South32 (S32) investor relations material

Climate strategy evolution and portfolio repositioning

• Portfolio shifted from less than 50% to about 90% revenue from aluminium and base metals since 2015, with increased focus on copper and critical minerals for the energy transition.

• 100% of capital expenditure now directed to transition metals and materials, prioritizing high-return, critical mineral operations.

• Divested from capital-intensive, lower-return businesses, including coal, and acquired interests in Hermosa and Sierra Gorda to support base metals growth and transition risk reduction.

• Scenario analysis stress-tested business under 1.5°C and 2.8°C pathways, showing demand growth for aluminium, copper, and manganese, with all commodities except lead expected to grow.

• Capital management framework prioritizes safe operations, investment-grade credit rating, and minimum 40% earnings distribution as dividends, while supporting decarbonisation investments.

Emissions reduction and decarbonization efforts

• Target to halve net operational emissions by FY35 and achieve net zero by 2050, including Scope 3 emissions.

• Major operational emissions stem from the aluminium value chain, especially Hillside (coal-powered) and Worsley (coal/gas-powered), with Hillside accounting for 58% of emissions.

• Hillside's decarbonization depends on securing affordable, large-scale low-carbon energy; multi-stakeholder collaboration ongoing with Eskom and government.

• Worsley reduced emissions by 12% through boiler conversions to natural gas; further reductions depend on electrification and renewable energy infrastructure.

• Scope 3 emissions reduced by 80% since FY19, mainly due to portfolio changes and improved tracking.

Climate risk management, resilience, and just transition

• Physical climate risks integrated into business risk management, with a three-year adaptation and resilience plan underway and five key initiatives to strengthen resilience.

• Infrastructure upgrades focus on tailings storage, flood resilience, power supply, and raw material supply chain disruptions.

• Financial exposure to physical climate risks is assessed and incorporated into asset valuations and closure cost estimates, with ongoing disclosure improvements.

• Community climate resilience and just transition principles embedded in governance, social investment plans, and workforce evolution.

• Ongoing participation in regional just transition groups and proactive engagement with governments and industry to secure low-carbon solutions.