Comercial Metales Blancos AB

                the lease, or if that rate cannot be readily determined, the Company's incremental borrowing rate. At
                the commencement date, the lease payments included in the measurement of the lease liability
                comprise fixed payments (including in-substance fixed payments), variable lease payments that
                depend on an index or a rate, amounts expected to be payable under residual value guarantees, the
                exercise price of a purchase option reasonably certain to be exercised, and lease termination
                penalties reasonably certain to be incurred.

                After the commencement date the lease liability is measured by increasing the carrying amount to
                reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments
                made, and remeasuring the carrying amount as appropriate to reflect any reassessment or lease
                modifications, or to reflect revised in-substance fixed lease payments. The Company recognizes
                interest expense on the lease liabilities using the effective interest rate method.

           h.   Decommissioning and restoration provisions

                The Company recognizes decommissioning and restoration provisions related to its mining activities
                based on estimated future costs that are discounted to their present value. Provisions are recognized
                in the period that the decommissioning and restoration obligation arises or when there is a legal or
                constructive obligation to do so. The provision is measured using risk-free nominal discount rates
                derived from the term structure of interest rates. The corresponding decommissioning and
                restoration costs are added to the carrying amount of property, plant and equipment which are
                amortized over the expected economic life. The provisions are accreted overtime and the accretion
                expense is recognized in finance costs in the Consolidated statements of income (loss) and
                comprehensive income (loss).

                Changes in closure and reclamation estimates are adjusted to the carrying value of the related asset
                and recognized as amortized over the remaining economic life of the asset. Changes in cost
                estimates, excluding increases due to the passage of time, are added or deducted from the asset
                value and amortized prospectively over the asset's remaining economic life. Increases due to the
                passage of time (accretion) are expensed. Reductions due to the passage of time are not credited
                but applied to reduce the asset value initially recognized.

                The provision recorded is periodically remeasured when changes occur that would impact the
                timing or amount of cash required to settle the obligation. Actual costs related to decommissioning
                and restoration activities are charged against the provision as incurred.

           i.   Income taxes
                Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognized
                in net income (loss) and comprehensive income (loss) except to the extent that it relates to a business
                combination, or items recognized directly in equity or in other comprehensive income.

                Current income taxes are amounts expected to be payable or recoverable as taxes levied upon
                taxable income of the current year. Current tax assets and current tax liabilities are offset if there is
                a legally enforceable right to set off current tax assets against current tax liabilities and the amounts
                relate to income taxes levied by the same taxation authority on the same taxable entity.

                Deferred tax assets and deferred tax liabilities are recognized in respect of temporary differences
                between the carrying amounts of assets and liabilities for financial reporting purposes and the
                amounts used for taxation purposes. Deferred tax assets and liabilities are calculated using rates
                and provisions enacted or substantively enacted on or before the Consolidated statement of financial
                position date. The effect on deferred tax assets and liabilities of a change in tax rates is recognized




                                                           14