Property, plant and equipment is recorded at the cost of acquisition or construction, net of accumulated depreciation and impairment charges.
Mineral properties developed internally are determined by (i) direct and indirect costs attributed to build the mining facilities, (ii) financial charges incurred during the construction period, (iii) depreciation of other fixed assets used during construction, (iv) estimated decommissioning and site restoration expenses, and (v) other capitalized expenditures during the development phase (phase when the project demonstrates its economic benefit to the Company, and the Company has ability and intention to complete the project).
The depletion of mineral properties is determined based on the ratio between production and total proven and probable mineral reserves.
Property, plant and equipment, other than mineral properties are depreciated using the straight-line method based on the estimated useful lives, from the date on which the assets become available for their intended use and are capitalized, except for land which is not depreciated.
The estimated useful lives are as follows:
|
|
|
Useful life |
|
|
Buildings |
|
15 to 50 years |
|
|
Facilities |
|
3 to 50 years |
|
|
Equipment |
|
3 to 40 years |
|
|
Others: |
|
|
|
|
Locomotives |
|
12 to 25 years |
|
|
Wagon |
|
30 to 44 years |
|
|
Railway equipment |
|
5 to 33 years |
|
|
Ships |
|
20 years |
|
|
Others |
|
2 to 50 years |
|
The residual values and useful lives of assets are reviewed at the end of each reporting period and adjusted if necessary.