During the mine development phase, stripping costs (removal of surface waste material) are generally capitalised as part of the depreciable cost of the mine. Once production begins, a degree of continued stripping will usually be required, and this may include a ‘stripping campaign’ which involves the removal of overburden in targeting a specific ore body. The need for such a stripping campaigns are identified in the planning stage of development.

To the extent that the stripping improves access to the ore and the entity either owns the land or otherwise controls access to mine the land, an asset can be recognised as part of the existing mine asset. This must be distinguished from routine stripping costs which are a production cost. Capitalisation of campaign stripping costs must cease when the waste removal activity necessary to access the specific ore bed is complete. Costs that qualify for recognition as an asset are those directly incurred to perform the stripping activity and an allocation of directly attributable costs.

The stripping campaign component of the asset shall be depreciated or amortised in a rational and systematic manner over the expected useful life of the specific section of the ore body to which the stripping campaign related. A units of production method will be generally applicable.


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