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Provisions
12 Months Ended
Dec. 31, 2020
Disclosure of other provisions [abstract]  
Provisions [Text Block]

19.    Provisions

   

Decommis-

sioning,

restoration

and similar

liabilities

   

Deferred

share units

(note 24a)

   

Restricted

share

units1 (note

24a)

   

Performan-

ce share

units (note

24a)

    Other     Total  
Balance, January 1, 2020 $ 302,116   $ 3,876   $ 5,477   $   $ 2,956   $ 314,425  
Net additional provisions made   5,868     1,628     3,642     1,257     15     12,410  
Amounts used   (18,737 )   (497 )   (2,646 )       (1,824 )   (23,704 )
Unwinding of discount (note 6g)   3,543                     3,543  
Effect of change in discount rate   43,180                     43,180  
Effect of foreign exchange   7,162     191     116     43     (3 )   7,509  
Effect of change in share price       3,521     3,860     730         8,111  
Balance, December 31, 2020 $ 343,132   $ 8,719   $ 10,449   $ 2,030   $ 1,144   $ 365,474  

1 Certain amounts relating to the Arizona segment are capitalized.

Provisions are reflected in the consolidated balance sheets as follows:

December 31, 2020   Decommis-sioning, restoration and similar liabilities     Deferred share units (note 24a)     Restricted share units1 (note 24a)     Performance share units (note 24a)     Other     Total  
Current (note 14) $ 20,308   $ 8,719   $ 4,648   $   $   $ 33,675  
Non-current   322,824         5,801     2,030     1,144     331,799  
  $ 343,132   $ 8,719   $ 10,449   $ 2,030   $ 1,144   $ 365,474  
 
 
 
    Decommis-sioning, restoration and similar liabilities     Deferred share units (note 24a)     Restricted share units1 (note 24a)     Performance share units (note 24a)     Other     Total  
Balance, January 1, 2019 $ 202,024   $ 4,288   $ 12,201   $   $ 411   $ 218,924  
Net additional provisions made   68,881     1,479     2,885         2,882     76,127  
Amounts used   (4,136 )   (1,668 )   (9,380 )       (341 )   (15,525 )
Unwinding of discount (note 6g)   4,392                     4,392  
Effect of change in discount rate   23,635                     23,635  
Effect of foreign exchange   7,320     99     225         4     7,648  
Effect of change in share price       (322 )   (454 )           (776 )
Balance, December 31, 2019 $ 302,116   $ 3,876   $ 5,477   $   $ 2,956   $ 314,425  

1 Certain amounts relating to the Arizona segment are capitalized.

 

December 31, 2019  

Decommis-

sioning,

restoration

and similar

liabilities

   

Deferred

share units

(note 24a)

   

Restricted

share units1

(note 24a)

   

Performan-

ce share

units (note

24a)

    Other     Total  
Current (note 14) $ 23,621   $ 3,876   $ 4,468   $   $ 1,610   $ 33,575  
Non-current   278,495         1,009         1,346     280,850  
  $ 302,116   $ 3,876   $ 5,477   $   $ 2,956   $ 314,425  

 

 

Decommissioning, restoration and similar liabilities are remeasured at each reporting date to reflect changes in discount rates, which can significantly affect the liabilities.

Decommissioning, restoration and similar liabilities

Hudbay's decommissioning, restoration and similar liabilities relate to the rehabilitation and closure of currently operating mines and metallurgical plants, development-phase properties and closed properties. The amount of the provision has been recorded based on estimates and assumptions that management believes are reasonable; however, actual decommissioning and restoration costs may differ from expectations.

During the year ended December 31, 2020, additional provisions were recognized mostly as a result of lower discount rates and increased cost in Peru and Manitoba as well as additional disturbance in Peru.

During 2019, additional provisions were recognized as a result of higher estimates for closure activities of tailings facilities at the Manitoba operations to ensure compliance with higher industry-wide standards for tailings management safety and, to a lesser extent, increased mine activity footprints and the resulting higher disturbance at the Constancia operation.

Hudbay's decommissioning and restoration liabilities relate mainly to its Manitoba operations. Management anticipates that the assets in Flin Flon will be placed on care and maintenance once mining activities are completed at 777 mine in order to maintain optionality for restart should a new mine be found in the Flin Flon area. The majority of closure activities will occur once all mining activities in Manitoba are completed. These provisions also reflect estimated post-closure cash flows that extend to the year 2100 for ongoing monitoring and water treatment requirements. Management anticipates most decommissioning and restoration activities for the Constancia operation will occur from 2035 to 2070, which include ongoing monitoring and water treatment requirements.

These estimates have been discounted to their present value at rates ranging from 0.12% to 1.65% per annum (2019 - 1.59% to 2.39%), using pre-tax risk-free interest rates that reflect the estimated maturity of each specific liability.