Company: RTNTF
Filing Date: 2025-02-20
Form Type: 20-F
Source: 0001628280-25-006642
Chunk: 344

Company: RIO TINTO LTD
Filing Date: 2025-02-20
Form: 20-F
Chunk 344
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ivables and other assets” on the balance sheet.

| Annual Report on Form 20-F 2024 | 191 | riotinto.com |

Financial statements | Notes to the consolidated financial statements

14 Close-down, restoration and environmental provisions continued

| Key judgement - close-down, restoration and environmental obligationsWe use our judgement and experience to determine the potential scope of closure rehabilitation work required to meet the Group’s legal,statutory and constructive obligations, and any other commitments made to stakeholders, and the options and techniques available to meetthose obligations in order to estimate the associated costs and the likely timing of those costs. Significant judgement is also required to thendetermine both the costs associated with that work and the other assumptions used to calculate the provision. External experts support thecost estimation process where appropriate but there remains significant estimation uncertainty.The key judgement in applying this accounting policy is determining when an estimate is sufficiently reliable to make or adjust a closureprovision. Adjustments are made to provisions when the range of possible outcomes becomes sufficiently narrow to permit reliableestimation. Depending on the materiality of the change, adjustments may require review and endorsement by the Group’s Closure SteeringCommittee before the provision is updated.Cost provisions are updated throughout the life of the operation with conceptual study estimates reviewed every 5 years. Within 10 years from theexpected closure date, closure cost estimates must comply with the Group’s Capital Project Framework. This means, for example, that where an Orderof Magnitude (OoM) study is required for closure, it must be of the same standard as an OoM study for a new mine, smelter or refinery.In 2023, a reforecast for the Ranger Uranium mine operated by Energy Resources of Australia resulted in an increase to the closureprovision ofUS$850million. The majority of the provision increase was attributable to rehabilitation activities post 2027 and is subject tofurther study which could result in material change to the provision. These activities remain subject to a number of studies and are alsopotentially sensitive to external events such as rainfall.In some cases, the closure study may indicate that monitoring and, potentially, remediation will be required indefinitely - for example,groundwater treatment. In these cases, the underlying cash flows for the provision may be restricted to a period for which the costs can bereliably estimated, which on average is around30years. Where an alternative commercial arrangement to meet our obligations can bepredicted with confidence, this period may be shorter. |

Analysis of close-down, restoration and environmental provisions