Financial statements of JSW S.A. for 2012

21. Provisions

	Property tax	Mining damages	Decommissioning of a mining plant	Environmental fee and environ-mental protection	Other provisions	Total
As at 1 January 2011
Long-term	-	73.3	274.8	21.1	-	369.2
Short-term	218.7	99.2	-	3.7	6.6	328.2
	218.7	172.5	274.8	24.8	6.6	697.4
2011
Establishment of additional provisions	36.8	189	-	0.2	6.1	232.1
Dissolution of unused provisions	(195.8)	(6.7)	(48.3)	(3.4)	(3.1)	(257.3)
Interest expenses	29.3	-	15.7	1.8	-	46.8
Provisions used during the year	(54.7)	(86.3)	-	-	(1.2)	(142.2)
As at 31 Dec 2011
Long-term	-	169.5	242.2	23.2	-	434.9
Short-term	34.3	99	-	0.2	8.4	141.9
	34.3	268.5	242.2	23.4	8.4	576.8
2012
Establishment of additional provisions	66	95.1	86.7	-	6.8	254.6
Dissolution of unused provisions	-	(34.0)	-	-	(2.4)	(36.4)
Interest expenses	13.2	-	10.9	2.1	-	26.2
Provisions used during the year	(29.4)	(85.4)	-	-	(1.4)	(116.2)
As at 31 Dec 2012
Long-term	-	148.1	339.8	13.2	-	501.1
Short-term	84.1	96.1	-	12.3	11.4	203.9
	84.1	244.2	339.8	25.5	11.4	705

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Property tax

The remaining provision for property tax in the amount of PLN 0.7 million pertains to the tax on railway infrastructure.

Mining damages

Under the adopted policy, the Company creates present-value provisions for future liabilities and recognizes and captures provisions for mining damage resulting from the extraction operations of mining enterprises in amounts resulting from documented claims which have been submitted or approved or are being examined by courts.

Decommissioning of a mining plant

The Company establishes a provision for future costs associated with the decommissioning of a mining plant based on the obligations existing under the applicable law. As at 31 December 2012, the amount of the mining plant decomissioning provision is PLN 339.8 million. The amount of the mine decommissioning costs is calculated on the basis of assumptions with regards to the life of a mine, anticipated inflation and long-term discounting rates and the expected nominal cost of decomissioning the respective mining plants, which are determined inside the Company. Any changes to these assumptions affect the book value of the provision. The assumptions made to calculate this reserve are described in Note 4.

Environmental fee and environmental protection

Provisions for the environmental fee and environmental protection include a provision for waste storage fee which reached PLN 21.4 million as at 31 December 2012 (PLN 19.5 million on 31 December 2011). In connection with the termination of a landfill management agreement in 2007 and consequently lack of confirmations that waste has been accepted at the landfill site, there is a risk that the Company could be charged with waste storage fees for the period from 1 June 2007 to 15 August 2008. The Act of 10 July 2008 on Mining Waste (Journal of Laws of 2008 No. 138 Item 865) removes the obligation of calculating and paying waste storage fees after 15 August 2008. It is expected that the provision may be used in 2014.