Company: RTNTF
Filing Date: 2025-02-20
Form Type: 20-F
Source: 0001628280-25-006642
Chunk: 339

Company: RIO TINTO LTD
Filing Date: 2025-02-20
Form: 20-F
Chunk 339
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 to whether multiple pits at a mine are considered separate or integrated operations. This determines whether thestripping activities of a pit are classified as pre-production or production phase stripping and, therefore, the amortisation base for those costs.The analysis depends on each mine’s specific circumstances and requires judgement: another mining company could make a differentjudgement even when the fact pattern appears to be similar.The following factors would point towards the initial stripping costs for the individual pits being accounted for separately:–if mining of the second and subsequent pits is conducted consecutively following that of the first pit, rather than concurrently–if separate investment decisions are made to develop each pit, rather than a single investment decision being made at the outset–if the pits are operated as separate units in terms of mine planning and the sequencing of overburden removal and ore mining, rather thanas an integrated unit–if expenditures for additional infrastructure to support the second and subsequent pits are relatively large–if the pits extract ore from separate and distinct orebodies, rather than from a single orebody.If the designs of the second and subsequent pits are significantly influenced by opportunities to optimise output from several pits combined,including the co-treatment or blending of the output from the pits, then this would point to treatment as an integrated operation for thepurposes of accounting for initial stripping costs. The relative importance of each of the above factors is considered in each case.In order for production phase stripping costs to qualify for capitalisation as a stripping activity asset, 3 criteria must be met:–it must be probable that there will be an economic benefit in a future accounting period because the stripping activity has improvedaccess to the orebody–it must be possible to identify the “component” of the orebody for which access has been improved–it must be possible to reliably measure the costs that relate to the stripping activity.A “component” is a specific section of the orebody that is made more accessible by the stripping activity. It will typically be a subset of thelarger orebody that is distinguished by a separate useful economic life (for example, a pushback). |

| Annual Report on Form 20-F 2024 | 187 | riotinto.com |

Financial statements | Notes to the consolidated financial statements

13 Property, plant and equipment continued

Recognition and measurement of deferred stripping

| Phase                                                                    | Development Phase                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Production Phase                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| Stripping activity                                                       | Overburden and other waste removalduring the development of a minebefore