QUARTERLY REPORT

September 2024

South32 Chief Executive Officer, Graham Kerr: "We were devastated by the loss of Mr José Luis Pérez, who was fatally injured in an incident at Cerro Matoso on 17 September and we express our sincere and deepest sympathies to his family, friends and colleagues.

"We remain committed to improving our safety performance. We continue to implement our Safety Improvement Program, which will help us to achieve a step change in our performance so that everyone goes home safe and well every day.

"We have maintained annual production guidance for all of our operations with a strong start to the year in aluminium and a 20 per cent uplift in copper equivalent volumes from Sierra Gorda.

"Completing the sale of Illawarra Metallurgical Coal is a major milestone in our portfolio transformation which has unlocked significant value and streamlined our business toward commodities critical for a low-carbon future.

"The sale has also lowered our sustaining capital intensity and strengthened our financial position, enabling us to self fund our growth in base metals and deliver returns to shareholders via our on-market share buy-back. 

"At Hermosa, construction of our large-scale, long-life Taylor zinc-lead-silver project is progressing as planned and we are continuing to unlock value across our broader land package.

"During the quarter, Hermosa was selected for a US$166 million award negotiation from the US Department of Energy, which recognises Clark's potential to supply battery-grade manganese for the emerging North American market.

"Our transformed portfolio, focused on copper, zinc and our aluminium value chain, leaves us well placed to capitalise on the global energy transition and stronger market conditions to start the year."              

CORPORATE UPDATE

Safety

Sustainability

Portfolio

Financial

DEVELOPMENT AND EXPLORATION UPDATE

Hermosa project

Greenfield exploration

Other exploration

PRODUCTION SUMMARY

a.         The denotation (e) refers to an estimate or forecast year.

b.         Reflects percentage of achieved production for YTD FY25 compared to current FY25e.

s

WORSLEY ALUMINA (86% SHARE)

Worsley Alumina saleable production decreased by 7% (or 66kt) to 850kt in the September 2024 quarter as planned calciner maintenance was undertaken, and we managed constrained bauxite supply due to delayed approvals for new mining areas. FY25 production guidance remains unchanged at 3,750kt with the refinery to convert excess hydrate stocks to calcined alumina across the remainder of the year.

Sales decreased by 15% in the September 2024 quarter due to lower product availability and the timing of shipments.  We realised a circa 8% discount to the Platts Alumina index¹⁵ on a volume weighted M-1 basis for alumina sales in the September 2024 quarter, which reflected market based prices with the exception of a legacy supply contract with Mozal Aluminium which is linked to the LME aluminium price.

On 8 July 2024, the Western Australian Environmental Protection Authority (WA EPA) published its recommendation that the Worsley Mine Development Project (the Project) be approved, subject to conditions. If imposed in their current form, several conditions would create significant operating challenges. We have lodged an appeal in relation to the WA EPA assessment report.

On 15 October 2024, the Western Australian State Government announced that it would defer regulation of greenhouse gas emissions to the Federal Government's Safeguard Mechanism. The change will remove policy inconsistencies that currently exist between the State and Federal Government with regard to greenhouse gas emissions, and is expected to be addressed as part of the appeals process for the Project.

We continue to work collaboratively with the Western Australian Government to enable Worsley Alumina to continue to meet the State's robust environmental standards. The Western Australian Environment Minister is expected to consider approval of the Project in December 2024, with required Federal approvals expected shortly thereafter.

BRAZIL ALUMINA (36% SHARE, NON-OPERATED)

Brazil Alumina saleable production was largely unchanged at 334kt in the September 2024 quarter as the refinery continued to benefit from improved plant availability. FY25 production guidance remains unchanged at 1,350kt.

A preliminary environmental license for MRN's West Zone project, which has the potential to extend the life of the bauxite mine by more than 20 years¹⁶, was issued during the September 2024 quarter. A final investment decision for an enabling transmission line to connect MRN to the Brazilian power grid is expected during the December 2024 quarter.

BRAZIL ALUMINIUM (40% SHARE, NON-OPERATED)

Brazil Aluminium saleable production increased by 7% (or 2kt) to 30kt in the September 2024 quarter as the smelter continued to ramp-up all three potlines. FY25 production guidance remains unchanged at 130kt.

HILLSIDE ALUMINIUM (100% SHARE)

Hillside Aluminium saleable production was unchanged at 180kt in the September 2024 quarter as the smelter continued to test its maximum technical capacity, despite the impact of load-shedding. FY25 production guidance remains unchanged at 720kt¹³.

MOZAL ALUMINIUM (63.7% SHARE)

Mozal Aluminium saleable production increased by 14% (or 11kt) to 88kt in the September 2024 quarter as the smelter achieved improved process stability following completion of its operational recovery plan, despite the impact of load-shedding.  FY25 production guidance remains unchanged at 360kt¹³.

The smelter sources all of its alumina from our Worsley Alumina refinery with approximately 50% priced as a percentage of the LME aluminium index under a legacy contract and the remainder linked to the Platts Alumina index on a M-1 basis, with caps and floors that reset every calendar year. As a result, the smelter's cost of alumina was at a discount to the index in the September 2024 quarter.

As previously disclosed, we continue to work with Eskom and the Government of the Republic of Mozambique to extend the smelter's hydro-electric power supply beyond March 2026, as there are currently no viable alternative suppliers of renewable energy at the required scale.

SIERRA GORDA (45% SHARE)

Sierra Gorda payable copper equivalent production³ increased by 20% (or 3.7kt) to 22.1kt in the September 2024 quarter  with higher planned copper grades and a significant increase in molybdenum recoveries due to improved ore quality.  FY25 production guidance remains unchanged at 84.8kt payable copper equivalent (copper 70.0kt, molybdenum 1.3kt, gold 25.0koz and silver 550koz).

A feasibility study and final investment decision by the joint venture partners for the fourth grinding line expansion is now expected in the second half of calendar year 2025, to enable additional detailed engineering and study work on the tailings thickeners to be completed.

CANNINGTON (100% SHARE)

Cannington payable zinc equivalent production⁴ decreased by 34% (or 26.6kt) to 50.7kt in the September 2024 quarter, as the operation managed increased underground activity and complexity which is expected to continue to drive variability in quarterly performance.

Ore mined decreased by 24% during the September 2024 quarter as additional dewatering and ground rehabilitation was required to access stoping fronts. Average metal grades also declined as the processing of a higher grade stope was deferred to the December 2024 quarter.

FY25 production guidance remains unchanged at 265.4kt payable zinc equivalent (silver 11,300koz, lead 100.0kt, zinc 50.0kt), with dewatering completed in the September 2024 quarter expected to benefit underground performance and access to higher grade stopes across the remainder of the year.

CERRO MATOSO (99.9% SHARE)

Cerro Matoso payable nickel production decreased by 25% (or 2.9kt) to 8.6kt in the September 2024 quarter due to lower planned nickel grades. FY25 production guidance remains unchanged at 35.0kt.

Sales decreased by 27% during the September 2024 quarter due to lower product availability. The discount for our ferronickel product narrowed to ~14% to the LME Nickel Index¹⁷ (FY24: ~25% discount) in the September 2024 quarter, reflecting tighter global supply of class two nickel.

We continued to progress our strategic review of Cerro Matoso and expect to provide an update in the June 2025 half year.

AUSTRALIA MANGANESE (60% SHARE)

Australia Manganese continued to implement the operational recovery plan following the impacts of Tropical Cyclone Megan in the March 2024 quarter. We progressed a substantial dewatering program and a phased mining restart during the September 2024 quarter and remain on track to resume production from the primary concentrator during the December 2024 quarter.

We also continued our investment in mine repairs and infrastructure, including a critical bridge and the wharf.  Wharf construction activity during the September 2024 quarter prioritised stabilisation of existing infrastructure and safe demolition of undersea structures.

FY25 production guidance remains unchanged at 1,000kwmt. Subject to maintaining construction productivity during the upcoming wet season, sales volumes are expected to progressively increase over the June 2025 quarter.

SOUTH AFRICA MANGANESE (ORE 54.6% SHARE)

South Africa Manganese saleable production increased by 12% (or 63kwmt) to 597kwmt in the September 2024 quarter as the operation delivered strong mining performance and continued to sell secondary products to maximise margins.  We will continue to optimise our product mix and use of higher cost trucking in response to market conditions, with FY25 production guidance remaining unchanged at 2,000kwmt. Planned maintenance is scheduled for the June 2025 half year.   

NOTES

The following abbreviations have been used throughout this report: US$ million (US$M); US$ billion (US$B); grams per tonne (g/t); tonnes (t); thousand tonnes (kt); thousand tonnes per annum (ktpa); million tonnes (Mt); million tonnes per annum (Mtpa); ounces (oz); thousand ounces (koz); million ounces (Moz); thousand wet metric tonnes (kwmt); million wet metric tonnes (Mwmt); million wet metric tonnes per annum (Mwmt pa); dry metric tonne unit (dmtu); thousand dry metric tonnes (kdmt); Mineração Rio do Norte (MRN).

Figures in Italics indicate that an adjustment has been made since the figures were previously reported. The denotation (e) refers to an estimate or forecast year.

OPERATING PERFORMANCE

Forward-looking statements

This release contains forward-looking statements, including statements about trends in commodity prices and currency exchange rates; demand for commodities; production forecasts; plans, strategies and objectives of management; capital costs and scheduling; operating costs; anticipated productive lives of projects, mines and facilities; and provisions and contingent liabilities. These forward-looking statements reflect expectations at the date of this release, however they are not guarantees or predictions of future performance. They involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results to differ materially from those expressed in the statements contained in this release. Readers are cautioned not to put undue reliance on forward-looking statements. Except as required by applicable laws or regulations, the South32 Group does not undertake to publicly update or review any forward-looking statements, whether as a result of new information or future events. Past performance cannot be relied on as a guide to future performance. South32 cautions against reliance on any forward-looking statements or guidance.

FURTHER INFORMATION

Approved for release to the market by Graham Kerr, Chief Executive Officer
JSE Sponsor: The Standard Bank of South Africa Limited

21 October 2024

South32 Limited

(Incorporated in Australia under the Corporations Act 2001 (Cth))

(ACN 093 732 597)

ASX / LSE / JSE Share Code: S32; ADR: SOUHY

ISIN: AU000000S320