South32 Annual Report 2026 31 Strategic Report ## CASH FLOW Group free cash flow from operations, excluding EAIs, was an inflow of US$107M in FY26 (FY25: US$192M inflow), which reflected higher profitability and an unwind in working capital, partially offset by an increase in growth capital expenditure at Hermosa (-US$194M) and higher income tax payments (-US$49M). Working capital decreased by US$82M in FY26, reflecting the timing of receivables, and lower inventories and payables at Mozal Aluminium as the smelter transitioned to care and maintenance in March 2026. Separately, we received net distributions$^{63}$ of US$503M (FY25: US$66M) from our EAIs in FY26. This included a record US$401M from Sierra Gorda (FY25: US$176M) reflecting strong operating performance and higher metal prices, and a net distribution of US$102M from our manganese business (FY25: US$110M net funding) as external insurance recoveries related to Australia Manganese were finalised. ### Free cash flow from operations excluding EAIs | US$M | FY26 | FY25 | | --- | --- | --- | | Operating profit/(loss) from continuing and discontinued operations | **1,385** | 493 | | Non-cash or non-operating items | **167** | 1,029 | | Share of (profit)/loss from EAIs | **(89)** | (99) | | (Gain)/loss from sale of operations | **(16)** | 47 | | Change in working capital | **82** | (37) | | **Cash generated from operations** | **1,529** | 1,433 | | Total capital expenditure, excluding EAIs | **(1,094)** | (963) | | **Operating cash flows generated from operations after capital expenditure** | **435** | 470 | | Net interest paid^{64} | **(43)** | (42) | | Income tax paid | **(285)** | (236) | | **Free cash flow from operations** | **107** | 192 | ### Working capital movement | US$M | FY26 | Commentary | | --- | --- | --- | | Trade and other receivables | **93** | Collection of receivables, partially offset by higher commodity prices | | Inventories | **42** | Predominantly lower inventories at Mozal Aluminium | | Trade and other payables | **(89)** | Mozal Aluminium transitioned to care and maintenance | | Provisions and other liabilities | **36** | | | **Total working capital movement** | **82** | | $^{63}$ Net distributions from our material EAIs (manganese and Sierra Gorda) includes dividends, capital contributions and net repayments/drawdowns of shareholder loans, which should not be considered as an indication of or alternative to an IFRS measure of profitability, financial performance or liquidity. FY26 net distributions from our material EAIs comprise a distribution (+US$401M) from Sierra Gorda and a net distribution from Australia Manganese (+US$102M). The distribution from Sierra Gorda (US$401M) relates to accrued interest. $^{64}$ Net interest paid excludes amounts reported as net distributions from material EAIs. --- South32 Annual Report 2026 32 Strategic Report # **Financial and operating performance summary** continued # CAPITAL EXPENDITURE The Group's capital expenditure(a), excluding EAIs, increased by US$131M to US$1,094M in FY26, largely reflecting higher growth capital expenditure at Hermosa: - Safe and reliable capital expenditure decreased by US$140M to US$213M, reflecting a reduction in sustaining capital intensity following the divestment of IMC and Cerro Matoso; - Improvement and life extension capital expenditure increased by US$66M to US$113M, as we advanced development of new mining areas at Worsley Alumina; - Growth capital expenditure increased by US$194M to US$711M(a) at Hermosa as we progressed underground development and surface infrastructure construction for the Taylor zinc-lead-silver project, and completed the exploration decline for the Clark deposit in Q2 FY26; and - Intangibles and capitalised exploration expenditure increased by US$11M to US$57M with the continuation of multiple exploration programs targeting base metals in highly prospective mineral belts. Our share of capital expenditure for our material EAIs decreased by US$43M to US$347M in FY26: - Capital expenditure for our Sierra Gorda EAI increased by US$12M to US$241M, as the operation continued its investment in deferred stripping and tailings infrastructure; and - Capital expenditure for our manganese EAIs decreased by US$55M to US$106M, as Australia Manganese executed its recovery plan in FY25, and South Africa Manganese completed work to access new mining areas at Wessels. # Capital expenditure (South32 share)(a) | US$M | FY26 | FY25 | | --- | --- | --- | | Safe and reliable capital expenditure | **207** | 269 | | Improvement and life extension capital expenditure | **111** | 44 | | Growth capital expenditure | **711** | 517 | | Intangibles and the capitalisation of exploration expenditure | **57** | 45 | | Discontinued operations(a) | **8** | 88 | | **Total capital expenditure (excluding EAIs)** | **1,094** | 963 | | EAIs capital expenditure | **347** | 390 | | **Total capital expenditure (including EAIs)** | **1,441** | 1,353 | (a) Reflects Cerro Matoso (FY26: US$6M safe and reliable capital expenditure and US$2M improvement and life extension capital expenditure; FY25: US$27M safe and reliable capital expenditure and US$3M improvement and life extension capital expenditure), and IMC (FY26: nil; FY25: US$57M safe and reliable capital expenditure and US$1M capitalised exploration). (a) Total capital expenditure comprises capital expenditure, capitalised exploration and the purchase of intangibles. Capital expenditure comprises safe and reliable capital expenditure, improvement and life extension capital expenditure (including decarbonisation), and growth capital expenditure. (a) Hermosa growth capital expenditure excludes lease payments of US$53M for self generated power and other assets directly attributable to construction of infrastructure at the Taylor deposit. These self generated power and other costs were included in our capital cost estimate provided in market release "Hermosa project update" dated 30 April 2026. --- South32 Annual Report 2026 33 Strategic Report ## BALANCE SHEET Group net cash increased by US$160M to US$283M in FY26, as improved profitability and higher EAI net distributions (+US$503M), more than offset our investment in growth at Hermosa (-US$711M) and returns to shareholders (-US$327M). We continue to prioritise a strong balance sheet and retain access to significant liquidity, including our undrawn US$1.4B sustainability-linked revolving credit facility, which matures in December 2028. Following announcement of the Transaction, our BBB+/Baa1 credit ratings were placed under review by S&P Global Ratings and Moody's, respectively, reflecting a reduction in business scale and diversification. ### Net cash | US$M | FY26 | FY25 | | --- | --- | --- | | Cash and cash equivalents | **2,134** | 1,757 | | Lease liabilities | **(748)** | (713) | | Other interest bearing liabilities | **(1,103)** | (921) | | **Net cash^{(a)}** | **283** | 123 | (a) FY25 net cash included US$80M classified as held for sale as part of the Cerro Matoso disposal group. ## DIVIDENDS AND CAPITAL MANAGEMENT Consistent with our current policy to distribute a minimum 40% of Underlying earnings attributable to members as ordinary dividends, the Board has resolved to pay a fully-franked final ordinary dividend of US 5.4 cents per share (US$242M) in respect of H2 FY26, representing 41% of Underlying earnings attributable to members. The Board has also resolved to extend our US$2.6B capital management program by a further six months to 10 September 2027$^{47}$, with US$209M remaining to be returned to shareholders. Until completion of the Transaction, earnings from the Aluminium Value Chain Assets will form part of South32's Underlying earnings and accordingly the calculation of dividends under our current policy to distribute a minimum 40% of Underlying earnings attributable to members as ordinary dividends. ### Dividends announced | Period | Dividend per share (US cents) | US$M | Franking | Pay-out ratio | | --- | --- | --- | --- | --- | | H1 FY24 | 0.4 | 18 | 100% | 45% | | H2 FY24 | 3.1 | 140 | 100% | 41% | | H1 FY25 | 3.4 | 154 | 100% | 41% | | H2 FY25 | 2.6 | 117 | 100% | 40% | | H1 FY26 | 3.9 | 175 | 100% | 40% | | H2 FY26 | 5.4 | 242 | 100% | 41% | South32 shareholders registered on the South African branch register will not be able to dematerialise or rematerialise their shareholdings between 16 and 18 September 2026 (both dates inclusive), nor will transfers to/from the South African branch register be permitted between 11 and 18 September 2026 (both dates inclusive). Details of the currency exchange rates applicable for the dividend will be announced to the relevant stock exchanges. Further dividend information is available on our website (www.south32.net). South32 American Depositary Receipts (ADRs) each represent five fully paid ordinary shares in South32 and ADR holders will receive dividends accordingly, subject to the terms of the Depositary Agreement. | Dividend timetable | Date | | --- | --- | | Announce currency conversion into South African rand | 14 September 2026 | | Last day to trade cum dividend on the Johannesburg Stock Exchange (JSE) | 15 September 2026 | | Ex-dividend date on the JSE | 16 September 2026 | | Ex-dividend date on the ASX and London Stock Exchange (LSE) | 17 September 2026 | | Record date (including currency election date for ASX) | 18 September 2026 | | Payment date | 15 October 2026 | $^{47}$ Since inception of our capital management program, US$1.8B has been allocated to our on-market share buy-back (B37M shares at an average price of A$3.06 per share) and US$525M returned in the form of special dividends. --- South32 Annual Report 2026 34 Strategic Report ## Financial and operating performance summary continued ### OUTLOOK #### Production We achieved 101% of FY26 Group copper equivalent production$^{48}$ guidance, despite localised weather impacts. Looking ahead, Sierra Gorda is expected to deliver copper equivalent production growth$^{49}$ of 5% in FY27 and a further 2% in FY28, underpinned by higher planned copper grades in the next phase of the mine plan. At Cannington, we have increased ore processed by 20% to 2.1Mtpa in FY27, with milling of lower grade stockpiled material$^{50}$ to supplement ore mined. Payable zinc equivalent production$^{51}$ is expected to be 290.0kt over both FY27 and FY28, reflecting planned metal grades. At Australia Manganese, production guidance for FY27 and FY28 is set at 2,650kwmt to 2,900kwmt, reflecting constrained mine pit access due to elevated water volumes. FY28 production guidance is subject to receipt of required approvals for additional water management infrastructure, and its subsequent installation during the next dry season. FY27 production guidance for our aluminium value chain business remains unchanged. As the Transaction is expected to complete in H2 FY27, we have not provided guidance for FY28. #### Production guidance (South32 share) | | FY26 | FY27e^{(a)} | FY28e^{(a)} | Key guidance assumptions | | --- | --- | --- | --- | --- | | **Sierra Gorda (non-operated)** | | | | | | Ore processed (Mt) | 21.0 | **21.8** | **21.8** | | | Payable copper equivalent production (kt)^{49} | 87.8 | **91.8** | **94.0** | | | Payable copper production (kt) | 69.2 | **79.0** | **79.0** | | | Payable molybdenum production (kt) | 1.9 | **0.5** | **1.0** | Higher planned copper grades | | Payable gold production (koz) | 18.5 | **20.0** | **20.0** | | | Payable silver production (koz) | 741 | **700** | **700** | | | **Cannington** | | | | | | Ore processed (kdmt) | 2,163 | **↑2,100** | **2,100** | | | Payable zinc equivalent production (kt)^{51} | 290.0 | **290.0** | **290.0** | Processing of lower grade stockpiled material to supplement ore mined | | Payable silver production (koz) | 8,906 | **↑8,725** | **8,725** | | | Payable lead production (kt) | 82.9 | **80.0** | **80.0** | Average metal grades in accordance with the mine plan | | Payable zinc production (kt) | 39.2 | **↑45.0** | **45.0** | | | **Australia Manganese** | | | | | | Manganese ore production (kwmt) | 3,031 | **2,650 - 2,900** | **2,650 - 2,900** | Managing constrained pit access and progressing approvals for additional water discharge options | | **South Africa Manganese** | | | | | | Manganese ore production (kwmt) | 2,085 | **2,000** | **2,000** | Subject to our continued use of higher cost trucking | | **Worsley Alumina^{52}** | | | | | | Alumina production (kt) | 3,722 | **3,900** | **N/A** | Further improvement in bauxite supply to the refinery | | **Brazil Alumina (non-operated)^{52}** | | | | | | Alumina production (kt) | 1,411 | **1,360** | **N/A** | Expected to operate near nameplate capacity | | **Brazil Aluminium (non-operated)^{52}** | | | | | | Aluminium production (kt) | 144 | **140** | **N/A** | Continuing to stabilise operations | | **Hillside Aluminium^{52, 53}** | | | | | | Aluminium production (kt) | 717 | **720** | **N/A** | Expected to continue to test maximum technical capacity | (a) The denotation (e) refers to an estimate or forecast year. $^{48}$ Group FY26 payable copper equivalent production, calculated by applying FY26 realised prices for all operations. $^{49}$ Payable copper equivalent production (kt) was calculated by aggregating revenues from payable copper, molybdenum, gold and silver, and dividing the total Revenue by the price of copper. FY26 realised prices for copper (US$5.92/b), molybdenum (US$25.90/b), gold (US$4.462/oz) and silver (US$70.6/oz) have been used for FY26, FY27e and FY28e. $^{50}$ The stockpiled material referred to in this report is not included as Mineral Resources in accordance with the JORC (2012) Code. $^{51}$ Payable zinc equivalent production (kt) was calculated by aggregating revenues from payable silver, lead and zinc, and dividing the total Revenue by the price of zinc. FY26 realised prices for zinc (US$3,000/t), lead (US$1,944/t) and silver (US$66.4/oz) have been used for FY26, FY27e and FY28e. $^{52}$ FY28 guidance not provided, reflecting expected completion of the Transaction in H2 FY27. $^{53}$ Production guidance does not assume any load-shedding impact on production. --- South32 Annual Report 2026 35 Strategic Report ## COSTS AND CAPITAL EXPENDITURE ### Operating unit costs guidance The Group's cost base was largely unchanged in FY26, as the divestment of lower returning businesses, and active cost management, which supported a US$58M reduction in controllable costs, offset uncontrollable cost pressures in raw material input prices and freight rates from the conflict in the Middle East, and stronger producer currencies. Looking ahead, we expect a continuation of these external impacts, including generally stronger producer currencies, to influence Operating unit costs in FY27. We continue to pursue cost efficiencies to mitigate these impacts, while higher planned volumes at Sierra Gorda and processing of lower grade stockpiles at Cannington are expected to benefit Operating unit costs. As previously announced, in connection with the Transaction, we expect to reduce the Group's functional support costs by approximately US$125M per annum, with the full benefit expected to be realised in FY29. These cost savings will be reflected in both lower Group and unallocated expenses and reduced Operating unit costs. We recently implemented the first phase of this work, streamlining senior leadership roles, accountabilities and support functions. ### Operating unit cost | | FY26e^{(a),3a)} | FY26 | H1 FY26 | H2 FY26 | FY27e^{(a),3b)} | Key guidance assumptions | | --- | --- | --- | --- | --- | --- | --- | | **Sierra Gorda (non-operated)** | | | | | | | | (US$/t)^{(b)} | 17.0 | **18.9** | 17.0 | 20.9 | **17.5** | Higher planned volumes and lower labour costs to more than offset inflation | | **Cannington** | | | | | | | | (US$/t)^{(b)} | 205 | **185** | 183 | 187 | **205** | Stronger Australian dollar, general inflation, and costs to support an extended mine life | | **Australia Manganese** | | | | | | | | (US$/dmtu, FOB) | 2.40 | **2.62** | 2.31 | 2.93 | **3.15** | Lower planned volumes, a stronger Australian dollar and general inflation | | **South Africa Manganese** | | | | | | | | (US$/dmtu, FOB) | 3.10 | **3.22** | 3.09 | 3.35 | **3.50** | Inflation and higher in-land logistics costs | | **Worsley Alumina** | | | | | | | | (US$/t) | 310 | **313** | 318 | 308 | **320** | Higher planned volumes and reduced caustic soda consumption, more than offset by a stronger Australian dollar, higher energy prices and inflation | | **Brazil Alumina (non-operated)** | | | | | | | | (US$/t) | Not provided | **324** | 320 | 330 | **Not provided** | Will continue to be influenced by energy and raw material input prices | | **Brazil Aluminium (non-operated)** | | | | | | | | (US$/t) | Not provided | **2,895** | 2,919 | 2,870 | **Not provided** | Will continue to be influenced by raw material input prices and ramp-up profile for all three potlines | | **Hillside Aluminium** | | | | | | | | (US$/t) | Not provided | **2,298** | 2,295 | 2,301 | **Not provided** | Will continue to be influenced by raw material input prices, the South African rand and inflation-linked energy costs | (a) The denotation (e) refers to an estimate or forecast year. (b) US dollar per tonne of ore processed. Periodic movements in finished product inventory may impact Operating unit costs. $^{34}$ FY26e Operating unit cost guidance includes royalties (where appropriate), the influence of exchange rates, and various assumptions for FY26, including: an alumina price of US$340/t; a manganese ore price of US$4.40/dmtu for 44% manganese product; a silver price of US$47.0/oz; a lead price of US$2,000/t (gross of treatment and refining charges); a zinc price of US$2,980/t (gross of treatment and refining charges); a copper price of US$4.80/lb (gross of treatment and refining charges); a molybdenum price of US$22.00/lb (gross of treatment and refining charges); a gold price of US$3,900/oz; an AUD/USD exchange rate of 0.66; a USD/ZAR exchange rate of 17.50; a USD/COP exchange rate of 3,940; USD/CLP exchange rate of 950; and a reference price for caustic soda, which reflect forward markets as at February 2026 or our internal expectations. $^{35}$ FY27e Operating unit cost guidance includes royalties (where appropriate) and the influence of exchange rates, and various assumptions for FY27, including: an alumina price of US$320/t; a manganese ore price of US$4.90/dmtu for 44% manganese product; a silver price of US$65.0/oz; a lead price of US$2,000/t (gross of treatment and refining charges); a zinc price of US$3,500/t (gross of treatment and refining charges); a copper price of US$6.20/lb (gross of treatment and refining charges); a molybdenum price of US$26.00/lb (gross of treatment and refining charges); a gold price of US$4,300/oz; an AUD/USD exchange rate of 0.70; a USD/ZAR exchange rate of 17.00; USD/CLP exchange rate of 930; and a reference price for caustic soda, which reflect forward markets as at August 2026 or our internal expectations. --- South32 Annual Report 2026 112 Strategic Report # Summary of the Work Performed # Review A review is a limited assurance engagement and involves performing procedures to obtain evidence about the specified Sustainability Disclosures subject to review. The nature, timing and extent of procedures selected depend on professional judgement, including the assessed risks of material misstatement at the disclosure level, whether due to fraud or error. In conducting our review, we: - Enquire with relevant South32 Limited personnel to obtain an understanding over the internal controls, governance structure and reporting processes of the specified Sustainability Disclosures; - Test the specified Sustainability Disclosures to source documentation on a sample basis; - Assess the application of the Criteria in respect of the specified Sustainability Disclosures; and - Review the Sustainability Report in its entirety to ensure it is consistent with our overall knowledge of South32 Limited and our observation of its operations. KPMG KPMG Jane Bailey Partner Perth, Australia 27 August 2026 Julia Bilyanska Partner Melbourne, Australia 27 August 2026 --- South32 Annual Report 2026 113 Strategic Report ![img-0.jpeg](img-0.jpeg) ## INDEPENDENT PRACTITIONER'S LIMITED ASSURANCE REPORT To the Directors of South32 Limited *Report on Select Sustainability Information presented in the South32 Limited 2026 Reports (being the Sustainability section of the Annual Report (AR), the Sustainability Databook (Databook), and the Sustainability Standards and Frameworks Index (Index)) for the year ended 30 June 2026.* ### Limited Assurance Conclusion We have conducted a limited assurance engagement on the following Select Sustainability Information of South32 Limited for the year ended 30 June 2026, prepared in accordance with the Reporting Criteria. The Select Sustainability Information comprised the following qualitative and quantitative information. #### Qualitative information | Assertion | Location of assured assertion in the Sustainability section of the AR and Index | Criteria used as the basis of reporting (the Reporting Criteria) | | --- | --- | --- | | South32 Limited's assertion that it has incorporated the requirements of the ICMM 10 Principles, the relevant ICMM Performance Expectations (PEs) and the mandatory requirements set out in the ICMM Position Statements, into its own policies, strategies and standards. | • 'Our sustainability approach' section, paragraph 3 (page 58) | ICMM Assurance and Validation Procedure 2023 (Subject Matter 1). | | South32 Limited's disclosure regarding the approach it has adopted to identify and prioritise its material sustainability risks and opportunities and how it has addressed the GRI Principles of completeness and materiality as set out in the Sustainability section of the AR. | • 'Our sustainability approach' section, sub-section 'Material sustainability topics' (page 59) | ICMM Assurance and Validation Procedure 2023 (Subject Matter 2). | | South32 Limited's assertion regarding the existence and status of implementation of systems and approaches used to manage the following material sustainability areas: – Greenhouse Gas (GHG) Emissions and Energy – Safety and Health – Biodiversity (Landholdings data) – Water – Prioritisation processes for selection of assets for third party PE assurance | • 'Addressing climate change' section, the following subsections: ◦ 'Supporting emissions reduction across the value chain' (page 85-87) ◦ 'Climate-related targets and metrics', operational energy consumption table' (page 106) • 'Protecting and respecting our people' section, subsection 'Safety and health' (page 61-63) • 'Managing our environmental impact' section, the following subsections: ◦ 'Biodiversity' (page 72) ◦ 'Water' (page 73-74) • ICMM Mining Principles and PEs of the Index | ICMM Assurance and Validation Procedure 2023 (Subject Matter 3 & 5). | #### Quantitative information | Quantitative information | Amount assured for the year ended 30 June 2026 | Criteria used as the basis of reporting; ICMM Assurance and Validation Procedure 2023 (Subject Matter 4) and the below (the Reporting Criteria) | | --- | --- | --- | | **Safety and Health** | | | | Fatalities | 1 | Terms and definitions presented within the Databook – Safety and Health tab available on South32 Limited's website. | KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation, Liability limited by a scheme approved under Professional Standards Legislation. --- South32 Annual Report 2026 114 Strategic Report [LOGO] # Quantitative information continued | Quantitative information | Amount assured for the year ended 30 June 2026 | Criteria used as the basis of reporting; ICMM Assurance and Validation Procedure 2023 (Subject Matter 4) and the below (the Reporting Criteria) | | --- | --- | --- | | Biodiversity | | | | Total South32 landholdings – land owned, leased or managed | 550,167 ha | Terms and definitions presented within the Databook – Landholdings tab available on South32 Limited's website. | | Land classified as disturbed | 10,997 ha | | | Land under progressive rehabilitation | 6,745 ha | | | Land set aside for conservation | 4,684 ha | | | Water | | | | Operational water inputs / withdrawal | 116,939 ML | Mineral Council of Australia's Water Accounting Framework and Terms and definitions presented within the Databook – Water tab available on South32 Limited's website. | | Operational water outputs / discharge | 82,197 ML | | | Operational water consumption | 74,611 ML | | | Recycling and reuse | 206,058 ML | | | Water to tasks | 243,874 ML | | | Other managed water inputs / withdrawal | 46,267 ML | | | Other managed water outputs / discharge | 43,615 ML | | | Other managed water consumption | 452 ML | | | GHG emissions | | | | Total Scope 3 GHG emissions | 28.6 Mt CO₂-e | World Resources Institute (WRI) and World Business Sustainable Council for Sustainable Development (WBCSD)'s GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard (2013) and Technical guidance for Calculating Scope 3 Emissions (version 1.0); and Basis of Preparation (BoP) as described and presented within the Climate-related Reporting Methodology 2026 available on South32 Limited's website. | | Total energy (managed basis) | 138 PJ | Basis of Preparation (BoP) as described and presented within the Climate-related Reporting Methodology 2026 available on South32 Limited's website. | The Select Sustainability Information needs to be read and understood together with the Reporting Criteria. Based on the procedures performed and evidence obtained, nothing has come to our attention to cause us to believe that the accompanying Select Sustainability Information presented in the South32 Limited 2026 Reports for the year ended 30 June 2026 is not presented, in all material respects, in accordance with the Reporting Criteria. ### Basis of Conclusion We conducted our limited assurance engagement in accordance with International Standard on Sustainability Assurance 5000 General Requirements for Sustainability Assurance Engagements issued by the International Auditing and Australian Standards Board (ISSA 5000), and the Australian Standard on Sustainability Assurance Engagements 5000 General Requirements for Sustainability Assurance Engagements issued by the Australian Auditing and Assurance Standards Board (AUASB) (ASSA 5000). The procedures performed in a limited assurance engagement vary in nature and timing from and are less in extent than for a reasonable assurance engagement. Consequently, the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have been obtained had a reasonable assurance engagement been performed. Our responsibilities under this standard are further described in the "Practitioner's Responsibilities" section of our report. We comply with the independence and other ethical requirements of APES 110 Code of Ethics for Professional Accountants (including Independence Standards) issued by the Accounting Professional & Ethical Standards Board Limited related to sustainability assurance engagements. Our firm applies International Standard on Quality Management (ISQM1) Quality Management for Firms that Perform Audit or Reviews of Financial Statements, or Other Assurance or Related Service Engagements, issued by the IAASB and Auditing Standard ASQM1 Quality Management for Firms that Perform Audits or Reviews of Reports and Other Financial Information, or Other Assurance or Related Services Engagements, issued by the AUASB. These standards require the firm to design, implement and operate a system of quality management, including policies or procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion. --- South32 Annual Report 2026 115 Strategic Report ![img-1.jpeg](img-1.jpeg) ## Other Information The Directors of South32 Limited are responsible for the other information. The other information comprises the financial and non-financial information included in South32 Limited's 2026 Reports but does not include the Select Sustainability Information and our limited assurance report thereon. Our limited assurance conclusion on the Select Sustainability Information does not cover the other information and we do not express any form of assurance conclusion thereon, with the exception of the 2026 Financial Report, Remuneration Report and our auditors report thereon, the specified Sustainability Disclosures within the Sustainability Report prepared in accordance with the Corporations Act 2001 and our audit and review report thereon. In connection with our limited assurance engagement on the Select Sustainability Information, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the Select Sustainability Information, or our knowledge obtained in the assurance engagement, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. ## Use of this Assurance Report This report has been prepared solely for the Directors of South32 Limited, who have voluntarily requested independent assurance over the Select Sustainability Information of South32 Limited. Accordingly, this report may not be suitable for another purpose. We disclaim any assumption of responsibility for any reliance on this report, to any person other than the Directors of South32 Limited, or for any other purpose than that for which it was prepared. ## Responsibilities for the Select Sustainability Information Management of South32 Limited are responsible for: - The preparation of the Select Sustainability Information in accordance with the Reporting Criteria; and - Designing, implementing and maintaining a system of internal control that it determines is necessary to enable the preparation of the Select Sustainability Information in accordance with the Reporting Criteria that is free from material misstatement, whether due to fraud or error. Those charged with governance are responsible for overseeing the reporting process for South32 Limited's' Select Sustainability Information. ## Inherent Limitations Inherent limitations exist in all assurance engagements due to the selective testing of the information being examined. It is therefore possible that fraud, error or material misstatement in the Select Sustainability Information may occur and not be detected. Non-financial data may be subject to more inherent limitations than financial data, given both its nature and the methods used for determining, calculating, and estimating such data. The precision of different measurement techniques may also vary. The absence of a significant body of established practice on which to draw to evaluate and measure non-financial information allows for different, but acceptable, evaluation and measurement techniques that can affect comparability between entities and over time. Greenhouse gas quantification is subject to inherent uncertainty due to the nature of the information and the uncertainties inherent in: (i) the methods used for determining or estimating the appropriate amounts, (ii) information used to determine emission factors and (iii) the values needed to combine emissions of different gases. ## Practitioner's Responsibilities Our objectives are to plan and perform the engagement to obtain limited assurance about whether the Select Sustainability Information is free from material misstatement, whether due to fraud or error, and to issue a limited assurance report that includes our conclusion. Misstatements can arise from fraud or error, and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the decisions of intended users taken on the basis of the Select Sustainability Information. As part of a limited assurance engagement in accordance with ISSA 5000 and ASSA 5000, we exercise professional judgment and maintain professional scepticism throughout the engagement. We also: - Perform risk assessment procedures, including obtaining an understanding of internal controls relevant to the engagement, to identify and assess the risks of material misstatement, whether due to fraud or error, at the disclosure level but not for the purpose of providing a conclusion on the effectiveness of the entity's internal control. - Design and perform procedures responsive to the assessed risks of material misstatement at the disclosures level in the Select Sustainability Information. The risk of not detecting a material misstatement due to fraud is higher than for one due to error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. --- South32 Annual Report 2026 116 Strategic Report ### Summary of the Work Performed A limited assurance engagement involves performing procedures to obtain evidence about the Select Sustainability Information. The nature, timing and extent of procedures selected depend on professional judgement, including the assessed risks of material misstatement at the disclosure level, whether due to fraud or error. In conducting our limited assurance engagement, the procedures we performed primarily consisted of: - Enquiries with senior management and relevant staff at corporate and three operating sites covering Worsley Alumina, Hillside Aluminium and Groote Eylandt Mining Company (GEMCO), to assess the key systems, processes and internal controls to capture, collate, calculate and report the Select Sustainability Information; - Assessment of the suitability and application of the Reporting Criteria in respect of the Select Sustainability Information; - Analytical procedures over the Select Sustainability Information; - Substantive testing of the Select Sustainability Information, on a sample basis, at corporate and select operations, covering Worsley Alumina, Hillside Aluminium and GEMCO; - On a sample basis, testing the mathematical accuracy of calculations and reconciling the Select Sustainability Information to underlying information; - Assessing South32's incorporation of the requirements of the ICMM 10 principles for sustainable development, the relevant ICMM Performance Expectations (PEs) and the mandatory requirements set out in the ICMM Position Statements, into its own policies, strategies and standards; - Reviewing South32 Limited's disclosure regarding the approach it has adopted to identify and prioritise its material sustainable development risks and opportunities and comparing it to our overall knowledge of South32 Limited and the context we gathered by conducting print and media searches; and - Reviewing the Select Sustainability Information in its entirety to ensure it is consistent with our overall knowledge of South32 Limited and our observation and understanding of its operations. KPMG KPMG Melbourne, Australia 27 August 2026 **Julia Bilyanska** Partner --- South32 Annual Report 2026 117 Strategic Report # GOVERNANCE | Our Board in action | 118 | | --- | --- | | Our Board | 119 | | Our Board members | 122 | | Board focus areas | 127 | | Board stakeholder engagement | 129 | | Board appointment, renewal and evaluation | 130 | | Board skills, knowledge and experience | 131 | | Board and Committee meetings | 134 | | Our Committees | 136 | | Corporate and ethical standards | 140 | | Inclusion and diversity | 141 | | Other governance matters | 142 | | Our Lead Team | 143 | | Directors' Report | 146 | | Remuneration Report | 150 | --- South32 Annual Report 2026 118 Governance Governance continued # OUR BOARD IN ACTION The role of our Board is to represent shareholders, uphold high standards of governance, and strengthen confidence and trust in our work. This section describes our governance framework, policies and practices designed to support ethical conduct, and assist the Group in promoting compliance with legal and regulatory obligations and guide responsible decision-making. It also details the changes to our Board, and its areas of focus, during FY26. ## Introduction This Corporate Governance Statement is current as at 27 August 2026 and has been approved by the Board of South32 Limited. ## ASX Principles and Recommendations As an Australian Securities Exchange (ASX) listed entity, we are required to benchmark our corporate governance practices against the fourth edition of the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations (ASX Principles and Recommendations), available at www.asx.com.au. Our Board considers that our corporate governance practices are (and were for FY26) compliant with the ASX Principles and Recommendations. Further details are provided in our Appendix 4G, available at www.south32.net. ## Our values While our strategy outlines what we do to achieve our purpose, our values guide how we do it. Our values shape the way we behave and the standards we set for ourselves and others. Learn more about our values on page 2. ## Learn more ... ### Board documents - Board Charter - Board Committee processes and procedures - Independence of Directors Policy ### Committee Terms of Reference - Nomination and Governance Committee - Remuneration Committee - Risk and Audit Committee - Sustainability Committee ### Other documents - South32 Constitution - Code of Business Conduct (including our Speak Up Policy) - Anti-Bribery and Corruption Policy - Inclusion and Diversity Policy - Securities Dealing Policy Go to www.south32.net. ## Positive legacy in South Africa In February 2026, our Board held a Board program at our office in Johannesburg, South Africa. While there, members of our Board and Lead Team travelled to the town of Meyerton to witness first-hand the tangible and enduring benefits of South32 Metalloys¹ social investment initiatives. At the Sicelo Clinic, they learned how the facility has improved community access to primary healthcare and addressed preventative healthcare needs since it opened in January 2025. At Springfield Primary School, which supports children and young adults living with mild intellectual disabilities, they were briefed on the infrastructure improvements and learning support initiatives that are enhancing the teaching environment. At Kotulong Community Centre, which provides protection and support for vulnerable children, the visit highlighted the centre's safe and nurturing environment, and its access to education, psychosocial support and other basic needs. ![img-2.jpeg](img-2.jpeg) Above: Board and Lead Team members with Sicelo Clinic staff. 1 South32 divested the Metalloys manganese alloy smelter in FY25. --- South32 Annual Report 2026 119 Governance # OUR BOARD ![img-3.jpeg](img-3.jpeg) Our Board governs the Company, having regard to our purpose, strategy, values and culture, our shareholders as a whole, and the interests of other relevant stakeholders. As part of our planned Board succession process, FY26 saw the retirement of the previous Chair and three inaugural Directors, and the appointment of a new Chair and two new Directors. Our Board also implemented the succession plan for our new Chief Executive Officer and Managing Director. As outlined in our Board Charter, ultimate responsibility for governance and strategy rests with the Board. Our Board comprises 10 Directors and all except our CEO are considered to be independent, Non-Executive Directors. The Board appoints one of its independent Non-Executive Directors as Chair. Following a formal succession process announced in October 2025, Mr Stephen Pearce commenced as Chair on 1 March 2026. Mr Pearce, a Director since 1 February 2025, replaced Ms Karen Wood AM who retired from the Board. Ms Wood had been Chair from 12 April 2019, and a Director from 1 November 2017. Our Chair leads our Board and assists it to work effectively in the discharge of its responsibilities, while encouraging a culture of openness and debate to foster a high-performing and collegiate team. Outside of Board meetings, our Chair acts as the main interface between the Board and the CEO, and represents the Board to our shareholders. Mr Frank Cooper AO and Dr Futhi Mtoba, two inaugural Directors, retired at our AGM on 23 October 2025. As part of our Board succession process, two new Directors were appointed in FY26. Mr Geoff Healy joined the Board on 2 December 2025 and Ms Sinead Kaufman joined on 1 April 2026. Following an extensive global CEO succession and evaluation process by the Board, Matt Daley assumed the role of Deputy CEO, and member of the Lead Team, on 2 February 2026. He assumed the role of CEO on 1 July 2026 after Graham Kerr stepped down from that role on 30 June 2026². Director³ | Mr Stephen Pearce (Chair) | 1 February 2025; Chair since 1 March 2026 | | --- | --- | | Mr Matthew (Matt) Daley (CEO) | 1 July 2026 | | Mr Geoff Healy | 2 December 2025 | | Ms Sinead Kaufman | 1 April 2026 | | Dr Xiaoling Liu | 1 November 2017 | | Mr Carlos Mesquita | 1 May 2023 | | Ms Mandlesilo (Mandla) Msimang | 1 February 2025 | | Ms Jane Nelson | 1 May 2023 | | Mr Wayne Osborn | 7 May 2015 | | Ms Sharon Warburton | 28 November 2023 | Appointment date ² Refer to market release "Agreement to sell aluminium value chain assets to Alcoa for up to US$5.6b and Chief Executive Officer transition" dated 1 July 2026 for further details. ³ Ms Karen Wood AM was a Director from 1 November 2017, and Chair from 12 April 2019, until she retired on 1 March 2026. Mr Frank Cooper AO and Dr Ntombifuthi (Futhi) Mtoba were Directors from 7 May 2015 until they retired on 23 October 2025. Graham Kerr was CEO and Managing Director from 21 January 2015, until he stepped down on 30 June 2026. --- South32 Annual Report 2026 120 Governance Governance continued # OUR CORPORATE GOVERNANCE FRAMEWORK # Board of Directors Our Board represents our shareholders, and promotes and protects the interests of the Group. Our Board Charter sets out its role and responsibilities. Delegating broad authority to our Chief Executive Officer (CEO) for the day-to-day management of the Group enables our Board to focus on its primary responsibilities, including oversight of performance, management's development and implementation of our strategy, and the culture of the Group. Directors are expected to apply independent judgement to all Board discussions and decisions. Find out more about our Board, including members' qualifications, skills and experience, and other appointments on page 122. # Board Committees Four standing Committees have been established to assist the Board in discharging its responsibilities. # Nomination and Governance Committee Assists the Board with reviewing its composition and evaluating its performance and succession planning, and has oversight of the Group's corporate governance practices. # Remuneration Committee Assists the Board to oversee the Group's remuneration framework for all Group employees. # Risk and Audit Committee Assists the Board to oversee the financial reporting, risk management and assurance practices of the Group. # Sustainability Committee Assists the Board to oversee the sustainability management, performance, assurance and reporting practices of the Group. Find out more about our Board Committees on page 136. # Chief Executive Officer Our CEO has authority for day-to-day management of the Group, enabling the Board to focus on its primary responsibilities. The CEO in turn delegates certain authorities and responsibilities to management but remains accountable to the Board for the Group's performance and for all delegated authority. The CEO also guides and supervises our Lead Team. Find out more about our CEO on page 122. # Lead Team Our Lead Team members lead specific parts of our business. As a collective they work to progress the Group's strategy in a way that aligns with our purpose, values, Code of Business Conduct (our Code), and the risk appetite developed by management and approved by our Board. Find out more about our Lead Team members on page 144. # Shareholders Our shareholders are our owners, and we understand that effective two-way communication is important for them to exercise their rights. We maintain a program of engagement involving our Directors, Lead Team and shareholders, and other relevant stakeholders. Find out more about how we engage with our stakeholders on page 129. --- South32 Annual Report 2026 121 Governance # BOARD COMPOSITION In the 11 years since South32 was formed, our Board has been refreshed as Directors have retired or resigned. Succession planning has resulted in retirements being staggered to facilitate continuity and stability, and balance the benefits of retaining deep corporate knowledge with the contribution of fresh perspectives. Our Board's structure and composition is informed by the ASX Principles and Recommendations and our Board Charter, including that the Board: - should be an appropriate size so that business requirements can be met - will comprise a substantial majority of independent Non-Executive Directors - will seek to have Directors from a diverse range of backgrounds with an appropriate range of skills, expertise and experience necessary to carry out its role and responsibilities. Our Board has considered its structure and composition and remains satisfied that: - it is appropriate for the size of the Group, the nature of our portfolio and our strategy, noting the Board has undergone a period of succession - it achieves its gender diversity objective of at least 40% women - it represents a broad cultural, ethnic and background mix, and contains representation from our main operational regions of Australia, Southern Africa, and North and South America - its tenure profile balances the benefits of retaining deep corporate knowledge with the contribution of fresh perspectives, while providing stability during a period of inducting newly appointed Directors. Our Board composition as at the date of this report is further detailed below. The Board will continue to review its composition and size, particularly in light of the announced sale of the aluminium value chain, to ensure it remains fit for purpose. Length of tenure (Non-Executive Directors) ![img-4.jpeg](img-4.jpeg) 0-3 years 3-6 years 6-9 years 9-plus years Gender diversity (all Directors) ![img-5.jpeg](img-5.jpeg) Female Male Location (Non-Executive Directors) ![img-6.jpeg](img-6.jpeg) Australia Southern Africa Americas Ethnicity (all Directors) ![img-7.jpeg](img-7.jpeg) White British or other White (including minority-white groups) Asian/Asian British Black/African/Caribbean/Black British # Director independence To qualify as independent, a Director must be independent of management. They must also be free of any interest, position or other relationship that could (or be reasonably perceived to) materially influence the exercise of objective, unfettered or independent judgement by the Director, or the Director's ability to act in the best interests of the Group or its shareholders generally. The Nomination and Governance Committee assists the Board to assess the independence of Directors before new appointments are made, annually and if significant new interests arise. Our register of Directors' interests is periodically reviewed and updated by our Directors, as Non-Executive Directors may be involved with other companies, associations or professional firms which have dealings with us. Director tenure is also considered when assessing independence. Our Board has determined that for FY26 all Non-Executive Directors identified on page 119 are independent and, accordingly, the Board is comprised of a substantial majority of independent Non-Executive Directors. --- South32 Annual Report 2026 122 Governance Governance continued # OUR BOARD MEMBERS⁴ ![img-8.jpeg](img-8.jpeg) Mr Stephen Pearce BBus (Acc), FCA, FGIA, MAICD, 62 Chair and Independent Non-Executive Director Appointed: 1 February 2025; Chair: 1 March 2026 Location: Australia Career summary: Mr Pearce has more than 25 years' experience as a director of public companies and more than 40 years of financial and commercial experience in the mining, oil and gas, and utilities industries. Mr Pearce holds a Bachelor of Business from the Royal Melbourne Institute of Technology. He is a Fellow of the Institute of Chartered Accountants, a Fellow of the Governance Institute of Australia and a Member of the Australian Institute of Company Directors. He has held a range of leadership roles including Group Chief Financial Officer and Executive Director of Anglo American plc, a position he held for close to seven years. He also served as Group CFO and Executive Director of Fortescue Metals Group Limited, CFO of Alinta Energy, and as a Director and Strategic Advisor to the Wyllie Group. External appointments: Mr Pearce is a Non-Executive Director of ASX-listed Ampol Limited (since March 2025), where he is a member of the Audit and Risk Committee and Nomination Committee. He is also a Non-Executive Director at BAE Systems plc, where he is a member of the Audit and Risk Committee (Chair until May 2026) and Nominations Committee. In August 2025, he was appointed as a Trustee of the SAS Resources Fund. Skills and experience: Mr Pearce brings a wealth of global experience with resources, finance, commercial and operational expertise over more than 40 years in mining, oil and gas, and utilities. He is highly skilled in finance, strategy and capital projects. Mr Pearce also has well-regarded people and remuneration, leadership, corporate development and regulatory compliance experience. His financial experience and industry knowledge are valuable to our Board. Mr Pearce commenced as Chair of the Board on 1 March 2026, replacing Ms Karen Wood AM who retired from the Board. ![img-9.jpeg](img-9.jpeg) Mr Matthew (Matt) Daley BE (Mining) (Hons), GradDip (Finance and Investment), 48 Chief Executive Officer and Managing Director Appointed: 1 July 2026 Location: Australia Career summary: Mr Daley was previously Technical and Operations Director and a member of the executive leadership team at Anglo American plc, where he had accountability for the Group's global technical, operational excellence, safety, health and environment, supply chain, exploration and resource development functions. He joined Anglo American as Group Head of Mining in 2017 and subsequently led a group-wide operational excellence transformation program. Prior to Anglo American, Mr Daley held senior operational, project and commercial leadership roles with Glencore, Minera Alumbrera and Xstrata across Australia, Canada, Argentina and the Middle East. This included the positions of Executive General Manager of Glencore's Canadian copper division, Project Head of the Agua Rica Project in Argentina, metals trader based in Dubai and Mine Manager at the Mount Isa Copper Mine in Queensland. He also served as a Non-Executive Director at NYSE-listed PolyMet Mining Corp (2014 to 2017). Mr Daley holds a Bachelor of Engineering (Mining) (Hons) from the University of South Australia and a Graduate Diploma in Finance and Investment from the Securities Institute of Australia. External appointments: Mr Daley was a Non-Executive Director of JSE-listed Anglo American Platinum Limited (now named Valterra Platinum Limited) (from May 2023 to March 2025). Skills and experience: Mr Daley has more than 25 years' experience in the global mining and metals industry spanning underground and open cut mining, smelting, refining, major capital projects and commodity trading. He has held leadership roles across operations, technical, commercial and corporate functions in Australia, North America, South America, the Middle East and Europe. His experience spans a broad range of commodities and includes operational excellence, resource development, project execution, safety and sustainability leadership, and engagement with boards, investors and other stakeholders. Mr Daley commenced as Deputy CEO of South32 on 2 February 2026, and became CEO and Managing Director of South32 on 1 July 2026, replacing Mr Graham Kerr who stepped down from the role on 30 June 2026. Committee membership key: Chair appointment RA Risk and Audit Committee N Nomination and Governance Committee S Sustainability Committee R Remuneration Committee ⁴ This section provides details of the directors on the Board as at the date of this Report. Information on directors during the year and their attendance at Board and Committee meetings is set out on page 135. --- South32 Annual Report 2026 123 Governance ![img-10.jpeg](img-10.jpeg) Mr Geoff Healy LLB, BEc, 60 Independent Non-Executive Director Appointed: 2 December 2025 Location: Australia Career summary: Mr Healy has 35 years' senior executive experience, in the natural resources and professional services sectors. He is currently a Senior Advisor at Boston Consulting Group (BCG), having previously been appointed as a Managing Director and Partner of BCG in 2022. He advises global clients across industries on strategy, transformation, new market entry, geopolitics, and sustainability (and the energy transition). In 2013, Mr Healy joined BHP as its Chief Legal Counsel, and as a member of its Executive Leadership Team. In 2016, he became Chief External Affairs Officer. In that role, Mr Healy had oversight of Legal, Governance, Compliance, External Affairs, Health, Safety and the Environment, Risk, and Audit. Mr Healy began his career at Freehills in 1990. He was a Partner at Herbert Smith Freehills Kramer (HSFK) for 16 years from 1997, and a member of its Global Council on the merger of Freehills and Herbert Smith in 2012. While at HSFK, Mr Healy specialised in legal and reputational crises for Asia-Pacific based institutions. Mr Healy has been a member of the Board of the Grattan Institute, a leading Australian not-for-profit public policy think-tank, a member of the Law Society Professional Conduct Review Board, and a strategic advisor to the Red Cross. External appointments: Senior Advisor, BCG. Skills and experience: Mr Healy brings extensive experience to this role, having worked for HSFK, BHP and BCG on complex strategic and reputational decision-making, with a particular focus on natural resources. He has developed functional skills in the law, governance, health and safety, risk and audit, sustainability, corporate development, ethics and compliance, and external affairs. His experience in natural resources crosses a wide range of commodities (bulk and base metal) and markets (Australia, North, Central and South America, Asia and the Middle East). Mr Healy has worked both as advisor and executive across industries and geographies. He holds a Bachelor of Laws and a Bachelor of Economics from the University of Sydney. ![img-11.jpeg](img-11.jpeg) Ms Sinead Kaufman BSc (Geology), MSc (Mineral Exploration), FAusIMM, GAICD, 53 Independent Non-Executive Director Appointed: 1 April 2026 Location: Australia Career summary: Ms Kaufman has 30 years' international experience in the resources sector, spanning a range of commodities including copper, diamonds, aluminium, bauxite and iron ore. She joined Rio Tinto in 1997 as a geologist and has held a range of senior technical, operational and executive roles globally. Her most recent role was Chief Executive Minerals, where she was accountable for a global portfolio of critical minerals operational assets, including lithium. In this role, she was responsible for building and scaling Rio Tinto's position in battery materials, including through the acquisition of the Rincon and Arcadium lithium businesses. Born in Ireland, Ms Kaufman holds a Bachelor of Science in Geology from the University of Birmingham and a Master of Science in Mineral Exploration from the University of Leicester, both in the United Kingdom. External appointments: Ms Kaufman was appointed as a Non-Executive Director of ASX-listed Deep Yellow Limited in May 2026. Skills and experience: Ms Kaufman brings extensive international experience in the resources sector, with deep technical and operational expertise across a broad range of commodities. Her background includes senior leadership accountability for large-scale operations, portfolio management, safety and sustainability performance, and organisational transformation in complex, highly regulated environments. She has experience in strategy execution, capital discipline, stakeholder engagement and leading major divestment and change programs. Her extensive technical, operational and leadership experience, together with her strong track record in portfolio management and capital discipline in complex global operations, supports the Board's oversight of strategy and performance. --- South32 Annual Report 2026 124 Governance # Governance continued ![img-12.jpeg](img-12.jpeg) S N RA Dr Xiaoling Liu BEng (Extractive Metallurgy), PhD (Extractive Metallurgy), FTSE, GAICD, 69 Independent Non-Executive Director Appointed: 1 November 2017 Location: Australia Career summary: Dr Liu completed her undergraduate study at Chongqing University in China and her PhD in Extractive Metallurgy at Imperial College in the UK, before joining the Rio Tinto Group as a senior research scientist in 1988. Over her 26-year career with Rio Tinto, Dr Liu held various roles in smelting operations, including General Manager Operations at Bell Bay (Tasmania), leading to other senior management roles, including Managing Director Technical Services, where she led Rio Tinto's global technical services unit. Prior to her retirement, Dr Liu was President and Chief Executive Officer of Rio Tinto Minerals, with responsibility for integrated operations of mining, processing, supply chain, marketing and sales for its Borates business in the United States, Europe and Asia. Dr Liu has served as Vice President of the Board of the Australian Aluminium Council, a Board Member of the California Chamber of Commerce, a Director of Melbourne Business School and Chancellor of Queensland University of Technology. She has also served as a Non-Executive Director at Newcrest Mining Limited (from September 2015 to November 2020), Iluka Resources Limited (from February 2016 to April 2019) and Incitec Pivot Limited (from November 2019 to May 2024). External appointments: None. Skills and experience: With her accomplished career as a global executive in the resources industry, Dr Liu brings to our Board expertise in mining and processing operations, the execution of major capital projects and commodity value chain management. Her high financial acumen, expertise in health and safety, and strong understanding of the key environmental impacts, risks and opportunities relevant to our operations, make her a valued Chair of the Sustainability Committee. Dr Liu's knowledge and experience in technology and innovation, together with her technical background, is an asset to our Board as it oversees our advancement towards a low-carbon future. ![img-13.jpeg](img-13.jpeg) N S Mr Carlos Mesquita BEng (MetalEng), MBA, 68 Independent Non-Executive Director Appointed: 1 May 2023 Location: Chile Career summary: Mr Mesquita is a qualified Metallurgical Engineer. He has worked in the mining and metals industry for more than 40 years and has extensive experience in leading mining and processing operations and major capital projects. Mr Mesquita spent 30 years with BHP where he held various positions in the company's base metals and aluminium businesses, including Asset President of Mozal Aluminium and Asset President of Escondida, the world's largest copper mine. During this time he also served as Vice President Major Projects where he led the base metals projects program, overseeing more than US$10 billion in mining investments in countries including Chile, Australia and Peru. Mr Mesquita has also previously advised mining companies and private equity funds on acquisitions of mining assets in South America and, from 2014 to 2015, he was a Non-Executive Director of Mineração Serra Verde, a mid-sized rare earth minerals mine in central Brazil. In the first half of 2022, Mr Mesquita was a consultant for South32, providing in-country support following our acquisition of a 45% interest in the Sierra Gorda copper mine. External appointments: None. Skills and experience: Mr Mesquita has extensive experience in the global mining and metals industry with a particular focus on base metals and aluminium in the Americas and Africa. His previous roles and first-hand experience of working at projects in an operational capacity means he brings a unique and diverse perspective to our Board. This, together with his experience in leading complex operations with responsibility for safety, volume and costs, supports our strategy of optimising our business by working safely, minimising our impact, consistently delivering stable and predictable performance, and continually improving our competitiveness. Chair appointment RA Risk and Audit Committee N Nomination and Governance Committee $ Sustainability Committee R Remuneration Committee --- South32 Annual Report 2026 125 Governance ![img-14.jpeg](img-14.jpeg) Ms Mandlesilo (Mandla) Msimang MSc, BA, 49 Independent Non-Executive Director Appointed: 1 February 2025 Location: South Africa Career summary: Ms Msimang is an executive with more than 20 years of information and communications technology experience. Ms Msimang's professional area of expertise is regulation, with a focus on economic and infrastructure regulation, public policy, universal service and access, competition policy, and broadband policy and funding. She is currently Chief Executive Officer of Nozala Women Investments, a female-owned private equity firm that owns and manages a diversified portfolio in the minerals and energy sector as well as industrial and consumer services. The company aims to make a meaningful contribution towards building a lasting legacy for women in Africa. Ms Msimang served as a Non-Executive Director at Exxaro Resources Limited, from March 2021 to September 2025, and was a member of the Investment Committee and Risk and Business Resilience Committee, External appointments: Ms Msimang is a Non-Executive Director of JSE-listed Telkom SA Limited. She also serves on the International Advisory Board of the University of Johannesburg Business School, and the Board of Research ICT Africa. Skills and experience: Ms Msimang brings extensive regulatory, public policy and information, communications and technology expertise, as well as deep knowledge and experience across Africa and the Middle East. She has strong leadership, strategy and risk management skills and solid regulatory and legal compliance knowledge. Through her experience, Ms Msimang has a substantial understanding of working with communities and other stakeholders to create shared value. ![img-15.jpeg](img-15.jpeg) Ms Jane Nelson CMG BSc (Agricultural Economics (Cum Laude)), BA, MA (Philosophy, Politics and Economics), 66 Independent Non-Executive Director Appointed: 1 May 2023 Location: United States Career summary: Ms Nelson has a Bachelor of Science in Agricultural Economics (Cum Laude) from the University of KwaZulu-Natal in South Africa. She also holds a Bachelor of Arts and Master of Arts in Philosophy, Politics and Economics from the University of Oxford in the UK, where she was a Rhodes Scholar. Ms Nelson has a 30-year career researching and advocating for sustainable business practices and was the founding Director of the Harvard Kennedy School's Corporate Responsibility Initiative in 2004, where she is now a senior research fellow. She has co-authored seven books and more than 100 publications on the role of the private sector and multistakeholder partnerships in supporting sustainable development. She is a non-resident senior fellow in the Global Economy and Development program at Brookings and a former senior associate of Cambridge University's Programme for Sustainability Leadership. Since 1992, Ms Nelson has served on advisory councils for over 45 corporations, non-governmental organisations, and government bodies. These have included ExxonMobil's External Sustainability Advisory Panel, the Independent Advisory Panel to the ICMM's Resource Endowment Initiative, GE's Sustainability Advisory Council, the World Economic Forum's (WEF) Global Future Councils on Good Governance and on Transparency and Anti-Corruption, co-chair of the Business Commission to Tackle Inequality, and advisory councils for other companies, the World Bank Group and the United Nations. She also worked for The Prince of Wales International Business Leaders Forum in the UK, the World Business Council for Sustainable Development (WBCSD) in Africa, FUNDES in Latin America and as a Vice President at Citibank working in Asia, Europe and the Middle East. In December 2023, Ms Nelson was appointed a Companion of the Order of Saint Michael and Saint George (CMG) in the UK's Overseas and International Honours List, for services to business and to sustainability. External appointments: Ms Nelson is a Non-Executive Director of NYSE, ASX and TSX-listed Newmont Mining Corporation (since 2011) and Chair of its Safety and Sustainability Committee. She is a Co-Chair of the WEF's Global Future Council on the Energy Nexus, a member of WBCSD's Imperatives Advisory Board, and an Editor-in-Chief of the Cambridge Forum on Corporate Climate Governance, a Cambridge University Press publication. She serves on the Board of Chevron's Niger Delta Partnership Initiative foundation and on sustainability-related advisory councils for Bank of America, Abbott Laboratories and Griffith Foods. Skills and experience: Ms Nelson's career comprises a portfolio of roles across academia, international policy, business leadership groups and not-for-profit organisations. She has expertise in sustainable development including in human rights, cultural heritage and Indigenous issues, and a significant understanding of climate change and biodiversity issues. Her strong focus on sustainable development, together with her passion for building partnerships between business, government and civil society, is an asset to our Board as this is at the heart of our purpose and underpins our strategy. --- South32 Annual Report 2026 126 Governance # **Governance** continued ![img-16.jpeg](img-16.jpeg) **Mr Wayne Osborn** Dip Elect Eng, MBA, FTSE, 75 Independent Non-Executive Director **Appointed:** 7 May 2015 **Location:** Australia **Career summary:** Mr Osborn worked as an engineer in the telecommunications and iron ore industries, before joining Alcoa (Australia) in 1979. Mr Osborn held several senior management positions with Alcoa over the course of his career, including having accountability for its Asia-Pacific manufacturing operations in China, Japan, Korea and Australia. In 2001, he was appointed Managing Director, leading an integrated business comprised of bauxite mining, alumina refining, coal mining, power generation and aluminium smelting until his retirement in 2008. Since 2008, Mr Osborn has served as a Non-Executive Director in the mining, energy and construction industries. Most recently, he was a Non-Executive Director of Wesfarmers Limited from March 2010 to October 2021. Other key roles Mr Osborn has held include Chairman of the Australian Institute of Marine Science, Chairman of the Western Australia Branch of the Australia Business Arts Foundation and Vice President of the Chamber of Commerce and Industry, Western Australia. Mr Osborn is also a recipient of the WA Business Leader Award (2007) and the Australian Institute of Company Directors Award for Excellence (2018). **External appointments:** None. **Skills and experience:** Mr Osborn brings expertise in mining and smelting operations, large-scale capital projects and commodity value chain management to our Board. His broad skills and experience in health and safety management, and strong understanding of the key environmental issues, risks and opportunities relevant to our operations, are an asset to our Board as it oversees our commitments to improve our safety performance, our approach to sustainability-related risks and opportunities, and how we manage our environmental impact. Mr Osborn's experience leading large workforces, expertise in overseeing remuneration design and implementation, and strong focus on sustainability make him a highly capable Remuneration Committee Chair. ![img-17.jpeg](img-17.jpeg) **Ms Sharon Warburton** BBus (Accounting and Business Law), FCA, FAICD, 56 Independent Non-Executive Director **Appointed:** 28 November 2023 **Location:** Australia **Career summary:** Ms Warburton is a chartered accountant with more than 25 years' experience across the major project infrastructure, property development and resources industries. She has previously held executive roles with Brookfield Multiplex, Citigroup and Rio Tinto, working across Australia, Asia, Europe and the Middle East. Ms Warburton's previous board experience includes as a Director of Perth Children's Hospital Foundation, Gold Road Resources Limited, NEXTDC Limited, Barminco, Western Power, Northern Australia Infrastructure Facility, Karlka Nyiyaparli Aboriginal Corporation, Thiess Group Holdings Pty Limited and Blackmores Limited. She was also a Director of Fortescue Metals Group, a part-time member of the Takeovers Panel and, from February 2019 until August 2025, a Non-Executive Director of Worley Limited. In 2014, Ms Warburton was awarded Western Australia Telstra Business Woman of the Year. **External appointments:** Ms Warburton is currently a Non-Executive Director of ASX-listed Northern Star Resources Limited (since 2021) and Wesfarmers Limited (since 2019) where she is Chair of its Audit and Risk Committee. Ms Warburton is also an Independent Director of Mirvac Funds Management Australia Limited. **Skills and experience:** Ms Warburton is a prominent and highly credentialled Director. She has substantial executive experience in the areas of corporate governance, accounting and finance, and risk management. Ms Warburton's skills in areas of corporate strategy, business operations and major project construction contribute to the Board's broad range of skills and support the delivery of our strategy. Ms Warburton was appointed Chair of our Risk and Audit Committee when Mr Frank Cooper AO retired from the Board at our AGM on 23 October 2025. Committee membership key: Chair appointment Risk and Audit Committee Nomination and Governance Committee Sustainability Committee Remuneration Committee --- South32 Annual Report 2026 144 Governance Governance continued # OUR LEAD TEAM¹⁷ ![img-18.jpeg](img-18.jpeg) Matt Daley BE (Mining) (Hons), GradDip Chief Executive Officer and Managing Director See page 122 for Matt Daley's qualifications and experience. ![img-19.jpeg](img-19.jpeg) Sandy Sibenaler BCom, MFin, FCA, GAICD Chief Financial Officer Sandy Sibenaler joined South32 in 2021 and became our Chief Financial Officer in April 2023. Sandy has responsibility for Financial Reporting, Management Reporting, Treasury, Business Evaluation, Tax, Investor Relations, Risk and Assurance, Digital Technology and Global Business Services. Prior to this role, Sandy was our Vice President Finance. Sandy has more than 20 years of treasury, finance and commercial experience in the resources sector. Prior to joining South32, she held a number of senior finance and commercial roles at Woodside and BHP, including Vice President of Treasury and Insurance, General Manager Logistics and Finance Reporting Manager. Sandy holds a Bachelor of Commerce from The University of Western Australia, a Master of Finance from Kaplan Business School, is a Fellow of Chartered Accountants Australia and New Zealand and a Graduate of the Australian Institute of Company Directors. ![img-20.jpeg](img-20.jpeg) David Palmer BE (Mineral Processing) (Hons), MBA, MAICD Chief Technical Officer Dave Palmer joined South32 in August 2026 as Chief Technical Officer. In this role, he is responsible for Health and Safety, Projects and Technical. From 1 September 2026, his role will expand to Chief Technical and Operations Officer – Base Metals, bringing together Technical and South32's non-aluminium value chain assets under one Lead Team member. Dave has more than 25 years of global mining industry experience spanning operational leadership, technical services, business improvement and operational excellence. Prior to joining South32, he held a range of senior leadership positions with Anglo American, including Executive Head of Technical – Africa & Australia. He has extensive experience leading technical and operational teams across large resource portfolios and driving operational performance and transformational change. Dave holds a Bachelor of Engineering (Mineral Processing) from the University of Queensland and a Master of Business Administration from the University of Melbourne. ¹⁷ This section provides details of our Lead Team as at the date of this Report --- South32 Annual Report 2026 145 Governance ![img-21.jpeg](img-21.jpeg) # Simon Collins BE (Mining), MBA Chief Development and Commercial Officer Simon Collins has been our Chief Development Officer since 2018. In August 2026, his role was expanded and retitled Chief Development and Commercial Officer, with responsibility for Corporate Development, Exploration, Marketing and Strategic Supply. Simon has more than 30 years of experience in the resources industry in senior leadership, commercial and business development roles. Before joining South32, he worked for BHP for more than a decade, providing leadership to commercial and business development teams in Australia, Africa and the Americas. He began his career in mine operations in Australia and then South Africa. Simon holds a Master of Business Administration from London Business School and a Bachelor of Engineering (Mining) from the University of New South Wales. ![img-22.jpeg](img-22.jpeg) # Kelly O'Rourke LLB, BCom, MAICD Chief Legal, External Affairs and Sustainability Officer Kelly O'Rourke was appointed to the Lead Team in November 2020 and is our Chief Legal, External Affairs and Sustainability Officer with responsibility for Legal, Company Secretariat, Business Integrity, Communications, Social Performance, Government, Corporate Reporting, Sustainability and Human Resources. Kelly joined South32 in 2016 as the Vice President of Corporate Affairs and Investor Relations. She previously worked at BHP where she held senior roles in Legal, Business Development, Mergers and Acquisitions, and the Office of the Chief Executive. Prior to this, Kelly worked as a lawyer in private practice. Kelly has more than 20 years of experience in the mining industry across legal, commercial, business development, mergers and acquisitions, external affairs and social performance roles across Australia, Asia, the United Kingdom, Europe, Africa and the Americas. Kelly holds a Bachelor of Laws with Distinction from The University of Western Australia, a Bachelor of Commerce from Curtin University and is a Member of the Australian Institute of Company Directors. --- South32 Annual Report 2026 146 Governance Governance continued ## DIRECTORS' REPORT This report is presented by the Board of Directors of South32 Limited, together with the Group's Financial report, for the financial year ended 30 June 2026. This report is prepared in accordance with the requirements of the Corporations Act, with the following information forming part of this report: - Strategic Report on the inside front cover to page 116 - Our Board starting on page 119 - Director biographical information starting on page 122 - Board and Committee meeting attendance starting on page 135 - Company Secretary biographical details on page 135 - Remuneration Report starting on page 150 - Note 19(b) Financial risk management objectives and policies starting on page 214 - Note 20 Share capital on page 217 - Note 21 Auditor's remuneration on page 218 - Note 22 Employee share ownership plans starting on page 218 - Note 31 Subsequent events on page 229 - Directors' declaration on page 232 - Auditor's independence declaration on page 233 - Resources and Reserves starting on page 238 - Shareholder information starting on page 252 - Corporate directory on page 266. ### Principal activities, state of affairs and review of operations #### Principal activities and significant changes during the financial year In FY26, the principal activities of the Group were mining and metals production, from a portfolio of assets that included bauxite, alumina, aluminium, copper, zinc, lead, silver and manganese. On 1 December 2025, South32 completed the divestment of the Cerro Matoso ferronickel operation in Colombia¹⁸, and Mozal Aluminium in Mozambique was placed on care and maintenance on 15 March 2026¹⁹. On 30 June we entered into a binding conditional agreement to sell our aluminium value chain assets to Alcoa Corporation for an implied enterprise value of up to US$5.6 billion. Alcoa will also assume related rehabilitation provisions of approximately US$1.1 billion²⁰. There were no other significant changes in the Group's principal activities during the financial year. #### State of affairs There were no significant changes in the Group's state of affairs during the financial year, other than: - the completion of the sale of Cerro Matoso¹⁸ - Mozal Aluminium being placed on care and maintenance¹⁹ - entering into a binding conditional agreement to sell our aluminium value chain assets²⁰ - those set out in the Strategic Report on the inside front cover to page 150. ### Operating and financial review, review of operations, likely developments and expected results The Group's operating and financial review and a review of the Group's FY26 operations are contained on the inside front cover to page 116. The Strategic Report also includes likely developments in the Group's operations in future financial years and expected results of those operations. ### Matters since the end of the financial year On 1 July 2026, we announced that Matt Daley had commenced as CEO and Managing Director, marking the completion of our previously announced CEO transition plan. Graham Kerr stepped down as CEO and Managing Director on 30 June 2026. On 1 July 2026, we announced that the Sierra Gorda joint venture had approved execution of the fourth grinding line project, following completion of a feasibility study which confirmed the potential for attractive returns from this brownfield plant expansion²¹. Additional details of matters occurring since the end of the financial year can be found in Note 31 to the financial statements (Subsequent events) on page 229. Apart from those noted above, no other matters or circumstances have arisen since the end of the financial year that have significantly affected, or may significantly affect, the operations, results of operations or state of affairs of the Group in subsequent accounting periods. ### Dividends Details of the dividends paid during FY26 are set out in Note 7 to the financial statements (Dividends) on page 197 and below. | Type | 2025 Final dividend | 2026 interim dividend | | --- | --- | --- | | Payment date | 16 October 2025 | 2 April 2026 | | Period ends | 30 June 2025 | 31 December 2025 | | Cents per share | US 2.6 cents | US 3.9 cents | | Value | US$117 million | US$175 million | | Franking | Fully franked | Fully franked | ¹⁸ Refer to market release "Completion of Cerro Matoso divestment" dated 1 December 2025 for further details. ¹⁹ Refer to market release "Mozal Aluminium Placed on Care and Maintenance" dated 16 March 2026 for further details. ²⁰ Refer to market release "Agreement to sell aluminium value chain assets to Alcoa for up to US$5.60 and Chief Executive officer transition" dated 1 July 2026 for further details. ²¹ Refer to market release "Final investment decision for Sierra Gorda's fourth grinding line" dated 1 July 2026 for further details. --- South32 Annual Report 2026 147 Governance ## Our Directors Information about our Directors who held office at the date of this report is provided in the Our Board members section of the Governance chapter on page 122. Details of our robust processes for appointing, renewing and evaluating our Directors is outlined on page 130. The outcomes of our FY26 Board skills, knowledge and experience review are presented on page 131. ## Board and Committee meetings The Board and Committees section of our Governance chapter (page 134) provides information on: - meeting cadence and approach - typical agenda and briefing items - meetings held during FY26 - Directors' attendance at meetings during FY26. Key focus areas and considerations of the Board during FY26 are outlined on page 127. ## Directors' relevant interest in shares Information regarding our Directors' interest in shares can be found below and in our Remuneration Report on page 172. | Director | Number of South32 Limited shares in which a relevant interest is held as at the date of this Directors' Report | | --- | --- | | Stephen Pearce | 130,000 | | Matthew Daley^{(a)} | 3,482,857 | | Geoff Healy | - | | Sinead Kaufman | - | | Xiaoling Liu | 66,000 | | Carlos Mesquita | 177,440 | | Mandla Msimang | - | | Jane Nelson | 40,000 | | Wayne Osborn | 174,104 | | Sharon Warburton | 67,870 | (a) At the date of this Directors' Report, Matthew Daley's total interest includes 285,714 South32 Limited ordinary shares and 3,197,143 rights over South32 Limited shares held under the South32 Equity Incentive Plan. ## Rights and options over South32 Limited shares No rights or options over South32 Limited ordinary shares are held by any of our Non-Executive Directors. Details of rights over South32 Limited shares held by executive key management personnel are set out in the Remuneration report on page 171. The total number of rights over South32 Limited shares on issue as at 30 June 2026 is set out in Note 22 to the financial statements (Employee share ownership plans) starting on page 218. No rights have been granted since the end of FY26. As of the date of this report, the total number of rights over South32 Limited shares on issue is 44,815,226. No shares have been issued on vesting of rights during or since the end of FY26. South32 Limited has not had any options on issue during or since the end of FY26. ## Indemnities and insurance The South32 Limited Constitution requires that we indemnify each Director and Company Secretary (as well as employees appointed as directors and secretaries of a Group company) on a full indemnity basis and to the extent permitted by law against liability incurred by them in their capacity as an officer of any Group company. The Directors and the Company Secretary named in this report have the benefit of this indemnity (as do individuals who formerly held one of these positions). As permitted by our Constitution, South32 Limited has entered into Deeds of Indemnity, Access and Insurance with each of the Company's Directors, Company Secretary and the CFO under which we agree to indemnify those persons on a full indemnity basis and to the extent permitted by law. We purchase directors and officers liability insurance which insures against certain liabilities (subject to exclusions) in respect of current and former Directors and other Officers of the Group. Due to confidentiality obligations and undertakings of the insurance, we cannot disclose any further details about the premium or insurance. During FY26 and as at the date of this Directors' Report, no indemnity in favour of a current or former Director or Officer of the Group has been called on. ## Company Secretary Information about our Company Secretary, Claire Tolcon, including biographical details, can be found on page 135. ## Corporate Governance Under ASX Listing Rule 4.10.3, ASX-listed entities are required to benchmark their corporate governance practices against the fourth edition of the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations (ASX Recommendations). South32 is compliant with all relevant ASX Recommendations. Disclosures compliant with the ASX Recommendations and information required under the United Kingdom Financial Conduct Authority's Disclosure Guidance and Transparency Rules can be found in our Governance chapter, starting on page 117. ## Auditor Our External Auditor has provided an independence declaration in accordance with the Corporations Act, which is set out on page 233 and forms part of this report. ## Non-audit services No non-audit services were undertaken by, and no amounts in respect of such services were paid or are payable to, our External Auditor during FY26. Refer to Note 21. to the financial statements (Auditor's remuneration) on page 218. --- South32 Annual Report 2026 148 Governance # **Governance**continued # **Diversity representation** We embrace and celebrate differences. We know an inclusive and diverse workforce is safer and allows for greater collaboration, innovation and performance, and we are committed to building a workforce that reflects the communities in which we operate. The United Kingdom Financial Conduct Authority (FCA) requires listed companies to publish information on gender and ethnic representation of the Board and Executive Management. This includes demonstrated performance against the FCA's diversity and inclusion targets, namely that at least 40% of the Board are women, at least one of the senior Board positions is held by a woman and at least one member of the Board is from a non-white ethnic minority background. As set out in the table below, as at 30 June 2026 South32 meets or exceeds the FCA's targets that at least 40% of the Board are women and at least one member of the Board is from a non-white ethnic minority background. South32 does not currently meet the target that at least one of the senior Board positions (which for South32 is the Chair and the CEO) is held by a woman. The FCA includes the CFO in the definition of a senior Board position. Sandy Sibenaler has served as CFO since April 2023; however, in line with market practice for Australian listed companies, the CFO does not sit on the Board. The Board keeps its composition under review as part of its succession planning processes. This includes consideration of the skills, experience and diversity of Directors to ensure that the Board composition remains appropriate to achieve South32's purpose and strategy. | Board and Executive diversity^{22} | Number of Board members | Percentage of the Board | Number of senior positions on the Board^{23} | Number in Executive Management^{24} | Percentage of Executive Management | | --- | --- | --- | --- | --- | --- | | **Gender Identity** | | | | | | | Men | 5 | 50 % | 2 | 5 | 62 % | | Women | 5 | 50 % | – | 3 | 38 % | | Not specified / prefer not to say | – | – % | – | – | – % | | **Ethnic background** | | | | | | | White British or other White (including minority-white groups) | 8 | 80 % | 2 | 7 | 88 % | | Mixed/Multiple Ethnic Groups | – | – % | – | – | – % | | Asian/Asian British | 1 | 10 % | – | 1 | 12 % | | Black/African/Caribbean/Black British | 1 | 10 % | – | – | – % | | Other ethnic group | – | – % | – | – | – % | | Not specified / prefer not to say | – | – % | – | – | – % | Details of our approach to Inclusion and Diversity and the Board's role in this can be found on page 141. Details about the diversity of our Board can be found on page 121. Details about the diversity of our Lead Team can be found on page 143. # **Environmental performance** We seek to be compliant with all applicable environmental laws and regulations relevant to our operations. We classify environmental incidents based on actual and potential impact type as defined by our internal material risk management standard. In FY26, there were no environmental events that resulted in a major impact to the environment. # **Fines and prosecutions** During FY26, we did not identify any instances of significant non-compliance with applicable laws and regulations, that resulted in a significant fine, non-monetary sanction or prosecution. We define significant non-compliances with applicable laws and regulations where a regulator, court or competent authority has made a formal finding of non-compliance or imposed a sanction or fine on South32 (including matters under appeal) during the reporting period. # **Political donations and social investment** Our Code of Business Conduct sets out our approach to political donations and social investment. In FY26, we made no political donations to any political party, politician, political party official, elected official or candidate for public office in any country. On occasion, our representatives attend political events that charge an attendance fee where attendance is approved beforehand in accordance with our internal approval requirements. We record the details of attendances and the relevant costs at a corporate level. Details on our social investment activities in FY26 can be found on page 65. 22 The data presented in this table was collected via self-reported questionnaires completed by all members of the Board and Executive Management that included the definitions prescribed by the UK Listing Rules. The data presented is correct as at 30 June 2026. 23 The FCA prescribes that the senior positions on the Board are the Chair, CEO, CFO and Senior Independent Director (SID). For South32, the senior positions on the Board are only the Chair and the CEO. In line with market practice for Australian listed companies, the CFO does not sit on the Board and South32 does not have a SID as this role is not required under the corporate governance code South32 applies, being the ASX Principles and Recommendations. 24 In accordance with the UK Listing Rules, Executive Management includes the Lead Team (our most senior executive body below the Board) and the Company Secretary, excluding administrative and support staff. --- South32 Annual Report 2026 149 Governance ### Proceedings on behalf of South32 No proceedings have been brought or intervened in on our behalf, nor any application made, under section 237 of the Corporations Act. ### Rounding of amounts South32 Limited is an entity to which the Australian Securities and Investments Commission (ASIC) Corporations (Rounding in Financial/Directors' Reports) Instrument 2026/183 (ASIC Instrument 2026/183) applies. We have rounded amounts in this report and financial statements in accordance with ASIC Instrument 2026/183. This means the amounts in this report and the financial statements have been rounded to the nearest million US dollars, unless stated otherwise. ### Responsibility statement The Directors state that to the best of their knowledge: - (a) The consolidated financial statements and notes on page 173 to page 238 were prepared in accordance with applicable accounting standards, give a true and fair view of the assets, liabilities, financial position, and profit and loss of the Group and the undertakings included in the consolidation taken as a whole - (b) The Directors' Report includes a fair review of the development and performance of the business and the position of the Group and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties the Group faces. This Directors' Report and the responsibility statement are made in accordance with a resolution of the Board. **Stephen Pearce** Chair **Matthew Daley** Chief Executive Officer and Managing Director Date: 27 August 2026 --- South32 Annual Report 2026 150 Governance # REMUNERATION REPORT | Remuneration Committee Chair letter | 151 | | --- | --- | | Key management personnel | 152 | | Response to FY25 remuneration strike | 153 | | FY26 performance at a glance | 154 | | FY26 Executive KMP reward overview | 155 | | Executive reward framework and practices | 156 | | FY26 Executive KMP reward outcomes | 159 | | FY26 Non-Executive Director remuneration | 169 | | Statutory disclosures | 170 | --- South32 Annual Report 2026 151 Governance From the Remuneration Committee Chair # CREATING STAKEHOLDER VALUE ![img-23.jpeg](img-23.jpeg) On behalf of the Board, I am pleased to present the Remuneration Report for FY26. ## Executive key management personnel (KMP) changes FY26 was a year of transition for South32. In line with our CEO transition plan announced last year, Matt Daley commenced as Deputy Chief Executive Officer on 2 February 2026 and shortly thereafter took on accountability for our Australian operations. Matt assumed the role of CEO on 1 July 2026, after Graham Kerr stepped down from the position on 30 June 2026. The Board acknowledges Graham's outstanding contribution to South32. As our inaugural CEO, he established a values-based, safety-focused culture and reshaped our portfolio to capitalise on growing demand for base metals. We are pleased he will continue as a Strategic Advisor for a transitional period, supporting engagements related to the agreement to sell our aluminium value chain assets to Alcoa Corporation. This transaction represents a significant step in the transformation of our portfolio, reshaping South32 in line with our strategy to focus on base metals. We commend Graham and Matt for their professionalism and commitment to South32 during the transition period, particularly against the backdrop of the Aluminium value chain transaction. ## Strike against FY25 Remuneration Report At our Annual General Meeting (AGM) on 23 October 2025, we received a first strike against our Remuneration Report. Since the AGM, the Board has extensively considered the reasons for the strike and engaged with shareholders and proxy advisers to better understand their feedback. The key themes were: - the increase in fixed remuneration provided to Graham, due to the combined impact of changes to the executive remuneration framework with respect to superannuation and FY26 salary increase - a request for greater transparency around the threshold and maximum performance levels applicable to our short-term incentive (STI) Business Scorecard and the CEO's individual performance assessment - the design and inclusion of strategic measures in the long-term incentive (LTI). The Board acknowledges the feedback and has responded on page 153. ## Key changes to the FY26 executive reward framework As outlined in our 2025 Remuneration Report, the Board approved a number of changes to the executive reward framework, which took effect from FY26 (see page 155). These included: - separating fixed remuneration into salary and superannuation components, and increasing superannuation to align with the broader South32 workforce - changing the STI calculation methodology from a multiplier to an additive approach - replacing the MSCI World Index comparator with the S&P/ASX 100 constituent group in the LTI - increasing the minimum shareholding requirements, with the CEO's requirement increasing from 100% of fixed remuneration to 400% of salary, and the requirement for other Executive KMP increasing from 100% of fixed remuneration to 200% of salary. ## FY26 executive reward outcomes We were devastated by the loss of Simon Mukwarami, who was fatally injured at Worsley Alumina in March 2026. The Board's sympathies are with Mr Mukwarami's family, friends and colleagues. We remain unwavering in our expectation that everyone goes home safe and well every day. The loss of Simon, together with the revised timing and cost outlook for the Hermosa Taylor project, were considered by the Board in determining the application of a Business Modifier for the CEO and the other Executive KMP. Further details are on page 163. Our Business Scorecard achieved 108.0% of target. After taking into account the -20% Business Modifier applied to Graham's award and his approved individual performance outcome of 130%, his STI outcome was 66% of maximum. More information is on page 164. As disclosed in the 2025 Remuneration Report, and in recognition of Graham's tenure, skills and experience, the Board approved a 7.8% increase in his salary effective 1 September 2025. Further information is provided on page 159. The FY23 LTI award was assessed following completion of its four-year performance period. Total shareholder return (TSR) of 12.7% over the period fell short of the threshold required for vesting under both TSR measures. Having considered performance against the two strategic measures over the period, the Board awarded a combined outcome for the portfolio management measure and climate change measure of 15.5%. As a result, the FY23 LTI award vested at 15.5%, with the remaining 84.5% lapsing (see page 164). Looking ahead, subject to completion of the agreed sale of our aluminium value chain assets to Alcoa, the Remuneration Committee intends to undertake a review of our executive reward framework Thank you for your ongoing support. I look forward to continuing our engagement with shareholders and sharing in the future success of South32. **Wayne Osborn** Chair, Remuneration Committee --- South32 Annual Report 2026 152 Governance # Remuneration Report # KEY MANAGEMENT PERSONNEL (KMP) COVERED IN THIS REPORT KMP consist of the Board (including the Chief Executive Officer), and members of the Lead Team who have authority and responsibility for planning, directing and controlling the activities of the Group directly or indirectly. The KMP for FY26 are set out in the below table. | Non-Executive Directors | Role | Term | | --- | --- | --- | | Stephen Pearce | Chair | Full year | | Geoff Healy | Non-Executive Director | Commenced on 2 December 2025 | | Sinead Kaufman | Non-Executive Director | Commenced on 1 April 2026 | | Xiaoling Liu | Non-Executive Director | Full year | | Carlos Mesquita | Non-Executive Director | Full year | | Mandla Msimang | Non-Executive Director | Full year | | Jane Nelson | Non-Executive Director | Full year | | Wayne Osborn | Non-Executive Director | Full year | | Sharon Warburton | Non-Executive Director | Full year | Former Non-Executive Directors | Karen Wood AM | Chair | Ceased on 28 February 2026 | | --- | --- | --- | | Frank Cooper AO | Non-Executive Director | Ceased on 23 October 2025 | | Ntombifuthi Mtoba | Non-Executive Director | Ceased on 23 October 2025 | | Executive KMP | Executive Role | Term | | --- | --- | --- | | Graham Kerr | Chief Executive Officer (CEO) | Full year | | Matthew Daley | Deputy CEO | Commenced on 2 February 2026 | | Sandy Sibenaler | Chief Financial Officer (CFO) | Full year | | Noel Pillay | Chief Operating Officer (COO) Southern Africa | Full year | Former Executive KMP | Vanessa Torres | COO Australia | Ceased on 9 February 2026 | | --- | --- | --- | --- South32 Annual Report 2026 216 Financial report ## Notes to financial statements – Capital structure and financing continued ### 19. Financial assets and financial liabilities continued #### (b) Financial risk management objectives and policies continued ##### (ii) Liquidity risk continued ###### Maturity profile of financial liabilities The maturity profiles of financial liabilities, based on the contractual amounts, are as follows: | FY26 US$M | Carrying amount | Total | On demand or less than 1 year | 1 to 5 years | More than 5 years | | --- | --- | --- | --- | --- | --- | | Trade and other payables^{1} | **738** | **738** | **738** | **–** | **–** | | Senior unsecured notes | **694** | **882** | **30** | **122** | **730** | | Lease liabilities | **748** | **1,131** | **165** | **381** | **585** | | Other interest bearing liabilities | **409** | **409** | **409** | **–** | **–** | | Other financial liabilities - contingent consideration payable | **22** | **28** | **–** | **28** | **–** | | **Total** | **2,611** | **3,188** | **1,342** | **531** | **1,315** | 1. Excludes current input taxes of US$24 million included in other creditors. Refer to note 14 Trade and other payables. | FY25 US$M | Carrying amount | Total | On demand or less than 1 year | 1 to 5 years | More than 5 years | | --- | --- | --- | --- | --- | --- | | Trade and other payables^{1} | 798 | 798 | 798 | – | – | | Senior unsecured notes | 693 | 913 | 30 | 122 | 761 | | Lease liabilities | 713 | 1,112 | 145 | 364 | 603 | | Other interest bearing liabilities | 228 | 230 | 175 | 55 | – | | Other financial liabilities - contingent consideration payable | 78 | 83 | – | 83 | – | | **Total** | **2,510** | **3,136** | **1,148** | **624** | **1,364** | 1. Excludes current input taxes of US$4 million included in other creditors. Refer to note 14 Trade and other payables. ##### (iii) Credit risk ###### Credit risk management The Group has credit risk management policies in place covering the credit analysis, approvals and monitoring of counterparty exposures. As part of these processes the ongoing creditworthiness of counterparties is regularly assessed. Credit limits are established for customers and reviewed annually or with the release of new information materially impacting the customer's creditworthiness. Mitigation methods are defined and implemented for higher-risk counterparties to protect revenues, with more than half of the Group's sales of physical commodities occurring via secured payment terms including prepayments, letters of credit, guarantees and other risk mitigation instruments. Mitigation methods include credit exposure management and overdue accounts monitoring. In addition, leading key risk indicators are actively monitored for all customers to identify any emerging risks. There are no material concentrations of credit risk, either with individual counterparties or groups of counterparties, by industry or geography. The carrying amounts of financial assets represent the maximum credit exposure. ###### Expected credit losses Impairment allowances are based on a forward-looking expected credit loss model. For trade receivables, the Group uses the simplified approach to recognise impairments based on the lifetime expected credit loss. For other receivables, the Group applies the general approach and recognises impairments based on a 12-month expected credit loss. Exposures are grouped by external credit rating and security options and an expected credit loss rate is calculated accordingly. Where applicable, actual credit loss experience is also taken into account. For remaining receivables without an external credit rating or security option, a rating of BB (S&P Global Ratings) is used, on the basis that there is no support that it is investment grade, nor is there any evidence of default. ###### Shareholder loan receivable from Sierra Gorda Purchased credit-impaired financial assets are initially recognised at fair value. They are subsequently measured at amortised cost using the credit-adjusted effective interest method, less an allowance for changes in lifetime expected credit losses since initial recognition. The credit-adjusted effective interest rate is determined at initial recognition and not amended for subsequent changes to lifetime expected credit losses since acquisition. Changes in lifetime expected credit losses are recognised as impairment or reversals of impairment of financial assets. The Group's investment in the Sierra Gorda operation is represented by the carrying value of an equity accounted investment of US$259 million (FY25: US$212 million), and the carrying value of a purchased credit-impaired receivable of US$1,780 million (FY25: US$1,774 million) classified as a loan to an equity accounted investment within trade and other receivables on the Consolidated balance sheet. --- South32 Annual Report 2026 217 Financial report ## 19. Financial assets and financial liabilities continued # (b) Financial risk management objectives and policies continued # (iii) Credit risk continued # Shareholder loan receivable from Sierra Gorda continued The loan has a contractual interest rate of 8 per cent and the repayment of the loan by the Sierra Gorda operation is dependent on its financial performance. At 30 June 2026, the Group updated its estimated timing of the loan repayments and as a result recognised an impairment reversal of US$249 million (FY25: impairment of US$27 million) which is included in expenses excluding finance costs in the Consolidated income statement. The net present value of the expected future cash flows of the loan was determined as US$1,780 million (FY25: US$1,774 million) using a measurement methodology consistent with a Level 3 fair value based on the inputs in the valuation technique. The following table shows the movement in the carrying amount of this receivable: | US$M | FY26 | FY25 | | --- | --- | --- | | At the beginning of the year | **1,774** | 1,814 | | Interest accrued | **158** | 163 | | Net impairment | **249** | (27) | | Repayment of accrued interest | **(401)** | (176) | | **At the end of the year** | **1,780** | 1,774 | The future loan repayments were informed by a production profile and costs based on management's planning processes. Refer to the Mineral Resources and Ore Reserves section of note 2(c) Key estimates, assumptions and judgements for further information on the estimates which underpin the production profile. An effective interest rate of 9 per cent, as determined on the date of acquisition, was applied to discount the future loan repayments. Determining the net present value requires management to make certain key estimates, assumptions and judgements, which are consistent with those outlined in note 13 Impairment of non-financial assets. The net present value of the expected future cash flows of the loan is most sensitive to the copper price assumption, with the copper price forecasts used within the range of US$5.28/lb - US$6.09/lb, in real terms, as published by market commentators. The following table illustrates the sensitivity of the net present value of the loan to a reasonable possible change in the copper price assumption, based on changing this assumption by 10 per cent while holding all other variables constant. | FY26 US$M | Face value | Carrying value | Impact on profit/(loss) after tax | | | --- | --- | --- | --- | --- | | | | | Favourable | Unfavourable | | **Trade and other receivables** | | | | | | Loans to equity accounted investments | **1,927** | **1,780** | **4** | **(24)** | # (c) Capital management The Group allocates capital in line with its strategy and capital management framework. The Group's priorities for allocating capital are to: - Maintain safe and reliable operations and an investment grade credit rating through the cycle; - Distribute to shareholders a minimum of 40 per cent of Underlying earnings attributable to equity holders of South32 Limited as dividends following each six-month reporting period; and - Maximise total shareholder returns through competition for excess capital, which may include special dividends, share buy-backs and other high return investment opportunities. ## 20. Share capital | | FY26 | | FY25 | | | --- | --- | --- | --- | --- | | | Shares | US$M | Shares | US$M | | **Share capital** | | | | | | At the beginning of the year | **4,503,635,121** | **13,160** | 4,529,258,568 | 13,216 | | Shares bought back and cancelled | **(17,149,383)** | **(35)** | (25,623,447) | (56) | | **At the end of the year** | **4,486,485,738** | **13,125** | 4,503,635,121 | 13,160 | | **Treasury shares** | | | | | | At the beginning of the year | **(9,719,505)** | **(25)** | (15,687,464) | (43) | | Purchase of shares by ESOP Trusts | **(1,881,123)** | **(5)** | (3,968,685) | (10) | | Employee share awards vested | **6,540,671** | **16** | 9,936,644 | 28 | | **At the end of the year** | **(5,059,957)** | **(14)** | (9,719,505) | (25) | Shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number of shares held. On a show of hands every holder of shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote. Incremental costs directly attributable to the issuance of shares, net of any income tax effects, are recognised as a deduction from equity. --- South32 Annual Report 2026 218 Financial report ## Notes to financial statements – Other notes ### 21. Auditor's remuneration The auditor of the Group is KPMG. | US$'000 | FY26 | FY25 | | --- | --- | --- | | **Fees payable to the Group's auditor for assurance services** | | | | Audit and review of financial statements | **4,079** | 4,052 | | Other assurance services^{1} | **1,390** | 767 | | **Total auditor's remuneration** | **5,469** | 4,819 | 1. Primarily comprises transaction assurance services and sustainability assurance services. ### 22. Employee share ownership plans At 30 June 2026, the Group had the following employee share ownership plans: | Plan | Overview | Vesting conditions^{1} | Vesting dates | | --- | --- | --- | --- | | Long-Term Incentive Plan^{2} (FY23 - FY26) | Recurring long-term incentive plan for Lead Team members. | Awards subject to performance and service conditions over a four-year vesting period. | August 2026 August 2027 August 2028 August 2029 | | Deferred Short-Term Incentive Plan^{3} (FY24, FY25) | Recurring short-term incentive plan for Lead Team members. | Awards subject to service conditions over a two-year vesting period. | August 2026 August 2027 | | Management Share Plan^{4} (FY23 - FY26) | Recurring long-term incentive plan for eligible employees below the Lead Team. The Management Share Plan comprises retention rights and performance rights. | Retention rights: Awards subject to service conditions over a three-year vesting period. Performance rights: Awards subject to performance and service conditions over a four-year vesting period. | August 2026 August 2027 August 2028 August 2029 | | AllShare Plan^{5} (2023 - 2025) | Recurring employee share plan for employees not eligible to participate in the other employee share plans. Awards to the value of at least US$1,250 per employee are granted annually. | Awards subject to service conditions over a three-year vesting period in Africa and a two-year vesting period elsewhere. | August 2026 August 2027 August 2028 | | Executive Transitional Award Plan^{6} (FY24, FY25) | A one-off grant made to Lead Team members in recognition of their adjustment from the Management Share Plan (three-year retention rights and four-year performance rights) to the four-year plan at the Group. | Awards subject to performance and service conditions over a three-year vesting period. | August 2026 August 2027 | | Management Share Plan Sign-on Award^{3} (FY25, FY26) | One-off grants made to employees on joining the Group. Awards may comprise retention rights and/or performance rights. | Awards subject to service and/or performance conditions over two vesting periods. | August 2026 August 2027 | | Deputy CEO Service Rights Award^{7} (FY26) | A one-off grant made to Matt Daley in recognition of benefits forfeited with his previous employer on joining the Group. | Awards subject to service conditions over two vesting periods. | August 2027 August 2028 | | CFO Retention Award^{8} (FY26) | A one-off grant of retention rights made to Sandy Sibenaler. The awards are based on an agreed cash value and will be settled in shares, with the number of shares determined by reference to the share price at the vesting date. | Awards subject to service conditions over two vesting periods. | January 2028 January 2029 | 1. Performance conditions are based on performance for the year ended 30 June of the relevant year prior to the vesting date. 2. Awards granted on 8 December 2022, 4 December 2023, 3 December 2024, 3 December 2025 and 13 February 2026. 3. Awards granted on 3 December 2024 and 3 December 2025. 4. Awards granted on 8 December 2022, 15 May 2023, 4 December 2023, 7 May 2024, 3 December 2024, 6 May 2025, 3 December 2025 and 7 May 2026. 5. Awards granted on 4 December 2023, 3 December 2024 and 3 December 2025. 6. Awards granted on 4 December 2023 and 3 December 2024. 7. Awards granted on 13 February 2026. 8. Awards granted on 3 May 2026. Awards may be granted annually subject to approval by shareholders at the annual general meeting for awards to the Chief Executive Officer and, in FY26, awards to the then Deputy Chief Executive Officer, and by the Board of Directors, for all other awards. All awards take the form of rights to receive one share in South32 Limited for each right granted, subject to Board of Directors discretion and performance and/or service conditions being met. Performance conditions include total shareholder return relative to peer groups, climate change, and portfolio management performance hurdles. Further information on the vesting conditions of performance rights granted in FY26 is disclosed in the Remuneration Report. Employees in Africa are granted rights on the JSE and all other employees are granted rights on the ASX. Awards do not confer any dividend or voting rights until they convert into shares at vesting. In addition, the awards do not confer any rights to participate in a share issue, however, there is discretion under the plans to adjust the awards in response to a variation in South32 Limited's share capital. The Deferred Short-term Incentive Plan, AllShare JSE Plan and Deputy CEO Service Rights Award are eligible to receive a payment equal to the dividend amount that would have been earned on the underlying shares awarded to those participants (a Dividend Equivalent Payment). The Dividend Equivalent Payment is made in cash to participants once the underlying shares are issued or transferred to them. --- South32 Annual Report 2026 219 Financial report ## 22. Employee share ownership plans continued No Dividend Equivalent Payment is made in respect of awards that have lapsed or have been forfeited. No other awards are eligible for a Dividend Equivalent Payment. ### (a) Employee Share Ownership Plan Trusts The South32 Limited Employee Incentive Plans Trust (the Australian Trust) and the South32 South African AllShare Trust (the South African Trust) are discretionary trusts for the benefit of employees of South32 Limited and its subsidiaries. The trustee for the Australian Trust (CPU Share Plans Pty Ltd) is an independent company in Australia. The trustees for the South African Trust are made up of employer and employee representatives per the Broad-Based Black Economic Empowerment (B-BBEE) requirements under South African law. The Trusts use funds provided by South32 Limited and/or its subsidiaries to acquire shares to enable awards to be made or satisfied under the Group employee share ownership plans. Shares may be acquired by purchase in the market or by subscription at not less than nominal value. ### (b) Measurement of fair values The fair value at grant date of equity-settled share awards is charged to the Consolidated income statement, net of tax, over the period for which the benefits of employee services are expected to be derived. The corresponding accrued employee entitlement is recorded in the employee share awards reserve. Where awards are forfeited because non-market based vesting conditions are not satisfied, the expense previously recognised is proportionally reversed. If awards do not vest due to a market performance condition not being met, the expense is recognised in full, and the share awards reserve is released to retained earnings. Where shares in South32 Limited are acquired by on-market purchases prior to settling the vested entitlement, the cost of the acquired shares is carried as treasury shares and deducted from equity. Where awards are settled through the delivery of acquired shares, any difference between the acquisition cost and the cumulative remuneration expense recognised is charged directly to retained earnings, net of tax. The fair value of market-based performance rights is measured using a Monte Carlo methodology and the fair value of retention and other non-market-based performance rights is measured using a Black Scholes methodology. The models consider the following: - Expected life of the award; - Current market price of the underlying shares; - Expected volatility (of the individual company and of each peer group); - Expected dividends; - Risk-free interest rate; and - Market based performance hurdles (performance rights only). The inputs used in the measurement of the fair values at grant date of the equity-settled share-based payment plans were as follows: | FY26 | Fair value at grant date (US$) | Share price at grant date (US$) | Expected volatility (%) | Expected life (in years) | Risk-free interest rate based on government bonds (%) | | --- | --- | --- | --- | --- | --- | | **Recurring plans** | | | | | | | FY26 Long-Term Incentive Plan | 1.26 - 2.15 | 2.22 - 2.34 | 35 | 4 | 3.98 - 4.20 | | FY25 Deferred Short-Term Incentive Plan | 2.09 | 2.22 | 35 | 2 | 3.84 | | FY26 Management Share Plan - Retention rights | 1.81 - 1.92 | 2.21 - 3.03 | 35 | 3 | 3.91 - 6.16 | | FY26 Management Share Plan - Performance rights | 1.19 - 1.26 | 2.21 - 3.03 | 35 | 4 | 3.98 - 6.72 | | 2025 AllShare Plan | 1.97 | 2.21 - 2.22 | 35 | 2 - 3 | 3.84 - 6.16 | | **Transitional and other plans^{1}** | | | | | | | FY26 Management Share Plan Sign-on Award | 1.97 | 2.22 | 35 | 2 | 3.84 | | FY26 Deputy CEO Service Rights Award - Tranche 1 and 2 | 3.24 | 3.13 | 35 | 1 - 2 | 4.14 - 4.15 | 1. Excludes awards issuable under the FY26 CFO Retention Award. The number of shares are variable, to be determined at vesting based on an agreed cash value. The fair value at grant date, expected life, and risk-free interest rates shown represent the ranges based on the amounts of rights granted on the ASX or the JSE during the year, and the variations in offer terms and grant dates of each plan where applicable. Expected volatility is based on the historical South32 Limited share price volatility at the grant date. --- South32 Annual Report 2026 220 Financial report ## Notes to financial statements – Other notes continued ### 22. Employee share ownership plans continued #### (c) Reconciliation of outstanding share awards None of the awards listed below have an exercise price or are exercisable at 30 June 2026. | FY26 Number of rights | Rights at beginning of the year | Granted during the year | Vested during the year | Forfeited during the year | Lapsed during the year | Rights at end of the year | | --- | --- | --- | --- | --- | --- | --- | | **Recurring plans** | | | | | | | | Long-Term Incentive Plan | 12,011,942 | 5,566,519 | (503,163) | (1,088,747) | (2,851,276) | 13,135,275 | | Deferred Short-Term Incentive Plan | 2,240,270 | 1,354,273 | (1,419,957) | – | – | 2,174,586 | | Management Share Plan - Retention rights | 5,454,770 | 3,393,008 | (1,938,265) | (667,547) | – | 6,241,966 | | Management Share Plan - Performance rights | 12,455,592 | 4,482,497 | (424,681) | (1,375,217) | (2,421,232) | 12,716,959 | | AllShare Plan | 10,453,280 | 5,677,500 | (6,453,880) | (469,290) | – | 9,207,610 | | **Transitional and other plans** | | | | | | | | Executive Transitional Award Plan | 171,900 | – | – | – | – | 171,900 | | Management Share Plan Sign-on Award - Retention rights | 103,600 | 14,000 | (46,100) | – | – | 71,500 | | Management Share Plan Sign-on Award - Performance rights | 42,000 | – | – | – | – | 42,000 | | FY26 Deputy CEO Service Rights Award - Tranche 1 | – | 1,242,857 | – | – | – | 1,242,857 | | FY26 Deputy CEO Service Rights Award - Tranche 2 | – | 240,000 | – | – | – | 240,000 | | **Total awards^{1}** | **42,933,354** | **21,970,654** | **(10,786,046)** | **(3,600,801)** | **(5,272,508)** | **45,244,653** | 1. Excludes awards issuable under the FY26 CFO Retention Award. The number of shares are variable, to be determined at vesting based on an agreed cash value. ### 23. Contingent assets and liabilities Contingent assets and liabilities not otherwise provided for in the consolidated financial statements are as follows: | US$M | FY26 | FY25 | | --- | --- | --- | | **Contingent liabilities** | | | | Actual or potential litigation | 310 | 318 | | Transaction-related contingencies | 82 | – | | **Total contingent liabilities** | **392** | **318** | | **Contingent assets** | | | | Actual or potential litigation | 6 | 15 | | **Total contingent assets** | **6** | **15** | Actual or potential litigation liabilities primarily relate to historical tax assessments and other related matters in Colombia and Brazil. Transaction-related contingencies relate to a possible break fee payable if the Group's agreement to sell its interests in the aluminium value chain assets, as outlined in note 2(c) Key estimates, assumptions and judgements, does not complete as a result of certain agreed circumstances. Actual or potential litigation assets primarily relate to potential recovery of pre-closing tax liabilities in respect of the Sierra Gorda acquisition. The Group's operations are subject to complex legislative regimes, including various environmental laws and regulations. From time to time there may be legal and regulatory claims, or potential claims, that have arisen in the course of business against entities in the Group. The Group only recognises amounts as liabilities when they are probable, or as contingencies when they are possible, and only where a reliable estimate can be made. The Group is not aware of any non-compliance or potential claims that are unrecognised, or have not been disclosed, which are expected to result in a material financial impact. Such disclosures are adjusted as new information develops or circumstances change. The Group has entered into various counter-indemnities for bank and performance guarantees related to its own future performance which are in the normal course of business. Additionally, the Group has provided indemnities against certain liabilities as part of agreements for the disposal of business operations. The Group considers the likelihood of a material liability arising from the indemnities provided as remote. --- South32 Annual Report 2026 221 Financial report ## 24. Subsidiaries The Group's material subsidiaries are as follows: | Material subsidiaries | Country of incorporation | Principal activity | Effective interest % | | | --- | --- | --- | --- | --- | | | | | FY26 | FY25 | | African Metals (Pty) Ltd | South Africa | Investment holding company | **100** | 100 | | Cerro Matoso S.A.^{1} | Colombia | Integrated laterite ferronickel mine and smelting complex | **–** | 99.9 | | Hillside Aluminium (Pty) Ltd | South Africa | Aluminium smelter | **100** | 100 | | South32 Aluminium (Holdings) Pty Ltd | Australia | Investment holding company | **100** | 100 | | South32 Aluminium (RAA) Pty Ltd | Australia | Interest in a joint operation | **100** | 100 | | South32 Aluminium (Worsley) Pty Ltd | Australia | Interest in a joint operation | **100** | 100 | | South32 Cannington Proprietary Limited | Australia | Silver, lead and zinc mine | **100** | 100 | | South32 Finance 1 B.V. | Netherlands | Financing company | **100** | 100 | | South32 Finance 2 B.V. | Netherlands | Financing company | **100** | 100 | | South32 Group Operations Pty Ltd | Australia | Administrative, management and support services | **100** | 100 | | South32 Hermosa Inc. | United States | Base metals exploration and development project | **100** | 100 | | South32 Investment 1 B.V. | Netherlands | Interest in a joint operation | **100** | 100 | | South32 Marketing Pte. Ltd. | Singapore | Sales, marketing and distribution | **100** | 100 | | South32 Minerals SA | Brazil | Interest in a joint operation | **100** | 100 | | South32 SA Investments Limited^{1} | United Kingdom | Investment holding company | **–** | 100 | | South32 Southern Africa Holdings Limited | United Kingdom | Investment holding company | **100** | **–** | | South32 Sierra Gorda SpA | Chile | Investment holding company | **100** | 100 | | South32 Treasury Limited | Australia | Financing company | **100** | 100 | | South32 USA Exploration Inc. | United States | Interest in a joint operation and exploration | **100** | 100 | 1. These subsidiaries were disposed of in FY26 as part of the sale of Cerro Matoso. Refer to note 30 Disposal of subsidiaries. --- South32 Annual Report 2026 223 Financial report ## 25. Equity accounted investments continued The following table summarises the financial information relating to each material equity accounted investment: | FY26 US$M | Joint ventures | | | | | --- | --- | --- | --- | --- | | | Australia Manganese^{1} | South Africa Manganese^{1} | Manganese Marketing^{1} | Sierra Gorda | | **Reconciliation of the carrying amount of equity accounted investments** | | | | | | Current assets | 600 | 229 | 183 | 661 | | Non-current assets | 888 | 523 | 55 | 4,919 | | Current liabilities | (299) | (88) | (141) | (411) | | Non-current liabilities | (1,036) | (252) | – | (4,594) | | **Net assets - 100%** | **153** | **412** | **97** | **575** | | **Carrying amount of equity accounted investments** | **92** | **187** | **58** | **259** | | **Reconciliation of share of profit/(loss) of equity accounted investments** | | | | | | Revenue - 100% | 996 | 547 | 1,773 | 2,565 | | Profit/(loss) after tax - 100% | 158 | (91) | 17 | 109 | | **Share of profit/(loss) of equity accounted investments** | **95** | **(49)** | **10** | **49** | | **Other balances of equity accounted investments presented on a 100% basis** | | | | | | Cash and cash equivalents^{2} | – | 18 | – | 129 | | Current financial liabilities (excluding trade and other payables and provisions) | (6) | (2) | – | (28) | | Non-current financial liabilities (excluding trade and other payables and provisions) | (248) | (68) | – | (4,451) | | Depreciation and amortisation | (139) | (51) | (5) | (437) | | Interest income | 6 | 3 | 3 | 8 | | Interest expense | (52) | (24) | – | (411) | | Income tax (expense)/benefit | (115) | 27 | (5) | (141) | | Royalty related tax (expense)/benefit | (56) | – | – | (68) | 1. The financial information presented includes sales and purchases between Manganese Marketing, and Australia Manganese and South Africa Manganese respectively. 2. South Africa Manganese cash and cash equivalents include US$17 million, on a 100 per cent basis, which is restricted by legal or contractual arrangements. | FY25 US$M | Joint ventures | | | | | --- | --- | --- | --- | --- | | | Australia Manganese^{1} | South Africa Manganese^{1} | Manganese Marketing^{1} | Sierra Gorda | | **Reconciliation of the carrying amount of equity accounted investments** | | | | | | Current assets | 370 | 223 | 131 | 548 | | Non-current assets | 860 | 604 | 60 | 4,858 | | Current liabilities | (183) | (119) | (91) | (336) | | Non-current liabilities | (936) | (203) | – | (4,598) | | **Net assets - 100%** | **111** | **505** | **100** | **472** | | **Carrying amount of equity accounted investments** | **67** | **236** | **60** | **212** | | **Reconciliation of share of profit/(loss) of equity accounted investments** | | | | | | Revenue - 100% | 61 | 541 | 710 | 1,850 | | Profit/(loss) after tax - 100% | (97) | 79 | (2) | 261 | | **Share of profit/(loss) of equity accounted investments** | **(58)** | **47** | **(1)** | **118** | | **Other balances of equity accounted investments presented on a 100% basis** | | | | | | Cash and cash equivalents^{2} | – | 16 | – | 123 | | Current financial liabilities (excluding trade and other payables and provisions) | (5) | (34) | – | (22) | | Non-current financial liabilities (excluding trade and other payables and provisions) | (277) | (23) | – | (4,445) | | Depreciation and amortisation | (29) | (37) | (7) | (364) | | Interest income | 4 | 6 | 3 | 5 | | Interest expense | (50) | (28) | – | (425) | | Income tax (expense)/benefit | 14 | (5) | – | (77) | | Royalty related tax (expense)/benefit | 5 | – | – | (33) | 1. The financial information presented includes sales and purchases between Manganese Marketing, and Australia Manganese and South Africa Manganese respectively. 2. South Africa Manganese cash and cash equivalents include US$14 million, on a 100 per cent basis, which is restricted by legal or contractual arrangements. The Group's share of capital expenditure commitments of material equity accounted investments as at 30 June 2026 was US$52 million (FY25: US$59 million). The material equity accounted investments had US$2 million (FY25: nil) contingent assets and US$1 million (FY25: nil) contingent liabilities as at 30 June 2026. --- South32 Annual Report 2026 224 Financial report # **Notes to financial statements – Other notes**continued # **26. Interests in joint operations** The Group's material interests in joint operations are as follows: | Material joint operations | Country of operation | Principal activity | Effective interest % | | | --- | --- | --- | --- | --- | | | | | FY26 | FY25 | | Ambler Metals | United States | Base metals exploration and development options | **50** | 50 | | Brazil Alumina^{1} | Brazil | Integrated bauxite mine and alumina refinery | **36** | 36 | | Brazil Aluminium^{1} | Brazil | Aluminium smelter | **40** | 40 | | Mozal Aluminium^{2,3} | Mozambique | Aluminium smelter | **63.7** | 63.7 | | Worsley Alumina^{1,3} | Australia | Integrated bauxite mine and alumina refinery | **86** | 86 | 1. On 30 June 2026, the Group entered into a binding conditional agreement to sell its interests in Worsley Alumina, Brazil Alumina and Brazil Aluminium to Alcoa Corporation. Refer to note 2(c) Key estimates, assumptions and judgements. 2. On 15 March 2026, Mozal Aluminium transitioned to care and maintenance. Refer to note 4(b)(ii) Significant items. 3. While the Group holds a greater than 50 per cent interest in Worsley Alumina and Mozal Aluminium, participants jointly approve certain matters and are entitled to receive their share of output from the arrangement. The consolidated financial statements of the Group include its share of the assets and liabilities, and revenue and expenses, arising jointly or otherwise from those operations, and its revenue derived from the sale of its share of the output from the joint operation. All such amounts are measured in accordance with the terms of each arrangement, which are usually in proportion to the Group's interest in the joint operation. The assets in these joint operations are restricted to the extent that they are only available to be used by the joint operation itself and not by other operations of the Group. For certain joint operations, the Group has also either pledged, mortgaged or provided a cross charge to joint operation partners over assets within the joint operation. # **27. Key management personnel** # **(a) Key management personnel compensation** | US$'000 | FY26 | FY25 | | --- | --- | --- | | Short-term employee benefits | **9,620** | 6,659 | | Post-employment benefits | **584** | 152 | | Other long-term benefits | **216** | 37 | | Termination benefits | **672** | – | | Share-based payments | **6,956** | 3,974 | | **Total** | **18,048** | 10,822 | # **(b) Transactions with key management personnel** There were no transactions with key management personnel during the year ended 30 June 2026 (FY25: US$nil). # **(c) Loans to key management personnel** There were no loans with any key management personnel as at 30 June 2026 (FY25: US$nil). # **(d) Transactions with key management personnel related entities** There were no transactions with entities controlled or jointly controlled by key management personnel and there were no outstanding amounts with those entities as at 30 June 2026 (FY25: US$nil). --- South32 Annual Report 2026 225 Financial report ## 28. Related party transactions ### (a) Parent entity The ultimate parent entity of the Group is South32 Limited, which is domiciled and incorporated in Australia. ### (b) Subsidiaries, joint ventures and associates The interests in subsidiaries, joint ventures and associates are disclosed in note 24 Subsidiaries and note 25 Equity accounted investments. ### (c) Key management personnel The compensation of, and loans to, key management personnel are disclosed in note 27 Key management personnel. ### (d) Pension and other post-retirement obligations The Group operates or participates in a number of defined benefit pension and medical plans throughout the world. The funding of the schemes complies with local regulations. The assets of the schemes are generally held separate from those of the Group and are administered by trustees or management boards. At 30 June 2026, the Group had post-retirement defined benefit pension net assets recognised on the Consolidated balance sheet of US$2,993 thousand (FY25: net liabilities of US$8,911 thousand, including amounts classified as held for sale). The net assets consist of defined benefit pension scheme assets with a fair value of US$32,586 thousand (FY25: US$32,414 thousand) and defined benefit pension obligations of US$29,593 thousand (FY25: US$41,325 thousand). At 30 June 2026, the Group had a post-retirement defined benefit medical scheme liability recognised on the Consolidated balance sheet of US$21,233 thousand (FY25: US$17,245 thousand). The post-retirement medical scheme is unfunded. Total contributions to these plans by the Group during the year were US$1,812 thousand (FY25: US$4,340 thousand). ### (e) Transactions with related parties | Transactions with related parties US$'000 | Joint ventures | | Associates | | | --- | --- | --- | --- | --- | | | FY26 | FY25 | FY26 | FY25 | | Sales of goods and services | **281,964** | 159,656 | – | 868 | | Purchases of goods and services | **5,596** | 5,968 | **174,288** | 191,833 | | Interest income | **172,694** | 177,375 | – | – | | Dividend income | **12,000** | 2,400 | – | – | | Interest expense | **10,782** | 9,454 | – | – | | Increase/(decrease) in short-term financing arrangements | **231,547** | 37,148 | – | – | | Increase/(decrease) in loans with related parties | **(9,674)** | (21,151) | – | (33,464) | | Outstanding balances with related parties US$'000 | Joint ventures | | Associates | | | --- | --- | --- | --- | --- | | | FY26 | FY25 | FY26 | FY25 | | Trade and sundry amounts owing to related parties | **7,418** | 4,354 | **8,983** | 13,199 | | Other amounts owing to related parties^{1} | **378,621** | 159,969 | – | – | | Other amounts owing from related parties^{2} | **600** | 13,495 | – | – | | Trade and sundry amounts owing from related parties | **38,561** | 28,797 | – | – | | Loan amounts owing from related parties^{3,4,5} | **1,947,410** | 1,957,084 | – | – | 1. 1. Relates to the Group's cash management program on behalf of its equity accounted investments. Amounts are repayable at call, and interest is predominantly charged based on the three-month Chicago Mercantile Exchange Term Secured Overnight Financing Rate (CME Term SOFR) plus a margin of 0.21 per cent and the one-month Johannesburg Interbank Average Rate (JIBAR). 2. 2. Relates to the Group's cash management program on behalf of its equity accounted investments. Amounts are repayable at call, and interest is charged based on the one-month JIBAR. 3. 3. Includes an interest bearing loan owing from South Africa Manganese, which is repayable by 30 May 2028. Interest is charged based on the three-month JIBAR plus a margin of 1.45 per cent. 4. 4. Includes an interest free loan owing from Australia Manganese, which is repayable by 7 January 2030. 5. 5. Includes a purchased credit-impaired loan owing from Sierra Gorda, which has a face value of US\$1,927 million (FY25: US\$2,228 million) and incurs interest at a contractual rate of eight per cent per annum. The loan is repayable by 31 December 2032. Refer to note 19 Financial assets and financial liabilities. Sales to, and purchases from, related parties are transactions at market prices and on commercial terms, or under terms and prices that are no less favourable to the Group than those arranged with third parties. Outstanding balances at year end are unsecured and settlement mostly occurs in cash. South32 Limited has guaranteed its equivalent 45 per cent share of the repayment of a US$500 million (FY25: US$500 million) revolving credit facility entered into by Sierra Gorda Sociedad Contractual Minera. At the end of the year, the facility was drawn down by US$400 million (FY25: US$400 million). The facility extends to 24 September 2027. South32 Limited and two subsidiaries of the Group have guaranteed and entered into a deed of reimbursement for its equivalent 33 per cent share of the repayment of loan facilities totalling US$670 million (FY25: US$530 million) entered into by Mineração Rio do Norte, with maturities ranging from October 2026 to November 2027. At the end of the year, a total of US$664 million was drawn from these facilities (FY25: US$392 million). No other guarantees are provided for or have been received from any related party. --- South32 Annual Report 2026 226 Financial report # **Notes to financial statements – Other notes**continued # **29. Parent entity information** # **(a) Summary financial information** The individual financial statements for the parent entity, South32 Limited, show the following aggregate amounts: | US$M | FY26 | FY25 | | --- | --- | --- | | **Result of parent entity** | | | | Profit/(loss) after tax for the year | **1,187** | 319 | | **Total comprehensive income/(loss)** | **1,187** | 319 | | **Financial position of parent entity at year end** | | | | Current assets | **249** | 380 | | Current liabilities | **(270)** | (482) | | Total assets | **13,597** | 12,469 | | Total liabilities | **(2,427)** | (2,174) | | **Net assets** | **11,170** | 10,295 | | **Total equity of the parent entity** | | | | Share capital | **13,125** | 13,160 | | Treasury shares | **(12)** | (21) | | Other reserves | **28** | 26 | | Profit reserve^{1} | **3,207** | 3,499 | | Accumulated losses | **(5,178)** | (6,369) | | **Total equity** | **11,170** | 10,295 | 1. Prior year profits, net of dividends paid, have been appropriated to a profit reserve for future dividend payments. # **(b) Parent company guarantees** The parent entity and South32 Southern Africa Holdings Limited have jointly and severally, fully and unconditionally guaranteed the payment of the principal and premium, if any, and interest, including certain additional amounts that may be payable in respect of the US$700 million of unsecured notes issued by South32 Treasury Limited, a 100 per cent owned finance subsidiary of the parent entity, refer to note 17 Interest bearing liabilities. The parent entity and South32 Southern Africa Holdings Ltd have guaranteed the payment of such amounts when they become due and payable, whether on an interest payment date, at the stated maturity of the notes, by declaration or acceleration, call for redemption, or otherwise. The parent entity has guaranteed a US commercial paper program of US$1,500 million and a Group revolving credit facility of US$1,400 million. Both the US commercial paper program and the revolving credit facility are unutilised as at 30 June 2026, refer to note 19 Financial assets and financial liabilities for further details. The parent entity has guaranteed its equivalent 45 per cent share of the repayment of a US$500 million (FY25: US$500 million) revolving credit facility entered into by Sierra Gorda Sociedad Contractual Minera. At the end of the year, the facility was drawn down by US$400 million (FY25: US$400 million). The facility extends to 24 September 2027. The parent entity and two subsidiaries of the Group have guaranteed and entered into a deed of reimbursement for its equivalent 33 per cent share of the repayment of loan facilities totalling US$670 million (FY25: US$530 million) entered into by Mineração Rio do Norte, with maturities ranging from October 2026 to November 2027. At the end of the year, a total of US$664 million was drawn from these facilities (FY25: US$392 million). The parent entity has guaranteed the repayment of revolving credit facilities totalling US$80 million (FY25: US$80 million) entered into by South32 Minerals SA, with maturities ranging from August 2026 to October 2026. At the end of the year, a total of US$30 million was drawn from these facilities (FY25: US$30 million). One of the facilities expired on 11 August 2026 and has since been extended to 10 August 2028. The parent entity is party to a Deed of Support with the effect that the Company guarantees debts in respect of South32 Group Operations Pty Ltd. --- South32 Annual Report 2026 227 Financial report ### 30. Disposal of subsidiaries Non-current assets and disposal groups (inclusive of directly associated liabilities) are reclassified to current assets held for sale if their carrying amount is highly probable to be recovered through sale rather than through continuing use, and are available for immediate sale in their present condition. A discontinued operation is a component of the Group's business that represents a separate major line of business or geographical area of operations that has been disposed of or is classified as held for sale. When an operation is classified as discontinued, the comparative financial results are restated as if the operation had been discontinued from the start of the comparative year. #### Cerro Matoso In July 2025, the Group announced its decision to enter into a binding agreement for the sale of Cerro Matoso to an entity owned by CoreX Holding B.V. The sale completed on 1 December 2025 and resulted in a loss on disposal of US$3 million. The sale consideration included a nominal upfront cash consideration and contingent consideration of up to US$100 million, subject to customary working capital and net debt adjustments. Cerro Matoso was classified as held for sale and presented separately on the Group's FY25 Consolidated balance sheet. The disposal group represents the entire Cerro Matoso segment, which comprises the Group's 99.9% interest in Cerro Matoso S.A., 100% interest in South32 Energy S.A.S. E.S.P. and other investment holding companies. Cerro Matoso is an integrated laterite ferronickel mine and smelting complex in Colombia. As a separate major component of the Group, Cerro Matoso has also been presented as a discontinued operation in the Group's Consolidated income statement. The results of the discontinued operation are as follows: | US$M | FY26 | FY25 | | --- | --- | --- | | Revenue: | | | | Group production | **193** | 485 | | | **193** | 485 | | Other income | **1** | 3 | | Expenses excluding finance costs | **(184)** | (549) | | Loss on disposal of the discontinued operation | **(3)** | – | | **Operating profit/(loss) from a discontinued operation** | **7** | (61) | | Finance income | **1** | 2 | | Finance costs | **(4)** | (15) | | **Net finance income/(costs)** | **(3)** | (13) | | **Profit/(loss) before tax from a discontinued operation** | **4** | (74) | | Income tax (expense)/benefit | **3** | (17) | | **Profit/(loss) for the year from a discontinued operation** | **7** | (91) | | **Total comprehensive income/(loss) from a discontinued operation attributable to the equity holders of South32 Limited** | **7** | (91) | | Basic earnings/(loss) per share (cents) | **0.2** | (2.0) | | Diluted earnings/(loss) per share (cents) | **0.2** | (2.0) | The cash flows from the discontinued operation are as follows: | US$M | FY26 | FY25 | | --- | --- | --- | | Net cash flows from operating activities | **2** | 90 | | Net cash flows from investment activities | **(22)** | (30) |