Assessing the awareness of environmental management accounting in the mining industry in South Africa

Abstract

Mining activities normally have a huge impact on the environment. The whole lifecycle of a mining company with activities such as exploration, development, production and mine closure could result in high environmental costs. The years of waiting between the start of exploration, commencement of production and mine closure create specific challenges in the field of accounting for mining companies. Most of the damages caused by mining activities cannot be hidden and has to be accounted for, and that requires a sound accounting system. It is therefore important for a mining company to implement a system that accounts for environmental costs. This study assesses the awareness of Environmental Management Accounting (EMA) in the mining industry. A questionnaire is administered to a selected group of participants, consisted out of mine management personnel, financial practitioners and environmental practitioners from different mining organizations in Gauteng, Mpumalanga and North West provinces of the Republic of South Africa. The overall findings of the study indicated relatively high levels of awareness of environmental management accounting in the mining industry; however, there are differences between the different functional groups. In most of the responses it was clear that the environmental and financial practitioners have a stronger sense of awareness about the importance of EMA than the managers of the mine.