Minas-Rio Impairment Considerations and Project Delivery
IMPAIRMENT CONSIDERATIONS
Impairment considerations
Base case valuation for impairment test does not
include the potential value from future
expansions to 90 Mtpa
• Full impairment test included sensitivity analysis
based on various risk adjusted assumptions
• Downside scenario considered the impact of
potential delay and capital cost increases
• The fair value of Minas-Rio is determined on a
discounted cash flow basis using:
a real post-tax discount rate of 6.5%
quality adjusted long-term iron ore prices
slightly above the median of US$80 per tonne
(as at December 2012)
Carrying value
Carrying value at 31 December 2012
$bn
Acquisition cost(1)
5.2
Capex to date
3.8
Other net assets
0.6
Carrying value (excluding cash and debt)
9.6
(1) Includes goodwill of $1.1 billion
Income statement
Income statement impact (special items)
Impairment (pre-tax)
$bn
5.0
Tax
1.0
Impairment (post-tax)
4.0
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