Environmental issues are an increasing concern for various stakeholders in the mining industry. To
address these concerns, managements of mining companies should embrace sustainable mining
practices in their daily decision making processes. Internal decision making processes are strongly
dependent on the quality of data included in reports used by management. Currently environmental
issues are only considered as a separate item which is attached to the annual financial statements. No
link is made between the environmental performance of the mine and the economic performance that
is achieved.
To achieve greater acknowledgement by management of the importance of controlling environmental
costs on a daily basis, environmental costs need to be identifiable in internal management reports,
including management accounting reports. Various methods are available with which the value of
environmental inputs and outputs can accurately be determined. If these values are correctly
integrated into information systems, reporting these environmental costs will be possible, allowing a
mining company to consider triple-bottom-line reporting.
The goal of this study is to assist mining companies, specifically platinum mining, in measuring and
reporting on environmental costs by setting up a framework. This framework will be formulated by
means of conducting a thorough study of the recent and current literature pertaining to the
measurement methods of environmental costs upon which a comparison will be drawn between this
theory and the actual measurement and reporting of environmental costs by means of case study
research. A gap analysis has identified the problems that platinum mines are experiencing, and
consequently, the framework created will assist platinum mines in introducing the reporting of
environmental costs.
A case study on a platinum mine was done in order to evaluate the current measurement methods and
reporting on environmental costs. The collected data was analysed through explanation building and
an organisational-level logic model was developed in order to understand the reasons that costs are
recorded and reported on by using the method currently applied in the case study principal. This organisational-level logic model will assist in identifying problems within the current costing method
in relation to environmental cost measurement and reporting. The findings identified by the case
study were compared to the theory underlying environmental management accounting after which a
gap analysis identified the problems that platinum mines experience. Based on the findings of the gap
analysis, a framework was developed to assist platinum mines in closing the gap that has been
identified.
The framework, if applied within an organisation will assist mining companies in expanding their
current reporting on environmental issues to an in-depth review of environmental impacts which can
be linked to the achievement of economic performance. This will allow a step forward in triplebottom-
line reporting as the value of environmental costs has been identified as the missing link in
current financial reports.
The framework could not be tested as the application of the framework requires a procedural change
within the organisation which needs to be approved at top management level. This limitation does,
however, open the possibility for a follow up study. Additional reporting on environmental costs will
help management in adding value and quality to daily and overall decision making processes. This
hypothesis can be tested in possible future studies which involve multiple-case studies and which will
extend the framework to include a decision making matrix. / MCom (Management Accountancy), North-West University, Potchefstroom Campus, 2014
| Identifer | oai:union.ndltd.org:NWUBOLOKA1/oai:dspace.nwu.ac.za:10394/11539 |
| Date | January 2013 |
| Creators | Du Plessis, Anél |
| Source Sets | North-West University |
| Language | English |
| Detected Language | English |
| Type | Thesis |
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