2013 the Group\u2019s share 120 36 71 Share of profit/(loss) of equity accounted investments 120 36 71 Other balances of equity accounted investments presented on a 100% basis Cash and cash equivalents(1) - 32 180 Non-current financial liabilities (excluding trade and other payables and provisions) (263) (8) (4,331) Depreciation and amortisation (167) (32) (314) Interest income 4 9 3 Interest expense (39) (11) (385) Income tax (expense)/benefit (excluding royalty related tax) (127) (37) (62) (1) South Africa Manganese cash and cash equivalents includes US$32 million, on a 100 per cent basis, which is restricted by legal or contractual arrangements. Joint ventures FY22 US$M Australia Manganese South Africa Manganese Sierra Gorda Reconciliation of the carrying amount of equity accounted investments Current assets 328 258 485 Non-current assets 836 516 4,252 Current liabilities (260) (81) (367) Non-current liabilities (665) (290) (4,303) Net assets \u2013 100% 239 403 67 Net assets \u2013 the Group\u2019s share 143 180 30 Carrying amount of equity accounted investments 143 180 30 Reconciliation of share of profit/(loss) of equity accounted investments Revenue \u2013 100% 1,239 602 535 Profit/(loss) after tax \u2013 100% 351 59 67 Profit/(loss) after tax \u2013 the Group\u2019s share 211 31 30 Share of profit/(loss) of equity accounted investments 211 31 30 Other balances of equity accounted investments presented on a 100% basis Cash and cash equivalents(1) - 27 154 Non-current financial liabilities (excluding trade and other payables and provisions) (173) (19) (4,177) Depreciation and amortisation (136) (26) (129) Interest income - 3 - Interest expense (20) (13) (139) Income tax (expense)/benefit (excluding royalty related tax) (208) (63) (23) (1) South Africa Manganese cash and cash equivalents includes US$27 million, on a 100 per cent basis, which is restricted by legal or contractual arrangements The Group\u2019s share of contingent liabilities and capital expenditure commitments of significant equity accounted investments as at 30 June 2023 was US$3 million (FY22: US$6 million) and US$58 million (FY22: US$27 million) respectively. The Group uses the term \u2018equity accounted investments\u2019 to refer to associates and joint ventures collectively. Associates are entities in which the Group holds significant influence. If the Group holds 20 per cent or more of the voting power of an entity, it is presumed that the Group has significant influence, unless it can be clearly demonstrated that this is not the case. Significant influence can also arise when the Group has less than 20 per cent of the voting power but it can be demonstrated that the Group has the power to participate in the financial and operating policy decisions of the associate. Investments in associates are accounted for using the equity method. Joint ventures are joint arrangements in which the parties with joint control of the arrangement have rights to the net assets of the arrangement. A separate vehicle, not the parties, will have the rights to the assets and obligations for the liabilities, relating to the arrangement. If more than an insignificant share of output from a joint venture is sold to third parties, this indicates that the joint venture is not dependent on the parties to the arrangement for funding and that the parties to the arrangement have no obligation for the liabilities of the arrangement. Joint ventures are accounted for using the equity method. Equity accounted investments are initially recorded at cost, including the value of any goodwill on acquisition. In subsequent periods, the carrying amount of the investment is adjusted to reflect the share of post-acquisition profit or loss and other comprehensive income. After application of the equity method, including recognising the Group\u2019s share of the investees\u2019 results, the value of the investment will be assessed for impairment if there is objective evidence that an impairment of the investment may have occurred. ", "dimensions": { "concept": "ifrs-full:DisclosureOfJointVenturesExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-545": { "value": "The Group uses the term \u2018equity accounted investments\u2019 to refer to associates and joint ventures collectively. Associates are entities in which the Group holds significant influence. If the Group holds 20 per cent or more of the voting power of an entity, it is presumed that the Group has significant influence, unless it can be clearly demonstrated that this is not the case. Significant influence can also arise when the Group has less than 20 per cent of the voting power but it can be demonstrated that the Group has the power to participate in the financial and operating policy decisions of the associate. Investments in associates are accounted for using the equity method. Joint ventures are joint arrangements in which the parties with joint control of the arrangement have rights to the net assets of the arrangement. A separate vehicle, not the parties, will have the rights to the assets and obligations for the liabilities, relating to the arrangement. If more than an insignificant share of output from a joint venture is sold to third parties, this indicates that the joint venture is not dependent on the parties to the arrangement for funding and that the parties to the arrangement have no obligation for the liabilities of the arrangement. Joint ventures are accounted for using the equity method. Equity accounted investments are initially recorded at cost, including the value of any goodwill on acquisition. In subsequent periods, the carrying amount of the investment is adjusted to reflect the share of post-acquisition profit or loss and other comprehensive income. After application of the equity method, including recognising the Group\u2019s share of the investees\u2019 results, the value of the investment will be assessed for impairment if there is objective evidence that an impairment of the investment may have occurred. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentsInJointVentures", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-541": { "value": "The Group uses the term \u2018equity accounted investments\u2019 to refer to associates and joint ventures collectively. Associates are entities in which the Group holds significant influence. If the Group holds 20 per cent or more of the voting power of an entity, it is presumed that the Group has significant influence, unless it can be clearly demonstrated that this is not the case. Significant influence can also arise when the Group has less than 20 per cent of the voting power but it can be demonstrated that the Group has the power to participate in the financial and operating policy decisions of the associate. Investments in associates are accounted for using the equity method. Joint ventures are joint arrangements in which the parties with joint control of the arrangement have rights to the net assets of the arrangement. A separate vehicle, not the parties, will have the rights to the assets and obligations for the liabilities, relating to the arrangement. If more than an insignificant share of output from a joint venture is sold to third parties, this indicates that the joint venture is not dependent on the parties to the arrangement for funding and that the parties to the arrangement have no obligation for the liabilities of the arrangement. Joint ventures are accounted for using the equity method. Equity accounted investments are initially recorded at cost, including the value of any goodwill on acquisition. In subsequent periods, the carrying amount of the investment is adjusted to reflect the share of post-acquisition profit or loss and other comprehensive income. After application of the equity method, including recognising the Group\u2019s share of the investees\u2019 results, the value of the investment will be assessed for impairment if there is objective evidence that an impairment of the investment may have occurred. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociatesAndJointVenturesExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-529": { "value": "The Group uses the term \u2018equity accounted investments\u2019 to refer to associates and joint ventures collectively. Associates are entities in which the Group holds significant influence. If the Group holds 20 per cent or more of the voting power of an entity, it is presumed that the Group has significant influence, unless it can be clearly demonstrated that this is not the case. Significant influence can also arise when the Group has less than 20 per cent of the voting power but it can be demonstrated that the Group has the power to participate in the financial and operating policy decisions of the associate. Investments in associates are accounted for using the equity method. Joint ventures are joint arrangements in which the parties with joint control of the arrangement have rights to the net assets of the arrangement. A separate vehicle, not the parties, will have the rights to the assets and obligations for the liabilities, relating to the arrangement. If more than an insignificant share of output from a joint venture is sold to third parties, this indicates that the joint venture is not dependent on the parties to the arrangement for funding and that the parties to the arrangement have no obligation for the liabilities of the arrangement. Joint ventures are accounted for using the equity method. Equity accounted investments are initially recorded at cost, including the value of any goodwill on acquisition. In subsequent periods, the carrying amount of the investment is adjusted to reflect the share of post-acquisition profit or loss and other comprehensive income. After application of the equity method, including recognising the Group\u2019s share of the investees\u2019 results, the value of the investment will be assessed for impairment if there is objective evidence that an impairment of the investment may have occurred. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociates", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-540": { "value": "27. Interests in joint operations Significant joint operations of the Group, which are those with the most significant contributions to the Group\u2019s net profit/(loss) after tax or net assets, are as follows: Effective interest % Significant joint operations Country of operation Principal activity Acquisition date FY23 FY22 Ambler Metals United States Base metals exploration and development options 11 February 2020 50 50 Brazil Alumina Brazil Integrated bauxite mine and alumina refinery 3 July 2014 36 36 Brazil Aluminium Brazil Aluminium smelter 3 July 2014 40 40 Eagle Downs Metallurgical Coal Australia Metallurgical coal exploration and development option 14 September 2018 50 50 Mozal Aluminium (1) Mozambique Aluminium smelter 27 March 2015 (2) 63.7 63.7 Worsley Alumina(1) Australia Integrated bauxite mine and alumina refinery 8 May 2015 86 86 (1) While the Group holds a greater than 50 per cent interest in Worsley Alumina and Mozal Aluminium, participants jointly approve certain matters and are entitled to receive their share of output from the arrangement. (2) The Group initially acquired a 47.1 per cent interest on 27 March 2015 and subsequently acquired a further 16.6 per cent interest on 31 May 2022. Joint operations are joint arrangements in which the parties with joint control have rights to the assets and obligations for the liabilities relating to the arrangement. The activities of a joint operation are primarily designed for the provision of output to the parties to the arrangement, indicating that: \u2013 The parties have the rights to substantially all the output and economic benefits of the assets of the arrangement; and \u2013 All liabilities are satisfied by the joint participants through their purchases of that output. This indicates that, in substance, the joint participants have an obligation for the liabilities of the arrangement. The consolidated financial statements of the Group include its share of the assets and liabilities, revenues and expenses arising jointly or otherwise from those operations and its revenue derived from the sale of its share of the output from the joint operation. All such amounts are measured in accordance with the terms of each arrangement, which are usually in proportion to the Group\u2019s interest in the joint operation. The assets in these joint operations are restricted to the extent that they are only available to be used by the joint operation itself and not by other operations of the Group. For certain joint operations, the Group has also either pledged, mortgaged or provided a cross charge to joint operation partners over assets within the joint operation. ", "dimensions": { "concept": "ifrs-full:DisclosureOfInvestmentsOtherThanInvestmentsAccountedForUsingEquityMethodExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-451": { "value": "27. Interests in joint operations Significant joint operations of the Group, which are those with the most significant contributions to the Group\u2019s net profit/(loss) after tax or net assets, are as follows: Effective interest % Significant joint operations Country of operation Principal activity Acquisition date FY23 FY22 Ambler Metals United States Base metals exploration and development options 11 February 2020 50 50 Brazil Alumina Brazil Integrated bauxite mine and alumina refinery 3 July 2014 36 36 Brazil Aluminium Brazil Aluminium smelter 3 July 2014 40 40 Eagle Downs Metallurgical Coal Australia Metallurgical coal exploration and development option 14 September 2018 50 50 Mozal Aluminium (1) Mozambique Aluminium smelter 27 March 2015 (2) 63.7 63.7 Worsley Alumina(1) Australia Integrated bauxite mine and alumina refinery 8 May 2015 86 86 (1) While the Group holds a greater than 50 per cent interest in Worsley Alumina and Mozal Aluminium, participants jointly approve certain matters and are entitled to receive their share of output from the arrangement. (2) The Group initially acquired a 47.1 per cent interest on 27 March 2015 and subsequently acquired a further 16.6 per cent interest on 31 May 2022. Joint operations are joint arrangements in which the parties with joint control have rights to the assets and obligations for the liabilities relating to the arrangement. The activities of a joint operation are primarily designed for the provision of output to the parties to the arrangement, indicating that: \u2013 The parties have the rights to substantially all the output and economic benefits of the assets of the arrangement; and \u2013 All liabilities are satisfied by the joint participants through their purchases of that output. This indicates that, in substance, the joint participants have an obligation for the liabilities of the arrangement. The consolidated financial statements of the Group include its share of the assets and liabilities, revenues and expenses arising jointly or otherwise from those operations and its revenue derived from the sale of its share of the output from the joint operation. All such amounts are measured in accordance with the terms of each arrangement, which are usually in proportion to the Group\u2019s interest in the joint operation. The assets in these joint operations are restricted to the extent that they are only available to be used by the joint operation itself and not by other operations of the Group. For certain joint operations, the Group has also either pledged, mortgaged or provided a cross charge to joint operation partners over assets within the joint operation", "dimensions": { "concept": "ifrs-full:DisclosureOfJointOperationsExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-511": { "value": "Joint operations are joint arrangements in which the parties with joint control have rights to the assets and obligations for the liabilities relating to the arrangement. The activities of a joint operation are primarily designed for the provision of output to the parties to the arrangement, indicating that: \u2013 The parties have the rights to substantially all the output and economic benefits of the assets of the arrangement; and \u2013 All liabilities are satisfied by the joint participants through their purchases of that output. This indicates that, in substance, the joint participants have an obligation for the liabilities of the arrangement. The consolidated financial statements of the Group include its share of the assets and liabilities, revenues and expenses arising jointly or otherwise from those operations and its revenue derived from the sale of its share of the output from the joint operation. All such amounts are measured in accordance with the terms of each arrangement, which are usually in proportion to the Group\u2019s interest in the joint operation. The assets in these joint operations are restricted to the extent that they are only available to be used by the joint operation itself and not by other operations of the Group. For certain joint operations, the Group has also either pledged, mortgaged or provided a cross charge to joint operation partners over assets within the joint operation. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentsOtherThanInvestmentsAccountedForUsingEquityMethodExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-452": { "value": "28. Key management personnel (a) Key management personnel compensation US$\u2019000 FY23 FY22 Short-term employee benefits 5,419 6,321 Post-employment benefits 128 137 Other long-term benefits 276 293 Termination benefits - 428 Share-based payments 4,246 4,764 Total 10,069 11,943 (b) Transactions with key management personnel There were no transactions with key management personnel during the year ended 30 June 2023 (FY22: US$nil). (c) Loans to key management personnel On 22 June 2021, the Group made an interest free loan of US$620 thousand to Mike Fraser in relation to his South African income tax payable on his Group remuneration. The final instalment to repay the loan in full was made on 24 November 2021. There were no other loans with any key management personnel as at 30 June 2023 (FY22: US$nil). (d) Transactions with key management personnel related entities There were no transactions with entities controlled or jointly controlled by key management personnel and there were no outstanding amounts with those entities as at 30 June 2023 (FY22: US$nil) ", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutKeyManagementPersonnelExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-475": { "value": "29. Related party transactions (a) Parent entity The ultimate parent entity of the Group is South32 Limited, which is domiciled and incorporated in Australia. (b) Subsidiaries, joint ventures and associates The interests in subsidiaries, joint ventures and associates are disclosed in note 25 Subsidiaries and note 26 Equity accounted investments. (c) Key management personnel The compensation of, and loans to, key management personnel are disclosed in note 28 Key management personnel. (d) Pension and other post-retirement obligations The pension and other post-retirement obligations are disclosed in note 22 Pension and other post-retirement obligations. (e) Transactions with related parties Transactions with related parties US$\u2019000 Joint ventures Associates FY23 FY22 FY23 FY22 Sales of goods and services 271,141 360,674 3,863 3,961 Purchases of goods and services 531 - 163,096 53,107 Interest income 160,288 60,661 - - Dividend income 223,468 224,424 - - Interest expense 14,977 2,109 - - Increase/(decrease) in short-term financing arrangements (47,726) 49,530 - - Increase/(decrease) in loans with related parties 113,587 1,619,366 (9,117) (17,237 ) Outstanding balances with related parties US$\u2019000 Joint ventures Associates FY23 FY22 FY23 FY22 Trade and sundry amounts owing to related parties 928 748 18,393 973 Other amounts owing to related parties (1) 286,804 334,530 - - Trade and sundry amounts owing from related parties 29,993 30,114 312 769 Loan amounts owing from related parties (2)(3)(4) 1,863,753 1,750,166 40,302 49,419 (1) Other amounts owing to joint ventures relate to short-term deposits and cash managed by the Group on behalf of its equity accounted investments. Interest was paid based on the three-month London Inter-Bank Offer Rate (LIBOR) less a margin of 0.05 per cent and the one-month Johannesburg Inter-Bank Agreed Rate. From 1 July 2023 the three- month LIBOR was replaced by the three-month Chicago Mercantile Exchange Term Secured Overnight Financing Rate (CME Term SOFR) plus a margin of 0.21 per cent. (2) Loan amounts owing from GEMCO include an interest bearing loan which is repayable by 2 January 2026. Interest was paid based on the three-month LIBOR plus a margin of three per cent. From 1 July 2023 the three-month LIBOR was replaced by the three-month CME Term SOFR plus a margin of 3.26 per cent. (3) Loan amounts owing from Sierra Gorda include a purchased credit-impaired loan which has a face value of US$2,185 million (FY22: US$2,073 million) and incurs interest at a contractual rate of eight per cent per annum. The loan is repayable by 15 December 2024, subject to review and agreement between the joint venture parties. Refer to note 19 Financial assets and financial liabilities. (4) Loan amounts owing from Port Kembla Coal Terminal include an interest free loan which is repayable by 30 June 2030. Sales to, and purchases from, related parties are transactions at market prices and on commercial terms, or under terms and prices that are no less favourable to the Group than those arranged with third parties. Outstanding balances at year end are unsecured and settlement mostly occurs in cash. South32 Limited has guaranteed its equivalent 45 per cent share of the repayment of a US$700 million revolving credit facility entered into by Sierra Gorda. At the end of the year, the facility was drawn down by US$400 million (FY22: US$400 million). The facility extends to 30 September 2024. No other guarantees are provided for or have been received from any related party ", "dimensions": { "concept": "ifrs-full:DisclosureOfRelatedPartyExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-422": { "value": "The ultimate parent entity of the Group is South32 Limited, which is domiciled and incorporated in Australia. ", "dimensions": { "concept": "ifrs-full:NameOfUltimateParentOfGroup", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-6": { "value": "South32 Limited", "dimensions": { "concept": "ifrs-full:NameOfParentEntity", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-7": { "value": "Australia", "dimensions": { "concept": "ifrs-full:DomicileOfEntity", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-453": { "value": "(e) Transactions with related parties Transactions with related parties US$\u2019000 Joint ventures Associates FY23 FY22 FY23 FY22 Sales of goods and services 271,141 360,674 3,863 3,961 Purchases of goods and services 531 - 163,096 53,107 Interest income 160,288 60,661 - - Dividend income 223,468 224,424 - - Interest expense 14,977 2,109 - - Increase/(decrease) in short-term financing arrangements (47,726) 49,530 - - Increase/(decrease) in loans with related parties 113,587 1,619,366 (9,117) (17,237 ) Outstanding balances with related parties US$\u2019000 Joint ventures Associates FY23 FY22 FY23 FY22 Trade and sundry amounts owing to related parties 928 748 18,393 973 Other amounts owing to related parties (1) 286,804 334,530 - - Trade and sundry amounts owing from related parties 29,993 30,114 312 769 Loan amounts owing from related parties (2)(3)(4) 1,863,753 1,750,166 40,302 49,419 (1) Other amounts owing to joint ventures relate to short-term deposits and cash managed by the Group on behalf of its equity accounted investments. Interest was paid based on the three-month London Inter-Bank Offer Rate (LIBOR) less a margin of 0.05 per cent and the one-month Johannesburg Inter-Bank Agreed Rate. From 1 July 2023 the three- month LIBOR was replaced by the three-month Chicago Mercantile Exchange Term Secured Overnight Financing Rate (CME Term SOFR) plus a margin of 0.21 per cent. (2) Loan amounts owing from GEMCO include an interest bearing loan which is repayable by 2 January 2026. Interest was paid based on the three-month LIBOR plus a margin of three per cent. From 1 July 2023 the three-month LIBOR was replaced by the three-month CME Term SOFR plus a margin of 3.26 per cent. (3) Loan amounts owing from Sierra Gorda include a purchased credit-impaired loan which has a face value of US$2,185 million (FY22: US$2,073 million) and incurs interest at a contractual rate of eight per cent per annum. The loan is repayable by 15 December 2024, subject to review and agreement between the joint venture parties. Refer to note 19 Financial assets and financial liabilities. (4) Loan amounts owing from Port Kembla Coal Terminal include an interest free loan which is repayable by 30 June 2030. Sales to, and purchases from, related parties are transactions at market prices and on commercial terms, or under terms and prices that are no less favourable to the Group than those arranged with third parties. Outstanding balances at year end are unsecured and settlement mostly occurs in cash. South32 Limited has guaranteed its equivalent 45 per cent share of the repayment of a US$700 million revolving credit facility entered into by Sierra Gorda. At the end of the year, the facility was drawn down by US$400 million (FY22: US$400 million). The facility extends to 30 September 2024. No other guarantees are provided for or have been received from any related party . ", "dimensions": { "concept": "ifrs-full:DisclosureOfTransactionsBetweenRelatedPartiesExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-512": { "value": "Sales to, and purchases from, related parties are transactions at market prices and on commercial terms, or under terms and prices that are no less favourable to the Group than those arranged with third parties. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTransactionsWithRelatedPartiesExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-455": { "value": "30. Parent entity information (a) Summary financial information The individual financial statements for the parent entity, South32 Limited, show the following aggregate amounts: US$M FY23 FY22 Result of parent entity Profit/(loss) after tax for the year (995) 3,879 Total comprehensive income/(loss) (995) 3,879 Financial position of parent entity at year end Current assets 445 652 Total assets 12,056 13,006 Current liabilities (1,375) (100) Total liabilities (1,383) (108) Net assets 10,673 12,898 Total equity of the parent entity Share capital 13,251 13,469 Treasury shares (47) (28) Other reserves 32 24 Profit reserve (1) 3,816 4,823 Accumulated losses (6,379) (5,390) Total equity 10,673 12,898 (1) Prior year profits, net of dividends paid, have been appropriated to a profit reserve for future dividend payments. (b) Parent company guarantees The parent entity and South32 SA Investments Ltd have jointly and severally, fully and unconditionally guaranteed the payment of the principal and premium, if any, and interest, including certain additional amounts that may be payable in respect of the notes issued by South32 Treasury Ltd, a 100 per cent owned finance subsidiary of the parent entity. The parent entity and South32 SA Investments Ltd have guaranteed the payment of such amounts when they become due and payable, whether on an interest payment date, at the stated maturity of the notes, by declaration or acceleration, call for redemption or otherwise. At 30 June 2023, the guaranteed liabilities in respect of the notes amounted to US$690 million (FY22: US$689 million). The parent entity has also guaranteed a US commercial paper program and a Group revolving credit facility of US$1,400 million. The Group revolving credit facility remains undrawn as at 30 June 2023, refer to note 19 Financial assets and financial liabilities for further details. The parent entity is party to a Deed of Support with the effect that the Company guarantees debts in respect of South32 Group Operations Pty Ltd. ", "dimensions": { "concept": "south32limited:DisclosureOfParentEntityInformation", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-454": { "value": "31. Subsequent events Capital management On 24 August 2023, the Directors resolved to pay a fully-franked final dividend of US 3 .2 cents per share (US$145 million) in respect of the 2023 financial year. The dividends will be paid on 12 October 2023. The dividends have not been provided for in the consolidated financial statements and will be recognised in the 2024 financial year. On 24 August 2023, the Group also announced an increase to the existing capital management program, announced in March 2017, of US$50 million to a total of US$2.4 billion. This leaves US$133 million expected to be returned by 1 March 2024. No other matters or circumstances have arisen since the end of the year that have significantly affected, or may significantly affect, the operations, results of operations or state of affairs of the Group in subsequent accounting periods ", "dimensions": { "concept": "ifrs-full:DisclosureOfEventsAfterReportingPeriodExplanatory", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } }, "fact-513": { "value": "0.032", "decimals": 3, "dimensions": { "concept": "ifrs-full:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersPerShare", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00", "unit": "iso4217:USD/xbrli:shares" } }, "fact-514": { "value": "145000000", "decimals": -6, "dimensions": { "concept": "ifrs-full:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwners", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00", "unit": "iso4217:USD" } }, "fact-8": { "value": "108 St Georges Terrace Perth WA 6000 Australia", "dimensions": { "concept": "ifrs-full:AddressOfRegisteredOfficeOfEntity", "language": "en", "entity": "scheme:213800LAZNPXSBKVHR17", "period": "2022-07-01T00:00:00/2023-07-01T00:00:00" } } } }