South32 (S32) Investor update summary

Transaction overview

• Agreement to sell aluminium value chain assets, including Worsley Alumina, Hillside Aluminium, MRN Bauxite Mine, and Alumar refinery and smelter, to Alcoa for up to US$5.6 billion, comprising US$3.1 billion in cash, US$1 billion in Alcoa shares (~17M shares), US$750 million in net debt and lease liabilities, and up to US$750 million in contingent payments linked to alumina and aluminium prices through 2030.

• Alcoa will assume approximately US$1.2 billion in rehabilitation provisions associated with the assets.

• Transaction completion targeted for H2 FY2027, subject to shareholder and multiple regulatory approvals, including FIRB, ACCC, South African Reserve Bank, and other international clearances.

• Half of the Alcoa shares received (~US$500 million) will be distributed to shareholders as a fully franked special dividend.

• Locked-box mechanism grants Alcoa economic benefit from April 1, with a 5% ticking fee on cash consideration from shareholder approval to completion.

Strategic repositioning and portfolio focus

• Post-transaction, the business will focus on high-margin, long-life base metals assets, with ~85% of pro forma earnings from copper, zinc, silver, and lead.

• Complete exit from refining and smelting enables exclusive focus on upstream mining and growth projects.

• Sierra Gorda copper mine expansion approved, expected to increase copper production by 30%.

• Hermosa Taylor Project to deliver high-margin zinc, silver, and lead production, doubling annual silver output.

• Portfolio realigned to critical minerals with strong demand outlook and concentration in tier-one mining jurisdictions.

Financial and capital management

• Pro forma net cash position of US$3.8 billion expected after transaction completion.

• US$700 million in US dollar bonds to be redeemed at completion.

• Additional shareholder returns to be considered post-transaction, supported by a US$1.6 billion franking credit balance.

• Capital allocation will prioritize project delivery, operational excellence, and disciplined M&A aligned with core commodities.

• Growth projects in copper and zinc, including Hermosa and Sierra Gorda, are key capital priorities.