The quality of mine closure and financial provision disclosure in corporate reporting for the South African mining sector

Abstract

The transparency of mine closure and financial provision disclosure aims to reflect the performance of a mining organisations’ ability to meet its environmental liabilities at the end of closure. Corporate entities discloses information annually in their corporate reports, each reflecting its mandatory and voluntary obligation duties. By applying a qualitative research approach which is based on the thematic content analysis methodology and social constructivist approach to textual analysis, the research aims to evaluate the change in mine closure and financial provision disclosure quality in the mining sector by using four publically listed gold or coal producers with major operations in South Africa. Through performing a qualitative review of disclosure between the periods 2016 to 2018, the research reflected that disclosures are primarily presented to meet the organisation’s disclosure obligations in terms of mine closure and financial provisions rather than presenting a holistic or transparent view of the performance. By using the argument from McHenry, Morrison-Saunders, Gorey, Rita Sequeira, Mtegha and Doepel (2015) the current disclosures only provide a pieces of information, presented in a series of financial reporting and management disclosure formats, resulting in a disorientation of information to provide a clear reflection the organisations true ability to achieve the desired mine closure outcomes. Due to the significant influence of disclosure guidance on the information reflected in corporate reports, it is recommended that there should be development in more robust guidance on the nature and extent of information being disclosures in order to address the apparent lack in quality disclosures with regards to mine closure and financial provisions.