South32 Annual Report 2026
1 Strategic Report
ANNUAL
REPORT
2026
Our 2026 Annual Reporting Suite
Together with this Annual Report, the following documents also
form part of our 2026 Annual Reporting Suite and are published
separately:
Modern Slavery
Statement
Tax Transparency
and Payments to
Governments
Report
Climate-related
Reporting
Methodology
Other documents supplementing our Annual Reporting Suite
include the:
– Sustainability Databook
– Sustainability Standards and Frameworks Index
– Tax Databook
You can view all the documents in and supporting our Annual
Reporting Suite at www.south32.net.
Annual Report 2026
This Annual Report is a summary of South32’s operations, activities
and performance for the year ended 30 June 2026 and its financial
position as at 30 June 2026. It also includes our progress against
our sustainability and human rights commitments. South32 Limited
(ABN 84 093 732 597) is the ultimate holding company of the
South32 group of companies.
In this report, unless otherwise noted:
1. references to South32, the South32 Group, the Group, we, us,
our and similar expressions refer to South32 Limited, its
subsidiaries and operated joint ventures
1
2. references to ‘our operations’, or phrases such as commodities
‘we produce’, 'we refine' or in ‘our portfolio’ includes
commodities such as bauxite, alumina, aluminium and copper
that may form part of, or be produced by our non-operated joint
ventures
2
3. financial information outside of the Financial Report
3
is
presented based on the Group’s equity share in its subsidiaries,
4
operated joint ventures
5
and non-operated joint ventures
6
4. unless otherwise stated, metrics describing health, safety,
environment, people and community related performance in
this report are presented for the Group’s subsidiaries and
operated joint ventures
7
on a 100% basis, as outlined in the
Reporting Boundaries section of our Sustainability Databook
2026 available at www.south32.net
5. monetary amounts are expressed in US dollars.
Further explanation of commonly used terms and references can
be found in the Glossary starting on page 255 of this report.
Page 267 includes other information on the preparation of this
report and we encourage readers to consider this information
before reading the report.
This report should be read in conjunction with South32’s
Sustainability Databook, Sustainability Standards and Frameworks
Index, Climate-related Reporting Methodology 2026 and Climate
Change Action Plan 2025, together with other periodic and
continuous disclosure announcements lodged with the Australian
Securities Exchange, London Stock Exchange and Johannesburg
Stock Exchange. These documents are available at
www.south32.net.
Non-IFRS Measures
This report includes non-IFRS financial measures, including
underlying measures of earnings, effective tax rate, returns on
invested capital, cash flow and net cash/(debt).
Non-IFRS measures should be considered in addition to, and not as
a substitute for, IFRS measures of profitability, financial
performance or liquidity. For an explanation of how South32 uses
non-IFRS measures, see page 22. The definitions of individual non-
IFRS measures used in this report are set out in the glossary on
page 255.
Forward-looking statements
Any forward-looking statements in this report are based on
South32’s current expectations, best estimates and assumptions
as at the date of preparation, many of which are beyond South32’s
control. These forward-looking statements are not guarantees of
future performance, and involve known and unknown risks and
uncertainties, which may cause actual results to differ materially
from those expressed in the report. See page 267 for more
information.
Assurance
South32 engaged an independent external assurance organisation,
KPMG, to provide the Directors of South32 Limited with assurance
on select sustainability information, as explained in the FY26
Independent Assurance Report on pages 109 to 117.
South32 Annual Report 2026
Strategic Report
About this report
1.
Details of operations which are not wholly owned by South32 Limited or its subsidiaries and for which South32 manages the operation, can be found on page 267.
2.
Details of operations which are not wholly owned by South32 Limited or its subsidiaries and for which South32 does not manage the operation, can be found on page 267.
3.
For Financial Report basis of preparation, refer to note 2 to the financial statements (Basis of preparation) on page 179.
4.
Cerro Matoso SA financial information is presented on a 100% basis.
5.
Min Sud Argentina financial information is presented on a 100% basis.
6.
Mineração Rio do Norte S.A (MRN) financial information is excluded.
7.
Minera Sud Argentina disclosures are limited to safety and health metrics only.
Cover: Geologist at our Cannington operation.
Right: Our people with Anindilyakwa women from Bush Medijina, a community project supported by South32 on Groote Eylandt in Australia.
STRATEGIC REPORT
About this report
IFC
About South32
2
FY26 in review
3
From the Chair
6
From the CEO
7
Where we operate and what we produce
8
Our value chain
10
Our future
11
Our stakeholders
12
Our strategy in action
14
Financial and operating performance summary
20
Risk management
48
Sustainability
57
Our approach to sustainability 58
Assessing materiality 59
Sustainability governance 60
Our sustainability performance 61
Addressing Climate Change 77
Independent audit and assurance reports 109
GOVERNANCE
Our Board in action
118
Our Board
119
Board and Committee meetings
134
Corporate ethical standards
140
Inclusion and diversity
141
Other governance matters
142
Our Lead Team
143
Directors' Report
146
Remuneration Report
150
FINANCIAL REPORT
Consolidated financial statements
174
Notes to the financial statements
179
Consolidated entity disclosure statement
230
Directors' declaration
232
Lead auditor's independence declaration
233
Independent auditor's report
234
RESOURCES AND RESERVES
Information
239
Accompanying tables
241
INFORMATION
Shareholder information
252
Glossary of terms and abbreviations
255
Corporate directory
266
Information about this report
267
South32 Annual Report 2026
1 Strategic Report
Contents
Acknowledgement
We acknowledge and pay our respects to the Indigenous, Traditional and Tribal Peoples of the lands, waters and
territories on which South32 is located and where we conduct our business around the world.
We respect and acknowledge the unique cultural and spiritual relationships that Indigenous, Traditional and Tribal
Peoples have to the lands, waters and territories, and their rich contribution to society.
In the spirit of respect and reconciliation, we will continue to support initiatives that strengthen culture and ways of life
so that their legacy continues and extends to future generations.
ABOUT
SOUTH32
Our purpose
Our purpose is to make a difference by developing natural resources, improving people’s lives now and for generations
to come. We are trusted by our owners and partners to realise the potential of their resources.
Our strategy
Our strategy underpins our purpose and outlines what we do to achieve it.
OPTIMISE
We optimise our business by working
safely, minimising our impact, consistently
delivering stable and predictable
performance, and continually improving
our competitiveness.
UNLOCK
We unlock the full value of our business
through our people, innovation, projects
and technology.
IDENTIFY
We identify and pursue opportunities to
sustainably reshape our business for the
future, and create enduring social,
environmental and economic value.
Our values
Our values guide how we achieve our purpose. Every day, our values shape the way we behave and the standards we set
for ourselves and others.
CARE
We care about people, the
communities we're a part of
and the world we depend on.
TRUST
We deliver on our
commitments and rely on
each other to do the right
thing.
TOGETHERNESS
We value difference and we
openly listen and share,
knowing that together we are
better.
EXCELLENCE
We are courageous and
challenge ourselves to be the
best in what matters.
South32 Annual Report 2026
2 Strategic Report
Our purpose-led approach
A YEAR OF
LEADERSHIP
RENEWAL
In 2026 we said farewell to two highly respected leaders who have contributed significantly
to South32's first 11 years, and welcomed a new Chair and a new Chief Executive Officer.
〉 In March 2026, Karen Wood AM retired as
Chair of South32, a position she had held
since April 2019 after joining the Board in
November 2017 as a Non-Executive
Director.
〉 During this time, she provided exceptional
leadership and strategic oversight of our
portfolio transformation and approach to
sustainability.
〉 As part of a planned succession process,
she was replaced as Chair by Stephen
Pearce, who initially joined the Board as a
Non-Executive Director in February 2025.
〉 Stephen 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.
〉 Read Stephen's reflections on the year on
page 6.
〉 Following an extensive global CEO
succession and evaluation process by the
Board, Matt Daley joined South32 as
Deputy CEO in February 2026.
〉 He assumed the role of CEO on 1 July
2026 after Graham Kerr stepped down
from that role on 30 June 2026.
〉 Graham was our inaugural CEO and his
legacy includes establishing a values-
based, safety-focused culture while
transforming our portfolio to increase our
exposure to higher-margin base metals.
〉 Matt has more than 25 years’ experience
in the mining and metals industry,
spanning underground and open cut
mining, smelting, refining, projects and
commodity trading, and he has held
leadership roles around the world.
〉 Matt's overview of FY26 is on page 7.
South32 Annual Report 2026
3 Strategic Report
FY26 in review
OUR PERFORMANCE
AT A GLANCE
Copper equivalent production
1,015kt
FY25: 1,083kt
Total recordable injury frequency
3.4
FY25: 3.7
Social investment
US$23M
FY25: US$22M
8
Underlying EBITDA
US$2,462M
FY25: US$1,928M
Total recordable illness frequency
0.7
FY25: 1.0
Scope 1 and 2 emissions, total operations
9
20.5Mt CO
2
-e
FY25: 20.7Mt CO
2
-e
Shareholder returns
10
US$327M
FY25: US$350M
Significant hazard frequency
245
FY25: 196
Inclusion index score
82.8%
FY25: 80.2%
Learn more about our financial highlights in the Business and Operating Performance Summary starting on page 21.
Other business performance metrics can be found in the Remuneration report, starting on page 150.
South32 Annual Report 2026
4 Strategic Report
8.
FY25 social investment data has been restated following the identification of a calculation error. FY25 values have been revised as follows:
Total: US$22.2M (previously US$23.3M); South Africa: US$9.6M (previously US$10.7M); South Africa Manganese: US$3.2M (previously US$4.3M).
9.
Total operations includes divested operations, and continuing operations reflecting emissions from our current operations.
10.
Fully-franked ordinary dividends paid in respect of H2 FY25 (US$117 million), fully-franked ordinary dividends paid in respect of H1 FY26 (US$175 million)
and on-market share buy-back (US$35 million).
FY26 in review
Copper
87.1kt
FY25: 89.7kt
Silver
9,647koz
FY25: 10,876koz
Manganese ore
5.1mwmt
FY25: 3.3mwmt
Aluminium
1,109kt
FY25: 1,211kt
Zinc
205.4kt
FY25: 234.2kt
Lead
82.9kt
FY25: 92.4kt
Alumina
5,133kt
FY25: 5,067kt
South32 Annual Report 2026
5 Strategic Report
OUR FY26 PRODUCTION
OUR BUSINESS IN FY26
〉 On 6 October 2025, the US
Government announced it would
issue authorisations necessary for
the establishment of the Ambler
Access Road. This road is a key
enabler in unlocking the value of
the Ambler Mining District, where
we hold a 50% interest in the
Ambler Metals joint venture and
have a 100% interest in the
Roosevelt exploration project.
Learn more on page 18.
〉 On 23 October 2025, a non-binding
resolution in relation to our second
Climate Change Action Plan was
passed by shareholders at our
AGM, with 90% of the votes cast in
favour of the resolution. Learn
more about how we are addressing
climate change on page 80.
〉 On 1 December 2025, we
completed the divestment of Cerro
Matoso in Colombia to an
international nickel-focused
company with an existing footprint
in the country. This further
streamlined our portfolio towards
higher-margin base metals
businesses and provided balance
sheet flexibility to support
investment in growth options.
〉 On 12 February 2026, we reported
a 28% increase in Cannington’s
underground Ore Reserve,
extending reserve life by
approximately two years to FY33,
while targeting further potential
growth through underground and
open pit development options.
Learn more on page 16.
〉 On 15 March 2026, Mozal
Aluminium was placed on care and
maintenance after it was unable to
secure sufficient and affordable
electricity supply beyond March
2026.
〉 On 30 April 2026, the initial
operating life of Hermosa's Taylor
deposit was extended by five years
to approximately 33 years, and the
Peake deposit's Mineral Reserve
increased by 32%. First production
was revised to H2 FY28 and
expected growth capital
expenditure for Taylor increased to
approximately US$3.3 billion. Learn
more on page 17.
〉 On 15 May 2026, it was announced
Ambler Metals' Arctic polymetallic
deposit had been accepted as a
covered project under the US
Government's FAST-41 program, a
key step towards unlocking value
from this polymetallic deposit.
〉 On 30 June 2026, we entered into a
binding conditional agreement to
sell our aluminium value chain
assets to Alcoa Corporation (Alcoa)
for up to US$5.6 billion. Alcoa will
also assume related rehabilitation
provisions of approximately US$1.1
billion. Learn more on page 11.
SIMPLER
AND
STRONGER
We were devastated when Simon Mukwarami was fatally injured at
our Worsley Alumina refinery in Western Australia in March 2026.
The loss of a loved one while going about their work is something
that no family should have to endure.
On behalf of the Board, I offer our heartfelt sympathies to Mr
Mukwarami’s family, friends and colleagues.
We continue to focus on eliminating fatalities and serious injuries
from our business, and on improving our safety performance.
FY26 was a year of transition for South32, with my predecessor,
Karen Wood AM, retiring from the Board on 1 March 2026 and
Graham Kerr, our inaugural Chief Executive Officer, stepping down
from the role on 30 June 2026. I would like to pay tribute to both.
Karen worked with Directors and the Lead Team to substantially
reposition South32 and capitalise on the increasing global demand
for base metals. We were fortunate to benefit from her wealth of
knowledge, strong governance and purpose-driven approach.
I also congratulate Graham on his outstanding contribution over
the past 11 years. He was instrumental in defining our purpose and
strategy, establishing a values-based and safety-focused culture,
and reshaping our portfolio with a disciplined approach to capital
management. He has set up a strong foundation for future success,
and his leadership has left a lasting impact on South32.
In line with our CEO transition plan announced last year, Matt Daley
joined us as Deputy CEO on 2 February 2026 and assumed the role
of CEO on 1 July.
Matt is a highly accomplished executive who brings extensive
operational and leadership experience to South32. Since joining our
company, he has spent time at our operations, overseen our
Australian and African operations, and engaged with our
stakeholders around the world.
He has a clear plan to take our business forward, centred on
delivering safe and reliable production, creating a simpler, stronger
business and delivering our growth projects.
The transition comes at an important time for South32. On 30 June
2026, we entered into a binding conditional agreement to sell our
aluminium value chain assets, with the transaction expected to
complete in the second half of FY27. This is a step change for us
that accelerates the delivery of our strategy and provides us with
additional balance sheet flexibility to invest in our next phase of
growth, while delivering shareholder returns.
Against a backdrop of global geopolitical and economic
uncertainty, in FY26 we delivered strong operating performance,
earnings and shareholder returns.
We returned US$327 million to shareholders, including US$292
million in fully-franked ordinary dividends, and US$35 million via our
on-market share buy-back.
In February 2026, the Board resolved to increase our capital
management program by US$100 million to US$2.6 billion and
subsequent to 30 June 2026, the Board approved a further
extension of the program to September 2027 with US$209 million
remaining to be returned to shareholders.
During the year, Directors travelled to our Hermosa project in
Arizona in the United States and Johannesburg in South Africa as
part of our Board program. While at Hermosa, we attended a
community engagement event at Nogales, where our remote
operations facility is being built, and learned more about the social
and economic benefits this project is expected to support in the
region. In South Africa, we saw the positive impacts that our social
investment initiatives can have, including visiting a centre which
provides protection and support for vulnerable young people.
At our AGM in October 2025, our second Climate Change Action
Plan (CCAP) received strong shareholder backing, with 90% of votes
cast in favour in a non-binding advisory resolution. The annual
report this year includes a new section, 'Addressing Climate
Change', which details our progress in implementing the CCAP and
identifying the risks and opportunities presented by climate
change.
The process of refreshing our Board continued in FY26, with two
inaugural Directors, Frank Cooper AO and Dr Futhi Mtoba, retiring
at our AGM, and Geoff Healy and Sinead Kaufman appointed
independent Non-Executive Directors in December 2025 and April
2026, respectively.
Geoff has more than three decades of experience within the
professional services and natural resources industries, while Sinead
has 30 years’ international experience in the resources sector.
Geoff and Sinead bring a range of skills and are already
contributing significant value to the Board.
In FY27, the Board will work with Matt and our Lead Team on our
key priorities, including completing the sale of our aluminium value
chain assets, progressing our Hermosa project and continuing to
grow our exposure to base metals.
I look forward to ongoing engagement with our shareholders and
other stakeholders during the year. On behalf of the Board, I would
like to acknowledge their support and also thank our people across
the world for their hard work and dedication to South32.
Stephen Pearce
Chair
South32 Annual Report 2026
6 Strategic Report
From the Chair
RESHAPING
OUR
FUTURE
I am proud to have started as Chief Executive Officer at such a
pivotal time for South32. This is a company with strong
foundations, real momentum and a bright future.
Since February 2026, I have visited our sites and offices, getting to
know our people and our stakeholders, and gained a deep
understanding of our business and the opportunities that lie ahead.
It is clear we have extraordinary dedication and capability within
our organisation.
Our purpose is to make a difference by developing natural
resources and improving people’s lives. We do that through safe,
responsible operations and strong and trusted relationships with
the communities that host us.
The death of our colleague Simon Mukwarami, in an incident at
Worsley Alumina in March 2026, had a profound impact on
everyone at South32, particularly those at the operation. Mr
Mukwarami’s family, friends and colleagues remain in our thoughts.
Following the incident, I travelled to Worsley Alumina to support
the team and gain an understanding of what had occurred. We
have taken steps to further enhance awareness of Worsley
Alumina’s existing procedures, permits, risk assessments and
controls for working at heights hazards as part of our cooperation
with the authorities. We reinforced these where relevant at our
other operations, and we continue to look for opportunities to
design tasks in a way that eliminates or reduces fall from heights
risks so far as practicable.
It was encouraging to see improvements in our key safety metrics
in FY26, including our significant hazard frequency increasing by
25%, which showed improved hazard awareness. But we know we
cannot be regarded as successful until all our people return home
safe and well at the end of every shift. As CEO, I am unwavering in
my commitment to a workplace free from fatalities.
We are simplifying our portfolio to sharpen our operational focus,
directing capital to our highest-return opportunities, and building a
stronger base metals mining and processing business. The agreed
sale of our aluminium value chain assets to Alcoa, for up to US$5.6
billion, is a fundamental change that will reshape South32. When
the transaction completes, we will be focused on high-margin,
long-life copper, zinc, silver and lead operations, alongside our
strong position in manganese.
On top of this, projects in construction or approved for
development in our streamlined portfolio are expected to grow our
copper equivalent production volumes by approximately 55%.
At our Hermosa project, construction progressed on the Taylor
zinc-lead-silver project and the federal permitting process under
the National Environmental Policy Act was completed in July 2026.
An assessment of Taylor’s project milestones confirmed its
potential to deliver attractive returns and its expected operating
life increased by five years to approximately 33 years. At the
adjacent Peake deposit, the Mineral Reserve has been increased by
32%, supporting our expectation it will become a source of future
copper production and mine life extension.
We revised expectations for Taylor’s shaft construction and
expected growth capital expenditure, due to contractor
performance and productivity challenges, materially higher inflation
and industry-wide increases in key input costs. Taylor’s underlying
quality remains strong. It will increase our production of base and
precious metals, lift Group margins due to its low cost position, and
establish significant shared infrastructure for future growth phases.
We are also excited about Sierra Gorda, where the joint venture
approved execution of the fourth grinding line project and a
feasibility study confirmed the potential for attractive returns. The
project is expected to increase copper equivalent production by
approximately 30% from FY31.
At Cannington, we are investing to extend underground mine life
by about two years and unlock value from its high-margin, silver-
rich production, while progressing study work for a potential open-
pit development and further underground life extensions. We also
completed the divestment of the Cerro Matoso ferronickel
operation, further streamlining our portfolio towards base metals.
We continue to advance our pipeline of growth options in study
and exploration phases. In October 2025, the US Government
supported the establishment of the Ambler Access Road, a key
step in unlocking the potential of the Ambler Mining District where
our Ambler Metals joint venture offers high-grade copper and zinc
options. Recently, Ambler Metals' Arctic polymetallic deposit was
confirmed as a covered project under the FAST-41 program.
At Mozal Aluminium, despite extensive engagement with key
stakeholders, the smelter was unable to secure sufficient and
affordable electricity to enable it to operate beyond March 2026,
when it was safely placed on care and maintenance. Divestment is
now under active consideration.
Outside of South32, global markets remained volatile and we continue
to manage inflationary pressures and higher freight rates and raw
material input prices. Despite these headwinds, in FY26 we exceeded
Group production guidance and Underlying EBITDA increased by 28%
to US$2.5 billion, while Underlying earnings increased by 55% to US$1
billion. Group cash flow from operations increased by US$352 million
to US$610 million after investing US$711 million to grow future base
metals production from our Hermosa project.
We have a strong business, and much of this is down to Graham
Kerr’s leadership since he was appointed our inaugural CEO in
2015. I thank Graham for his significant contribution. I would also
like to thank our partners, our shareholders and particularly our
people for their ongoing commitment to South32.
Matt Daley
Chief Executive Officer
South32 Annual Report 2026
7 Strategic Report
From the CEO
DIVERSIFIED BUSINESS FOR
THE ENERGY TRANSITION
We have operations across the Americas, Australia and Southern Africa,
are progressing construction at our Hermosa Taylor project, and have
a pipeline of high-quality development options and exploration projects.
South32 Annual Report 2026
8 Strategic Report
Where we operate and what we produce
AMBLER METALS
Non-operated joint venture
South32 share: 50%
Copper, lead, gold, silver and zinc
HERMOSA
Operated development project
South32 share: 100%
Zinc, lead, silver and manganese
BRAZIL ALUMINA
Non-operated joint venture
South32 share: Bauxite 33%; Alumina 36%
Alumina
SIERRA GORDA
Non-operated joint venture
South32 share: 45%
Copper, molybdenum and gold
BRAZIL ALUMINIUM
Non-operated joint venture
South32 share: 40%
Aluminium
VANCOUVER
KEY: Mining and processing Development Exploration Office
OUR MINERALS AND METALS
Copper
Copper is an excellent conductor of electricity. It is a key metal
used in electric vehicles (EVs) and charging infrastructure, and as
the world moves towards electrification and artificial intelligence
(AI) adoption, it is expected to be used in power-related
infrastructure including renewable energy generation. Copper is
also widely used in construction and consumer durables including
household appliances.
Manganese
Manganese is used to improve the quality and strength of steel in
major infrastructure such as hospitals, office towers and bridges.
It also has the potential to improve lithium-ion battery energy
density and reduce costs, while lowering reliance on ESG-sensitive
cobalt, with demand for manganese-rich cathode chemistries
expected to grow.
Zinc, lead, silver
Zinc, as the coating in galvanised steel, is widely used in
construction, transportation, energy, agriculture, household
equipment and more. Zinc plays a key role in energy transition by
protecting steel structures, wind turbines and solar panels against
corrosion, and zinc oxide coatings help achieve higher energy
conversion in solar panels. Lead batteries have potential to be used
in energy storage systems to support uptake of renewable energy.
Silver plays a crucial role in electrification, AI adoption and data
centre development as it is widely used in electronics and electrical
systems such as printed circuit boards, semiconductors and
electrical switches. It is also an integral component in solar panels,
medical appliances and consumer electronics.
Aluminium value chain
11
Aluminium is lightweight, durable, strong, recyclable and can
conduct electricity. It has a wide range of applications including
construction, electrical wiring, battery energy storage systems, and
transportation including EVs. It also has the potential to substitute
copper for certain applications in aerospace and rail.
South32 Annual Report 2026
9 Strategic Report
11.
On 1 July 2026, we announced we had entered into an agreement to sell our aluminium value chain assets, which is expected to complete in H2 FY27, subject to satisfaction or waiver
of conditions precedent. Refer to market release “Agreement to sell aluminium value chain assets to Alcoa for up to US$5.6b and Chief Executive Officer transition” for further details.
Find detailed analysis of the underlying performance of the Group's operations starting on page 21.
HILLSIDE ALUMINIUM
Subsidiary
South32 share: 100%
Aluminium
LONDON
SINGAPORE
JOHANNESBURG
PERTH HEAD OFFICE
SOUTH AFRICA
MANGANESE
Operated joint venture
South32 share: 54.6%
Manganese
WORSLEY ALUMINA
Operated joint venture
South32 share: 86%
Alumina
AUSTRALIA MANGANESE
Operated joint venture
South32 share: 60%
Manganese
CANNINGTON
Subsidiary
South32 share: 100%
Silver, lead and zinc
MOZAL ALUMINIUM
Care and maintenance
South32 share: 63.7%
Aluminium
GLOBAL NETWORKS THAT
UNDERPIN MODERN LIFE
The metals and minerals we produce are used in many aspects of 21st century society. At each stage
of the mining cycle, we work to mitigate the impact of our activities and aim to create enduring value
for our stakeholders. Our supply chains which support these stages are complex worldwide networks.
Explore
We have a portfolio of greenfield exploration partnerships and prospects to discover deposits to
underpin our next generation of mines, with a focus on minerals and metals critical to the global
energy transition. We use technology and well-designed programs to manage our exploration
footprint.
Develop
Our growth pipeline is focused on base metals. As we advance our projects and options, including as
we develop the Taylor zinc-lead-silver project at Hermosa, we look to apply 'next generation mine'
design principles. The design at our Taylor project aims to lower operational emissions and features a
small-footprint underground mine with efficient water use and dry stack tailings.
Mine/process
We mine and process bauxite, copper, zinc, silver, lead and manganese. The health, safety and
wellbeing of our employees, contractors, visitors and communities at all our sites is critically
important. We listen to, and work with, our stakeholders with the aim of creating enduring value.
Refine/smelt
We refine bauxite to produce alumina and we smelt alumina to produce aluminium. We are also
evaluating and executing operational decarbonisation initiatives, focusing on our highest-emitting
facilities.
Market
We generate revenue from the sale of our commodities to a global customer base and purchase raw
materials and supplies from global markets. Our products are distributed by road, rail and ship and
we work to support emissions reduction across our value chains, including international shipping.
Rehabilitate and close
We seek to mitigate our adverse impacts on the surrounding communities and environments. We
undertake progressive rehabilitation and our closure plans are informed by the aspirations and
expectations of our host communities and countries.
Learn how we are working to mitigate the impacts of our activities, including addressing climate change, in the Sustainability section from page 57.
South32 Annual Report 2026
10 Strategic Report
Our value chain
A TRANSFORMATIONAL
TRANSACTION
Selling our aluminium value chain assets
12
repositions South32 as an upstream base
metals focused company with high-margin assets and transformational growth.
13,14,15
South32 Annual Report 2026
11 Strategic Report
12.
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.
13.
Based on Group closure and rehabilitation provisions as at 31 December 2025.
14.
Subject to exercise of pre-emptive rights held by MRN's partners.
15.
Presented on a proportional consolidation basis. Excludes Cerro Matoso; Hermosa; Group and unallocated items/eliminations.
Unlocking significant value
On 30 June 2026, we entered into a binding conditional
agreement to sell our aluminium value chain assets to Alcoa
Corporation (Alcoa) for up to US$5.6 billion. Alcoa will also
assume related rehabilitation provisions of approximately
US$1.1 billion
13
.
Alcoa will acquire our interests in:
– Worsley Alumina (86%)
– Hillside Aluminium (100%)
– MRN bauxite mine (33%)
14
– Brazil Alumina refinery (36%)
– Brazil Aluminium smelter (40%).
The transaction is expected to complete in the second half of
FY27, subject to satisfaction or waiver of conditions
precedent, including approval by our shareholders at a
meeting convened for that purpose. Mozal Aluminium is
excluded from the transaction and remains on care and
maintenance.
The transaction is expected to realise significant value, able to
be directed into near-term growth and shareholder returns.
Transaction value (US$B)
Underlying EBITDA by commodity
15
Alumina
Copper
Manganese
Aluminium
Zinc-lead-silver
Simpler and stronger
Our future
South32's streamlined portfolio will be focused on long-life,
high-margin copper, zinc, silver and lead operations, and
maintain our position as a large producer of manganese.
Our streamlined portfolio will include:
– Sierra Gorda (45%): Large-scale, long-life open pit copper
mine
– Cannington (100%): High-grade zinc-lead-silver
underground mine with life extension potential
– Australia Manganese (60%): High-grade open pit
manganese mine
– South Africa Manganese (54.6%): A leading producer by
volume in the Kalahari manganese basin
– Hermosa (100%): Taylor zinc-lead-silver underground
mine under construction
– Ambler Metals (50%): High-grade copper and zinc growth
options in the Ambler Mining District.
53%
29%
18%
8%
34%
30%
18%
10%
FY26
Post
transaction
High-quality assets
– We will retain our highest margin operations with expansion
and life extension options.
– Projects in construction or approved for development are
expected to grow production volumes by approximately 55%.
– We will have balance sheet flexibility to allocate capital into
high-returning growth projects and shareholder returns.
– Our portfolio value will be concentrated in tier one mining
jurisdictions in Australia, Chile and the US.
3.1
1.0
0.75
0.75
5.6
1.2
6.8
—
2.5
5.0
7.5
Cash upfront
Alcoa shares
Contingent consideration
Net debt assumed
Enterprise value
Rehabilitation provisions
assumed
Total
CREATING BRIGHTER
FUTURES TOGETHER
Our stakeholders are individuals, communities or groups who may be affected by or interested
in our activities, and we engage with them to build meaningful relationships. Here are some of
the ways we have sought to improve the lives of people in FY26.
Our people
6,867 employees around the world
16
US$988M paid in employee wages and benefits
17
Our people are fundamental to our success and we recognise the
importance of proactive, timely and transparent engagement,
using a variety of channels. Our annual Your Voice employee survey
helps us obtain feedback on our people’s experience of working for
South32. Our Board and senior leaders regularly visit sites to better
understand the operating context, the challenges our sites face,
and our culture.
Investors
US$292M returned via fully-franked dividends
US$35M returned via our on-market share buy-back
In FY26, we increased our capital management program by US$100
million to US$2.6 billion and subsequent to 30 June 2026, the Board
approved a further extension of the program to September 2027,
with US$209 million remaining to be returned to shareholders. We
maintain a comprehensive engagement program with a broad
range of investors, including shareholders, fund managers and
lenders. This program involves our Directors and senior leaders,
and strengthens our understanding of investor expectations. We
also engage with proxy advisers and investor-led initiatives such as
Climate Action 100+.
Suppliers
US$4.2B spent on 4,774 suppliers
18
US$969M spent on local procurement
Our suppliers are located in 41 countries and our supply chains are
complex networks. We need surety of supply to support business
continuity and an understanding of sustainability-related risks in
our supply chains. We aim to work with suppliers with strong values
and standards and have outlined our expectations in our Code of
Business Conduct and Supplier Minimum Requirements, available
at www.south32.net.
Communities
US$23M spent on social investment
34,828 beneficiaries of education and skills programs
Communities neighbouring or near our operational areas may be
impacted directly or indirectly by our activities and business
relationships. We seek to build strong, meaningful relationships
with them and establish transparency and trust, including with
Indigenous, Traditional and Tribal Peoples.
Customers
170 customers buy our metals and minerals
355 vessels are chartered by us
Our customer base primarily comprises large industrial and
manufacturing companies across a wide range of sectors. We
engage with our customers to understand their responsible
sourcing and product stewardship needs and expectations, and
work with certification bodies to attain certification against
performance standards that reinforce responsible practices and
build stakeholder confidence in certain products.
Governments
US$576M paid in total taxes and royalties
Our contribution to local economies includes the significant
royalties and taxes we pay. We engage across government and
with regulatory bodies responsible for licensing and regulation. We
seek to work collaboratively with them to support the
development of natural resources. Our approach to tax
transparency and payments to government aligns with the
International Council on Mining and Metal’s Position Statement on
Transparency of Mineral Revenues, and the Extractive Industries
Transparency Initiative.
South32 Annual Report 2026
12 Strategic Report
16.
Includes direct employees at our non-operated joint ventures.
17.
Includes wages, salaries, redundancies, employee share awards, pensions and other post-retirement obligations paid to employees of subsidiaries, operated joint ventures and non-
operated joint ventures, at our ownership proportion, excluding Sierra Gorda.
18.
Spend data does not include spend associated with (a) traded goods and services that are not used for operating costs (logistics and bulk raw materials are included in total spend);
(b) purchasing/credit cards which can only be used for low-value transactions (under US$2,000 per month), time-sensitive land tenement payment or regulatory permit or license
applications and renewals; and (c) non-order invoice payments which are typically limited to regulatory payments, internal payments (including to internal companies and joint
arrangement partners), donations, employee benefits, non-employee reimbursements, legal settlements, or payments to doctors, hospitals or for medical treatments.
Our stakeholders
Joint venture partners
These are companies which we have a relationship with through a
joint venture, joint operation, or joint arrangement. Our operated
joint ventures must comply with our operating policies, standards,
practices and procedures. Our non-operated joint ventures operate
under their own governance frameworks. We seek to support non-
operated joint ventures, through governance rights and
engagement, to establish fit-for-purpose standards.
Industry associations
We are a member of various industry associations, including peak
bodies, business chambers, advisory bodies and think tanks.
Industry associations seek to protect, support and advance the
interests of a specific sector or commodity. Membership provides
us with opportunities to understand, learn and contribute to
industry best practice and innovation, share knowledge and
influence matters affecting our business.
Civil society groups
These organisations are distinct from government and business,
and can include community-based organisations as well as non-
governmental organisations (NGOs). Engagement with them can
promote shared understanding and learnings on issues of common
interest, and our senior leaders attend meetings with them. We
monitor NGO activities and campaigns and seek to engage and
partner with groups at local, state, national and international levels.
We are governed by robust risk management and a corporate
governance framework. Learn more in our Risk management section
from page 49, and our Governance section from page 117.
South32 Annual Report 2026
13 Strategic Report
Hillside Aluminium: 30 years of
meaningful relationships
On 7 May 2026, we celebrated 30 years of
production at Hillside Aluminium with a gala event
attended by South African dignitaries including
President Cyril Ramaphosa.
Hillside Aluminium was officially opened by then President
Nelson Mandela on 19 April 1996. Today, it is the largest
aluminium smelter in the southern hemisphere producing
high-quality, primary aluminium.
It supports approximately 1,100 permanent employees
and 2,550 indirect on- and off-site jobs. More than 90% of
employees are Black People and women account for more
than a third of staff.
Hillside Aluminium supplies aluminium to the local
downstream industry and provides the foundation for an
estimated 29,000 jobs across the economy.
On 28 April 2026, it was announced we were advancing
discussions with Eskom on a new long-term electricity
solution for Hillside Aluminium, targeted to commence in
2031 subject to compliance with all regulatory
requirements.
This work will continue in FY27, ahead of the completion of
our transaction to sell our aluminium value chain assets.
More information on this transaction is on page 11.
Above: President Cyril Ramaphosa, centre, with Hillside employees.
SUSTAINED FOCUS ON
OPTIMISING OUR BUSINESS
Our strategy is to optimise our business by working safely, minimising our impact, consistently
delivering stable and predictable performance, and continually improving our competitiveness.
FY26 safety performance
Nothing is more important than everyone going home safe and well
at the end of every shift. In FY26, we were devastated by the loss of
members of our workforce and contractor team. We are
unwavering in our commitment to a workplace free from fatalities.
In March 2026, a contractor at Worsley Alumina, Simon Mukwarami,
was fatally injured while he and his work crew were undertaking a
plant maintenance activity at the refinery. We continue to offer our
sympathies to his family, friends and colleagues.
We are cooperating with authorities in relation to their
investigations and activities, including taking steps to further
enhance awareness of our existing controls for working at heights
hazards at Worsley Alumina. We continue to look for opportunities
to design tasks in a way that eliminates or reduces fall from heights
risks so far as practicable.
In July 2025, we were saddened to hear that a maintenance
employee had been fatally injured in an incident at the Alumar
smelter, a non-operated joint venture. We supported the smelter’s
response, including its investigation of the incident and provision of
assistance to affected family members and colleagues.
In FY26, we continued to implement our global Safety Improvement
Program. This included investing in safety leadership through our
LEAD Safely Every Day program, further simplification of our
systems and improved effectiveness of controls.
Our leading safety indicator, Significant Hazard Frequency, was 245
(FY25: 196) indicating improved hazard awareness and a more
proactive reporting culture.
Results for Lost Time Injury Frequency (LTIF) and Total Recordable
Injury Frequency (TRIF) improved too. Our LTIF reduced by 28.6% to
1.0 (FY25: 1.4) and our TRIF reduced by 8.1% to 3.4 (FY25: 3.7).
Our Coached Workplace Safety Interactions score, a metric on our
Business Scorecard, measures the ratio of workplace safety
interactions that are coached by a more senior leader. In FY26, this
was 7.2%, which was better than our 5% target and showed a
continued emphasis on visible safety leadership.
Our safety stars
In the second year of our Safety Guarantee Awards, we again
recognised our people who are making South32 a safer place.
Each quarter a Safety Guarantee Champion is highlighted, and the
first winners in FY26 were the Hillside Aluminium Casthouse team.
This team redesigned the ceramic fibre blanket seal 'nappy' which
transfers molten aluminium from the furnace to the launder. The
new 'nappy' is more heat-resistant, stronger and durable, leading to
less frequent replacement and a reduced exposure risk.
The Q2 Champions were also from Hillside Aluminium. The Potline 2
and Reductions Services teams, pictured below, worked together
to redesign an anode beam raising task, which previously meant
exposure to working from heights and manual handling risks. The
work can now be done at ground level.
Teams from Cannington were recognised in Q3 for developing a
long-term solution to structural concerns surrounding the “portal
can” decline, a critical mine access point to the underground mine,
following severe weather and flooding.
The Q4 award went to Australia Manganese's Mobile Workshop
crew. This team redesigned the process of monitoring hydraulic
pressures in heavy mobile equipment so it could be done remotely,
eliminating exposure to a range of hazards.
More information on our safety performance is in our Sustainability
section on page 61.
South32 Annual Report 2026
14 Strategic Report
Using AI technology to improve safety outcomes
We recognise the potential for safe, well-governed artificial intelligence (AI) to enhance our business. In FY26, this included using AI systems
to improve safety at our operations.
We commenced trials of the VisionAI system at Worsley Alumina and Australia Manganese. This uses cameras at our mine sites and on
trucks, and AI-driven video analysis to monitor stop-sign compliance by our vehicles with the intention of reducing vehicle interaction risks
and improving traffic management. Previous monitoring relied on manual observation and post-incident reviews, limiting our ability to
proactively identify and address risky behaviours through daily reporting. The trial is ongoing.
We also joined the Incident AI network, which uses Mineguard AI software's advanced analytics to improve ICAM (Incident Cause Analysis
Method) event investigation quality. We are now able to identify patterns, precursors and systemic failures in the data that are not always
visible through traditional or manual ICAMs.
Our strategy in action
Stable and predictable performance
In FY26, we delivered strong operating performance and achieved
101% of Group copper equivalent production
19
guidance, despite
localised weather impacts.
Supported by favourable market conditions for key commodities,
this translated into one of our largest financial results, with Group
Underlying EBITDA increasing by 28% to US$2.5 billion and
Underlying earnings increasing by 55% to US$1 billion.
Production guidance was exceeded by 2% at both Sierra Gorda and
Cannington.
Sierra Gorda, a non-operated joint venture, delivered record annual
distributions of US$401 million (South32 share). Information on
approval of the fourth grinding line project for Sierra Gorda is on
page 16.
Payable zinc equivalent production at Cannington decreased by
12%, reflecting lower metal grades in accordance with the mine
plan. This was partially offset by an 11% increase in ore processed
as lower grade stockpiled material was milled. Information on our
work on underground and open pit life-extension options at
Cannington is on page 16.
South Africa Manganese saleable production exceeded guidance
by 4%, while Australia Manganese saleable production exceeded
revised guidance by 1% as the operation managed elevated site
water levels resulting from ongoing groundwater inflows and
significant wet season impacts.
Aluminium production exceeded FY26 guidance by 1%, while
Alumina production was in line with guidance.
The Group's cost base was largely unchanged, as the divestment of
lower returning businesses, and active cost management, which
supported a US$58 million 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.
More information can be found in the Financial and Operating
Performance summary, starting on page 20.
Portfolio transformation
On 30 June 2026, we entered into a binding conditional agreement
to sell our aluminium value chain assets to Alcoa for up to US$5.6
billion. Alcoa will also assume related rehabilitation provisions of
approximately US$1.1 billion.
The transaction is expected to unlock significant value for
shareholders and reposition South32 as an upstream base metals
focused company with high-margin assets and transformational
growth. See page 11 for more information.
Group Operating margin (%)
20
In March 2026, the Mozal Aluminium smelter was safely placed on
care and maintenance, due to the inability to secure sufficient and
affordable electricity supply to support its continued operation.
This followed extensive engagement with the Government of the
Republic of Mozambique, Eskom and other key stakeholders. While
this was not the outcome we had sought, we are proud of Mozal
Aluminium's significant contribution to local communities and the
economy of Mozambique over 25 years of operation.
We worked closely with our people and stakeholders through this
change, and more details can be found on page 70.
On 1 December 2025, we completed the divestment of the Cerro
Matoso ferronickel operation in Colombia for future cash payments
of up to US$100 million. This further streamlined our portfolio
towards higher-margin businesses in minerals and metals critical to
the world's energy transition.
South32 Annual Report 2026
15 Strategic Report
19.
Group FY26 payable copper equivalent production, calculated by applying FY26 realised prices for all operations.
20.
Comprises Underlying EBITDA excluding third party products and services EBITDA, divided by Underlying revenue excluding third party products and services revenue. Presented on
a proportional consolidation basis. Excludes Hermosa and Group and unallocated items/eliminations. Demerger refers to FY16.
At a glance: Mitigating our impact
〉 At Worsley Alumina, we completed baseline flora, fauna and soil mapping on 900ha to inform restoration planning, and continued
restoration activities, including feral animal and weed control.
〉 At Hillside Aluminium, we completed installation of infrastructure to treat non-potable municipal water, eliminating operational use of
potable water and increasing water availability for domestic use.
〉 At our Hermosa project, we incorporated over 135 conservation efforts to mitigate possible environmental impacts, including redesigning
dry-stack tailings to avoid the endangered beardless chinweed plant, and building five wildlife underpasses at our primary access road.
Learn more about how we manage our impact in our Sustainability section, which starts on page 57.
22%
28%
50%
Demerger HY1 FY26 Post-transaction
Potential for further margin expansion
from overhead reduction and
Taylor commissioning
UNLOCKING VALUE
ACROSS OUR OPERATIONS
Our strategy is to unlock the full value of our business through our people, innovation,
projects and technology.
Sierra Gorda expansion
We hold a 45% interest in the Sierra Gorda open-pit copper mine
located in the Antofagasta region of northern Chile, and in FY26 we
received a record distribution of US$401 million.
On 1 July 2026, we announced that the fourth grinding line project
had been approved, following completion of a feasibility study
which confirmed the potential for attractive returns from this
brownfield plant expansion
21
.
The project will install a fourth grinding line, expanded crushing and
flotation capacity, and associated process infrastructure. It is
expected to increase processing capacity from approximately
48Mtpa to approximately 60Mtpa (100% basis), and increase
copper equivalent production by approximately 30%
22
relative to
current levels. First production is planned for mid FY30, with full
production rates in FY31.
Growth capital expenditure is expected to be approximately
US$725 million (100% basis) over FY27 to FY30, representing a
highly efficient capital intensity benefitting from existing water and
power infrastructure.
Sierra Gorda offers additional growth potential beyond the fourth
grinding line project. The current Catabela pit remains open at
depth and we are also studying options to unlock value from
approximately 110Mt of brownfield oxide material at the
operation
23
. At the Catabela Northeast exploration project,
exploration holes have intersected significant copper
mineralisation, highlighting the potential for future mine extension.
In FY26, South32 invested US$12 million in exploration programs to
support potential future copper production growth at Sierra Gorda.
Further exploration activity will be completed in CY26.
Cannington extends mine life
Our Cannington zinc-lead-silver underground mine, in north-west
Queensland, Australia, is one of the world’s largest producers of
silver and lead.
Silver, lead and zinc are extracted from the ore using grinding,
sequential flotation and leaching techniques that produce high-
grade, marketable lead and zinc concentrates with a high silver
content.
In FY26, we continued work on underground and open pit life-
extension options as we seek to unlock additional value from
Cannington’s high-margin, silver-rich production.
In February 2026, we announced a 28% increase in the
underground Ore Reserve, extending the reserve life by
approximately two years to FY33.
We expect to invest additional capital expenditure of
approximately US$65 million to US$80 million during FY27 and
FY28, including for ventilation and electrical upgrades, while
assessing further growth potential.
We are progressing study work for a potential open pit
development to unlock a 27Mt resource, which could add further
life. A final investment decision for the open pit development is
targeted for H1 FY28.
We are also trialling the processing of lower-grade materials in
stockpiles.
Refer to Resource and Reserves section on page 242 for updated
Reserves at Cannington as at 30 June 2026.
South32 Annual Report 2026
16 Strategic Report
21.
Refer to market release "Final investment decision for Sierra Gorda's fourth grinding line" dated 1 July 2026 for further details.
22.
Compared to FY26 guidance of 190kt CuEq (copper 160kt, molybdenum 2.7kt, gold 40.0koz and silver 1,333koz) (100% basis).
23.
The stockpiled oxide material referred to in the text is not included as Mineral Resources in accordance with the JORC Code. South32 cannot confirm whether the estimate has been
compiled using an appropriate foreign reporting code.
Our strategy in action continued
CASE STUDY
Unlocking value through our people at Centro
In FY26, we poured the concrete slab for Centro, the future remote operations centre for Hermosa which is expected to be completed in
2027. Centro is located in Nogales, about 45km from Hermosa, and employees will use automation to, in part, remotely monitor and
operate Hermosa’s equipment and facilities.
Centro will also bring together teams across engineering, geoscience, environmental science, human resources, supply chain and other
functions that will support Hermosa.
Centro’s office-like setting has been designed to provide inclusive, family-friendly jobs and attract people who have not previously
considered a career in mining.
The Nogales location will help distribute economic benefits more broadly and contribute to increased local tax revenue, while supporting
our goal of 80% of Hermosa’s workforce being recruited from the local community when fully operational.
Hermosa project update
Our Hermosa project, located in a historic mining district in Arizona,
has the potential to become a significant long-term producer of
critical minerals across multiple deposits. It includes one of the
world’s largest undeveloped resources of zinc.
We are developing the zinc-lead-silver Taylor deposit. Hermosa
also includes the Peake copper deposit south of Taylor, the Clark
battery-grade manganese deposit, and an extensive, highly
prospective land package with the potential for further polymetallic
and copper mineralisation.
In FY26, we invested US$711 million of capital growth expenditure
as we continued to sink the ventilation and main shafts at the
Taylor deposit and completed the exploration decline at the Clark
deposit. We also completed an assessment of Taylor's milestones
and capital expenditure, after receiving updated pricing for
remaining surface and underground construction packages
24
.
This assessment reaffirmed Taylor’s potential to deliver attractive
returns as a large-scale, long-life, low-cost underground mine and
conventional process plant. We increased our Ore Reserve and
Mineral estimates by 52%, to 99Mt, and the expected operating life
increased by five years, to approximately 33 years
25
.
Taylor is expected to almost double annual Group silver production,
and the deposit remains open in several directions, offering the
potential for further growth.
At the adjacent Peake deposit, continued exploration success
underpinned a 32% increase in its Mineral Resource estimate to
33Mt
26
. This supports our expectation that Peake will become a
source of future copper production and mine life extension within
the Taylor development.
Study work for the Clark deposit confirmed its decline
infrastructure can be used to access the Taylor orebody, with first
production expected in H2 FY28.
We also revised our expectations for the completion of Taylor’s
shafts, as a result of contractor performance and productivity
challenges. First production from Taylor's shafts is now expected
from H1 FY29, reflecting a revised timeline for shaft completion.
As a result of the above changes, there will now be a more gradual
ramp up to nameplate capacity, with full capacity expected in FY31
(previously FY30). The expected growth capital expenditure for
Taylor has also been increased by approximately US$1,100 million,
compared to final investment approval, to approximately US$3,300
million (from 1 January 2024).
This reflects a change in scope with the addition of decline
infrastructure, revised shaft construction costs, materially higher
inflation, industry-wide increases in key inputs including steel
piping, concrete and electrical components, and the impacts of US
tariffs.
On 7 July 2026, the US Forest Service released the Final Record of
Decision for Hermosa, completing the federal permitting process
under the National Environmental Policy Act (NEPA)
27
. A
subsequent Notice to Proceed is on track for Q1 FY27.
South32 Annual Report 2026
17 Strategic Report
24.
Refer to market release "Hermosa project update" dated 30 April 2026.
25.
The information in this report that refers to Production Target and forecast financial information is based on Proved (41Mt, 32%) and Probable (58Mt, 44%) Ore Reserves and
Measured (1.1Mt, 1%), Indicated (4.2Mt, 3%), Inferred (13Mt, 10%) Mineral Resources and Exploration Target (13Mt, 10%) for the Taylor deposit. The Ore Reserves, Mineral Resources
and Exploration Target underpinning the Production Target, included in this report, have been prepared by Competent Persons and reported in accordance with the JORC Code
(2012). All material assumptions on which the Production Target and forecast financial information is based continues to apply as indicated in the original announcement titled
"Hermosa Project update" dated 30 April 2026 and have not materially changed. There is low level of geological confidence associated with Inferred Mineral Resources and there is
no certainty that further exploration work will result in the determination of Indicated Mineral Resources or that the Production Target will be realised. The potential quantity and
grade of the Exploration Target is conceptual in nature. In respect of Exploration Target used in the Production Target, there has been insufficient exploration to determine a Mineral
Resource and there is no certainty that further exploration work will result in the determination of Mineral Resources or that the Production Target itself will be realised. The stated
Production Target is based on South32’s current expectations of future results or events and should not be solely relied upon by investors when making investment decisions.
Further evaluation work and appropriate studies are required to establish sufficient confidence that this Production Target will be met. South32 confirms that inclusion of 20% of
tonnage (10% Inferred Mineral Resources and 10% Exploration Target) is not the determining factor of the project viability and the project forecasts a positive financial performance
when using 80% tonnage (32% Proved and 44% Probable Ore Reserves and 1% Measured and 3% Indicated Mineral Resources). South32 is satisfied, therefore, that the use of Inferred
Mineral Resources and Exploration Target in the Production Target and forecast financial information reporting is reasonable.
26.
Further details can be found in the Resources and Reserves section on page 243.
27.
Refer to Hermosa news release "U.S. Forest Service issues Final Record of Decision for South32 Hermosa” dated 7 July 2026.
South32 Board members tour the Hermosa project in December 2025.
ACTIVELY EXPLORING
TO IDENTIFY BASE METALS
Our strategy is to identify and pursue opportunities to sustainably reshape our business
for the future, and create enduring social, environmental and economic value.
Advancing Ambler Metals
We hold a 50% share in the Ambler Metals joint venture, an
early-stage exploration project in north-west Alaska that contains
known high-grade copper, zinc and silver resources.
It includes the high-grade Arctic polymetallic deposit, which has the
potential to be an open pit mine, and the Bornite copper deposit,
which could facilitate open pit and underground mining.
In October 2025, the US Government announced it would issue
federal permits for the Ambler Access Road
28
. This proposed
industrial road would be approximately 340km long and be a key
step in unlocking the potential of the Ambler Mining District, where
Ambler Metals and our 100%-owned Roosevelt project are located.
Separately, the US Government agreed to acquire an initial 10%
equity interest in Trilogy Metals, our joint venture partner in Ambler
Metals, to support exploration and development activities. As part
of the investment, we agreed to sell approximately 8.2 million
shares in Trilogy for up to US$17.8 million, and reinvest this into
exploration and development at Ambler Metals.
In the final quarter of FY26, Ambler Metals commenced summer
field season work, including geotechnical and condemnation drilling
to support development studies for the Arctic polymetallic deposit.
Ambler high-grade base metal options
29
Arctic
open pit
Bornite
open pit
Bornite
underground
43Mt
78Mt
70Mt
@2.93% copper,
4.30% zinc
@1.04% copper
@2.29% copper
In May 2026, it was announced the Arctic polymetallic deposit had
been accepted as a covered project under the FAST-41 program
30
,
with the permitting timetable published following the end of the
quarter. FAST-41 is designed to streamline environmental reviews
and permitting for major infrastructure and critical mineral
developments, and our Hermosa project was the first mining
project to be added to this program in May 2023.
Our 100%-owned Roosevelt exploration project, also located within
the Ambler Mining District, is expected to benefit from the access
the proposed Ambler Access Road would provide. Roosevelt has a
similar geological setting to Ambler Metals, and a 2,500m
exploration drilling program is taking place this year.
Creating enduring value across our portfolio
Social value
〉 At our Roosevelt project in Alaska, pictured, we partnered with
Doyon Tribal leaders on a social mapping exercise and
videography project to preserve cultural knowledge.
〉 Mozal Aluminium provided approximately US$1.1 million to fund
the construction of two new bridges in Maputo Province,
providing safer access for more than 70,000 people who can be
cut off during the wet season.
〉 At our Hermosa project, we continued to engage with 12 Native
American Tribes and hosted site tours to support ongoing
dialogue on cultural interests, opportunities and project
development.
Environmental value
〉 Decarbonisation expenditure totalled US$3.4 million, including
energy efficiency technology at Hillside Aluminium and studies
at Worsley Alumina.
〉 At Worsley Alumina, we worked with Danju Rangers to install
upgraded 'bandicoot bungalows' to create safe shelter for
bandicoots and other small native animals.
〉 At Hermosa, we launched a publicly accessible dashboard which
provides access to independently analysed data on airborne
particulates and metals.
Economic value
〉 At Roosevelt, we prioritised hiring directly from local tribes and
creating a culturally safe and respectful working environment.
〉 At South Africa Manganese, we are working with the local
community on a model to apply future proceeds from sugilite, a
rare mineral found sporadically within manganese ore at our
Wessels mine, to community development.
〉 In Australia, we launched a three-year Indigenous procurement
strategy to increase the participation of Aboriginal and Torres
Strait Islander businesses in our supply chain.
Learn more about how we are creating enduring value in our
Sustainability section, starting on page 57.
South32 Annual Report 2026
18 Strategic Report
28.
Further details are provided in the media release titled "South32 backs U.S. Government move to advance access to critical minerals in Alaska" dated 7 October 2025.
29.
Further details can be found in the Resources and Reserves section on page 244.
30.
Further details are provided in the news release by Trilogy Metals Inc. titled "Trilogy Metals Announces Acceptance of Alaska’s High-Grade Arctic Copper-Zinc-Lead-Gold-Silver
Project into the FAST-41 Federal Permitting Program” dated 15 May 2026.
Our strategy in action continued
Exploration projects
We have more than 20 active exploration programs in highly
prospective regions around the world.
In FY26, we invested US$34 million in our greenfield exploration
opportunities, targeting base metals in Australia, North and South
America, Europe, Namibia and Botswana.
This is central to our strategy and identifying long-term value for
shareholders, supporting growth for the company over multiple
years and allowing us to remain relevant and profitable into the
future.
Optionality reduces risk in our portfolio and we are always on the
lookout for new opportunities, with a bias to base metals, to
partner and invest with junior explorers and miners globally.
Our exploration projects include:
– a farm-in agreement with Encounter Resources targeting base
metals at the Jessica project in the Northern Territory, Australia
– a strategic alliance with AusQuest to explore a pipeline of high-
potential exploration opportunities such as copper and zinc
projects in Australia
– an earn-in agreement with Hammer Metals for the Isa Valley
project, targeting copper and zinc in Queensland, Australia
– an earn-in agreement with Ridgeline Minerals to explore the
Selina copper, zinc, lead and silver project in Nevada, United
States
– a South32-operated joint venture with Minsud Resources to
explore the Chita Valley copper, molybdenum, zinc, silver and
gold project in San Juan Province, Argentina
– a farm-in agreement with Bowyang Resources and Barrier
Resources targeting base metals at the Thackaringa and Broken
Hill projects in New South Wales, Australia
– a strategic alliance with Orogen Royalties exploring for high-
potential base metal targets in western North America
– an option agreement with Exploraciones Juncal SpA to explore
the Juncal copper–gold project in Chile
– a strategic alliance agreement covering new base metal
opportunities in Norway, the Czech Republic, Ireland and
Germany
– an earn-in agreement with Noronex Limited for the Humpback-
Damara Copper Project in Namibia, along with a strategic
alliance to target base metal projects in this country, as well as
two exploration licenses in Botswana
– advancing internally generated base metal exploration
opportunities in Australia and the Americas.
South32 Annual Report 2026
19 Strategic Report
FINANCIAL
AND OPERATING
PERFORMANCE
SUMMARY
Financial highlights
21
Non-IFRS measures
22
Business performance
23
Financial performance
27
Earnings reconciliation
28
Earnings analysis
29
Cash flow
31
Capital expenditure
32
Balance sheet
33
Dividends and capital management
33
Outlook
34
Production 34
Costs and capital expenditure 35
Operations analysis
38
South32 Annual Report 2026
20 Strategic Report
STRONG PERFORMANCE,
CONTINUED PORTFOLIO
TRANSFORMATION
Strong operating performance coupled with commodity price tailwinds underpinned one of the best
financial results in our history, with Group Underlying EBITDA increasing by 28 per cent to US$2.5 billion
and Underlying earnings increasing by 55 per cent to US$1 billion.
US$2,462M
US$1,032M
31.0%
Underlying EBITDA
Underlying earnings
Operating margin
FINANCIAL HIGHLIGHTS
US$M
FY26 FY25 % Change
Revenue from continuing operations
1,2
5,816 5,780 1%
Operating profit/(loss) from continuing operations
1,2
1,359 554 145%
Profit/(loss) after tax
1,085 210 417%
Profit/(loss) after tax attributable to members
3
1,087 213 410%
Basic earnings/(loss) per share (US cents)
4
24.2 4.7 415%
Ordinary dividends per share (US cents)
5
9.3 6.0 55%
Ordinary shares on issue (million)
4,486 4,504 (0.4%)
Other financial measures
6
Underlying revenue
8,108 7,610 7%
Underlying EBITDA
2,462 1,928 28%
Underlying EBITDA margin
31.0% 26.3% 4.7%
Underlying EBIT
1,717 1,211 42%
Underlying EBIT margin
21.7% 16.5% 5.2%
Underlying earnings attributable to members
3
1,032 666 55%
Basic Underlying earnings per share (US cents)
4
23.0 14.8 55%
Return on invested capital (ROIC)
13.6% 9.0% 4.6%
South32 Annual Report 2026
21 Strategic Report
1.
On 29 August 2024, South32 sold its shareholding in Illawarra Metallurgical Coal to an entity owned by Golden Energy and Resources Pte Ltd and M Resources Pty Ltd. As a result,
Illawarra Metallurgical Coal was classified as a discontinued operation in the FY26 and FY25 results. Our FY25 Group underlying financial measures include the financial contribution of
Illawarra Metallurgical Coal prior to its sale.
2.
On 1 December 2025, South32 sold its shareholding in Cerro Matoso to an entity owned by CoreX Holding B.V. As a result, Cerro Matoso was classified as a discontinued operation in
the FY26 and FY25 results. Our FY26 and FY25 Group underlying financial measures include the financial contribution from Cerro Matoso prior to its sale.
3.
Members are equity holders of South32 Limited. Amounts reported as attributable to members are stated net of amounts attributable to non-controlling interests.
4.
Basic earnings per share is calculated as profit/(loss) after tax attributable to members divided by the weighted average number of shares for the period. Basic Underlying earnings
per share is calculated as Underlying earnings attributable to members divided by the weighted average number of shares for the period. The weighted average number of shares
for FY26 is 4,486 million (FY25: 4,510 million).
5.
FY26 ordinary dividends per share is calculated as H1 FY26 ordinary dividend announced (US$175M) divided by the number of shares on issue at 31December 2025 (4,486 million)
plus H2 FY26 ordinary dividend announced (US$242M) divided by the number of shares on issue at 30 June 2026 (4,486 million).
6.
The underlying information reflects the Group’s interest in material equity accounted joint ventures and is presented on a proportional consolidation basis. Our Group underlying
financial measures reflect continuing and discontinued operations. Financial measures listed in this table and subsequently repeated throughout this report are defined in the
Glossary of terms and abbreviations starting on page 255.
USE OF NON-IFRS MEASURES
The Group uses both International Financial Reporting Standards (IFRS) financial measures and non-IFRS financial measures such as
underlying measures of earnings, effective tax rate (ETR), return on invested capital (ROIC), cash flow and net cash/(debt), to assess the
Group’s performance.
The definitions of individual non-IFRS financial measures used in this report are set out in the Glossary of terms and abbreviations starting
on page 255.
A reconciliation of the Group’s underlying financial results to the statutory information included in the Group’s consolidated financial
statements is included in note 4(b)(i) to the financial statements on page 190.
The Directors believe that the non-IFRS financial measures are relevant to understanding the underlying financial and operating
performance of the Group and its operations. These non-IFRS financial measures provide useful information, but should not be considered
as an indication of, or an alternative to, profit/(loss) after tax as an indicator of actual operating performance or as an alternative to cash
flow as a measure of liquidity.
In discussing the operating results of the Group, the focus is on Underlying earnings attributable to members and ROIC. Underlying
earnings attributable to members is the key measure that is used by the Group to assess our performance, make decisions on the
allocation of resources and assess senior management’s performance. In addition, the performance of each of the Group’s operations and
operational management is assessed based on Underlying EBIT and Underlying EBITDA.
Management uses these measures because financing structures and tax regimes differ across the Group’s operations and substantial
components of tax and interest charges are levied at a Group level rather than an operational level.
The underlying information reflects the Group’s interest in material equity accounted joint ventures and is presented on a proportional
consolidation basis.
In order to calculate Underlying EBITDA, Underlying EBIT and Underlying earnings attributable to members, the following items are
adjusted as applicable each period, irrespective of materiality:
– Exchange rate gains/losses on restatement of monetary items;
– Impairment losses/reversals;
– Gains/losses on disposal and/or consolidation of interests in operations;
– Gains/losses on non-trading derivative instruments, contingent consideration and other investments measured at fair value through
profit or loss;
– Major corporate restructures;
– Joint venture adjustments;
– Exchange rate variations on net cash/(debt);
– Tax effect of earnings adjustments; and
– Exchange rate variations on tax balances.
In addition, items that do not reflect the underlying operations of the Group, and are individually, or in combination with other related
earnings adjustments, significant to the financial statements, are excluded to determine Underlying earnings.
Non-IFRS measures
Non-IFRS measures referenced throughout the Annual Report are listed below. The definition of each of these measures can be found in
the Glossary starting on page 255.
– Underlying earnings
– Underlying earnings attributable to members
– Underlying revenue
– Underlying EBIT
– Underlying EBITDA
– Underlying depreciation and amortisation
– Underlying net finance incomes/(costs)
– Underlying income tax and royalty-related expense
– Underlying tax expense
– Underlying royalty-related tax expense
– Underlying ETR
– Adjusted Underlying EBITDA
South32 Annual Report 2026
22 Strategic Report
Financial and operating performance summary continued
BUSINESS PERFORMANCE
Base metals
Sierra Gorda
Sierra Gorda payable copper equivalent production
7
decreased by 3% (or 2.6kt) to 87.1kt in FY26, but exceeded guidance, as strong by-
product volumes more than offset weather-related impacts in H2 FY26.
Payable copper equivalent production
7
is expected to increase by 5% to 91.8kt in FY27 and a further 2% to 94.0kt in FY28, supported by
higher planned copper grades in the next phase of the mine plan.
Underlying EBITDA increased by US$276M to US$758M in FY26, for an operating margin of 66%, due to higher realised metal prices.
On 30 June 2026, the Sierra Gorda joint venture approved execution of the fourth grinding line project
8
, a high-returning plant expansion
that is expected to increase copper equivalent production by approximately 30% from FY31. Capital expenditure is expected to be
~US$725M (100% basis) over FY27-FY30
9
, representing a highly efficient capital intensity of ~US$21k/t CuEq
10
, benefitting from existing
water and power infrastructure.
During the year, Sierra Gorda progressed infill drilling programs designed to extend mine life. This work has supported a 61%
11
increase in
the Ore Reserve estimate to approximately 1.1Bt (100% basis), extending Sierra Gorda's reserve life by approximately 5 years to 2045
11
.
At the adjacent Catabela Northeast prospect, we defined an Exploration Target
12
ranging from 1.1Bt @ 0.48% TCu to 2.9Bt @ 0.45% TCu,
highlighting the potential for future mine life extension. Exploration and early-stage study work to advance Catabela Northeast will
continue in FY27.
On 8 June 2026, the Sierra Gorda joint venture signed a non-binding memorandum of understanding with the nearby BHP Spence mine for
the purpose of identifying and evaluating opportunities for operational collaboration.
Cannington
Cannington payable zinc equivalent production
13
decreased by 12% (or 28.8kt) to 205.4kt in FY26, reflecting lower metal grades in
accordance with the mine plan. This was partially offset by an 11% increase in ore processed as lower grade stockpiled material was milled.
Payable zinc equivalent production
13
is expected to be 290.0kt across both FY27 and FY28 (ore processed 2,100kdmt, zinc 45.0kt, lead
80.0kt and silver 8,725koz), with the processing of lower grade stockpiled material to supplement ore mined.
Underlying EBITDA increased by US$170M to US$451M in FY26, for an operating margin of 53%, reflecting higher average realised metal
prices together with lower Operating unit costs.
Cannington's underground Ore Reserve of 11Mt
14
supports a reserve life of approximately 7 years to FY33, with work continuing to unlock
value from the underground Mineral Resource of approximately 44Mt. As previously announced, we expect to invest US$65M to US$80M
over FY27 and FY28 in additional ventilation and electrical infrastructure to support further underground mine life extensions.
In addition, study work for the open pit development option is continuing, with a final investment decision targeted for H1 FY28.
South32 Annual Report 2026
23 Strategic Report
7.
Payable copper equivalent production (kt) was calculated by aggregating revenues from copper, molybdenum, gold and silver, and dividing the total Revenue by the price of copper.
FY25 realised prices for copper (US$4.18/lb), molybdenum (US$21.12/lb), gold (US$2,877/oz) and silver (US$31.7/oz) have been used for FY25 and FY26. FY26 realised prices for
copper (US$5.92/lb), molybdenum (US$25.90/lb), gold (US$4,462/oz) and silver (US$70.6/oz) have been used for FY27e and FY28e.
8.
Refer to market release "Final investment approval for Sierra Gorda’s fourth grinding line” dated 1 July 2026.
9.
US dollars (real). Based on a USD:CLP exchange rate of 900. Reflects ~US$190M in FY27, ~US$290M in FY28, ~US$200M in FY29 and ~US$45M in FY30.
10.
Based on increased copper equivalent production volumes over CY31 to CY41.
11.
Compared to 30 June 2026. Information in this announcement that relates to Ore Reserve and/or Mineral Resource estimates for Sierra Gorda was declared in market release "61%
increase in Sierra Gorda Ore Reserve estimate" dated 25 August 2026 and prepared by Competent Persons in accordance with the requirements of the JORC Code. South32
confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement. All material assumptions and
technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. South32 confirms that the form and
context in which the Competent Persons' findings are presented have not been materially modified from the original market announcement.
12.
The information in this report that relates to the Exploration Target and Exploration Results for Catabela Northeast is extracted from “2026 Half Year Financial
Results” (www.south32.net) dated 12 February 2026. The information was prepared by Competent Persons in accordance with the requirements of the JORC Code. South32 confirms
that it is not aware of any new information or data that materially affects the information included in the original market announcement. South32 confirms that the form and context
in which the Competent Persons’ findings are presented have not been materially modified from the original market announcement.
13.
Payable zinc equivalent (kt) was calculated by aggregating revenues from payable silver, lead and zinc, and dividing the total Revenue by the price of zinc. FY25realised prices for
zinc (US$2,648/t), lead (US$1,883/t) and silver (US$31.9/oz) have been used for FY25 and FY26. FY26realised prices for zinc (US$3,000/t), lead (US$1,944/t) and silver (US$66.4/oz) have
been used for FY27e and FY28e.
14.
For further information refer to Resources and Reserves starting on page 238.
Hermosa project
We invested US$711M
15
of growth capital expenditure at Hermosa in FY26, continuing construction of the Taylor zinc-lead-silver project
(Taylor), and completing the exploration decline for the Clark battery-grade manganese deposit.
On 30 April 2026, we announced an update on the Taylor project
16
. This included an increase in Taylor's initial operating life by 5 years to
~33 years
17
, first production expected in H2 FY28, and growth capital expenditure updated to US$3.3B. Based on updated assumptions,
Taylor is expected to deliver steady-state EBITDA of ~US$650M
18
per annum and a net present value of ~US$3.1B
19
.
Underground development and surface infrastructure construction is progressing in accordance with the Taylor project update. Lateral
development and shaft station construction at the first underground mining level from the main shaft was completed in Q4 FY26, while the
ventilation shaft is expected to reach the primary production level in Q1 FY27.
Work is also underway to extend the Clark decline to provide additional access to the Taylor orebody. This will enhance operational
flexibility and increase ore handling capacity by approximately 25%, offering the potential to increase production above Taylor's design
capacity through future plant de-bottlenecking.
On 7 July 2026, the United States Forest Service released the Final Record of Decision for Hermosa
20
, completing the federal permitting
process under the National Environmental Policy Act. A Notice to Proceed is on track for Q1 FY27.
We expect to invest growth capital expenditure of US$1,000M
21
in FY27 as we continue construction of Taylor, including a planned increase
in surface infrastructure construction activity.
We also invested US$30M in capitalised exploration at Hermosa in FY26, including exploration drilling at the adjacent Peake copper
deposit, as we test the potential for a continuous mineralised system connecting Peake and Taylor Deeps.
Ambler Metals project
The Ambler Metals joint venture (50% South32 share) approved a ~US$42M (100% basis) budget for CY26 work programs, focused on
drilling and development activities for the high-grade Arctic polymetallic deposit, located in the Ambler mining district, Alaska.
On 14 May 2026, Arctic was accepted as a covered project under FAST-41
22
, with the federal permitting timetable published in July 2026.
Exploration
We invested US$60M (US$44M capitalised) in exploration programs at our existing operations and development options in FY26, including
US$30M at our Hermosa project (all capitalised), US$12M for our Sierra Gorda EAI (US$6M capitalised), US$5M for our manganese EAI
(US$1M capitalised) and US$4M for the Ambler Metals project (all capitalised).
We also invested US$34M in greenfield exploration programs in FY26, progressing multiple exploration programs targeting base metals in
highly prospective regions. This included exploration activity at our 100% owned Roosevelt prospect in the Ambler mining district, Alaska,
and the Selena copper, zinc, lead, and silver project in Nevada, pursuant to an earn-in agreement with Ridgeline Minerals.
Cerro Matoso
The divestment of Cerro Matoso to a subsidiary of CoreX Holding B.V. completed on 1 December 2025
23
. Prior to completion, payable nickel
production decreased by 19% to 15.0kt in H1 FY26, while Underlying EBITDA decreased by US$73M to US$11M.
South32 Annual Report 2026
24 Strategic Report
Financial and operating performance summary continued
15.
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.
16.
Refer to market release "Hermosa project update" dated 30 April 2026.
17.
The information in this announcement that refers to the Production Target and forecast financial information for the Taylor deposit is based on Proved (41Mt, 32%) and Probable
(58Mt, 44%) Ore Reserves and Measured (1.1Mt, 1%), Indicated (4.2Mt, 3%), Inferred (13Mt, 10%) Mineral Resources and Exploration Target (13Mt, 10%). The Ore Reserves, Mineral
Resources and Exploration Target underpinning the Production Target were declared as part of the "Hermosa Project Update" (www.south32.net) dated 30 April 2026 and have been
prepared by Competent Persons and reported in accordance with the JORC Code. All material assumptions and technical parameters underpinning the estimates in the relevant
market announcement continue to apply and have not materially changed. South32 confirms that the form and context in which the Competent Persons' findings are presented have
not been materially modified from the original market announcement. There is low level of geological confidence associated with Inferred Mineral Resources and there is no certainty
that further exploration work will result in the determination of Indicated Mineral Resources or that the Production Target will be realised. The potential quantity and grade of the
Exploration Target is conceptual in nature. In respect of the Exploration Target used in the Production Target, there has been insufficient exploration to determine a Mineral Resource
and there is no certainty that further exploration work will result in the determination of Mineral Resources or that the Production Target itself will be realised. The stated Production
Target is based on South32’s current expectations of future results or events and should not be solely relied upon by investors when making investment decisions. Further evaluation
work and appropriate studies are required to establish sufficient confidence that this Production Target will be met. South32 confirms that inclusion of 20% of tonnage (10% Inferred
Mineral Resources and 10% Exploration Target) is not the determining factor of the project viability and the project forecasts a positive financial performance when using 80%
tonnage (32% Proved and 44% Probable Ore Reserves and 1% Measured and 3% Indicated Mineral Resources). South32 is satisfied, therefore, that the use of Inferred Mineral
Resources, the Exploration Target in the Production Target and forecast financial information reporting, is reasonable.
18.
Average EBITDA calculated over the steady state production years (FY31-FY59).
19.
Based on a valuation date of 1 July 2026 included in market release "Hermosa project update" dated 30 April 2026.
20.
Refer to Hermosa news release "U.S. Forest Service issues Final Record of Decision for South32 Hermosa” dated 7 July 2026.
21.
Hermosa growth capital expenditure guidance excludes expected lease payments of US$60M 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.
22.
Refer to news release by Trilogy Metals Inc. "Trilogy Metals Announces Acceptance of Alaska’s High-Grade Arctic Copper-Zinc-Lead-Gold-Silver Project into the FAST-41 Federal
Permitting Program” dated 15 May 2026 (https://trilogymetals.com/news-and-media/news/trilogy-metals-announces-acceptance-of-alaskas-high-grade-arctic-copper-zinc-lead-
gold-silver-project-into-the-fast-41-federal-permitting-program/).
23.
Refer to market release "Completion of Cerro Matoso Divestment" dated 1 December 2025.
Manganese
Australia Manganese
Australia Manganese production increased to 3,031kwmt in FY26, as operations resumed following the impacts of Tropical Cyclone Megan
in the prior period. Notwithstanding, production was below plan, as the operation managed elevated site water levels resulting from
ongoing groundwater inflows and significant wet season impacts.
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. We expect to invest approximately US$70M in additional water infrastructure across
FY27 and FY28, subject to regulatory approvals.
Underlying EBITDA increased to US$229M in FY26, with sales volumes increasing to 3,598kwmt, following the restart of operations and
commissioning of new wharf infrastructure in the prior period.
South Africa Manganese
South Africa Manganese production decreased by 3% to 2,085kwmt in FY26, but exceeded guidance, as the operation completed planned
maintenance and additional underground development activity at Wessels. Production is expected to be 2,000kwmt across both FY27 and
FY28, subject to our continued use of higher cost trucking.
Underlying EBITDA decreased by US$16M to US$30M in FY26, as higher sales volumes were more than offset by a stronger South African
rand, higher trucking costs and diesel prices.
South32 Annual Report 2026
25 Strategic Report
Aluminium value chain
Alumina
Alumina saleable production was largely unchanged year-on-year at 5.1Mt in FY26. Brazil Alumina operated above nameplate capacity
driven by improved plant availability, while improved bauxite availability at Worsley Alumina was offset by a weather-related disruption to
third-party gas supply during Q3 FY26. FY27 production guidance remains unchanged at 5.3Mt.
Underlying EBITDA decreased by US$868M to US$210M in FY26, for an operating margin of 12%, due to a 32% decrease in our average
realised price of alumina.
Aluminium
Aluminium saleable production decreased by 8% to 1,109kt in FY26, as Mozal Aluminium was placed on care and maintenance in March
2026, due to the inability to secure sufficient and affordable electricity supply
24
.
Hillside Aluminium saleable production was largely unchanged at 717kt in FY26, as the smelter continued to test its maximum technical
capacity, despite the impact of load-shedding. Production is expected to be 720kt
25
in FY27.
Brazil Aluminium saleable production increased by 4% (or 6kt) to 144kt in FY26, with the smelter's operator implementing additional
measures to improve process stability, following unplanned pot outages and energy disruptions in December 2025. Production is expected
to be 140kt in FY27, as the smelter continues to stabilise operations.
Underlying EBITDA increased by US$678M to US$865M in FY26, for an operating margin of 24%, reflecting a 19% increase in our average
realised price of aluminium, and lower alumina input prices at Hillside Aluminium and Brazil Aluminium.
26,27,28
Sale of Aluminium Value Chain Assets
On 1 July 2026, we announced a binding conditional agreement to sell our aluminium value chain assets to Alcoa Corporation (Alcoa) for an
implied enterprise value of up to US$5.6B (the Transaction)
26
. Alcoa will also assume related rehabilitation provisions of approximately
US$1.1B
27
.
Alcoa will acquire South32’s interests in Worsley Alumina (86%), Hillside Aluminium (100%), Mineração Rio do Norte (MRN) bauxite mine (33%)
28
,
Brazil Alumina refinery (36%) and Brazil Aluminium smelter (40%) (together, the Aluminium Value Chain Assets), under the Transaction. Mozal
Aluminium is excluded from the Transaction and remains on care and maintenance, with divestment under active consideration.
The Transaction is expected to complete in H2 FY27, subject to satisfaction or waiver of conditions precedent, including South32 shareholder
approval.
The Aluminium Value Chain Assets will continue to be reported in South32's Group financial results until Transaction completion.
South32 Annual Report 2026
26 Strategic Report
Financial and operating performance summary continued
24.
Refer to market release "Mozal Aluminium placed on care and maintenance" dated 16 March 2026.
25.
Production guidance for Hillside Aluminium does not assume any load-shedding impact on production.
26.
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.
27.
Based on Group closure and rehabilitation provisions as at 30 June 2026.
28.
Subject to exercise of pre-emptive rights held by MRN’s partners.
FINANCIAL PERFORMANCE
Profit and Loss
The Group's profit after tax attributable to members increased by US$874M to US$1,087M in FY26, as we delivered strong operating
results and captured the benefit of higher prices for many of our commodities. Underlying earnings attributable to members increased by
US$366M to US$1,032M in FY26. A reconciliation of profit/(loss) to Underlying earnings attributable to members is set out on page 28.
Underlying revenue increased by US$498M (or 7%) to US$8,108M, with strong operating performance at Cannington and Sierra Gorda
enabling the Group to capitalise on higher base and precious metals prices (+US$668M). In our aluminium value chain, higher aluminium
prices (+US$435M) were more than offset by lower alumina prices (-US$504M).
Underlying EBITDA increased by US$534M (or 28%) to US$2,462M, with Group operating margin increasing to 31.0% (FY25: 26.3%). This
reflected higher average commodity prices and lower controllable costs (+US$58M), which more than offset uncontrollable cost pressures
from stronger producer currencies (-US$159M), general inflation (-US$74M) and raw material input prices (-US$26M).
Underlying EBIT increased by US$506M (or 42%) to US$1,717M in FY26. Underlying depreciation and amortisation increased by US$28M to
US$745M, with higher depreciation at Australia Manganese and Sierra Gorda, partially offset by Mozal Aluminium.
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).
Separately, we received net distributions
29
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 of funding) as external insurance recoveries related to Australia Manganese were finalised.
Group capital expenditure, excluding EAIs, exploration and intangibles, increased by US$120M to US$1,037M in FY26, as higher growth
capital expenditure at Hermosa (+US$194M) was partially offset by lower sustaining capital expenditure (-US$140M) following the
divestments of Illawarra Metallurgical Coal (IMC) and Cerro Matoso.
Capital expenditure for our Sierra Gorda EAI, excluding exploration and intangibles, increased by US$19M to US$235M in FY26, as the
operation continued its investment in deferred stripping and tailings infrastructure.
Capital expenditure for our manganese EAI, excluding exploration and intangibles, decreased by US$54M to US$105M in FY26, as Australia
Manganese executed its recovery plan in FY25, and South Africa Manganese completed work to access new mining areas at Wessels.
We returned US$327M to shareholders during FY26, including US$292M
30
in fully-franked ordinary dividends and US$35M via our
on-market share buy-back
31
.
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).
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. This takes total dividends in respect of FY26 to 9.3 cents per share, representing a
year-on-year increase of 55%.
The Board has also resolved to extend our US$2.6B capital management program by a further six months to 10 September 2027
32
, with
US$209M remaining to be returned to shareholders.
South32 Annual Report 2026
27 Strategic Report
29.
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.
30.
Comprised of US$117M in respect of H2 FY25 paid in Q2 FY26 and US$175M in respect of H1 FY26 paid in Q4 FY26.
31.
We returned US$35M via the on-market share buy-back in FY26, purchasing 17M shares at an average price of A$3.08 per share.
32.
Since inception of our capital management program, US$1.8B has been allocated to our on-market share buy-back (837M shares at an average price of A$3.06 per share) and
US$525M returned in the form of special dividends.
EARNINGS RECONCILIATION
Consistent with our accounting policies, various items are excluded from the Group’s profit/(loss) to derive Underlying earnings
33
.
Total adjustments to derive FY26 Underlying EBIT (+US$332M), shown in the table below, include:
– Significant items (+US$122M): recognition of costs related to Mozal Aluminium's transition to care and maintenance
34
, including
employee separation costs and termination of contractual arrangements (+US$33M), and the non-cash write-down of raw materials and
consumables and work in progress inventories (+US$89M);
– Joint venture adjustments
35
(+US$613M): to reconcile the equity accounting position to a proportional consolidation basis for our
manganese and Sierra Gorda EAIs;
– Gain on the disposal of subsidiaries (-US$16M): recognition of a gain on disposal from finalisation of the upfront consideration for the
sale of IMC (-US$19M) and loss on disposal of Cerro Matoso (+US$3M);
– Impairment reversal of financial assets (-US$249M): periodic revaluation of the shareholder loan receivable from Sierra Gorda reflecting
higher copper prices and other macroeconomic assumptions. An offsetting amount is recorded in the Sierra Gorda joint venture
adjustments noted above; and
– Gain on non-trading derivative instruments and contingent consideration measured at fair value through profit and loss (-US$146M):
revaluation of the contingent consideration receivable
36
from the sale of IMC reflecting higher metallurgical coal prices (-US$93M) and
determination that no contingent consideration is payable
37
in relation to our acquisition of Sierra Gorda (-US$55M).
Further information on these adjustments is included in Note 4 Segment information to the financial statements on page 190.
Profit/(loss) to Underlying EBITDA reconciliation
US$M
FY26 FY25
Operating profit/(loss) from continuing operations
1,359 554
Operating profit/(loss) from discontinued operations
26 (61)
Adjustments to derive Underlying EBIT:
Significant items 122 (71)
Joint venture adjustments
35
613 122
(Gains)/losses on the disposal of subsidiaries (16) 47
Exchange rate (gains)/losses on restatement of monetary items 8 8
Impairment losses/(reversals) of financial assets (249) 27
Impairment losses/(reversals) of non-financial assets – 464
(Gains)/losses on non-trading derivative instruments and contingent consideration measured at fair value
through profit and loss
(146) 121
Total adjustments to derive Underlying EBIT
332 718
Underlying EBIT
1,717 1,211
Underlying depreciation and amortisation
745 717
Underlying EBITDA
2,462 1,928
Profit/(loss) to Underlying earnings attributable to members reconciliation
US$M
FY26 FY25
Profit/(loss) after tax attributable to members
1,087 213
Total adjustments to derive Underlying EBIT
332 718
Total adjustments to derive Underlying net finance costs
(180) (237)
Total adjustments to derive Underlying income and royalty related tax expense
(207) (28)
Underlying earnings attributable to members
1,032 666
South32 Annual Report 2026
28 Strategic Report
Financial and operating performance summary continued
33.
Our Group underlying financial measures reflect continuing and discontinued operations.
34.
Refer to market release "Mozal Aluminium placed on care and maintenance" dated 16 March 2026.
35.
The underlying information reflects the Group’s interest in material equity accounted joint ventures and is presented on a proportional consolidation basis, which is the measure used
by the Group’s management to assess its performance. The joint venture adjustments reconcile the proportional consolidation to the equity accounting position included in the
Group’s consolidated financial statements. The FY26 Sierra Gorda joint venture adjustments include a revaluation loss of US$(249)M (US$(182)M post-tax) relating to the shareholder
loan payable that was eliminated from the Group's Underlying earnings upon proportional consolidation. The FY26 Australia Manganese joint venture adjustments include significant
items of US$92M (US$59M post-tax) relating to insurance income recognised as Australia Manganese finalised its insurance recoveries for the impacts of Tropical Cyclone Megan in
March 2024. The FY26 South Africa Manganese joint venture adjustments include an impairment of US$49M (US$38M post-tax) recognised for the Wessels mine at Hotazel
Manganese Mines.
36.
Applicable for five years from the date of completion of the sale of IMC in August 2024, with no annual cap. The first two years will be calculated and paid on the second anniversary
of completion and annually thereafter. The contingent price-linked consideration will be calculated as 50% of incremental metallurgical coal revenue from equity production, net of
royalties, based on the following metallurgical coal price thresholds: Year 1: US$200/t, Year 2: US$200/t, Year 3: US$190/t, Year 4: US$180/t, Year 5: US$180/t.
37.
Under the sale agreement, contingent price-linked consideration of up to US$500M, was payable at threshold copper production rates and prices for years 2022 to 2025. Specifically,
50% of incremental revenue realised above the following copper price threshold, only where payable copper production exceeds the agreed threshold: CY25: US$3.80/lb and 158kt
Cu. The production threshold was not achieved in CY25. As a result, no amount is payable for CY25 and the contingent consideration payable was written down to nil in FY26 (FY25:
US$55M).
EARNINGS ANALYSIS
The following key factors influenced Underlying EBIT in FY26, relative to FY25.
Reconciliation of movements in Underlying EBIT (US$M)
38,39
500
1,000
1,500
2,000
2,500
Earnings analysis US$M Commentary
FY25 Underlying EBIT
1,211
Change in sales price
596
Higher average realised prices for our commodities, including:
Silver (+US$331M)
Copper (+US$314M)
Zinc and Lead (+US$23M)
Aluminium (+US$435M), offset by lower average realised prices for alumina (-US$504M)
Net impact of price-linked costs
(60)
Higher aluminium smelter raw material input prices, primarily coke (-US$26M)
Higher price-linked royalties at Cannington (-US$10M)
Higher diesel prices (-US$7M)
Change in exchange rates
(159)
Stronger South African rand (-US$75M), Australian dollar (-US$46M), Brazilian real (-US$31M) and
Chilean peso (-US$7M)
Change in inflation
(74)
General inflation across South America (-US$27M), Australia (-US$24M), and South Africa (-US$15M)
Inflation-linked indexation of electricity prices at Hillside Aluminium (-US$8M)
Change in sales volume
(98)
Lower planned volumes at Cannington (-US$131M), and Hillside Aluminium (-US$118M) reflecting
the timing of shipments
Partially offset by increased volumes to third party customers from Worsley Alumina (+US$119M)
as sales were redirected from Mozal Aluminium, along with higher volumes at Brazil Alumina
(+US$24M) and Brazil Aluminium (+US$16M)
Controllable costs
58
Inventory and volume related movements (+US$28M) primarily at Cannington and Hillside
Aluminium, reflecting lower sales volumes for the period
Lower contractor and maintenance costs (+US$37M), primarily at Worsley Alumina, Brazil Alumina
and Brazil Aluminium
Lower caustic soda consumption at Worsley Alumina (+US$16M) primarily due to improved bauxite
quality
Partially offset by a one-off workforce payment at Sierra Gorda (-US$27M), following finalisation of
new three-year industrial agreements
Portfolio changes
(97)
Reflects divestments of IMC (-US$50M) and Cerro Matoso (-US$47M)
Australia Manganese
268
Restart of operations at Australia Manganese following the impacts of Tropical Cyclone Megan
Other
72
Higher EBIT from Mozal Aluminium (+US$127M) prior to care and maintenance
Higher royalty income (+US$8M)
Higher depreciation and amortisation (-US$57M), primarily at Sierra Gorda
FY26 Underlying EBIT
1,717
South32 Annual Report 2026
29 Strategic Report
38.
Sales price variance reflects the revenue impact of changes in commodity prices, based on the current period’s sales volume. Price-linked costs variance reflects the change in
royalties together with the change in input costs driven by changes in commodity prices or market traded consumables. Foreign exchange reflects the impact of exchange rate
movements on local currency denominated costs and sales. Sales volume variance reflects the revenue impact of sales volume changes, based on the comparative period’s sales
prices. Controllable costs variance represents the impact from changes in the Group’s controllable local currency cost base, including the variable cost impact of production volume
changes on expenditure, and period-on-period movements in inventories. The controllable cost variance excludes earnings adjustments including significant items.
39.
Underlying net finance costs, Underlying income tax expense (includes Underlying royalty related tax expense) and amounts attributable to non-controlling interests are actual FY26
results, not year-on-year variances.
Uncontrollable
Net finance
costs & tax
FY25 Underlying EBIT
Sales price
Market traded
consumables and
price-linked costs
Foreign exchange
Inflation
Sales volume
Controllable costs
Portfolio changes
Australia Manganese
Other
FY26 Underlying EBIT
Underlying
net finance costs
Underlying
income tax expense
Non-controlling interests
FY26 Underlying
earnings attributable
to members
1,211
596
(60)
(159)
(74)
(98)
58
72 1,717 (175)
(512)
1,032
(97)
2
268
Net finance income/(costs)
The Group’s FY26 Underlying net finance costs of US$175M primarily comprise the unwinding of the discount applied to our closure and
rehabilitation provisions (US$132M), interest on lease liabilities (US$59M), largely for the multi-fuel co-generation facility at Worsley Alumina,
and interest on our US$700M of senior unsecured notes (US$31M).
Underlying net finance income/(costs) reconciliation
US$M
FY26 FY25
Unwind of discount applied to closure and rehabilitation provisions
(132) (136)
Interest on lease liabilities
(59) (58)
Interest on senior unsecured notes
(31) (31)
Change in discount rate on closure and rehabilitation provisions
1 –
Interest income on cash and cash equivalents
67 66
Other
(21) (29)
Underlying net finance costs
(175) (188)
Add back earnings adjustment for exchange rate variations on net cash/(debt)
(38) 12
Joint venture adjustments
40
218 225
Total adjustments to derive Underlying net finance costs
180 237
Remove net finance costs from discontinued operations
3 16
Net finance income/(costs)
8 65
Tax expense
The Group’s Underlying income tax and royalty related taxation expense increased by US$152M to US$512M in FY26, reflecting higher
profitability, for an Underlying ETR of 32.9% (FY25: 35.0%). Our Group Underlying ETR reflects the corporate tax rates
41
and royalty related
taxes
42
of the jurisdictions in which we operate and our geographical earnings mix.
The Underlying ETR for our manganese business was 66.4% in FY26, including the royalty related tax
42
at Australia Manganese and the
derecognition of certain deferred tax assets. The Underlying ETR for our Sierra Gorda EAI was 32.3% in FY26, reflecting royalty related tax
42
.
Underlying income tax expense (including royalty related taxation) reconciliation
US$M
FY26 FY25
Underlying EBIT
1,717 1,211
Include: Underlying net finance costs (175) (188)
Remove: Share of (profit)/loss of EAIs 16 7
Underlying profit/(loss) before tax
1,558 1,030
Income tax expense/(benefit) from continuing operations
308 304
Income tax expense/(benefit) from discontinued operations
(3) 28
Tax effect of other adjustments to derive Underlying EBIT (31) 5
Tax effect of other adjustments to derive Underlying net finance costs 11 (3)
Exchange rate variations on tax balances 27 14
Significant items (2) 1
Joint venture adjustments relating to income tax
40
144 (3)
Joint venture adjustments relating to royalty related tax
40
58 14
Total adjustments to derive Underlying income tax (expense)/benefit
207 28
Underlying income tax expense/(benefit)
512 360
Underlying effective tax rate
32.9% 35.0%
South32 Annual Report 2026
30 Strategic Report
Financial and operating performance summary continued
40.
The underlying information reflects the Group’s interest in material equity accounted joint ventures and is presented on a proportional consolidation basis, which is the measure used
by the Group’s management to assess their performance. The joint venture adjustments reconcile the proportional consolidation to the equity accounting position included in the
Group’s consolidated financial statements.
41.
The corporate tax rates applicable to the countries where the Group operates include: Australia 30%, South Africa 27%, Colombia 35%, Mozambique 0%, Brazil 34% and Chile27%.
42.
Australia Manganese is subject to a royalty related tax equal to 20% of adjusted EBIT. Sierra Gorda is subject to a royalty related tax based on the amount of copper sold and the
mining operating margin, the rate is between 5% and 14% for annual sales over 50kt of refined copper. These royalties are included in Underlying royalty related tax expense.
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
43
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
44
(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
South32 Annual Report 2026
31 Strategic Report
43.
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.
44.
Net interest paid excludes amounts reported as net distributions from material EAIs.
CAPITAL EXPENDITURE
The Group’s capital expenditure
45
, 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
46
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$106M, as Australia Manganese executed its recovery plan in
FY25, and South Africa Manganese completed work to access new mining areas at Wessels.
Capital expenditure (South32 share)
45
US$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).
South32 Annual Report 2026
32 Strategic Report
Financial and operating performance summary continued
45.
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.
46.
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.
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
South32 Annual Report 2026
33 Strategic Report
47.
Since inception of our capital management program, US$1.8B has been allocated to our on-market share buy-back (837M shares at an average price of A$3.06 per share) and
US$525M returned in the form of special dividends.
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
Higher planned copper grades
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
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
Processing of lower grade stockpiled material to
supplement ore mined
Average metal grades in accordance with the mine plan
Payable zinc equivalent production (kt)
51
290.0 290.0 290.0
Payable silver production (koz)
8,906 ↑8,725 8,725
Payable lead production (kt)
82.9 80.0 80.0
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.
South32 Annual Report 2026
34 Strategic Report
Financial and operating performance summary continued
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/lb), molybdenum (US$25.90/lb), 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. FY26realised
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.
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$125M per annum, with the full benefit expected to be realised in FY29. These cost savings will be reflected in both lower Group and
unallocated expenses and reduced Operating unit costs. We recently implemented the first phase of this work, streamlining senior
leadership roles, accountabilities and support functions.
Operating unit cost
FY26e
(a),54
FY26 H1 FY26 H2 FY26 FY27e
(a),55
Key guidance assumptions
Sierra Gorda (non-operated)
(US$/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.
South32 Annual Report 2026
35 Strategic Report
54.
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.
55.
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.
Capital expenditure guidance (excluding exploration and intangibles)
FY27 capital expenditure guidance for base metals and manganese, including EAIs, is expected to increase by US$395M to US$1,500M as
we invest in our base metals growth projects, continuing construction of Hermosa's Taylor project and commencing Sierra Gorda's fourth
grinding line expansion project:
– Safe and reliable: expected to increase by US$24M to US$395M, including deferred stripping at Sierra Gorda, and additional water
infrastructure at Australia Manganese to manage elevated water volumes;
– Improvement and life extension: expected to increase by US$82M to US$105M, with investment in Sierra Gorda's fourth grinding line
project and underground infrastructure upgrades at Cannington to support an extended mine life; and
– Growth: Hermosa capital expenditure is expected to increase by US$289M to US$1,000M
56
, reflecting a planned increase in surface
infrastructure construction activity.
FY27 capital expenditure guidance for the Aluminium Value Chain Assets is expected to increase by US$28M to US$300M:
– Safe and reliable: expected to increase by US$59M to US$225M, including additional bauxite residue disposal activity and planned
infrastructure upgrades at Worsley Alumina, and replacement of pot tending assemblies at Hillside Aluminium; and
– Improvement and life extension: expected to decrease by US$31M to US$75M, as we execute the Worsley Mine Development Project,
including the Nullaga mine development, at Worsley Alumina.
Capital expenditure for base metals and manganese
US$M
FY26 FY27e
(a)
Sierra Gorda
227 220
Cannington
41 80
Australia Manganese
75 80
South Africa Manganese
22 15
Cerro Matoso
57
6 –
Safe and reliable capital expenditure (excluding EAIs)
47 80
Safe and reliable capital expenditure (including EAIs)
371 395
Sierra Gorda
8 90
Cannington
1 10
Australia Manganese
3 5
South Africa Manganese
5 –
Cerro Matoso
57
2 –
Group & Unallocated
4 –
Improvement and life extension capital expenditure (excluding EAIs)
7 10
Improvement and life extension capital expenditure (including EAIs)
23 105
Hermosa
711 1,000
Growth capital expenditure
711 1,000
Total capital expenditure (excluding EAIs)
765 1,090
Total capital expenditure (including EAIs)
1,105 1,500
Capital expenditure for Aluminium Value Chain Assets
US$M
FY26 FY27e
(a)
Worsley Alumina
55 85
Brazil Alumina
25 35
Brazil Aluminium
15 15
Hillside Aluminium
62 90
Mozal Aluminium (care & maintenance)
58
9 –
Safe and reliable capital expenditure
166 225
Worsley Alumina
105 75
Hillside Aluminium
1 –
Improvement and life extension capital expenditure
106 75
Total capital expenditure
272 300
(a) The denotation (e) refers to an estimate or forecast year.
South32 Annual Report 2026
36 Strategic Report
Financial and operating performance summary continued
56.
Hermosa growth capital expenditure guidance excludes expected lease payments of ~US$60M 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.
57.
Reflects five months of ownership prior to the divestment of Cerro Matoso on 1 December 2025.
58.
Capital expenditure for Mozal Aluminium reflects the period ending March 2026.
Capitalised exploration guidance
FY27 Group capitalised exploration guidance, including EAIs, is expected to increase by US$36M to US$80M, reflecting increased
exploration drilling at Hermosa as we test regional targets in our highly prospective regional land package, and exploration and study work
at Ambler Metals to progress the high-grade Arctic polymetallic deposit.
Capitalised exploration (South32 share)
US$M
FY26 FY27e
(a)
Capitalised exploration (excluding EAIs)
37 70
EAIs capitalised exploration
7 10
Capitalised exploration (including EAIs)
44 80
(a) The denotation (e) refers to an estimate or forecast year.
Other expenditure guidance
Other expenditure items presented below are on a proportional consolidation basis including our manganese and Sierra Gorda EAIs.
FY26 FY27e
(a)
Commentary
Group and unallocated expense in Underlying EBIT (excluding greenfield exploration and third party products and services EBIT)
(US$M)
63 120
(b)
FY26 reflected favourable inter-group inventory adjustments in
our aluminium value chain (US$46M)
Guidance reflects current run-rate, ahead of Transaction
completion
Hermosa expenses included in Underlying EBIT
(US$M)
46 45
Work across the broader Hermosa project
Underlying depreciation and amortisation
(US$M)
745 800
(b)
Higher depreciation at Sierra Gorda with higher deferred stripping
amortisation reflective of the mine sequence
Underlying net finance costs
(US$M)
175 180
(b)
Reflects current balance sheet
Greenfield exploration
(US$M)
34 40
Exploration activity targeting base metals in highly prospective
regions
(a) The denotation (e) refers to an estimate or forecast year.
(b) Guidance reflects ownership of the Aluminium Value Chain Assets for FY27.
South32 Annual Report 2026
37 Strategic Report
OPERATIONS ANALYSIS
A summary of the underlying performance of the Group’s operations is presented below and a more detailed analysis is included beginning
page 39.
Operations table (South32 share)
Underlying revenue Underlying EBIT
US$M
FY26 FY25 FY26 FY25
Sierra Gorda
1,154 832 561 318
Cannington
852 659 364 204
Hermosa
– – (46) (45)
Australia Manganese
675 42 143 (125)
South Africa Manganese
364 353 2 24
Worsley Alumina
1,319 1,917 5 619
Brazil Alumina
502 749 (27) 226
Brazil Aluminium
441 355 20 (97)
Hillside Aluminium
2,236 1,989 581 85
Mozal Aluminium (care & maintenance)
890 979 182 55
Third party products and services
59
262 370 18 18
Inter-segment / Group and unallocated
(780) (1,264) (97) (179)
South32 Group (excluding IMC and Cerro Matoso)
7,915 6,981 1,706 1,103
IMC
60
– 144 – 50
Cerro Matoso
193 485 11 58
South32 Group
8,108 7,610 1,717 1,211
South32 Annual Report 2026
38 Strategic Report
Financial and operating performance summary continued
59.
FY26 Underlying revenue on third party products and services sold from continuing operations comprises US$77M for aluminium, US$1M for alumina, US$35M for manganese,
US$94M for freight services and US$55M for raw materials. FY26 Underlying EBIT on third party products and services sold from continuing operations comprises US$8M for
aluminium, US$11M for alumina and US$(1)M for freight services. FY25 Underlying revenue on third party products and services sold from continuing operations comprises US$142M
for aluminium, US$28M for alumina, US$35M for manganese, US$50M for freight services and US$115M for raw materials. FY25 Underlying EBIT on third party products and services
sold from continuing operations comprises US$3M for aluminium, US$16M for alumina and US$(1)M for raw materials.
60.
FY25 underlying results for IMC include third party products and services. FY25 Underlying revenue on third party products and services sold was US$28M and Underlying EBIT on
third party products and services sold was nil.
SIERRA GORDA
Location: Antofagasta, Chile
South32 share: 45 per cent (non-operated)
Sierra Gorda is a large-scale, open pit mine in the prolific
Antofagasta copper mining region, that produces copper,
molybdenum, gold and silver.
Volumes
Sierra Gorda payable copper equivalent production
61
decreased by
3% (or 2.6kt) to 87.1kt in FY26, but exceeded guidance, as strong
by-product volumes more than offset weather-related impacts in
H2 FY26.
Payable copper equivalent production
61
is expected to increase by
5% to 91.8kt in FY27 and a further 2% to 94.0kt in FY28, supported
by higher planned copper grades in the next phase of the mine
plan.
Operating costs
Operating unit costs increased by 17%, to US$18.9/t ore processed
in FY26, reflecting a one-off workforce payment following the
finalisation of new three-year industrial agreements, together with
higher diesel prices and a stronger Chilean peso.
Our operating margin increased to a record 66% (FY25: 58%),
reflecting higher average metal prices.
We expect FY27 Operating unit costs to decrease by 7% to
US$17.5/t ore processed, with higher planned volumes and
normalisation of labour costs following the one-off workforce
payment, partially offset by general inflation. Exchange rate and
price assumptions for FY27 Operating unit cost guidance are
detailed on page 35, footnote 55.
Financial performance
Underlying EBIT increased by 76% (or US$243M), to US$561M in
FY26, as higher average realised metal prices (+US$344M) more
than offset lower sales volumes (-US$22M), the one-off workforce
payment (-US$27M), and higher diesel prices (-US$4M).
Depreciation and amortisation increased by US$33M to US$197M in
FY26, largely due to higher deferred stripping amortisation
reflective of the mine sequence.
Capital expenditure
Safe and reliable capital expenditure was US$227M in FY26 and is
expected to be largely unchanged at US$220M in FY27, as the
operation continues deferred stripping activity and investment in
tailings infrastructure.
Improvement and life extension capital expenditure was US$8M in
FY26 and is expected to step up to US$90M in FY27 as execution of
the fourth grinding line project (the Project) commences. The
Project, which was approved for execution on 30 June 2026, is
expected to increase processing capacity by ~25% to ~60Mtpa
(100% basis) and deliver an ~30% increase in copper equivalent
production from FY31
62
. Total capital expenditure for the Project is
expected to be ~US$725M
63
(100% basis) over FY27 to FY30.
On 8 June 2026, Sierra Gorda and BHP Spence signed a
non-binding memorandum of understanding for the purpose of
identifying and evaluating opportunities for operational
collaboration across these nearby mines.
South32 share
FY26 FY25
Ore mined (Mt)
19.6 23.0
Ore processed (Mt)
21.0 21.7
Ore grade processed (%, Cu)
0.42 0.42
Payable copper equivalent
production (kt)
61
87.1 89.7
Payable copper production (kt)
69.2 71.4
Payable molybdenum production (kt)
1.9 1.5
Payable gold production (koz)
18.5 27.9
Payable silver production (koz)
741 584
Payable copper sales (kt)
69.1 72.9
Payable molybdenum sales (kt)
2.1 1.3
Payable gold sales (koz)
18.6 28.5
Payable silver sales (koz)
737 599
Realised copper sales price (US$/lb)
5.92 4.18
Realised molybdenum sales price
(US$/lb)
25.90 21.12
Realised gold sales price (US$/oz)
4,462 2,877
Realised silver sales price (US$/oz)
70.6 31.7
Operating unit cost
(US$/t ore processed)
64
18.9 16.1
South32 share (US$M)
FY26 FY25
Underlying revenue
1,154 832
Underlying EBITDA
758 482
Underlying EBIT
561 318
Net operating assets
1,883 1,769
Capital expenditure
235 216
Safe and reliable 227 191
Improvement and life extension 8 25
Exploration expenditure
12 13
Exploration expensed
6 –
South32 Annual Report 2026
39 Strategic Report
61.
Payable copper equivalent production (kt) was calculated by aggregating revenues from copper, molybdenum, gold and silver, and dividing the total Revenue by the price of copper.
FY25 realised prices for copper (US$4.18/lb), molybdenum (US$21.12/lb), gold (US$2,877/oz) and silver (US$31.7/oz) have been used for FY25 and FY26. FY26 realised prices for
copper (US$5.92/lb), molybdenum (US$25.90/lb), gold (US$4,462/oz) and silver (US$70.6/oz) have been used for FY27e and FY28e.
62.
Based on expected increase in average copper equivalent production over CY31 to CY41.
63.
US dollars (real). Based on a USD:CLP exchange rate of 900. Reflects ~US$190M in FY27, ~US$290M in FY28, ~US$200M in FY29 and ~US$45M in FY30.
64.
Sierra Gorda Operating unit cost is Underlying revenue less Underlying EBITDA divided by ore processed. Periodic movements in finished product inventory may impact Operating
unit costs.
CANNINGTON
Location: Queensland, Australia
South32 share: 100 per cent
Cannington is an underground mine located in north-west
Queensland, Australia, that produces high-grade lead and
zinc concentrates with a high silver content.
Volumes
Cannington payable zinc equivalent production
65
decreased by 12%
(or 28.8kt) to 205.4kt in FY26, reflecting lower planned metal grades
in accordance with the mine plan. This was partly offset by an 11%
increase in ore processed, as lower grade stockpiled material was
milled.
Looking ahead, the processing of lower grade stockpiles is
expected to support ore processed rates of 2.1Mtpa across both
FY27 and FY28, with payable zinc equivalent production
65
guidance
set at 290.0kt for both years, reflecting planned metal grades.
Operating costs
Operating unit costs decreased by 5%, to US$185/t ore processed
inFY26, as higher ore processed more than offset higher price-
linked royalties and a stronger Australian dollar.
Our operating margin increased to 53% (FY25: 43%), reflecting
stronger metal prices and lower Operating unit costs.
We expect FY27 Operating unit costs to increase by 11% to
US$205/t ore processed, reflecting a stronger Australian dollar,
general inflation, and costs to support an extended mine life.
Exchange rate and price assumptions for FY27 Operating unit cost
guidance are detailed on page 35, footnote 55.
Financial performance
Underlying EBIT increased by 78% (or US$160M), to US$364M in
FY26, as higher average realised metal prices (+US$324M) more
than offset lower planned sales volumes (-US$131M), higher price-
linked royalties (-US$10M) and a stronger Australian dollar
(-US$15M).
Capital expenditure
Capital expenditure was US$42M in FY26 and is expected to
increase to US$90M as we invest in underground infrastructure
upgrades to support mine life extensions.
Study work on mine life extension options from both underground
and open pit resources continues to progress, with a final
investment decision for the open pit development targeted for
H1 FY28.
South32 share
FY26 FY25
Ore mined (kwmt)
2,113 1,960
Ore processed (kdmt)
2,163 1,944
Ore grade processed (g/t, Ag)
150 191
Ore grade processed (%, Pb)
4.6 5.6
Ore grade processed (%, Zn)
2.6 3.1
Payable zinc equivalent production (kt)
65
205.4 234.2
Payable silver production (koz)
8,906 10,292
Payable lead production (kt)
82.9 92.4
Payable zinc production (kt)
39.2 44.5
Payable silver sales (koz)
8,693 11,019
Payable lead sales (kt)
82.8 99.3
Payable zinc sales (kt)
38.0 45.7
Realised silver sales price (US$/oz)
66.4 31.9
Realised lead sales price (US$/t)
1,944 1,883
Realised zinc sales price (US$/t)
3,000 2,648
Operating unit cost
(US$/t ore processed)
66
185 194
South32 share (US$M)
FY26 FY25
Underlying revenue
852 659
Underlying EBITDA
451 281
Underlying EBIT
364 204
Net operating assets
46 131
Capital expenditure
42 49
Safe and reliable 41 49
Improvement and life extension 1 –
Exploration expenditure
4 6
Exploration expensed
1 2
South32 Annual Report 2026
40 Strategic Report
Financial and operating performance summary continued
65.
Payable zinc equivalent (kt) was calculated by aggregating revenues from payable zinc, lead and silver, and dividing the total Revenue by the price of zinc. FY25realised prices for
zinc (US$2,648/t), lead (US$1,883/t) and silver (US$31.9/oz) have been used for FY25 and FY26. FY26realised prices for zinc (US$3,000/t), lead (US$1,944/t) and silver (US$66.4/oz) have
been used for FY27e and FY28e.
66.
Cannington Operating unit cost is Underlying revenue less Underlying EBITDA divided by ore processed. Periodic movements in finished product inventory may impact Operating
unit costs.
AUSTRALIA MANGANESE
Location: Northern Territory, Australia
South32 share: 60 per cent
Australia Manganese is Groote Eylandt Mining Company
(GEMCO) in the Northern Territory, Australia, an open-cut
mining operation that produces high-grade manganese ore.
Volumes
Australia Manganese saleable production increased to 3,031kwmt
in FY26, as operations resumed following the impacts of
Tropical Cyclone Megan in the prior period. Notwithstanding,
production was below plan, as the operation managed elevated
site water levels resulting from ongoing groundwater inflows and
significant wet season impacts.
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.
Operating costs
Operating unit costs were US$2.62/dmtu in FY26, reflecting a
stronger Australian dollar and higher diesel prices.
We expect FY27 Operating unit costs to increase to US$3.15/dmtu,
reflecting lower planned volumes, a stronger Australian dollar and
general inflation. Exchange rate and price assumptions for FY27
Operating unit cost guidance are detailed on page 35, footnote 55.
Financial performance
Underlying EBIT increased to US$143M in FY26 (FY25: loss of
US$125M), with sales volumes increasing to 3,598kwmt, following
the restart of operations and commissioning of new wharf
infrastructure in the prior period.
Separately, external insurance recoveries of US$92M in relation to
the impacts of Tropical Cyclone Megan were received in FY26. This
income was excluded from Underlying earnings as an earnings
adjustment.
Capital expenditure
Capital expenditure was US$78M in FY26 and is expected to be
US$85M in FY27 including investment in additional water
infrastructure, subject to receipt of regulatory approvals.
South32 share
FY26 FY25
Manganese ore production (kwmt)
3,031 1,106
Manganese ore sales (kwmt)
3,598 253
Realised external manganese ore sales price
(US$/dmtu, FOB)
67,68
4.23 3.68
Operating unit cost (US$/dmtu, FOB)
68,69
2.62 –
South32 share (US$M)
FY26 FY25
Underlying revenue
675 42
Underlying EBITDA
229 (105)
Underlying EBIT
143 (125)
Net operating assets
190 240
Capital expenditure
78 115
Safe and reliable 75 114
Improvement and life extension 3 1
Exploration expenditure
5 5
Exploration expensed
4 5
South32 Annual Report 2026
41 Strategic Report
67.
Realised ore prices are calculated as external sales Underlying revenue less freight and marketing costs, divided by external sales volume.
68.
FY26 average manganese content of external ore sales was 41.6% on a dry basis (FY25: 41.5%). 100% of FY26 external manganese ore sales (FY25: 100%) were completed on a CIF
basis. FY26 realised FOB ore prices and Operating unit costs have been adjusted for freight and marketing costs of US$68M (FY25: US$8M), consistent with our FOB cost guidance.
69.
FOB Ore Operating unit cost is Underlying revenue less Underlying EBITDA, freight and marketing costs, divided by ore sales volumes.
SOUTH AFRICA MANGANESE
Location: Northern Cape and Gauteng, South Africa
South32 share: Ore - 54.6 per cent, Alloy - 60 per cent (divested)
South Africa Manganese consists of two manganese mines in
the Kalahari Basin, the open-cut Mamatwan mine and the
underground Wessels mine.
In June 2025, Samancor Manganese Proprietary Limited completed
the divestment of the Metalloys manganese alloy smelter
70
, which
had been on care and maintenance since FY20.
Volumes
South Africa Manganese saleable production decreased by 3%
(or 66kwmt) to 2,085kwmt in FY26, but exceeded guidance, as the
operation completed planned maintenance and additional
underground development activity at Wessels.
Production is expected to be 2,000kwmt across both FY27 and
FY28, subject to our continued use of higher cost trucking.
Operating costs
Operating unit costs increased by 6% to US$3.22/dmtu in FY26,
reflecting a stronger South African rand and higher diesel prices.
We expect FY27 Operating unit costs to increase by 9% to
US$3.50/dmtu, reflecting general inflation and higher in-land
logistics costs. Exchange rate and price assumptions for FY27
Operating unit cost guidance are detailed on page 35, footnote 55.
Financial performance
Ore Underlying EBIT decreased by US$28M to US$2M in FY26, as
higher sales volumes (+US$14M), were more than offset by a
stronger South African rand (-US$18M), higher trucking costs
(-US$3M) and diesel prices (-US$3M).
Capital expenditure
Capital expenditure was US$27M in FY26 and is expected to
decrease to US$15M in FY27 following the completion of mine
access work at Wessels.
South32 share
FY26 FY25
Manganese ore production (kwmt)
2,085 2,151
Manganese ore sales (kwmt)
2,181 2,096
Realised external manganese ore sales price
(US$/dmtu, FOB)
71,72
3.65 3.71
Operating unit cost (US$/dmtu, FOB)
72,73
3.22 3.05
South32 share (US$M)
FY26 FY25
Underlying revenue
364 353
Manganese ore 364 353
Manganese alloy – –
Underlying EBITDA
30 46
Manganese ore 30 52
Manganese alloy – (6)
Underlying EBIT
2 24
Manganese ore 2 30
Manganese alloy – (6)
Net operating assets/(liabilities)
211 252
Manganese ore 211 252
Manganese alloy – –
Capital expenditure
27 44
Safe and reliable 22 28
Improvement and life extension
5 16
South32 Annual Report 2026
42 Strategic Report
Financial and operating performance summary continued
70.
Refer to media release “Completion of Metalloys Manganese Alloy Smelter Divestment” dated 3 June 2025.
71.
Realised ore prices are calculated as external sales Underlying revenue less freight and marketing costs, divided by external sales volume.
72.
FY26 average manganese content of external ore sales was 38.5% on a dry basis (FY25: 38.9%). 95% of FY26 external manganese ore sales (FY25: 92%) were completed on a CIF
basis. FY26 realised FOB ore prices and Operating unit costs have been adjusted for freight and marketing costs of US$61M (FY25: US$54M), consistent with our FOB cost guidance.
73.
FOB Ore Operating unit cost is Underlying revenue less Underlying EBITDA, freight and marketing costs, divided by ore sales volumes.
WORSLEY ALUMINA
Location: Western Australia, Australia
South32 share: 86 per cent
Worsley Alumina is an integrated bauxite mining and alumina
refining operation in the South West of Western Australia.
Alumina from Worsley Alumina is exported to the Hillside
Aluminium smelter and other smelters around the world.
Volumes
Worsley Alumina saleable production was largely unchanged at
3,722kt in FY26, with improved bauxite availability offset by a
weather-related disruption to third-party gas supply in Q3 FY26.
Production is expected to increase by 5% to 3,900kt in FY27,
supported by further improvements in bauxite quality through the
Worsley Mine Development Project
74
.
Operating costs
Operating unit costs increased by 3%, to US$313/t in FY26, as
reduced caustic soda consumption (FY26: 111kg/t, FY25: 119kg/t)
resulting from improved bauxite quality, together with lower
contractor costs reflecting timing and optimisation of maintenance
activities, were more than offset by a stronger Australian dollar and
general inflation.
Our operating margin decreased to 14% (FY25: 41%), as alumina
prices declined from elevated levels in FY25.
We expect FY27 Operating unit costs to increase by 2% to
US$320/t, with higher planned volumes and reduced caustic soda
consumption, more than offset by a stronger Australian dollar,
higher energy prices and general inflation. Exchange rate and price
assumptions for FY27 Operating unit cost guidance are detailed on
page 35, footnote 55.
Financial performance
Underlying EBIT decreased by 99% (or US$614M) to US$5M in FY26,
as lower contractor expenditure (+US$25M) and caustic soda
consumption (+US$16M), were more than offset by a 30% decrease
in the average realised price of alumina (-US$563M), a stronger
Australian dollar (-US$37M) and general inflation (-US$21M).
Capital expenditure
Safe and reliable capital expenditure was US$55M in FY26 and is
expected to increase to US$85M in FY27 as we invest in additional
bauxite residue disposal capacity and infrastructure upgrades.
Improvement and life extension capital expenditure was US$105M
in FY26 and is expected to decrease to US$75M in FY27 as we
execute the Worsley Mine Development Project, including the
Nullaga mine development.
South32 share
FY26 FY25
Alumina production (kt)
3,722 3,727
Alumina sales (kt)
3,630 3,699
Realised alumina sales price (US$/t)
363 518
Operating unit cost (US$/t)
313 303
South32 share (US$M)
FY26 FY25
Underlying revenue
1,319 1,917
Underlying EBITDA
181 795
Underlying EBIT
5 619
Net operating assets
1,705 1,707
Capital expenditure
160 106
Safe and reliable 55 87
Improvement and life extension 105 19
Exploration expenditure
4 2
Exploration expensed
4 2
South32 Annual Report 2026
43 Strategic Report
74.
Refer to market release "Worsley Mine Development Project Receives Federal Approval" dated 12 February 2025.
BRAZIL ALUMINA
Location: Pará and Maranhão, Brazil
South32 investment: Bauxite - 33 per cent
South32 share: Alumina - 36 per cent (non-operated)
Brazil Alumina includes a 33% interest in the Mineração Rio
do Norte (MRN) bauxite mine and a 36% interest in the
Alumar alumina refinery. Bauxite produced from MRN is
supplied to the Alumar alumina refinery. The alumina
produced from the Alumar alumina refinery is supplied to the
co-located Alumar aluminium smelter and exported to other
smelters around the world.
Volumes
Brazil Alumina saleable production increased by 5% (or71kt) to a
record 1,411kt in FY26, as the refinery operated above nameplate
capacity driven by improved plant availability.
Production is expected to be 1,360kt in FY27.
Operating costs
Operating unit costs were largely unchanged at US$324/t in FY26,
as higher volumes and lower planned maintenance, were partially
offset by a stronger Brazilian real and general inflation.
Our operating margin decreased to 6% (FY25: 38%) as alumina
prices declined from elevated levels in FY25.
While Operating unit cost guidance is not provided for this
non-operated facility, the refinery's cost profile will continue to be
influenced by energy and raw material input prices.
Financial performance
Underlying EBIT decreased by US$253M to a loss of US$27M in
FY26, as higher sales volumes (+US$33M) and lower planned
maintenance (+US$22M), were more than offset by a 36% reduction
in the average realised price of alumina (-US$280M).
Our share of the loss from our equity accounted interest in MRN
was US$16M in FY26.
Capital expenditure
Capital expenditure decreased by US$16M to US$25M in FY26 and
is expected to be US$35M in FY27.
South32 share
FY26 FY25
Alumina production (kt)
1,411 1,340
Alumina sales (kt)
1,409 1,349
Realised sales price (US$/t)
356 555
Operating unit cost (US$/t)
(a)
324 326
South32 share (US$M)
(b)
FY26 FY25
Underlying revenue
502 749
Underlying EBITDA
29 283
Underlying EBIT
(27) 226
Net operating assets
562 638
Capital expenditure
25 41
Safe and reliable 25 35
Improvement and life extension – 6
(a) Excludes the profit/(loss) from our equity accounted interest in MRN.
(b) Results for Brazil Alumina include MRN on an equity accounted basis.
South32 Annual Report 2026
44 Strategic Report
Financial and operating performance summary continued
BRAZIL ALUMINIUM
Location: Maranhão, Brazil
South32 share: 40 per cent (non-operated)
Brazil Aluminium produces aluminium for domestic and
export markets, with alumina supplied by the co-located
Alumar alumina refinery. Our share of Brazil Aluminium
production is powered by 100% renewable power.
Volumes
Brazil Aluminium saleable production increased by 4% (or 6kt) to
144kt in FY26, with the smelter's operator implementing additional
measures to improve process stability, following unplanned pot
outages and energy disruptions in December 2025.
Production is expected to be 140kt in FY27 as the smelter
continues to stabilise operations.
Operating costs
Operating unit costs decreased by 11%, to US$2,895/t in FY26,
as higher volumes and lower alumina input prices, more than offset
a stronger Brazilian real and general inflation.
While Operating unit cost guidance is not provided, the smelter’s
cost profile will continue to be influenced by raw material input
prices and the ramp-up profile for all three potlines.
Financial performance
Underlying EBIT improved by US$117M to US$20M in FY26
(FY25: loss of US$97M), driven by higher average realised
aluminium prices (+US$70M) and sales volumes (+US$16M),
together with lower alumina input prices (+US$60M).
Capital expenditure
Capital expenditure was US$15M in FY26 and is expected to be
unchanged at US$15M in FY27.
South32 share
FY26 FY25
Aluminium production (kt)
144 138
Aluminium sales (kt)
143 138
Realised sales price (US$/t)
3,084 2,572
Operating unit cost (US$/t)
2,895 3,239
South32 share (US$M)
FY26 FY25
Underlying revenue
441 355
Underlying EBITDA
27 (92)
Underlying EBIT
20 (97)
Net operating assets
74 71
Capital expenditure
15 9
Safe and reliable 15 9
Improvement and life extension – –
South32 Annual Report 2026
45 Strategic Report
HILLSIDE ALUMINIUM
Location: KwaZulu-Natal, South Africa
South32 share: 100 per cent
Hillside Aluminium is located in Richards Bay, South Africa,
and is the largest aluminium smelter in the southern
hemisphere. The smelter produces high-quality, primary
aluminium for domestic and export markets.
Volumes
Hillside Aluminium saleable production was largely unchanged at
717kt in FY26, as the smelter continued to test its maximum
technical capacity, despite the impact of load-shedding.
Production is expected to be 720kt
75
in FY27.
Operating costs
Operating unit costs decreased by 8%, to US$2,298/t in FY26,
as lower alumina input prices more than offset a stronger South
African rand and inflation-linked indexation of energy costs.
Our operating margin increased to 29% (FY25: 8%), reflecting a 20%
increase in the average realised price of aluminium and lower costs.
While Operating unit cost guidance is not provided, the cost profile
of the smelter will continue to be heavily influenced by the price of
smelter raw material inputs and other external factors including the
South African rand and inflation-linked indexation of energy costs.
Financial performance
Underlying EBIT increased by 584% (or US$496M), to US$581M in
FY26, as higher average realised aluminium prices (+US$365M),
lower alumina input prices (+US$238M) and reduced pot relining
(+US$16M), more than offset lower sales volumes (-US$118M) due
to the timing of sales, and a stronger South African rand (-US$57M).
Capital expenditure
Capital expenditure was US$63M in FY26 and is expected to
increase to US$90M in FY27 as we continue our investment to
replace the pot tending assemblies.
South32 share
FY26 FY25
Aluminium production (kt)
717 718
Aluminium sales (kt)
688 732
Realised sales price (US$/t)
3,250 2,717
Operating unit cost (US$/t)
2,298 2,507
South32 share (US$M)
FY26 FY25
Underlying revenue
2,236 1,989
Underlying EBITDA
655 154
Underlying EBIT
581 85
Net operating assets
858 788
Capital expenditure
63 67
Safe and reliable 62 66
Improvement and life extension 1 1
South32 Annual Report 2026
46 Strategic Report
Financial and operating performance summary continued
75.
Production guidance for Hillside Aluminium does not assume any load-shedding impact on production.
MOZAL ALUMINIUM
(CARE AND MAINTENANCE)
Location: Maputo, Mozambique
South32 share: 63.7 per cent
Mozal Aluminium is located near Maputo, Mozambique.
On 15 March 2026, Mozal Aluminium was placed on care and
maintenance, due to the inability to secure sufficient and affordable
electricity supply
76
.
Volumes
Mozal Aluminium saleable production was 248kt in the period to
March 2026.
Operating costs
Operating unit costs increased by 6%, to US$2,571/t in FY26,
reflecting higher priced alumina under a legacy supply contract
with Worsley Alumina, and a stronger South African rand.
Financial performance
Underlying EBIT increased by 231% (or US$127M) to US$182M in
FY26, reflecting a 16% increase in our average realised price of
aluminium.
Separately, employee separation costs and termination of
contractual arrangements (US$33M) and non-cash write-down of
inventories (US$89M) were incurred in FY26, related to the
smelter's transition to care and maintenance. These expenses were
excluded from Underlying earnings as significant items.
Capital expenditure
Capital expenditure decreased by US$12M to US$9M in FY26.
South32 share
FY26 FY25
Aluminium production (kt)
248 355
Aluminium sales (kt)
275 351
Realised sales price (US$/t)
3,237 2,789
Operating unit cost (US$/t)
2,571 2,433
South32 share (US$M)
FY26 FY25
Underlying revenue
890 979
Underlying EBITDA
183 125
Underlying EBIT
182 55
Net operating assets/(liabilities)
(96) 152
Capital expenditure
9 21
Safe and reliable 9 21
Improvement and life extension – –
South32 Annual Report 2026
47 Strategic Report
76.
Refer to market release "Mozal Aluminium placed on care and maintenance" dated 16 March 2026.
RISK MANAGEMENT
Our system of risk management
49
Keeping our people safe and well
51
Portfolio reshaping
51
Climate change and environment
52
Maintain, realise or enhance the value of our Mineral Inventory
52
Cybersecurity and privacy
53
Predictable operational performance
53
Delivery of our project portfolio
53
Supply chain security
54
Shaping our culture and managing diverse talent
55
Evolving societal expectations
55
Political risks, actions by governments and/or authorities
56
Global economic uncertainty and liquidity
56
South32 Annual Report 2026
48 Strategic Report
MANAGING RISKS
TO ACHIEVE
OUR PURPOSE
Risk management is integral to achieving our objectives, delivering our purpose, and guiding our
strategic direction. By identifying and managing risks we seek to safeguard our business, support our
people and communities, and meet regulatory obligations and stakeholder expectations. This
disciplined approach allows us to make better decisions, allocate resources efficiently, and consistently
execute our strategy.
Our approach to risk management is governed by our risk
management framework and delivered through our system of risk
management. Our internal risk management standard outlines the
minimum mandatory requirements for the management of risks
that have the potential to impact our ability to achieve our purpose,
strategy and business plans. Our system of risk management is
aligned to the principles of the International Standard for Risk
Management AS/NZS ISO 31000:2018. Our risks are regularly
assessed and managed at both a Group-wide strategic level and at
a tactical level for operations, projects and functions.
Risk taxonomy
Our risks are organised within a structured taxonomy designed to
enhance visibility, support clear communication and enable
effective risk management across all levels of the organisation.
Material risks are grouped into risk categories based on shared
characteristics or scope, and these categories are then aligned to
our strategic risks. This structure recognises the collective potential
of these risks to impact the achievement of our strategic
objectives.
Risk appetite and strategic risks
Risk appetite statements for each of our strategic risks are
approved annually by our Board. They define the level of risk we are
willing to take in pursuit of our purpose, strategy and objectives.
In FY26, we managed 12 strategic risks, which are outlined in
subsequent pages with their respective risk appetite. We monitor
our strategic risks over the course of the year, and use key risk
indicators to inform us of internal and external changes in risk
exposure, and to frame appropriate management responses where
required. This information is reported to our Risk and Audit
Committee and Sustainability Committee twice per year.
Material risks
Material risks, which can materially impact our ability to deliver our
business plans and processes, are managed and reported on
through our real-time risk management tool, Global360. This
software connects data relating to the management of our risks,
events, hazards and assurance actions. Beyond helping us manage
our material risks, data captured in this platform contributes
towards the monitoring and management of our strategic risks and
provides insight into trends that could inform a review of our
business plans or a change in strategic direction.
Risk governance
We apply the three lines operating model to our system of risk
management, which determines how our structures, processes,
and organisational roles work together to facilitate strong risk
management and assurance.
– First line: Responsible for designing, implementing and
executing processes and controls in order to manage our risks.
– Second line: Assists the first line in managing risk by
establishing group-level requirements, providing support and
advice on the management of risks, and monitoring and
reporting across risk families.
– Third line: Our Group Assurance function provides independent
and objective assurance over the Group’s system of risk
management and control.
Our Risk and Audit Committee and Sustainability Committee
receive periodic reports on risk performance which assist our Board
to carry out its role of overseeing our risk management and
assurance practices.
South32 Annual Report 2026
49 Strategic Report
Risk trend and strategic alignment
The inherent risk impact or likelihood has
increased, decreased, or not materially changed,
over the past 12 months. Changes reflect the
underlying risk exposure, and exclude how we
respond to, or control for these changes.
The risk is aligned to our strategy to optimise
our business by working safely, minimising our
impact, consistently delivering stable and
predictable performance, and continually
improving our competitiveness.
The risk is aligned to our strategy to unlock the
full value of our business through our people,
innovation, projects and technology.
The risk is aligned to our strategy to identify
and pursue opportunities to sustainably reshape
our business for the future, and create social,
environmental and economic value.
OUR RISKS AT A GLANCE DURING FY26
Keeping our people safe and well
Portfolio reshaping
Climate change and environment
Maintain, realise or enhance the value of
our mineral resources and ore reserves
Cybersecurity and privacy
Predictable operational performance
Delivery of our project portfolio
Supply chain security
Shaping our culture and managing
diverse talent
Evolving societal expectations
Political risks, actions by governments
and/or authorities
Global economic uncertainty and
liquidity
South32 Annual Report 2026
50 Strategic Report
Risk management continued
KEEPING OUR PEOPLE SAFE AND WELL
Keeping our people safe and well underpins the culture we
aspire to and sets our expectations of each other. A safe
and healthy working environment is fundamental to living
our values. We strive to build inclusion and diversity in our
workplace, where everyone is valued and can participate to
achieve their full potential. In everything we do, we focus on
the health, safety and wellbeing of our people, contractors
and communities.
Risk exposure trend FY26
Tragically, in March 2026 Simon Mukwarami was fatally
injured in an incident at Worsley Alumina while he and his
work crew were undertaking a plant maintenance activity at
the refinery. We are cooperating with authorities in relation
to their investigations and activities.
We continue to look for opportunities to ensure our existing
systems, processes, procedures, permits, risk assessments
and controls are suitable and effectively implemented. Our
approach in FY26 has centred on improving our safe
systems of work, capabilities and the effectiveness of our
critical controls related to material risks. This year we
enhanced leadership presence in the field with a focus on
leader coaching, coupled with an increased identification of
hazards and non-compliances.
Risk appetite
Aligned to our purpose and values, we will not take actions that
compromise the health, safety and wellbeing of our people,
contractors and communities.
Our response includes:
– We have simplified our safe systems of work, with associated
and optimised performance requirements designed to prevent
and mitigate potential exposure to health and safety risks.
– We are implementing our multi-year Group-wide Safety
Improvement Program designed to change mindsets and
behaviours to achieve a step change in our safety performance.
– We investigate actual and potential significant events that could
have led to severe injury or higher outcomes, put new or
enhanced controls in place where necessary and share the
learnings across our organisation.
– We identify, assess and mitigate psychosocial risks across our
business, and do not tolerate any form of inappropriate conduct
including bullying, harassment, discrimination or victimisation.
– In line with the three lines operating model, we have assurance
functions independent of our operating activities that provide
assurance against our own internal standards.
Learn more about how we are keeping our people safe and well on
page 61.
PORTFOLIO RESHAPING
Our objective is to improve our return on invested capital
and create shareholder value by increasing our exposure to
high-quality assets in commodities with a strong and
sustainable outlook, in jurisdictions where we believe we
can operate in line with our values and Code of Business
Conduct.
Risk exposure trend FY26
Consistent with the prior year, there is a constructive
outlook for future-facing commodities, with growing
attractiveness for critical minerals in stable jurisdictions,
and structural headwinds for carbon-intensive sectors and
assets. These factors continue to concentrate competition
for development and operating assets in developed and/or
low-risk jurisdictions, and drive a scarcity of actionable
opportunities.
Risk appetite
We accept that in actively transforming our portfolio, we need to
take risk to capture opportunities. We will seek to do so in
jurisdictions and commodities where we believe we can operate or
invest in line with our values and Code of Business Conduct.
Our response includes:
– We are actively reshaping our portfolio towards base metals
critical to the world's energy transition.
– We take more risk on early-stage exploration projects, including
jurisdictional risk as well as through joint ventures and earn-ins,
but commensurate with the commercial exposure.
– We will be flexible on opportunistic acquisitions, including non-
controlling and non-operating shareholdings in incorporated or
unincorporated joint ventures.
– We seek opportunities to transform our portfolio to maintain
competitiveness. On 30 June we entered into a binding
conditional agreement to sell our aluminium value chain assets
to Alcoa Corporation
1
. The transaction repositions us as an
upstream base
metals focused company with high-margin assets and
transformational growth.
– We regularly review commodity prices and exchange rates, to
develop long-term views for our portfolio commodities and
foreign exchange rates for the jurisdictions where we operate.
Learn more about how we are reshaping our portfolio in Our strategy
in action on page 18.
South32 Annual Report 2026
51 Strategic Report
1.
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.
CLIMATE CHANGE AND ENVIRONMENT
Climate change creates the potential for physical risks to
our business, our people and the infrastructure,
communities, environment and value chains on which we
rely. The political, social and economic responses to
climate change and the transition to a low-carbon economy
also create transition risks that may affect our business
performance. In addition, our business depends on
environmental assets and ecosystem services and has the
potential to impact the natural environment through land
and water use, waste generation and emissions.
Risk exposure trend FY26
Energy transition efforts across industry remain ongoing,
against a backdrop of continued regulatory scrutiny from
more granular mandatory climate-reporting requirements,
expanding carbon-pricing coverage, and elevated physical-
climate signals. Australia’s environmental laws, amended in
late 2025, aim to streamline approval processes, enhance
transparency, and tighten compliance obligations and
penalties. The implications for the mining sector will remain
uncertain until subordinate legislation and policy are
finalised.
Risk appetite
We recognise the critical role our industry plays in enabling the
transition to a low-carbon world and in supporting efforts to limit
biodiversity loss. Responding to climate change is a complex
challenge that requires balancing multiple factors, including the
need to produce minerals and metals critical for the energy
transition, economic viability, and ensuring a just transition for
affected communities. We acknowledge our exposure to physical
climate risks and other environmental impacts, and that we may
need to take considered risks to reduce our environmental
footprint and build resilience. We seek opportunities to transform
our portfolio in ways that maintain competitiveness in a low-carbon
world, consistent with our purpose and values.
Our response includes:
– Our approach to addressing climate-related risks and
opportunities is outlined in the Addressing Climate Change
section of this Annual Report and in our Climate Change Action
Plan 2025 at www.south32.net.
– We have set an aim to achieve a minimum of no net loss or net
gain of biodiversity
2
in life-of-operation planning and manage
biodiversity impacts and risks by implementing biodiversity
management plans and applying the mitigation hierarchy –
avoid, minimise, rehabilitate/restore and offset.
– We monitor inflows, uses, losses and outflows to support
effective water management and where operationally feasible,
recover, reuse and recycle water to support water efficiency. We
also implement water-related projects and initiatives tailored to
local water contexts and challenges.
– We manage waste-related risks by identifying and tracking
waste streams, assessing risks across handling, storage,
transport and disposal, and implementing controls aligned with
regulatory requirements and internal standards.
– We manage air emissions by identifying key sources and
assessing potential impacts using a Source-Pathway-Receptor
approach, supported by monitoring programs and defined
exposure thresholds.
Learn more about our approach to managing climate and nature-
related risks on pages 71 to 109.
MAINTAIN, REALISE OR ENHANCE THE
VALUE OF OUR MINERAL INVENTORY
We intend to realise the potential of the mineral inventory
we are entrusted to develop. We work to continually
optimise our operations and projects through sound
technical and economic understanding of our mineral
inventory.
Risk exposure trend FY26
The inherent risk trend remains constant from the prior
year. However, factors influencing the value of our mineral
inventory are increasingly being shaped by non-technical
constraints, with rising influence from climate transition
policy, biodiversity expectations, water scarcity and social
licence considerations on resource access and
development viability. Alongside an ageing profile of
operational infrastructure, these factors increase
uncertainty in mine planning, tenure security, reserve
conversion and long-term value realisation.
Risk appetite
We are not willing to take risks that inhibit our ability to realise the
potential of the resources and reserves we are entrusted to
develop.
Our response includes:
– We have capital prioritisation, capital allocation and planning
processes which prioritise the highest-value options across our
portfolio, and maximise the value throughout the life of our
operations.
– Drill plans and budgets are approved as part of our annual
planning cycle and compliance to those plans is tracked
monthly and reported quarterly. Where there is material
deviation to plan, actions are taken to get us back on track.
– We report Mineral Resources and Ore Reserves in accordance
with the JORC Code as required in Chapter 5 of the ASX Listing
Rules.
– We have an internal closure standard which requires that our full
life of operations value incorporates closure and rehabilitation
liabilities.
Learn more about resources and reserves on page 238.
South32 Annual Report 2026
52 Strategic Report
Risk management continued
2.
Measured at the completion of closure against a pre-operation or pre-expansion baseline for new operations and significant expansions, and against a 2020 or earlier baseline for
existing operations.
CYBERSECURITY AND PRIVACY
As the mining sector increasingly depends on
interconnected systems, automation and data-driven
operations, strong cybersecurity and privacy risk
management is essential. Protecting personal information,
production systems and company data requires these
considerations to be embedded throughout the design,
development and support of our technologies.
Risk exposure trend FY26
As geopolitical competition for strategic resources
intensifies, Australian mining companies are likely to
become increasingly attractive targets for cyber intrusion.
Third-party risk remains a threat, as multiple high-profile
global companies have been targeted in large-scale cyber
compromises. The rapid uptake of generative artificial
intelligence (AI) is increasing the sophistication and scale of
fraud, deepfakes, and cyber-attacks.
Risk appetite
We are not willing to take risks that compromise our resilience or
result in a loss of data or disruptions to our operations due to the
theft, disclosure or corruption of information and systems. We have
a low appetite for cyber threats that could materially impact
confidentiality, integrity, availability of data, or the personal
identifiable information of individuals.
Our response includes:
– We have developed our cybersecurity strategy and risk controls
aligned to the National Institute of Standards and Technology
cybersecurity and privacy framework.
– We build collective security awareness through training and
exercises to reduce exposure and minimise the impact of
disruptive cybersecurity events.
– We assess, monitor and respond to third-party risks to protect
South32 systems, data and identities, and use cyber threat
intelligence services to enable informed cyber risk management
activities.
Learn more about how we manage cybersecurity and privacy on
page 69.
PREDICTABLE OPERATIONAL
PERFORMANCE
External volatility and challenges can impact predictable
performance and prevent us from reliably delivering on our
strategic objectives. We build resilience and predictability
into our business by remaining focused on keeping our
people safe and well, meeting our regulatory and social
obligations, effectively managing and improving our assets,
leveraging technology and innovation, planning for and
proactively managing major events and natural
catastrophes, managing cost inflation and consistently
delivering quality products to our customers.
Risk exposure trend FY26
While the trend remains constant from prior years,
operational predictability is increasingly being challenged
by compounding external disruptions as operational
systems are exposed to more frequent, correlated shocks
rather than isolated events. The interaction of factors such
as extreme weather, infrastructure stress, cyber-kinetic
threats, supply chain disruption, and regulatory complexity
all contribute to potential exposures of unplanned outages
and performance volatility.
Risk appetite
We are not willing to take risks that compromise the safe, stable
and predictable performance of our operations.
Our response includes:
– We have an asset management system in place at each
operation. We regularly review our asset health and asset
integrity, and we invest in our operations to sustain and improve
production capacity that generates reliable cash flow to deliver
on our strategic objectives.
– We have integrated operating and planning systems to manage
long- and short-term planning, and we regularly verify and
improve our operating practices.
– We have business continuity, disaster response plans and
insurance coverage in place with trigger action response
processes to facilitate a rapid response to major events (e.g.
tailings dam failures, extreme weather, or supply chain
disruptions) and safely restore our operations, with the aim of
protecting the health and safety of our people and the
communities in which we operate.
Learn more about our operational performance in Our strategy in
action on page 15.
South32 Annual Report 2026
53 Strategic Report
DELIVERY OF OUR PROJECT PORTFOLIO
Delivery of our project portfolio, both brownfield and
greenfield, forms a critical component of our strategy.
Delivery of projects safely, on schedule and within budget
allows us to optimise and unlock the value of our business,
improve reliability, develop our assets, extend the life of our
operations, realise our external commitments and grow
volumes into structurally attractive markets.
Risk exposure trend FY26
Conditions challenging project development have persisted
through FY26, with approvals complexity and cost inflation
as common project disruptors. Supply chain and skills
constraints persist, with these external pressures
continuing to influence investment decisions and intensify
focus on capital discipline.
Risk appetite
Aligned to our strategy of unlocking value in our business, we will
not take actions that compromise the planning and execution of
our major projects. However, we accept there may be greater
levels of risk to pursue opportunities to extend the life of existing
operations through brownfield projects and in executing
decarbonisation projects for our assets.
Our response includes:
– Our internal investment framework defines a tollgate process
with a mature and an independent peer review mechanism to
inform key investment decisions.
– Investment decisions are underpinned by robust capital
prioritisation. We allocate capital to projects to deliver on our
medium- and long-term plan to maximise capital effectiveness
and returns.
– Our joint venture agreements include mechanisms which enable
South32 to exercise appropriate oversight of project, schedule
and cost outcomes.
Learn more about our project execution in Our strategy in action on
page 16.
SUPPLY CHAIN SECURITY
Optimal and sustainable management of supply chain risk
positions our business to operate safely and reliably, at the
lowest possible cost and in a manner that meets or
exceeds the expectations of our stakeholders.
The inability to procure critical goods and services, such as
raw materials, energy, water, equipment and spare parts,
consumables, technology, corporate services, labour and
logistics, has the potential to impact business performance
and our strategic objectives.
Risk exposure trend FY26
Globally, supply chain resilience is being increasingly
challenged, with heightened exposure to trade policy,
geopolitical tensions and climate-driven disruptions
increasing interruption risk. Supply chains are increasingly
treated as strategic and national security assets,
contributing to fragmentation of global trade flows.
Disruptions in CY26, including conflict in the Middle East,
have impacted costs and access to key inputs (e.g. oil) and
commodities (i.e. aluminium). In March 2026, the Mozal
Aluminium smelter was placed on care and maintenance
after it was unable to secure a new electricity supply
agreement.
Risk appetite
Aligned to our strategy of optimising our business, we are not
willing to take undue risks that compromise the security of our
supply chain. However, we accept we have a strong reliance on
certain critical suppliers, particularly to provide energy, logistics
and raw materials to our operations, and we have limited ability to
reduce this reliance.
Our response includes:
– We understand, assess and regularly monitor the risks relating
to potential shortages, critical suppliers and categories, vendor
liquidity, logistics, climate change and decarbonisation, and
modern slavery.
– We work closely with our vendors and operations to match
availability with demand, understanding options for alternative
sources of supply and implementing multi-source supply where
required, optimising inventory levels, flexing commercial terms
and maintaining up-to-date business continuity plans. We
regularly optimise our approach between ‘just in case’ and ‘just
in time’ as supply chain risk ebbs and flows.
– We build strong strategic partnerships with key suppliers and
customers on a long-term, mutually beneficial basis.
South32 Annual Report 2026
54 Strategic Report
Risk management continued
SHAPING OUR CULTURE AND MANAGING
DIVERSE TALENT
We must actively shape and embed our culture to attract,
develop, support and retain our talented people to deliver a
safe and sustainable business.
Risk exposure trend FY26
Culture and talent risks remain elevated due to ongoing
skill shortages. AI is expected to increasingly reshape
workforce size and structure over the medium term
through productivity gains and automation. While impacts
on the mining industry were limited in FY26, organisations
are expected to continue focusing on operating models,
workforce transition, training and future labour needs.
Risk appetite
People underpin everything we do and we are not willing to take
risks that could negatively impact our culture and the way our
people connect to our purpose. However, we recognise our size
and the competitive labour market in which we operate and
therefore accept there is risk in building our talent and succession
pipeline.
Our response includes:
– Our Code of Business Conduct sets the standards of conduct
that we expect of our employees and contractors, executive
management and Directors. We support and encourage people
to speak up when our values and Code of Business Conduct are
not being followed. Our leadership model defines the
accountabilities, behaviours and competencies expected of our
people. Together with our values, they clearly define our
expectations for workplace behaviours.
– We engage with our employees on our culture and their
experiences working at South32, including through periodic
perception surveys, to inform our approach to continuous
improvement.
– Our talent management process seeks to identify key talent,
provide them with development opportunities, and promote
movement within South32. Ultimately, this process aligns
people’s capabilities with work opportunities to perform
business-critical roles.
– We support professional development and provide learning
opportunities for employees. Our learning and development
channels include internal training and learning programs for
specific role profiles, self-assigned learning, and external
capability programs with specialist vendors.
EVOLVING SOCIETAL EXPECTATIONS
The expectations of resources companies by employees,
governments, investors, lenders, host communities
including Indigenous, Traditional and Tribal Peoples (ITTPs),
customers, non-governmental organisations and civil
society continue to evolve. Our purpose and strategy
expressly balance economic outcomes with social and
environmental outcomes, now and into the future. In the
decisions we take, we seek to mitigate our impact, respect
human rights and aim to create enduring social,
environmental and economic value for our stakeholders, in
a way that aligns with our purpose, strategy and values.
Risk exposure trend FY26
There have been no significant changes in material
sustainability topics between reporting years. The
geopolitical and economic uncertainty through FY26 has
broadly focused global attention and action towards trade,
market access, security and supply chain resilience, with a
corresponding softening of expectations from some
stakeholders with respect to sustainability-related action.
Risk appetite
We accept that we may be required to take considered risks
inherent to mining and mineral processing, and in pursuit of our
strategy, acknowledging these may not always align with all
societal expectations.
Our response includes:
– We undertake internal and external stakeholder engagement
with investors, employees, customers, communities (including
ITTPs), industry associations and other global forums on a wide
range of financial and ESG matters, to understand stakeholder
perceptions and areas of interest and concern, and to inform
decision-making.
– Through our Sustainability Governance Framework and periodic
Sustainability Materiality Assessment (Materiality Assessment)
we use a range of publicly available information, internal data,
and stakeholder survey results to inform our decision-making,
and the proportionality of our response.
– We work to build strong, positive and meaningful relationships
with local communities. We regularly complete and review
community perception surveys, human rights risk assessments,
social baseline studies, and social impact and opportunity
assessments to improve our understanding of the communities
in which we operate.
– We develop economic development plans at all of our
operations which contribute to local and regional economic
development through employment, procurement and business
development. These plans include targets informed by local
context, including women and people with diverse backgrounds,
and inform our social investment program.
Learn more about how we are delivering value to society, on page 65.
Details of the external standards and initiatives that guide us are
outlined on page 58.
South32 Annual Report 2026
55 Strategic Report
POLITICAL RISKS, ACTIONS BY
GOVERNMENTS AND/OR AUTHORITIES
Changes in legislation, regulation, policy and geopolitical
activity have the potential to impact our strategic
objectives and the way we work. This includes broader
policy decisions and regulatory changes, related but not
limited to changes to royalty and taxation policy,
nationalisation of mineral resources, supply chains,
renegotiation or nullification of contracts, leases, permits or
agreements, climate change and emissions reduction
requirements, and environmental and social performance
requirements.
Risk exposure trend FY26
Through FY26, heightened geopolitical fragmentation,
trade weaponisation, deterioration of global institutions,
and growth of nationalistic and protectionist policy are
embedding as structural features of the current risk
environment, rather than episodic shocks. Various armed
conflicts, particularly in Ukraine, Iran and their surrounding
areas, continue to exacerbate economic and policy
uncertainty and amplify exposure to sanctions, supply
disruption and market volatility across energy and
resources sectors.
Risk appetite
We have a low appetite for activities that are likely to result in non-
compliance with applicable legal or regulatory requirements. We
maintain programs that seek to comply with those requirements.
However, there can be no guarantee that such programs will
always be effective to identify or prevent breaches of the law.
Further, we operate in certain complex environments and
jurisdictions which are subject to legislative, regulatory or
government policy changes that may adversely impact our
business. Therefore, there will always be residual risk in relation to
compliance with legal and regulatory requirements, and changes to
those requirements that may adversely impact our business.
Our response includes:
– We monitor political activity, policy, and legislative and
regulatory changes in the jurisdictions where we operate, and
we also engage with relevant authorities, to understand and
mitigate potential impacts on our business performance.
– We engage with key stakeholders in all jurisdictions where we
operate on matters related to our business.
– We work through selected industry associations to influence
how the industry is positioned.
– We produce an annual Tax Transparency and Payments to
Governments Report, which shows how we meet our regulatory
tax obligations.
Learn more about our approach to tax in our Tax Transparency and
Payments to Government Report at www.south32.net.
GLOBAL ECONOMIC UNCERTAINTY AND
LIQUIDITY
We prioritise an investment grade credit rating and a
disciplined approach to allocating capital which aims to
keep our balance sheet strong, providing us with financial
flexibility regardless of market conditions. By creating
competition for capital and investing selectively in our
existing operations, growth options and external
opportunities, or by making returns to shareholders, we aim
to maximise total shareholder returns over time.
Risk exposure trend FY26
Higher macro-economic volatility is being driven by
geopolitical fragmentation, trade disruption, inflation
persistence and financial market instability. These
conditions are increasing pressure on capital allocation,
forecasting reliability, counterparty stability and funding
resilience, as policy-driven shocks and regionalised
economic outcomes become more frequent and less
predictable.
Risk appetite
We are not willing to take risks that may limit our ability to maintain
a minimum liquidity balance and/or access to funding on
acceptable terms. We recognise our preferred commodity basket
and our operating costs have the potential for price and exchange
rate volatility outside of our control, and while we accept that as a
resource company we are exposed to this inherent risk, we will act
to reduce its impact by understanding its effect on our business.
Our response includes:
– We have a diverse portfolio of operations, commodities and end
markets which strengthens our resilience to the disruption of
any one commodity, geography or operation.
– We prioritise a strong balance sheet and an investment grade
credit rating, with the aim of remaining resilient through
economic cycles. Capital allocation plans are adjusted according
to market conditions.
– We test our financial strength across a range of scenarios,
including a depressed demand and pricing environment. We
also maintain a minimum liquidity buffer and access to a diverse
range of funding sources.
– We mostly sell our products with reference to floating, market-
based prices, which are broadly correlated with floating global
currency markets and the input costs we are exposed to.
– We regularly review commodity prices and exchange rates,
which inform our operational plans.
Learn more about our capital management framework on page 33 and
254.
South32 Annual Report 2026
56 Strategic Report
Risk management continued
SUSTAINABILITY
Our approach to sustainability
58
Protecting and respecting our people
61
Safety and health 61
People and culture 63
Delivering value to society
65
Community relationships 65
Operating ethically and responsibly
68
Human rights 68
Ethics and business integrity 69
Cybersecurity and artificial intelligence 69
Closure 70
Managing our environmental impact
71
Nature 71
Biodiversity 72
Water 73
Pollution 75
Tailings management 76
Climate change
77
Independent assurance reports
113
South32 Annual Report 2026
57 Strategic Report
DEVELOPING RESOURCES
SUSTAINABLY
To us, sustainability means supporting the needs of the present without compromising the ability
of future generations to meet their own needs.
Our business delivers minerals and metals critical for the energy
transition and modern life, while supporting economic and social
development. At the same time, our activities can result in adverse
impacts. In pursuing our purpose and strategy, we seek to balance
environmental, social and economic considerations, with the aim of
reducing adverse impacts and creating enduring stakeholder value.
Our Sustainability Policy sets out our commitment to continuously
improve performance, optimise our positive contributions and
mitigate adverse impacts. This commitment underpins the five
interconnected pillars of our sustainability approach. Our
sustainability approach is further described in a series of ‘Our
Approach’ documents, available on our website, which outline how
we manage a range of sustainability-related matters.
Our Sustainability Policy and broader sustainability approach are
shaped by global standards and industry frameworks, including the
United Nations Sustainable Development Goals and the
International Council on Mining and Metals (ICMM) Mining
Principles, Performance Expectations and Position Statements.
Our approach and reporting are also informed by the Global
Reporting Initiative (GRI), Task Force on Climate-related Financial
Disclosures (TCFD) and the Taskforce on Nature-related Financial
Disclosures (TNFD). We prepare our climate-related disclosures in
accordance with the Australian Sustainability Reporting Standard
AASB S2 Climate-related Disclosures, with further detail provided in
the Addressing Climate Change section on page 77.
We are committed to transparently reporting our sustainability
performance through clear, meaningful disclosures that build
stakeholder trust and support continuous improvement. We
support efforts to harmonise sustainability standards and
frameworks, and enhance sustainability-related disclosures. In
FY26, we continued to contribute to the consultation process for
the Consolidated Mining Standard Initiative, which aims to unify
four key responsible mining standards into a single framework.
Information on our material sustainability topics is disclosed across
our 2026 Annual Reporting Suite and supplemented by topic-
specific disclosures, policies and other information available on our
website at www.south32.net.
Material topic disclosure locations
Sustainability Pillar Our material topics
Our
Approach
document
Annual Report
(Sustainability)
Tax
reports
1
Climate-
related
Methodology
Modern
Slavery
Statement
Databook
and Index
2
Protecting and
respecting our
people
Safety
● ●
Wellbeing and psychosocial health
● ●
Diversity, equity and inclusion
● ● ●
Attraction and retention
● ●
Delivering
value to society
Economic contribution
● ● ● ●
Communities and social impact
● ● ●
Indigenous engagement
● ● ●
Cultural heritage
● ● ●
Operating
ethically and
responsibly
Human rights
● ● ● ●
Business ethics and integrity
● ● ●
Privacy, cybersecurity and AI
● ●
Responsible value chain
● ● ●
Closure and post-mining
● ● ●
Sustainability governance and disclosure
● ●
Managing our
environmental
impact
Biodiversity and ecosystems
● ● ●
Water use and stewardship
● ● ●
Pollution and effluents
● ●
Waste and tailings
● ● ●
Circular economy
●
Addressing
climate change
Climate resilience and adaptation
● ● ●
Emissions, decarbonisation and transition risk
● ● ●
South32 Annual Report 2026
58 Strategic Report
Sustainability continued
1.
Includes our Tax Transparency and Payments to Governments Report 2026 and Tax Transparency Databook 2026.
2.
Includes our Sustainability Databook 2026 and Sustainability Standards and Frameworks Index 2026.
Material sustainability topics
We conduct materiality assessments to identify sustainability
topics that are material to our business and stakeholders. The
outcomes inform our prioritisation of activities and how we identify,
monitor and report on sustainability-related matters.
In FY25, we applied a double materiality approach for the first time,
considering both our impacts on the environment and society
(impact materiality) and how these factors impact our company,
including financial performance and position (financial materiality).
The assessment adopted a five-stage approach, including:
– desktop analysis, stakeholder engagement
– topic prioritisation
– validation with senior leaders
– finalisation with the Board's Sustainability Committee.
In FY26, we reviewed the continued relevance of these topics,
focusing on impact materiality in line with GRI requirements. This
review confirmed that there were no changes to our material
sustainability topics. Although some topics are prioritised more
highly than others for the purposes of reporting, we consider all
identified topics to be material to our business.
As in previous years, material topics have been grouped into
thematic sections in this report to provide a consistent and
structured overview of our performance and progress.
Sustainability governance
Our Board represents our shareholders and promotes and protects
the interests of South32. The Board oversees the management of
material exposures to sustainability-related risks and opportunities,
including climate-related risks and opportunities, as part of its
oversight of the Group’s strategy, risk management framework and
significant capital allocation and investment decisions.
The skills and experience of Directors, individually and collectively,
are assessed annually against those required to oversee the
Group’s strategy and risk profile, and are documented in our Board
skills matrix. The results are used to inform Board composition,
succession planning and priorities for the Board’s continuing
education program.
The Board skills matrix includes a range of sustainability-related
capability areas, including health and safety, social performance,
environment and climate change, as well as people and
remuneration, and technology and innovation (including artificial
intelligence). This includes an understanding of the nature- and
climate-related risks and opportunities relevant to a global mining
and metals company.
More information about our Directors and the Board’s skills
evaluation process is provided on pages 119 and 131.
Remuneration
Sustainability performance is embedded in our employee reward
framework. In FY26, 35% of the performance metrics in our
Business Scorecard, a key input into the determination of short-
term incentives, were sustainability-related.
A portion, 20%, of the long-term incentive for the CEO and Lead
Team is linked to our response to climate change and our portfolio
transition towards commodities critical to the energy transition.
Performance against these measures is assessed by the Board at
the end of each four-year performance period.
Materiality assessment outcomes
HIGHER
LOWER
LOWER
HIGHER
Sustainability pillar
Protecting and respecting
our people
Delivering value
to society
Operating ethically
and responsibly
Managing our
environmental impact
Addressing climate
change
South32 Annual Report 2026
59 Strategic Report
FINANCIAL IMPACT ON SOUTH32
IMPACT ON STAKEHOLDERS
Climate resilience and adaptation
Communities and social impact
Biodiversity and ecosystems
Safety
Waste and tailings
Business ethics and integrity
Water use and stewardship
Human rights
Diversity, equity and inclusion
Economic contribution
Indigenous engagement
Responsible value chain
Privacy, cybersecurity and AI
Closure and post-mining
Emissions, decarbonisation and
transition risk
Sustainability governance and disclosure
Cultural heritage
Wellbeing and psychosocial health
Attraction and retention
Pollution and effluents
Circular economy
o
m
Sustainability Committee
Oversees sustainability management, performance, assurance and reporting practices, including health and safety performance and the
Group's resilience and response to climate-related risks and opportunities. The Committee endorses:
〉 material public sustainability commitments, including our FY35 emissions reduction target, and monitors performance against them
〉 our Climate Change Action Plan and monitors progress against the plan
〉 sustainability-related disclosures in the Annual Report, including climate-related disclosures
〉 the scope of external and internal sustainability assurance.
The Committee meets quarterly and receives regular updates on sustainability matters, including health and safety performance, climate
change and environment-related matters, tailings management and social performance.
Risk and Audit Committee
Oversees corporate reporting, risk management and assurance practices. The Committee considers climate-related risks and opportunities
as part of its financial reporting and risk oversight responsibilities, including:
〉 reviewing sustainability-related disclosures where they contain financial information or may affect the Group’s financial reporting
〉 approving the scope of external and internal sustainability assurance
〉 considering advice from the Sustainability Committee on material exposures to sustainability-related risks and opportunities.
Remuneration Committee
Oversees remuneration policy and our employee remuneration and benefits framework, including endorsing to the Board:
〉 the annual Business Scorecard and associated outcomes, including sustainability and climate-related performance measures
recommended by the Sustainability Committee
〉 remuneration outcomes for the CEO and approving outcomes for Lead Team members
〉 annual assessment outcomes for executive equity-based award performance conditions, including sustainability-related conditions.
Nomination and Governance Committee
Reviews Board composition, performance, succession planning and corporate governance practices. The Committee annually assesses
whether the Board collectively has the skills and experience required to oversee material risks and opportunities, including climate-related
risks and opportunities, informed by advice from the Sustainability Committee.
The Board's Committees operate in a coordinated manner to support oversight of climate-related matters. Climate-related risks and
opportunities are escalated between Committees and the Board as appropriate to support alignment between sustainability performance,
financial reporting and remuneration outcomes.
Chief Executive Officer and Lead Team
Day-to-day management of the Group is delegated to the CEO, who is responsible for developing and implementing the Group's strategy,
annual plan and budget, and is accountable to the Board for performance within delegated authority. The CEO is supported by the Lead
Team in executing the Group’s strategy in alignment with our purpose, values, Code of Business Conduct and Board-approved risk appetite.
The CEO and Lead Team implement our Sustainability Policy and Climate Change Action Plan, maintain systems of internal controls and
assurance to identify and manage sustainability-related risks and opportunities, and monitor performance against the Group's material
public sustainability commitments, including our FY35 emissions reduction target. They are informed about climate-related matters through
management processes, including regular reporting on GHG emissions, decarbonisation initiatives and risk management activities.
The CEO and Lead Team report to the Board, including through the Sustainability Committee and Risk and Audit Committee, on
sustainability and climate-related matters. Management accountability for sustainability-related matters is supported through defined
executive responsibilities. For example, the Chief Legal, External Affairs and Sustainability Officer (CLEASO) approves our internal
environment and climate change, and social performance standards, and the Chief Technical and Operating Officer approves health and
safety standards. These standards establish performance requirements across key sustainability-related areas and support management of
sustainability-related risks and opportunities.
Climate Change Steering Committee (CCSC)
The CCSC is composed of Lead Team members (including the CLEASO). It supports the development and implementation of our Climate
Change Action Plan and the integration of our climate change response into our strategy, governance and risk management processes.
The CCSC meets twice yearly and reviews six-monthly progress and performance reporting on GHG emissions, decarbonisation initiatives
and risk management activities. CCSC members also receive half-yearly risk reports, which include information on climate-related risks.
Further detail on the roles and responsibilities of the Board and its Committees, including matters relating to sustainability and climate change
oversight, is set out in the Board Charter and Committee Terms of Reference, available at www.south32.net.
Learn more about Board and Committee activities relating to sustainability, including climate change, on pages 127 and 139.
South32 Annual Report 2026
60 Strategic Report
Sustainability continued
PROTECTING AND RESPECTING OUR PEOPLE
Nothing is more important than the health, safety and wellbeing of our people and we remain committed to
improving our performance.
SAFETY AND HEALTH
We are deeply saddened by the death of Simon Mukwarami, a
contractor who was fatally injured in March 2026 while he and his
work crew were undertaking a plant maintenance activity at the
Worsley Alumina refinery. The incident involved a fall from height.
Our thoughts remain with Simon’s family, friends and colleagues.
Together with our contracting partner and a specialist third party,
Miners' Promise, we have provided support to Simon’s family.
Support has also been made available to our workforce.
We are cooperating with authorities in relation to their
investigations and activities. While Worsley Alumina has existing
procedures, permits, risk assessments and controls for working at-
heights hazards, including unprotected edges and voids, and
management of change processes, we have taken steps to further
enhance awareness of these as part of our cooperation with the
authorities. This has included reviewing existing systems of work
and risk management controls for fall from height hazards, and
updating training, permitting processes and supporting policies
and procedures.
We continue to look for opportunities to design tasks in a way that
eliminates or reduces fall from height risks so far as practicable,
and to ensure our existing systems, processes, procedures,
permits, risk assessments and controls are suitable and effectively
implemented.
In FY26, we were saddened to hear that a maintenance employee
was fatally injured in an incident at the Alumar smelter in Brazil, a
non-operated joint venture. Together with our joint venture partner,
we supported the smelter’s response, including its incident
investigation and provision of assistance to family members and
colleagues.
Fatality and serious injury elimination
Our approach to fatality and serious injury elimination focuses on
proactively identifying and managing fatality and serious injury
risks through:
– monitoring precursors to serious incidents, with a focus on
hazards and events that have the potential to result in a fatality
or serious injury; this helps us to identify, prioritise and manage
critical risks
– identifying and defining risk energy sources (such as
gravitational energy, electrical energy, vehicle energy and
machine energy) and establishing critical controls to manage
associated risks
– empowering our people to take action, including stopping work
where there is an actual or potential threat to health and safety;
our risk and event management system supports proactive
hazard identification, reporting and follow-up
– investigating significant actual and potential events and hazards
in line with our internal investigation protocol, enabling us to
capture learnings and continuously strengthen controls.
A key aspect of our approach is our 'safety guarantee'. Before
commencing work, we ask our people to reflect on whether they
can guarantee their safety and that of their colleagues. If the
answer is no, they are expected to stop, consider what needs to be
done differently, and only proceed when the work can be
performed safely.
FY26 performance and progress
We analyse a range of lagging and leading safety and risk
performance indicators to identify trends and inform risk reduction
activities. We also set health and safety KPIs in our annual Business
Scorecard, as detailed on page 160.
Several lagging indicators improved in FY26, with LTIF and TRILF
decreasing by approximately 30% and TRIF decreasing by 8% year-
on-year. HPIIF remained at 0.2, reinforcing our focus on preventing
serious harm. Leading indicators relating to the reporting of
significant hazards and significant event near misses remained
consistent with prior years, reflecting continued emphasis on
identifying and reporting serious safety risks. While these indicators
are encouraging, we recognise that fatalities and serious injuries
remain a risk in our industry. We continue to focus on eliminating
fatalities and serious injuries through embedding of our 'safety
guarantee' and the ongoing strengthening of critical risk
management practices.
Safety and health performance
3
FY26
Performance metric
Australia
Manganese Cannington Hermosa
Hillside
Aluminium
Mozal
Aluminium
South Africa
Manganese
Worsley
Alumina FY26 FY25 FY24
Fatalities from health and safety incidents
0 0 0 0 0 0 1 1 1 0
Lost time injury frequency (LTIF)
2.9 3.0 1.0 0.0 0.3 0.6 1.6 1.0 1.4 2.0
Total recordable injury frequency (TRIF)
7.1 12.5 1.6 0.2 0.6 1.3 8.0 3.4 3.7 5.1
High-potential injury and illness frequency (HPIIF)
0.0 0.4 0.0 0.0 0.0 0.0 0.7 0.2 0.2 0.5
Total recordable illness frequency (TRILF)
0.7 3.0 0.0 0.2 0.0 0.0 2.0 0.7 1.0 1.3
Total significant hazards frequency (SHF)
— — — — — — — 245 196 122
Significant hazard to significant event near miss ratio
— — — — — — — 77 78 21
South32 Annual Report 2026
61 Strategic Report
3.
Frequency rates are per million hours worked. Incidents are included where South32 controls the work location or controls the work activity, including those related to operations,
development options and exploration projects that we own and control. FY26 totals include assets not separately presented in this table, including operations divested during the
year. Refer to our Sustainability Databook 2026 for more information on our reporting boundaries.
Driving continuous improvement
Our global Safety Improvement Program focuses on safety
leadership and empowering our people to take ownership of their
safety and that of others, improving critical control effectiveness,
and enhancing systems and processes that support safe work.
A key component of the program is our LEAD Safely Every Day
(LSED) training, which builds a common understanding of safety
leadership. Following the initial rollout, implementation continued in
FY26 across leaders, frontline employees and selected contractors,
with delivery tailored to operational requirements.
During FY26, we progressed a range of initiatives through
operation-specific safety improvement plans, with a focus on
enhancing safety leadership, investigation capability and quality,
and critical control management.
Safety leadership and empowerment
We continue to embed the concepts of our LSED program across
our business through visible felt leadership, where leaders
demonstrate care and commitment to safety through regular
engagement in the field, and coached safety interactions, which
provide real-time feedback and development to strengthen
capability and reinforce safe behaviours.
We monitor this through Workplace Interaction Frequency (WPIF),
which measures the frequency of leadership safety interactions in
the field relative to hours worked, and Coached Interactions (CI%),
which measures the proportion of workplace interactions assessed
as coaching-focused to support learning, accountability and safer
work practices. FY26 WPIF and CI% both exceeded annual Business
Scorecard targets, reflecting our continued focus on visible
leadership engagement in the field and improving the quality of
safety conversations across our operations.
To promote shared learning and empowerment, our CEO Safety
Guarantee Awards recognise individuals and teams who identify
and implement safety improvement ideas that support our 'safety
guarantee'. A safety champion is recognised each quarter, with an
annual winner selected from the quarterly recipients. Learn about
these initiatives on page 14 and at www.south32.net.
Investigation capability and quality
Recognising the importance of consistent, high-quality
investigations in identifying systemic issues and preventing serious
injuries and fatalities, we progressed several initiatives during FY26
to further strengthen investigation capability. This included real-
time coaching and delivering in-person training to support
improved investigation planning, facilitation and quality.
These initiatives were complemented by trials of an AI-enabled
investigation tool and the introduction of a new internal standard
for event reporting, management and investigation. Together,
these initiatives support more consistent learning, clearer
accountability, and improved identification and management of
safety and health risks.
In FY27, we intend to continue embedding these initiatives across
our business, supporting our ongoing focus on preventing serious
injuries and fatalities in line with our 'safety guarantee'.
Enhancing critical control management
Critical controls are the key safeguards relied upon to prevent or
mitigate potentially fatal and other high-consequence events.
During FY26, we worked to align our internal critical control
methodology with the Critical Control Management Good Practice
Guide, published by ICMM in April 2026. Our updated methodology
provides a more consistent approach to identifying, implementing
and verifying these controls across our operations.
To support implementation, we have updated relevant internal
standards to clarify performance requirements and introduced
additional verification activities to strengthen assurance that critical
controls are being implemented as intended. Together, these
enhancements support a more structured and industry-aligned
approach to managing safety risks across the Group.
Contractor management
Our internal contractor management standard outlines
performance expectations across the full contractor lifecycle.
During FY26, we continued to strengthen our contractor
management approach, recognising the important role contractors
play in supporting our operations, projects and exploration
activities.
This included revising the standard to strengthen governance and
risk management requirements across the contractor lifecycle and
targeted implementation activities to embed the revised
requirements. We also further integrated contractor management
requirements within broader internal standards and processes,
including training, risk management, safety and asset
management, to support a more integrated approach to managing
contractor-related risks.
During the year, we introduced additional internal metrics to
monitor the involvement of supplier and contractor companies in
significant safety events, significant hazards and workplace
interactions. These metrics complement our existing contractor
safety performance measures, helping to identify trends and
strengthen contractor oversight.
CASE STUDY
Shaping safer workplaces through contractor insights
Contractors play a critical role in our business and
understanding their experiences helps strengthen our
safety management approach and outcomes. In FY26, we
introduced a new confidential survey, available in multiple
local languages, to better understand the perspectives of
contractors working across our operations.
We received responses from over 2,000 participants,
providing valuable insights into their awareness of our
'safety guarantee', perceptions of our safety management
approach, confidence to speak up, and opportunities to
improve safety performance.
Survey insights indicated strong alignment with our safety
expectations, including a shared understanding of our
'safety guarantee' and confidence to speak up and stop
unsafe work. They also highlighted opportunities to improve
the consistency of how safety concerns are acknowledged,
addressed and communicated.
In FY27, we will continue to focus on coaching-based
leadership, visible leadership in the field and site-specific
improvement initiatives informed by the survey findings. We
also plan to repeat the survey periodically to monitor
progress and support continuous improvement.
South32 Annual Report 2026
62 Strategic Report
Sustainability continued
Light vehicles and mobile surface equipment
Light vehicles and mobile equipment (LVME) interaction remains a
priority focus area, contributing to 25% of potential significant
events in FY26. We completed implementation of our Mobile
Equipment Collision Avoidance (MECA) program in FY26, with
activities focused on embedding vehicle interaction risk
management into our broader risk management processes and
day-to-day activities.
This included:
– Risk management integration: aligning how vehicle-related
risks are identified and managed within our Group risk
management system, including mapping key risks and critical
controls to the Earth Moving Equipment Safety Round Table
framework, a recognised industry approach to vehicle
interaction risk management.
– Vehicle interaction maturity assessments: using findings from
ICMM's Vehicle Interaction Maturity Framework self-
assessments completed in FY25 to identify opportunities to
strengthen vehicle interaction controls, including physical
segregation measures and technologies for fatigue monitoring
and collision intervention. Assessment outcomes informed
prioritised improvement actions across our operations.
– Control enhancements:
◦ continuing the rollout of fatigue monitoring systems across
our operations and select contractors to strengthen
management of fatigue-related vehicle risks in shift-based
operational environments
◦ continuing implementation of collision-avoidance systems to
support management of vehicle interaction risks in mixed-
fleet environments
◦ progressing light vehicle bypasses at high-risk intersections
at Australia Manganese to reduce interactions between light
and heavy vehicles and strengthen reliance on engineered
controls.
Following completion of the MECA program, vehicle interaction
risks will continue to be managed through our risk management
processes, including implementation of critical controls.
Potential occupational exposures
Our activities present a range of potential occupational exposure
and health risks, including airborne contaminants, hazardous
substances and non-ionising radiation. We manage these risks by
identifying key health hazards and setting Occupational Exposure
Limits (OELs). OELs are informed by legislative requirements,
independent expert guidance and scientific evidence, and are
periodically reviewed.
We manage occupational exposure risks through a range of
prevention, monitoring and response measures. These include
ventilation and dust suppression systems, and respiratory
protective equipment programs. Reactive controls include health
surveillance, biological monitoring and investigation of
exceedances to identify root causes and improve control
effectiveness.
In FY26, revised OELs were implemented across our operations
ahead of anticipated regulatory changes in Australia and South
Africa. In FY27, we plan to identify and prioritise projects to further
strengthen controls and support compliance with the revised OELs
across our operations.
Find more information about our safety and health management
approach at www.south32.net.
PEOPLE AND CULTURE
Our Approach to People and Culture outlines our focus on fostering
an engaged, inclusive and diverse workforce, while shaping a
positive employee experience.
Find Our Approach to People and Culture and our Inclusion and
Diversity Policy at www.south32.net.
Our employees by geography
4
54%
40%
5%
1%
Australia
Southern Africa
Americas
Rest of the world
Our culture
We use a range of mechanisms to assess and monitor culture.
These include engagement with employees and a representative
group of contractors through our Your Voice survey, and regular
reporting to the Board and Lead Team on people and culture
matters. This reporting includes Your Voice survey insights,
workplace misconduct, attrition risk, and talent and succession
management outcomes.
Our annual Your Voice survey is conducted confidentially and
captures workforce perceptions across key workforce and culture
dimensions. Results are reviewed against external global
benchmarks and shared with line leaders to support meaningful
team discussions and identify improvement opportunities.
While our 2026 Your Voice survey recorded a lower participation
rate, favourable responses improved across the five dimensions
assessed, including experiences relating to safety, engagement,
inclusion, leadership and workplace conduct. These results will
continue to inform our focus on building leadership capability and
fostering safe and respectful workplaces for our people.
FY26 Your Voice survey results summary
5
Response rate: 76% participation rate (FY25: 81%).
'Safety guarantee': 87% favourable response (FY25: 85%).
Leadership: 80% favourable response (FY25: 78%).
Employee engagement: 81% favourable response (FY25: 78%).
Employee experience: 81% favourable response (FY25: 78%).
Workplace misconduct intolerance / leadership response: 81%
favourable response (FY25: 79%).
Inclusion and diversity
Our approach to inclusion and diversity is guided by our Inclusion
and Diversity Policy. Each year, we develop a Group-wide Inclusion
and Diversity Action Plan, approved by our CEO, to guide our
efforts in building a more inclusive workplace.
Key activities delivered through our FY26 plan included:
– enhancing leadership capability through targeted development
programs to support inclusive leadership and cultural outcomes
– maturing our inclusion and diversity approach through
effectiveness testing, strengthening governance arrangements
and supporting consistent implementation across our business
– continuing the implementation of our Group-wide psychosocial
risk framework.
South32 Annual Report 2026
63 Strategic Report
4.
Includes direct employees at non-operated joint ventures.
5.
FY25 results restated to exclude Cerro Matoso, which was divested 1 December 2025, and Mozal Aluminium, which was placed on care and maintenance in March 2026.
6,867
employees
We assess our inclusion and diversity progress against a set of
annual measurable objectives approved by our Board. A subset of
these objectives is included in our Business Scorecard, detailed on
page 160.
We met six of our seven FY26 measurable objectives, including
objectives relating to women’s representation in our workforce,
leadership roles and on the Board, and local workforce diversity.
We completed 100% of the actions in our FY26 Group Inclusion and
Diversity Action Plan. Changes to Lead Team composition during
the year resulted in women’s representation falling below our
objective at year-end.
We periodically review our compensation practices to support
employee pay equity. Ratios of entry-level wages to living wages in
locations where we operate and pay equity data is available in our
Sustainability Databook 2026 at www.south32.net.
Workplace conduct
Our Code of Business Conduct (our Code), together with our values
and leadership model, define our expectations for workplace
behaviours. Our Speak Up Policy encourages reporting of
unacceptable behaviour and includes protections against
retaliation. Concerns can be raised through internal channels or our
confidential global whistleblower hotline, EthicsPoint. Mental health
and wellbeing support, including our Employee Assistance
Program, is available to those who may need it.
Bullying, harassment (including sexual harassment), discrimination
and other disrespectful behaviours are psychosocial hazards
inconsistent with our Code and are not tolerated. Inappropriate
conduct is addressed through formal disciplinary processes.The
Sustainability Committee receives regular reporting on reported
workplace conduct concerns and trends, while material workplace
conduct concerns are reported quarterly to the Business Conduct
Committee and twice yearly to the Risk and Audit Committee.
Sexual harassment remains a focus area within our broader
approach to workplace conduct. All reported events are
investigated, and the Sustainability Committee is regularly
informed of the number of reported events. Where legally
permissible, case-level information is reported quarterly to the
Business Conduct Committee and CEO, and twice-yearly to the
Risk and Audit Committee.
Learn more about how we manage workplace and business conduct
concerns on page 69.
Through our Your Voice employee survey we ask our people to
share their experience of working at South32, including instances
of bullying, discrimination, harassment, sexual harassment and
aggression.
In FY26, there was a continued reduction in the proportion of
respondents who reported experiencing workplace misconduct.
Since the introduction of the Your Voice survey in 2022, employee
experiences of workplace misconduct have declined, and reporting
rates have increased. While these trends are encouraging, we
recognise the importance of continuing to strengthen our
management of psychosocial risks and workplace conduct,
consistent with our 'safety guarantee'.
Psychosocial risk management
In FY26, we progressed the implementation of our psychosocial risk
management framework which standardises how psychosocial
risks are identified, assessed and managed across our business.
Key actions included:
– deploying psychosocial risk management training for leaders to
strengthen capability in identifying, assessing and managing
psychosocial risks
– expanding our Workplace Behaviour discussion series to include
a new aggression and violence module. This leader-led program
reinforces our Speak Up Policy and explores topics including
bullying, harassment, discrimination, aggression, sexual
harassment and conflicts of interest
– completing psychosocial risk assessments across our global
operations, building on the assessments completed at
Australian operations in FY25
– launching a new psychosocial risk management procedure,
including supporting tools and guidance material
– updating investigation and reporting procedures to strengthen
consistency, transparency and accountability of material
workplace conduct case management.
FY26 inclusion and diversity measurable objective performance
Measurable objective scope (%)
FY26 objective FY26 FY25
6
Women in our total workforce
Achieve at least 26.1%
■
26.3 25.6
Women on our Board
Maintain at least 40%
■
50.0 54.5
Women in our Lead Team
7
Maintain at least 40%
□
28.6 50.0
Women in leadership roles
8
Achieve at least 24.7%
■
24.9 24.2
Improve/maintain local workforce diversity
Achieve at least 2 of 3 targets
■ 2 of 3 achieved
3 of 3 achieved
Black People in our South African workforce
9
Year-on-year improvement 90.3 89.5
Black People in management roles in our South African workforce
10
Achieve at least 60% 56.5 60.0
Aboriginal and Torres Strait Islander Peoples in our Australian workforce
11
Achieve at least 2.25% 3.09 2.00
Inclusion Index Score
Achieve at least 80.2%
■
82.8 80.2
Group Inclusion and Diversity Action Plan
100% delivered ■ 100% delivered 92% delivered
■ Measurable objective met □ Measurable objective not met
South32 Annual Report 2026
64 Strategic Report
Sustainability continued
6.
For comparability, FY25 outcomes have been restated to exclude Cerro Matoso (divested on 1 December 2025) and Mozal Aluminium (placed on care and maintenance on 15 March
2026). As previously reported (including both operations), women represented 23.1% of the total workforce and 23.6% of leadership roles, the Inclusion Index Score was 82.1%, and
local workforce diversity performance was five of five targets achieved.
7.
Lead Team at 30 June 2026 comprised of Graham Kerr, Matthew Daley, Sandy Sibenaler, Kelly O’Rourke, Erwin Schaufler, Noel Pillay and Simon Collins. Effective 3 August 2026, Lead
Team comprises of Matthew Daley, Sandy Sibenaler, Kelly O’Rourke, Simon Collins and David Palmer with an outcome of 40%.
8.
A leader is defined as an employee occupying a Leadership Role, where a Leadership Role is a position in the organisational structure flagged as the head of an organisational unit.
9.
Black People is a generic term meaning Africans, Coloureds and Indians who are Citizens of the Republic of South Africa, as defined in the Broad-Based Black Economic
Empowerment Amendment Act, 2013. The percentage of Black People is calculated based on our workforce in South Africa only.
10.
Management roles include Operations Lead Team roles, including functional roles based at an operation and Grade 13 or above roles, assigned to a South African entity.
11.
Aboriginal and Torres Strait Islander Peoples is defined as employees that are located at one of South32’s Australian operations or functions that have an ethnicity of ‘Aboriginal’ and/
or 'Torres Strait Islander’, as a percentage of total Australian employees.
DELIVERING VALUE TO SOCIETY
We seek to contribute to the social and economic development of the countries and communities where we
operate through the taxes and royalties we pay, the employment and business opportunities we support, our
social investments, and the value we generate for shareholders.
Economic value distributed to stakeholders in FY26 (US$ million)
12
Country / Region
Total economic value
distributed
Paid in operating costs
(incl. to suppliers)
Paid in employee wages
and benefits
Paid to Governments
(incl. royalties)
Spent on social
investments
13
Paid to
shareholders
Australia
(2,211) (1,562) (423) (222) (4) –
South Africa
(2,112) (1,780) (135) (183) (14) –
United States
(43) (29) (10) (3) (1) –
Rest of the world
(2,207) (1,287) (420) (168) (4) (327)
South32 total
(6,573) (4,658) (988) (576) (23) (327)
COMMUNITY RELATIONSHIPS
Our Approach to Partnering with Communities outlines our
commitment to building trusted and meaningful relationships with
local communities.
Find Our Approach to Partnering with Communities at
www.south32.net.
Community relationships
Community engagement and research helps us to understand the
actual and potential impacts of our activities, as well as community
aspirations, interests, expectations and concerns. These insights
inform our operation-specific stakeholder engagement and social
performance plans, which are regularly updated to remain
responsive to community needs and reflect the evolving context of
each location.
During FY26, we continued work arising from social impact
assessments completed at our South African operations in FY25.
This included the use of findings to inform business planning at
South Africa Manganese and enhance communication and
engagement with stakeholders at Hillside Aluminium. We also
continued our Local Voices program at Worsley Alumina, using
regular pulse surveys to monitor community perceptions, with
outcomes published on our website.
At Hermosa, we continued activities to support the development of
a Community Protection and Benefits Agreement (CPBA), a
framework intended to formalise commitments relating to
community wellbeing, local economic participation and investment
priorities. This included signing a Community Investment
Agreement with local community and government stakeholders,
providing funding for near-term community projects while the
broader CPBA is developed.
Learn about stakeholder engagement during Mozal Aluminium's
transition into care and maintenance on page 70.
Addressing stakeholder concerns
We maintain complaints and grievance mechanisms that are
designed to be locally appropriate, culturally sensitive and aligned
with the effectiveness criteria of the United Nations Guiding
Principles on Business and Human Rights. In FY26, we received 192
community complaints through these mechanisms (FY25: 93), of
which 92% have been resolved. The increase was primarily driven
by complaints relating to dust and noise at Worsley Alumina,
reflecting increased operational activity near residential areas,
weather conditions influencing dust generation, together with
increased awareness and utilisation of our community reporting
channels. We continue to engage with affected communities and
implement measures to address community concerns and reduce
operational impacts, including those outlined in this report.
CASE STUDY
Building a community benefit model for sugilite
Sugilite is found sporadically, in limited quantities, within
manganese ore at our Wessels mine at South Africa
Manganese. While not actively mined, processed or sold as
a product, its value in jewellery, ornamental and spiritual
markets has contributed to theft and unauthorised trading,
as well as broader social impacts within local communities.
In 2021, the regulator accepted a prospecting right
application that overlaps with Wessels. The overlapping
application remains subject to ongoing legal proceedings
and contributed to uncertainty regarding access rights and
heightened community tensions. In response, we worked to
clarify legal rights, improve transparency with affected
stakeholders and support the development of a sustainable
community benefit model. Central to this was a broad
engagement program reaching over 2,000 stakeholders
through interviews, surveys and community meetings.
Feedback informed the design of a proposed independent
governance structure with joint South32 and community
representation, underpinned by transparency and
accountability.
Drawing on these outcomes, we are progressing a
community-informed model to support community
development initiatives through potential future proceeds
from sugilite sales, and have established communication
channels to support transparency and ongoing dialogue.
Key actions progressed include plans for a non-profit entity
with interim governance, regulatory approvals, and further
exploration of sugilite processing.
FY26 community complaints by type
Complaint category
%
Noise
45 %
Dust
31 %
Business and employment opportunities
6 %
Stakeholder engagement
5 %
Other
5 %
Traffic and road use
4 %
Environment
2 %
Employee and contractor behaviour
1 %
South32 Annual Report 2026
65 Strategic Report
12.
Refer to the Sustainability Databook 2026 supporting footnotes and reporting boundaries. The sum of figures may vary due to rounding.
13.
Our contributions to community programs comprise direct investment (including Enterprise Development), in-kind support and administrative costs.
Economic development and social investment
Economic development and social investment initiatives are
shaped by local priorities and context, supporting economic and
social outcomes in the regions where we operate. Our operations
maintain plans that are regularly reviewed and updated to respond
to evolving stakeholder priorities and interests.
We assess the impact of initiatives in these plans using an impact
measurement framework that supports data collection and
analysis of stakeholder and community outcomes. Insights from
these assessments inform future decisions, enhance program
design and support transparent reporting. Delivery of economic
development plans is also linked to performance and reward
through our Business Scorecard, detailed on page 160.
In FY26, we:
– sourced 23% of total procurement expenditure across our
operations from local suppliers. We seek to source goods and
services from local businesses and track performance against
annual local procurement targets at each operation
– supported Aboriginal and Torres Strait Islander economic
participation in Australia through procurement, employment
and community investment under our Reconciliation Action
Plan, including exceeding our FY26 procurement target with
3.1% of influenceable spend
14
directed to Aboriginal and Torres
Strait Islander businesses. Learn more about our Reconciliation
Action Plan performance on page 67
– invested US$13.8 million through our Enterprise and Supplier
Development (ESD) program in South Africa, exceeding our
statutory target of US$9.5 million. Our ESD program supports
economic transformation through the development of small,
medium and micro enterprises within and beyond our supply
chain.
Local procurement and economic transformation
Measure
FY26 FY25 FY24
Local procurement (US$ million)
969 1,064
1,160
Proportion of local procurement spend (%)
22.9 23.4 26.1
Procurement from Aboriginal and Torres
Strait Islander businesses (A$ million)
32.3 23.8 33.8
ESD spend (US$ million)
13.8 10.5 9.7
Social investment
Social investment comprises direct investment, in-kind support and
administrative costs. Our FY26 social investment increased 5%
year-on-year to US$23.2 million (FY25: US$22.2 million), distributed
across four focus areas.
FY26 social investment by focus area
27%
23%
39%
12%
FY26 stakeholder priorities and social investment outcomes
We seek to tailor our social investment and economic development
activities to locally identified stakeholder priorities.
Australia
Key stakeholder priorities
– Social outcomes: Education, youth engagement and wellbeing,
particularly in Indigenous and regional communities.
– Economic participation: Barriers to participation, including
workforce readiness, childcare and limited local services.
– Culture and Country: Indigenous partnerships, cultural heritage
protection and access to Country.
– Environment: Environmental stewardship, rehabilitation and
biodiversity, including long-term closure outcomes.
FY26 investment outputs and outcomes
– 29 Indigenous students received scholarships and 715 Indigenous
people participated in education and employment programs.
– 625 small businesses were supported through business
development programs and grants.
– A$100,000 was invested as part of our five-year partnership with
the Australian Research Council Training Centre for Advancing
Archaeology in the Resources Sector.
– Programs through our funding of the Australian Wildlife
Conservancy supported the conservation of 10 species.
Americas
Key stakeholder priorities
– Employment and skills: Local employment pathways, workforce
readiness and skills development, including education and STEM
pathways.
– Economic participation: Local business capacity and procurement
readiness to support participation.
– Infrastructure and services: Pressure on local infrastructure and
services due to project-related activities.
– Tribal and environment stewardship: Tribal engagement,
environmental stewardship and impact mitigation.
FY26 investment outputs and outcomes
– More than 13,000 children were supported and over 100 adults
gained technical certifications through education programs.
– 23 local vendors and 11 Tribal contractors were onboarded into
our vendor readiness program at Hermosa.
– US$80,000 was invested in community health transport services to
improve access to healthcare.
Southern Africa
Key stakeholder priorities
– Employment and inclusion: Unemployment and post-school skills,
particularly for youth and women.
– Infrastructure and services: Access to healthcare, potable water
and transport, and education constraints.
– Food security and livelihoods: Risks linked to declining
agricultural productivity, land degradation and water scarcity.
– Community safety and wellbeing: Social risks associated with
crime, gender-based violence and broader community wellbeing.
FY26 investment outputs and outcomes
– 607 bursaries were provided, with 73% of these supporting women
and girls in higher education.
– US$1.6 million was invested in bridges connecting communities
and water infrastructure servicing more than 2,000 households.
– US$370,000 was invested in food security and agricultural
programs, benefiting more than 400 households.
– Delivered 50 road safety training sessions to community leaders,
students and teachers, supporting safer roads in Mozambique.
South32 Annual Report 2026
66 Strategic Report
Sustainability continued
14.
Influenceable spend is external categories of spend where Aboriginal and Torres Strait Islander businesses participate in the local open market.
Focus area:
Education and leadership
Good health and social wellbeing
Economic participation
Natural resource resilience
Sum of figures may vary due to rounding.
US$23.2 million
Indigenous, Traditional and Tribal Peoples
Our Approach documents relating to engagements with
Indigenous, Traditional and Tribal Peoples, and Cultural Heritage,
outline our approach to building strong partnerships that support
preservation of cultural heritage and create opportunities through
employment, procurement, social investment and training.
In FY26, we strengthened this approach through updates to our
internal Social Performance Standard, improving alignment with the
ICMM Indigenous Peoples and Mining Position Statement. Key
enhancements included strengthened expectations for
engagement with Indigenous, Traditional and Tribal Peoples on
relevant matters, and guidance on culturally appropriate processes,
including where agreement may not be reached.
Find Our Approach to Engagement with Indigenous, Traditional and
Tribal Peoples and to Cultural Heritage at www.south32.net.
Strengthening relationships and cultural heritage
We work to build trusted relationships with Indigenous, Traditional
and Tribal Peoples through ongoing engagement, formal
agreements and long-term partnerships, while supporting the
preservation of cultural knowledge and cultural heritage. Key
activities in FY26 included:
Worsley Alumina, Australia:
We continued to implement our Noongar Standard Heritage
Agreement with the Gnaala Karla Booja Aboriginal Corporation
(GKB), which provides a framework for Aboriginal heritage survey
processes. Separately, we provided funding to support GKB's
heritage resources and capability in its role as an Aboriginal
Heritage Service Provider.
We also continued our partnership with the Leschenault Catchment
Council's Danju – Jobs Together program, a community-led
Aboriginal land management and employment initiative that
supports rehabilitation activities at Worsley's bauxite mine, while
building skills and employment pathways for Noongar participants.
Australia Manganese, Australia:
We continued our collaboration with the Anindilyakwa Land Council
to engage in a culturally appropriate and inclusive manner with
Traditional Owners, including on education, community
development and our operations at Australia Manganese.
Through our social investment program, we continued a range of
partnerships focused on supporting community priorities and long-
term outcomes:
– Employment and education pathways: We continued to
partner with the Polly Farmer Foundation and GEBIE Next
Generation, supporting the delivery of education, mentoring and
work readiness initiatives that aim to build skills and improve
employment pathways for Anindilyakwa people
– Community health and wellbeing: We provided funding
support for community-led health initiatives delivered by the
MJD Foundation and Bush Fit Mob, including on-Country
services and programs that promote physical health, wellbeing
and culturally appropriate community engagement
– Cultural preservation and connection to Country: We
continued our partnership with the Anindilyakwa Land and Sea
Rangers program, which enables Traditional Owners to manage
land and sea Country, maintain cultural practices and
strengthen the transfer of cultural knowledge across
generations.
Cannington, Australia:
We entered a five-year industry partnership with the Australian
Research Council Training Centre for Advancing Archaeology in the
Resources Sector. This partnership is focused on research,
capability development and knowledge sharing to improve
collaboration with Traditional Owners and the integration of
heritage considerations into business decision-making.
Hermosa and Roosevelt projects, United States:
At Hermosa, we continued to engage with Native American Tribes
to maintain ongoing dialogue on cultural interests, potential
impacts and project development. During FY26, we hosted site
visits to facilitate information sharing, relationship building and
Tribal input on cultural heritage considerations. We also progressed
consultation processes with Tribal stakeholders to support
culturally appropriate management of cultural heritage.
At our Roosevelt early-stage exploration project in Alaska, we
continued working with tribal communities to support local
employment, workforce capability development and cultural
preservation. This included prioritising local hiring, promoting
culturally safe workplaces, delivering training and job fairs across
tribal villages, and partnering with communities on social mapping
and cultural heritage initiatives.
Supporting reconciliation in Australia
Our second Innovate Reconciliation Action Plan (RAP) concluded in
June 2026, marking eight years since our first RAP was launched in
2018. Over this period, we focused on building relationships,
supporting cultural heritage management, and advancing
economic participation and social inclusion, establishing a strong
foundation for ongoing integration of these practices across our
business.
During FY26, we progressed several key objectives, including:
– Procurement: We work to identify opportunities that create
meaningful and lasting change. In FY26, we launched a three-
year Indigenous procurement strategy to increase the
participation of Aboriginal and Torres Strait Islander businesses
in our supply chain in Australia. 3.1% of FY26 influenceable
spend
15
was with these businesses, exceeding our 2.7% target.
– Employment: We aspire to be an employer of choice for
Aboriginal and Torres Strait Islander peoples by supporting a
culturally inclusive work environment and growing
representation across our workforce. In FY26, targeted
employment, retention and pathway programs supported
Aboriginal and Torres Strait Islander representation reaching
3.09% of our Australian workforce, exceeding our 2.25% target.
– Partnerships: We seek to build and maintain strong
relationships in the communities where we operate. In FY26, we
provided US$1.1 million in funding support across Australia
through partnerships with Indigenous organisations and
Traditional Owners for initiatives supporting cultural heritage
management, education and community development.
– Cultural capability: We continue to support culturally aware
workplaces. In FY26, we delivered cultural awareness training at
Australia Manganese and Cannington, focused on strengthening
understanding of Aboriginal and Torres Strait Islander history,
culture and local engagement.
In FY27, we will continue to support reconciliation through our
broader engagement and partnerships with Indigenous, Traditional
and Tribal Peoples, building on the work undertaken to date.
South32 Annual Report 2026
67 Strategic Report
15.
Influenceable spend is external categories of spend in Australia where Aboriginal and Torres Strait Islander businesses participate in the local open market.
OPERATING ETHICALLY AND RESPONSIBLY
Our approach is grounded in high standards of integrity and accountability, and ethical and responsible business
conduct.
HUMAN RIGHTS
Our Approach to Human Rights outlines our commitment to
respecting human rights. It also describes how we identify, assess
and manage human rights risks, and provide for or cooperate in
remedy where impact occurs.
Find Our Approach to Human Rights at www.south32.net.
Identifying and managing human rights risk
We identify, assess and manage human rights risks consistent with
the UN Guiding Principles on Business and Human Rights (UNGPs).
Our salient human rights issues, identified through an externally
facilitated assessment in FY24, remain unchanged and continue to
inform our risk management and due diligence approach.
Human rights due diligence
In FY26, we continued to enhance our due diligence approach,
further embedding it into our processes for identifying, assessing
and managing human rights risks across our operations and value
chain. Key activities included:
– improving alignment of our governance and business practices
with the ICMM Indigenous Peoples Position Statement,
strengthening expectations for engagement and respect for the
rights of Indigenous, Traditional and Tribal Peoples
– continuing to strengthen our approach to operating in, or
sourcing from, conflict-affected and high-risk areas (CAHRAs),
including enhancing our risk assessment and management
processes in alignment with OECD guidance
– conducting operation- and Group-level gap assessments
against the Voluntary Principles on Security and Human Rights
at selected operations. The assessments confirmed that robust
internal governance arrangements and expectations are in
place, while identifying opportunities to strengthen
implementation consistency across operations. The findings are
informing improvement actions and implementation priorities
– completing Human Rights Risk Self-Assessments at operations
to evaluate human rights risks, existing controls and relevant
changes in operational or local context. Priority issue areas
identified in FY26 are detailed in our Sustainability Databook
2026 at www.south32.net
– assessing remuneration against living wage benchmarks in the
jurisdictions in which we operate to inform remuneration
decisions and the provision of a living wage for our employees.
Modern slavery risk
In FY26, we continued our efforts to identify, assess and address
modern slavery risks across our operations, supply chains and
business relationships. Our Modern Slavery Statement 2026
provides further information on our approach and actions.
Find our Modern Slavery Statement 2026 at www.south32.net.
Our salient human rights issues
Safe and respectful
workplaces
Labour rights in the
value chain
Environmental
impacts
Impacts of security
services on human
rights
Land rights and
Indigenous,
Traditional and
Tribal Peoples’
rights
Community
wellbeing and
engagement,
including access to
remedy
Our human rights due diligence approach
We apply risk-based due diligence across our operations
and value chain to:
Identify and assess risks and potential impacts
Address impacts (prevent, mitigate and remediate)
Monitor effectiveness
Report on outcomes and progress
Supporting controls and enablers
Standards and governance
Policies, standards and
oversight by Board and
leadership
Assessments and due
diligence
Risk-based assessments and
due diligence across
operations, suppliers and
customers
Access to remedy
Accessible and safe complaint
and grievance mechanisms
Stakeholder engagement
Workforce training, industry
and civil engagement
South32 Annual Report 2026
68 Strategic Report
Sustainability continued
ETHICS AND BUSINESS INTEGRITY
Our Code of Business Conduct (our Code) outlines the standards of
behaviour expected of our employees, contractors, executive
management, Directors, suppliers and joint venture partners
operating on our behalf. It includes our Speak Up Policy, which
explains how to raise concerns, protections for reporters, and how
reports are managed. We do not tolerate any form of retaliation
against anyone who raises a concern or cooperates in an internal
investigation.
Concerns can be reported, including anonymously, via our
independently operated EthicsPoint hotline. Reports are initially
assessed by our Business Integrity team and allocated based on
their nature, urgency and severity. Oversight is provided by our
Business Conduct Committee, which meets quarterly, and our Risk
and Audit Committee, which receives twice-yearly reporting on
material matters. These matters are reported to the Board as
appropriate.
Training on our Code is mandatory for all new employees and
select contractors, with regular refresher training provided.
Anti-Bribery and Corruption
Our Business Integrity team, independent from our operations,
oversees our global Anti-Bribery and Corruption (ABC), anti-money
laundering and sanctions compliance programs. These programs
establish mandatory controls to manage legal and reputational
risks, with a focus on higher-risk activities such as third-party due
diligence and transactional oversight.
Our ABC program includes:
– risk assessments, monitoring and testing of internal control
effectiveness
– mandatory training for employees identified as having a higher
risk of exposure to bribery and corruption, completed on joining
South32 and supported by regular refresher training
– targeted additional training and awareness sessions led by our
Business Integrity team
– pre-approval for gifts, entertainment and hospitality above
modest value, social investments and sponsorships, attendance
at paid political activities, and other transfers of value to a
government official.
Learn more and find our Code, Speak Up Policy and Anti-Bribery and
Corruption Policy at www.south32.net.
CYBERSECURITY AND AI
Key elements of our approach to managing cybersecurity risk
include:
– monitoring critical cybersecurity control effectiveness and
conducting annual independent reviews of our cybersecurity
risk management system and information security controls
– mandatory cybersecurity awareness training for employees and
select contractors
– managing third-party cyber risk through a dedicated reporting
platform and contractual requirements addressing
cybersecurity and privacy obligations
– reporting cybersecurity risk monthly to our Lead Team and
Board and twice yearly to the Risk and Audit Committee.
Material breaches are managed under our internal cyber incident
response plan. No significant cybersecurity breaches occurred
within our technology environment or via third parties during FY26.
In FY26, we progressed our cybersecurity strategy through testing
response plans and enhancing data security, insider risk
16
and
identity security controls. In FY27, we plan to enhance cyber
resilience through continued improvements in third-party risk
management and broader data security measures, aligned with
evolving regulatory requirements.
Artificial intelligence (AI)
We recognise the potential for safe, well-governed AI to enhance
safety and productivity. Our approach is guided by four pillars:
– Safety: Supporting safety risk management through insights
from past events and investigations
– Value generation: Improving production throughput, yields and
blending, while delivering sustainability co-benefits such as
reduced energy and water use
– Exploration: Enhancing the speed and efficiency of exploration
and orebody insights
– Productivity enablers: Leveraging AI to improve efficiency
through faster, more accessible insights and information.
We take a risk-based approach to AI, with governance and internal
controls designed to support its safe and ethical development and
use. Building on our FY25 assessment of alignment with national
and international responsible AI frameworks
17
, during FY26 we
progressed alignment with these standards and developed a
cybersecurity strategy for AI to support its secure and responsible
use across our business.
Our Approach to Value Chain Management
Our Approach to Value Chain Management outlines how we identify, assess and manage sustainability-related risks across our
suppliers, contractors, customers and maritime transport activities through engagement, due diligence and risk management
processes.
Find Our Approach to Value Chain Management at www.south32.net.
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69 Strategic Report
16.
Insider risk refers to risks arising from the actions of authorised users, including accidental, negligent or malicious misuse of systems, data or information.
17.
Including the European Union's AI Act, the Australian Government’s Voluntary AI Safety Standard, the Australian Institute of Company Directors' governance principles, and
frameworks developed by Alphinity Investment Management and the Commonwealth Scientific and Industrial Research Organisation (CSIRO).
CLOSURE
Our Approach to Closure outlines our focus on progressive
rehabilitation and effective closure planning to support the
transition of lands we operate on to their next use.
Find Our Approach to Closure at www.south32.net and learn more
about our closure provisioning on page 208.
Closure planning
Closure planning is a priority from early stages of project
development and throughout an operation's lifecycle. We maintain
closure plans for all operations and projects under our operational
control. Where relevant, this includes long-life or indefinite assets,
such as ports and supporting infrastructure.
Closure plans incorporate progressive rehabilitation to reduce
impacts of land disturbance from our activities and support the
eventual relinquishment of landholdings, with the approach tailored
to the characteristics and context of each operation or project.
Closure planning for our operations is undertaken in line with our
internal closure standard and refined over time as mine life
assumptions and technical understanding evolve. These updates
are informed by operational insights and, where relevant,
engagement with stakeholders, including Indigenous, Traditional
and Tribal Peoples and regulators, and may incorporate
independent third-party input.
In FY26, we continued to progress closure readiness and alignment
with industry good practice, including by conducting closure
maturity assessments at selected operations using the ICMM
Closure Maturity Framework. These assessments involved
workshops to evaluate the maturity of progressive rehabilitation
and closure planning practices, identifying opportunities to further
strengthen closure planning and support continuous improvement
across our operations.
At Australia Manganese, we progressed closure planning and
stakeholder engagement during FY26. This included completing
the first stage of the closure pre-feasibility study, evaluating post-
mining landform options to inform closure design and stakeholder
engagement, and engaging with the Anindilyakwa Land Council,
the statutory representative body for the Traditional Owners of the
Groote Archipelago, with a focus on long-term land use and
rehabilitation.
Learn about Cannington’s mine life extension on page 16.
CASE STUDY
Supporting our people and the community through
transition at Mozal Aluminium
In March 2026, Mozal Aluminium was placed into care and
maintenance after the operation was unsuccessful in
securing a sufficient and affordable long-term electricity
supply, despite extensive engagement with key
stakeholders. While this was not the outcome we had
sought, we are proud of Mozal Aluminium's significant
contribution to the Mozambique community and economy
over its 25 years of operation.
Key measures implemented to mitigate potential social
and human rights impacts included:
– engaging with our workforce, their representatives and
communities to understand potential impacts
– providing redundancy entitlements, financial transition
support, counselling and wellbeing services, and
financial literacy training
– continuing select education, skills and local enterprise
initiatives in line with existing commitments
– maintaining accessible grievance and feedback
mechanisms.
Closure planning progressed throughout FY26 to support
the safe suspension of operational activities, with a focus
on workforce welfare. Planning will continue during the
care and maintenance period, as we assess potential
future pathways for the operation.
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Sustainability continued
MANAGING OUR ENVIRONMENTAL IMPACT
We recognise the importance of responsibly managing our environmental impacts across the lands and waters
where we operate.
NATURE
Our mining, processing, refining and smelting activities interact
with the natural environment through land and water use, waste
generation and emissions. At the same time, we depend on
environmental assets and ecosystem services, including water
availability, soil stability, climate regulation and biodiversity, to
sustain our operations and support long-term value creation.
These interactions create both impacts and dependencies, giving
rise to nature-related risks and opportunities. Understanding and
managing these effectively supports operational resilience,
stakeholder trust, regulatory compliance and continued access to
resources.
Strengthening our understanding
Since FY23, we have been deepening our understanding of nature-
related impacts and dependencies through:
– participating in Taskforce on Nature-related Financial
Disclosures (TNFD) studies and applying the TNFD LEAP (Locate,
Evaluate, Assess and Prepare) approach
– developing internal guidance to support the assessment and
calculation of biodiversity values
– working with external experts to assess nature-related impacts
and dependencies, as disclosed in our 2025 Annual Report on
page 45.
Building on this work, in FY26 we:
– analysed ecological sensitivities within and near our operations
and development projects
– assessed the nature-related risks and opportunities most
relevant to our operations and operating context, drawing on
our understanding of nature-related impacts and dependencies,
strategic and operational risk registers, evolving external
frameworks, and internal expertise across nature, climate and
risk management disciplines.
The outputs of and insights from this work are summarised in the
following tables.
Ecological sensitivities in proximity to our assets
The table below summarises ecological sensitivities identified
within or near our operations and development projects. Australia
Manganese, Worsley Alumina and Hermosa have the highest
potential impacts due to their proximity to areas of biodiversity
importance, high ecosystem integrity and high physical water risk.
Further information is available in our Sustainability Databook 2026.
Located in or near areas of
Biodiversity
importance
High
ecosystem
integrity
High physical
water risk
Australia Manganese
√ √ √
Worsley Alumina
√ √ √
Hermosa
√ √ √
Cannington
√ — √
Hillside Aluminium
√ — √
South Africa Manganese
√ — √
Biodiversity importance: operations located in or near areas recognised for their
significant biodiversity values, including Protected Areas and Key Biodiversity Areas, or
where species classified as Critically Endangered, Endangered or Vulnerable on the IUCN
Red List have the potential to occur within a specified buffer zone.
High ecosystem integrity: areas with largely intact ecosystems that support biodiversity
and ecosystem services.
High physical water risk: areas exposed to water-related challenges, including water
scarcity, flooding and poor water quality.
Climate-nature nexus
Climate and nature are closely interconnected. Changes in climate
can affect biodiversity, water resources and ecosystem functioning,
while the condition of ecosystems can influence resilience to
physical climate impacts and support adaptation outcomes. These
interconnections were considered in our assessment of climate-
and nature-related risks and opportunities.
Find our climate-related risks and opportunities on page 90.
Nature-related risks and opportunities
Nature-related risks and opportunities currently assessed as most relevant to our business are summarised in the table below.
Nature-related risks and opportunities
Type
Time horizon
Resource efficiency and innovation: Smart design principles and technological and process
innovations may reduce operational footprints, create value from waste streams, improve resource
efficiency, and strengthen rehabilitation and closure outcomes.
Opportunity
Medium and
long-term
Biodiversity and ecosystem impacts: Biodiversity impacts, including habitat disturbance and invasive
species, together with evolving stakeholder and regulatory expectations regarding biodiversity
protection and nature recovery, may increase operational complexity, remediation and closure costs,
constrain access to resources, and adversely affect relationships with communities and regulators.
Risk
Short, medium
and long-term
Water security: Changes in water availability or quality arising from operational, cumulative and climatic
impacts may increase costs, disrupt operations, and adversely affect ecosystems and other water
users.
Risk
Short, medium
and long-term
Environmental contamination and air emissions: Pollution impacts arising from contamination, air
emissions, noise, vibration and dust may adversely affect ecosystems and communities, resulting in
increased costs, operational disruption and more stringent regulatory requirements.
Risk
Short, medium
and long-term
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BIODIVERSITY
Our Approach to Biodiversity outlines how we address impacts to
biodiversity and ecosystem services. Aligned with ICMM's Nature
Position Statement, which reflects a shared ambition among
members to contribute to a nature positive future, we aim to
achieve no net loss or net gain of biodiversity by the completion of
closure
18
.
Find Our Approach to Biodiversity at www.south32.net.
Land stewardship
We own, lease and manage more than 550,000 hectares of land,
including operational areas, areas undergoing rehabilitation and
land managed for conservation and other strategic purposes.
Approximately 97% of this land remains undisturbed by our
activities. This includes 4,684ha managed for conservation at
Worsley Alumina. Of the 3% (17,741ha) of land disturbed by our
activities, 38% (6,745ha) is currently under active rehabilitation.
The extent of progressive rehabilitation varies by operation,
reflecting mining methods and site context. At Worsley Alumina
and Australia Manganese, shallow mining methods allow for
controlled removal of topsoil, ore extraction and revegetation after
mining, with over half of land disturbed at Worsley and 31% at
Australia Manganese under rehabilitation. Opportunities for
progressive rehabilitation are more limited at operations with
stable surface footprints, predominantly underground mining
methods or smelting operations, including South Africa
Manganese's Mamatwan and Wessels mines, Cannington and
Hillside Aluminium. At Hermosa, rehabilitation and closure
objectives are integrated into project planning and permitting. As a
future underground operation under development, opportunities
for progressive rehabilitation are limited.
Progressive rehabilitation is embedded in life-of-operation
planning. Rehabilitation activities typically begin once mining is
complete and include backfilling, landform recontouring, re-
spreading overburden and topsoil – often sourced from adjacent
new mining areas – followed by revegetation with local native
species. Scientific monitoring programs are implemented, based on
agreed and licence-defined success and completion criteria.
Land not required for operational purposes creates opportunities
to support land stewardship. During the year we developed an
integrated land management plan for Cowie Station, a 94,000ha
pastoral property near Cannington with significant cultural heritage
and biodiversity values. The plan establishes an adaptive, multi-use
management framework to conserve these values alongside
pastoral activities, while informing closure planning and maintaining
flexibility for future land use and tenure outcomes. Priority actions
are now being progressed in collaboration with Traditional Owners
and other stakeholders.
Learn about how we are managing environmental impacts at
Hermosa at www.south32.net.
Managing biodiversity risks and impacts
We manage biodiversity impacts and risks by implementing
biodiversity management plans and applying the mitigation
hierarchy – avoid, minimise, rehabilitate/restore and offset.
At Worsley Alumina, we continued ecological restoration and
environmental stewardship activities across landholdings and
biodiversity offset properties to support habitat recovery, long-
term biodiversity outcomes and compliance with environmental
approvals. During FY26, we:
– completed baseline flora, fauna and soil mapping across 900ha
to inform restoration planning, and continued restoration
activities, including weed control and feral animal management
– planted approximately 3.5ha of organic canola to provide a food
source for black cockatoos while native vegetation establishes,
and installed artificial cockatoo breeding hollows and other
habitat structures to support species return
– identified an additional population of the Cossack orchid, a
threatened species, and implemented protective management
measures, including disturbance buffer zones and ongoing
monitoring, to support conservation within operational areas.
At Australia Manganese, we:
– commenced a rehabilitation uplift program to support habitat
restoration and species return through native seed germination
trials and installation of habitat features
– progressed development of a feral cat management plan to
reduce invasive predator impacts and help protect threatened
and native species, with implementation planned from FY27
– finalised our no net loss/net gain plan for the Eastern Leases,
assessing biodiversity impacts and identifying measures to
achieve no net loss or a net gain by completion of closure,
informing future biodiversity management activities.
Local and regional partnerships
We continue to contribute to biodiversity conservation outcomes
through local and regional partnerships, including:
– co-funding PhD-led environmental DNA research at Worsley
Alumina, in partnership with Curtin University, to improve
detection and understanding of species presence within
rehabilitation areas
– partnering with the Western Australian Department of
Biodiversity, Conservation and Attractions to assess fauna
presence and abundance in forested areas near Worsley
Alumina affected by harvesting, controlled burns and feral
animal management programs, improving understanding of
feral species control effectiveness and fire impacts on fauna
– supporting the Australian Wildlife Conservancy’s Mt Gibson
Wildlife Sanctuary, contributing to species monitoring, feral
animal control and mammal reintroductions. In FY26, we
expanded the partnership to support species protection in the
Northern Territory.
Landholdings composition (hectares)
FY26 total
19
Australia
Manganese Cannington
Worsley
Alumina
Hillside
Aluminium
South Africa
Manganese Hermosa
Total landholdings (owned/leased/managed)
550,167 13,215 121,692 387,009 158 3,322 24,421
% of total landholdings disturbed by our activities
3 % 46 % 1 % 2 % 100 % 28 % 0.4 %
Total landholdings disturbed by our activities
17,741 6,082 820 9,372 158 917 106
% classified as disturbed
62 % 69 % 100 % 49 % 100 % 93 % 98 %
% under progressive rehabilitation
38 % 31 % – % 51 % – % 7 % 2 %
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72 Strategic Report
Sustainability continued
18.
Measured against a pre-operation or pre-expansion baseline for new operations and significant expansions, and against a 2020 or earlier baseline for existing operations.
19.
FY26 total disturbed landholdings includes Mozal Aluminium which is in care and maintenance (215ha), and Bayside Aluminium smelter which has been closed (135ha).
WATER
Our operational water sources include groundwater, surface water, seawater and third-party supply. Where operationally feasible, water is
recovered, reused and recycled to support efficient water use. Water not consumed in processes, retained in product or entrained in waste
is discharged to the environment or supplied to third parties in line with regulatory requirements.
Water volumes across our operations reflect differences in climate, operational context and water source availability. We monitor inflows,
uses, losses and outflows to support effective water management and report our operational water account in alignment with the Minerals
Council of Australia’s Water Accounting Framework.
Our approach to managing water resources and addressing water-related risks and opportunities is outlined in Our Approach to Water.
Find Our Approach to Water at www.south32.net.
Our FY26 operational water account
FY26 total water withdrawals increased by 19% compared with FY25, primarily due to increased dewatering activities at Australia
Manganese, where elevated site water levels and ongoing groundwater inflows continued to challenge water management capacity and
operational continuity. Third-party water withdrawals also increased to meet higher demand at Worsley Alumina. Water consumption
increased by 4%, largely due to higher entrainment losses to waste following the resumption of mining activities at Australia Manganese in
May 2025. Despite these changes, operational water efficiency continued to improve, with 84% of water used in our operations reused or
recycled within our reporting boundary.
Definitions:
Water inputs/withdrawal: Water drawn from the environment (surface water, groundwater or seawater) or purchased from third parties, for use in a task or activity.
Water to tasks: The total flow of water to a task. A task is a set of operational activities that use water.
Reused/recycled water: Water that has been used in an operational task and is recovered and used again in an operational task, either without (reuse) or with (recycle) treatment.
Operational water efficiency: Percentage of water used for operational activities which is reused/recycled water.
Water outputs/discharge: Water released from the operational water system through discharge to the environment, supply to third parties, or other outputs, including water consumed
in operations (e.g. evaporation, entrainment in product, waste or other losses).
Find more water-related data in our Sustainability Databook 2026 at www.south32.net.
Managing water-related risks
Water-related risks, including variable or excess water supply and changes in water quality from operational, cumulative and climatic
impacts, can increase costs, disrupt operations, and adversely affect ecosystems and other catchment users. We manage these risks
through water risk and opportunity screening across our operations and projects to identify exposures and inform water management.
Material water risks are captured in our risk management system and managed through site-specific controls, informed by the mitigation
hierarchy adapted to water (avoid, minimise, reuse, recycle, discharge and offset), operational water needs, local catchment conditions,
community needs and interactions with natural ecosystems.
We implement site-specific projects and initiatives, tailored to local water conditions and challenges. These include dewatering programs
at operations with high precipitation and groundwater inflows, such as Australia Manganese, and water management activities at Hermosa
and Cannington to manage excess water and maintain safe, efficient site access.
South Africa Manganese and Hermosa remain exposed to baseline water stress due to their location in arid regions. While Worsley
Alumina’s refinery is not identified as exposed to baseline water stress, it continues to manage material water-related risks to support
long-term operational resilience.
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73 Strategic Report
WATER OUTPUTS/DISCHARGE (ML)
82,197
↑ 4% from FY25
Discharge destination
and water consumption ML
Groundwater
515
Surface water
6,486
Third-party water
271
Seawater
314
Consumption
74,611
– 51% consumed through
entrainment in waste and product
– 32% consumed through natural
evaporation
– 16% consumed through task loss
and forced evaporation
WATER INPUTS/WITHDRAWAL (ML)
116,939
↑ 19% from FY25
Withdrawal source ML
Groundwater
75,773
Surface water
36,514
Third-party water
4,652
Seawater
0
– 79% of water withdrawn is
classified as freshwater
– 3% of water withdrawn is from
areas exposed to baseline water
stress
WATER TO TASKS (ML)
243,874
↓ 13% from FY25
OPERATIONAL
WATER EFFICIENCY
84%
↑ 1% from FY25
REUSED/RECYCLED WATER (ML)
206,058
↓ 12% from FY25
FY26 water-related projects and initiatives
In FY26, we continued the rollout of site water management and
water balance improvements, with a particular focus on operations
subject to highly variable water conditions, including Australia
Manganese and Cannington. This work focused on improving how
water is planned, managed and monitored across the life of our
operations, including through greater integration of mine planning,
dewatering, water reuse and recycling and excess water
management, to support decision-making, operational resilience
and regulatory compliance.
Other key activities progressed during the year included the
installation of infrastructure to treat non-potable municipal water at
Hillside Aluminium, eliminating operational use of potable water
and increasing water availability for domestic use.
At Hermosa, we progressed groundwater monitoring activities,
including enhancements to an on-site water treatment plant to
improve treatment of contaminants in groundwater discharged
through dewatering. We also continued our well protection
program at Hermosa to monitor potential impacts associated with
groundwater management activities.
Learn more about Hermosa's water management at
www.south32.net.
Water-related objectives
In FY22, we established a Water Efficiency Target (WET) as one of
three KPIs under our Sustainability-Linked Loan. Following a review
of historical water accounting methodologies and related data
restatements in FY25, it has been agreed with the lenders that the
WET will not be assessed in FY26 and FY27 while we continue to
strengthen water data governance and reporting processes. The
other two KPIs, relating to GHG emissions reduction and energy
efficiency, continue to be assessed.
Since establishing the WET, our portfolio and water-related risk
profile have evolved, and our approach to water management has
continued to develop, with an increased focus on operation-specific
water-related risks and opportunities. Consistent with this
approach, we set context-specific objectives at operations where
material water-related risks have been identified.
Contextual water targets
South Africa Manganese
Risk: Growing water scarcity, increasing competition for water
resources and ageing regional distribution infrastructure present water
supply risks to the Wessels and Mamatwan mines and town of Hotazel.
Objective: Identify a sustainable community project that will give
access to clean water and support the local municipality's water
access plans, with an expectation to have this project implemented by
the end of FY26.
Update: In FY26, we completed a community water access project in
the Joe Morolong Municipality, Northern Cape, South Africa, including
the installation of solar-powered pumping infrastructure and the
refurbishment of community boreholes to improve access to safe,
reliable water for local residents.
Water quality assessments and borehole performance testing
undertaken during implementation confirmed the suitability of the
water supply and supported improvements in borehole performance.
The project was delivered in consultation with community
representatives and local stakeholders, supporting the municipality's
broader water access objectives.
We will continue to engage with stakeholders to support the long-term
sustainability of the project
Worsley Alumina
Risk: Insufficient water in the refinery's catchment lake could result in
water supply disruptions to the refinery.
Objective: Strengthen long-term water security by entering into
commercial arrangements with third-party providers to ensure a
reliable water supply over a period of at least five years.
Update: In FY26, we progressed activities to support near-term water
security and long-term operational resilience in the context of
increasing climate variability.
We completed a review of water supply options and identified a
preferred solution to optimise existing third-party supply
arrangements and improve supply reliability and security. Engagement
and negotiations with relevant stakeholders are underway and
expected to continue into FY27. We also commenced a long-term
water security study to assess future supply options and align near-
term actions with our broader water security objectives.
Australia Manganese
Risk: Water management requirements exceed the capacity and/or
quality limits of the receiving environment, dewatering system or
operational water uses.
Objective: Maintain effective management of water volumes and
quality from all sources to support operational continuity and avoid
adverse impacts to the environment and communities.
Update: Water management remained a focus for the operation in
FY26 as elevated site water levels, resulting from ongoing groundwater
inflows and wet season rainfall, continued to challenge water
management capacity and operational continuity. Activities focused on
maintaining water management capacity to support delivery of the
mine plan, while managing the environmental impacts associated with
dewatering and excess water management.
Key activities included strengthening water management governance
and controls, progressing short-, medium- and long-term initiatives to
manage increasing water volumes, and improving water management
planning and oversight. This included:
– securing temporary authorisation to transfer water from the
Eastern Leases to the Western Leases to reduce the risk of
overtopping and associated environmental impacts
– commencing riverine discharge with regulatory approval and
stakeholder agreement to provide an additional pathway for
managing excess mine water
– progressing an excess water disposal project to develop long-term
infrastructure for discharging excess water to the ocean, manage
groundwater inflows and support future operational resilience.
Despite these measures, risk exposure remains high due to the
significant volumes of water retained in storage, ongoing groundwater
inflows, and constraints on dewatering, storage and discharge capacity
during extreme weather events. Maintaining operational continuity
continues to require ongoing stabilisation, dewatering, water storage
optimisation, monitoring, forecasting and discharge management
activities.
In FY27, Australia Manganese will continue to progress initiatives to
strengthen its water management and operational resilience, including
enhanced water modelling, monitoring and forecasting, improved
weather and flood surveillance, updated wet weather response
procedures, and trigger-based action plans to support earlier and
more effective operational decision-making.
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Sustainability continued
POLLUTION
Our activities generate non-greenhouse gas (GHG) air emissions
and waste streams that may affect air and water quality,
ecosystems, and human health if not effectively managed.
Air emissions
We adhere to applicable regulatory requirements for assessing
ambient air quality and draw on industry guidance, including
through our membership of the ICMM, to support effective air
emissions management.
We identify air emission sources and assess potential impacts
using the Source-Pathway-Receptor method, which considers how
emissions are generated, how they may travel through the
environment, and who or what could be affected. This supports a
focus on the most material air emissions and their potential
impacts, including manganese dust and fluoride emissions.
We maintain an internal cross-functional working group, led by our
Health and Hygiene team, to guide our approach to mitigating
community health risks associated with air emissions. This group
assesses health risks, sets exposure limits based on legislation,
research and industry practices, and monitors ongoing
developments, supporting continuous improvement of our
management approach.
Monitoring and mitigation
We monitor air quality to identify and, where appropriate, mitigate
potential community health impacts associated with our operations
and, where relevant, the transportation of our products. Our air
quality monitoring programs include both real-time and
compliance monitoring. For example, at Australia Manganese E-
Samplers are installed along the peripheries of nearby communities
to enable continuous ambient air quality monitoring and real-time
responses should a particulate matter exceedance be triggered.
High-volume air samplers are also used to monitor fugitive dust.
Where exceedances are identified, we investigate root causes and
implement corrective actions.
Data from monitoring programs is integrated into our global
environmental data management platform, supporting
performance analysis, trend identification and more informed
decision-making to enhance air quality protection.
Our operations implement a hierarchy of controls that supports
compliance with internal and regulatory requirements. Depending
on the activity and location, controls may include dust and air
quality training, air pollution control systems, dust suppression
techniques, enclosed material handling, and progressive
rehabilitation and blast management.
We engage with communities to inform our management approach
and to understand whether controls are being effectively applied.
Waste management
Most of the waste we generate arises from tailings and processing
activities. Additional waste streams include waste rock, process
water and other by-products that can contain hazardous
substances or exhibit potentially harmful physical properties.
Key aspects of our approach to waste management include:
– Waste identification and tracking: Operations maintain waste
registers that record the types, volumes and characteristics of
waste generated and disposed of. Disposal is undertaken at
approved facilities in line with operational procedures and
applicable regulations.
– Risk management: We assess risks associated with the
handling, storage, transport and disposal of waste and
implement controls to manage those risks.
– Regulatory compliance: Operations implement processes to
support compliance with applicable regulatory requirements
and internal standards.
Contamination
We manage contamination risks associated with tailings, process
water, spills, leaks and the mobilisation of contaminants, including
per- and polyfluoroalkyl substances (PFAS) and acid rock drainage.
We assess contamination risks and potential impacts using the
Source-Pathway-Receptor method, and operations with identified
contamination risks maintain registers to support monitoring and
management activities.
Each operation applies a risk-based approach tailored to its
geological and environmental context, supported by controls such
as water management infrastructure, dry-stack tailings storage
facilities, water treatment solutions, and site-specific monitoring
and management plans where required.
We continue to monitor evolving regulatory requirements and
support our operations to implement controls and management
plans aligned with applicable laws and environmental standards.
FY26 performance and progress
Initiatives progressed in FY26 included:
– conducting an independent review of the air quality monitoring
program at South Africa Manganese, which identified
opportunities for continuous improvement in sampling
methodologies, equipment and monitoring locations, with
implementation activities planned from FY27
– baseline air quality and meteorological monitoring at Hermosa
and launching a publicly accessible dashboard, providing access
to independently analysed data on airborne particulates and
metals, alongside real-time weather information
– an independent health impact assessment at Hermosa,
undertaken in partnership with the University of Arizona, to
establish baseline community health conditions and inform
health management and mitigation measures
– progressing remediation and rehabilitation activities at Hillside
Aluminium to support the long-term management of legacy
waste and contamination risks
– continuing assessments of the potential presence of PFAS
across our operations, including the phased removal of PFAS-
based fire suppressants
– completing a battery electric vehicle (BEV) trial at Cannington,
demonstrating the potential to reduce diesel particulate matter
and associated GHG emissions from underground mining
activities. Learnings from the trial have informed industry
guidance and will support development of future BEV capability
at Hermosa.
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TAILINGS MANAGEMENT
The safe design, operation and management of Tailings Storage Facilities (TSFs) is critical to protecting our people, the environment and
communities. Our Approach to Tailings Management outlines our focus on the safe and responsible management of the TSFs that we
operate.
Find Our Approach to Tailings Management at www.south32.net.
Tailings management
The Global Industry Standard on Tailings Management (GISTM) aims to strengthen industry management practices by integrating social,
environmental, local economic and technical considerations throughout a facility's lifecycle. We maintain alignment with the GISTM for all
Tailings Storage Facilities (TSFs) that we operate. Relevant public disclosures are available on our website at www.south32.net.
FY26 activities and progress
During FY26, we progressed several activities to further strengthen our approach to tailings management, including:
– conducting internal audits of TSFs and water dams at Australia Manganese and Hermosa to assess the effectiveness of critical controls
designed to prevent catastrophic failures. The reviews confirmed these controls were operating effectively, while also identifying
improvement opportunities, with follow-up actions underway
– advancing closure studies at Australia Manganese to evaluate safe and effective closure options for TSFs and water dams, informing
long-term closure planning with consideration of site-specific conditions
– completing laboratory studies with independent experts to test a process for creating a sustainable soil profile from bauxite residue (a
by-product of alumina refining), to support progressive rehabilitation of tailings storage areas. Multi-year field trials are planned to
evaluate durability and performance under site conditions
– engaging Independent Tailings Review Boards at relevant operations to provide independent technical advice and challenge on tailings
management, governance and risk management.
Innovating to derive value from tailings
We continue to assess opportunities to unlock value from tailings through reprocessing, re-mining for mineral recovery, and reuse across
our operations. In FY26, this included studies at Australia Manganese to better understand opportunities to recover minerals from finer
sand tails
20
and support evaluation of potential reuse applications, including mine void filling.
We also commenced investigations into bacterial-assisted manganese recovery, which uses naturally occurring biological processes to
help recover minerals from tailings.
At Cannington, we advanced the second phase of a technology study exploring metal recovery and tailings treatment to support potential
alternative end-uses. This included detailed laboratory testing to assess technical feasibility and inform potential applications, such as the
potential production of engineered soil products (technosoils).
Tailings storage facilities by GISTM consequence classification
Operation
Total TSFs Low Significant High Very High
Australia Manganese
10 – 6 4 –
Cannington
3 – – 3 –
Hermosa
1 – 1 – –
South Africa Manganese
4 4 – – –
Worsley Alumina
9 – 1 4 4
Total
27 4 8 11 4
South32 Annual Report 2026
76 Strategic Report
Sustainability continued
20.
Tails refers to the waste stream generated during mineral processing prior to deposition. Once deposited or stored, this material is referred to as tailings.
ADDRESSING CLIMATE CHANGE
Addressing the risks and opportunities presented by climate change is integral to how we optimise, unlock and continue to
sustainably shape our business for the future.
OUR CLIMATE-RELATED DISCLOSURES
In accordance with the requirements of the Australian Accounting
Standards Board (AASB) S2 Climate-related Disclosures and the
Corporations Act 2001, South32 has prepared climate-related
disclosures in the Addressing Climate Change section of this
Annual Report, including all cross-referenced sections, together
with the Climate-related Reporting Methodology 2026 (collectively,
the Sustainability Report), in respect of South32 Limited and its
subsidiaries and joint arrangements (the Group).
The Climate-related Reporting Methodology 2026 outlines the
methodologies and estimation approaches used in preparing our
climate-related disclosures. It forms part of our FY26 climate-
related disclosures and is cross-referenced, where relevant.
We consider the climate-related disclosures referenced above to
be consistent with the four recommendations and 11
recommended disclosures of the Task Force on Climate-related
Financial Disclosures (TCFD). All our TCFD climate-related
disclosures are contained in this Annual Report save for those in
relation to Metrics and Targets recommended disclosure (c) which
are included in the Climate-related Reporting Methodology 2026
given the close linkage to the other matters presented in that
document. The AASB S2 and TCFD indices in the Methodology
outline where relevant disclosures are addressed in our reporting.
Our CCAP 2025 constitutes the Group’s transition plan for the
purposes of AASB S2.
Cross-references identified by this icon or the words "refer to" form
part of the Sustainability Report and have been prepared in
accordance with AASB S2.
Other sustainability-related information in this Annual Report and
on our website does not form part of the Sustainability Report for
purposes of AASB S2. KPMG has provided assurance over select
AASB S2 disclosures within the Sustainability Report as detailed in
their Independent Assurance Report on page 113.
Find our CCAP 2025, Climate-related Reporting Methodology 2026
and Sustainability Standards and Frameworks Index 2026 at
www.south32.net.
Organisational boundaries
South32 applies different organisational boundaries and, where
relevant, bases of presentation to its climate-related disclosures,
reflecting the nature and purpose of the information presented and
the requirements of relevant reporting frameworks and standards.
Organisational boundaries determine which operations,
investments or activities are included in a disclosure. Presentation
bases determine how that information is grouped or presented to
support comparability and understanding of the disclosure.
For the purposes of our FY26 AASB S2 climate-related financial
disclosures, South32’s reporting entity is the same as that used for
the related financial statements. Within this reporting entity,
operational energy consumption and Scope 1 and Scope 2
emissions are measured and reported on an operational control
basis. Other climate-related disclosures, including Scope 3
emissions and climate-related risks and opportunities, may be
prepared using different organisational boundaries or presented on
a different basis where this better reflects the purpose of the
disclosure and aligns with the requirements of relevant reporting
frameworks and standards.
Scope 3 emissions are disclosed voluntarily and, consistent with the
transitional relief available to South32 for FY26, have not been
prepared in accordance with AASB S2.
Additional information on the organisational boundaries and
presentation bases used in preparing our climate-related
disclosures is provided on page 107.
Emissions in this Sustainability Report refer to greenhouse gas
(GHG) emissions.
Basis of preparation
Data and assumptions used in our climate-related financial
disclosures are, to the extent practicable, consistent with those
used in the related financial statements. Where differences arise,
these are explained.
Climate-related risks and opportunities across the value chain,
including equity-accounted investments and joint arrangements,
are disclosed where they could reasonably be expected to affect
the Group’s prospects. Quantitative information regarding the
financial effects of these risks and opportunities has been provided
where required by the standard. Where measurement uncertainty
is such that the quantitative information would not be useful,
qualitative information, including the financial statement line items
potentially impacted, has been provided.
South32 has not provided quantitative information about the
financial effects of certain climate-related risks or opportunities
where it has determined that those effects are not separately
identifiable from the effects of other material factors or drivers. In
such cases, South32 has instead provided quantitative information
about the combined financial effects of those risks or opportunities.
Measurement bases, disaggregation and assumptions are selected
to provide decision-useful information on current and anticipated
financial effects of climate-related risks and opportunities.
South32 has applied the transitional relief available under AASB S2
and, except where voluntarily presented, has not provided
comparative information for climate-related disclosures. South32
has also early adopted the Amendments to AASB S2 Climate-
related Disclosures issued in December 2025.
The methodology applied in FY26 is consistent with that applied to
the comparative information. Any material changes in methodology
or assumptions, and its effect on comparative information, will be
disclosed.
AASB S2 Directors' declaration
Each Director, as listed on page 119, declares that, in their opinion,
South32 Limited has taken reasonable steps to ensure that the
substantive provisions of the Sustainability Report have been
prepared in accordance with the Corporations Act, including
section 296C (compliance with sustainability standards etc.) and
section 296D (climate statement disclosures).
This declaration is made in accordance with a resolution of the
Board.
Stephen Pearce
Chair
27 August 2026
South32 Annual Report 2026
77 Strategic Report
OUR CLIMATE CHANGE ACTION PLAN
Climate change is reshaping the mining and metals sector through
growing demand for materials critical to electrification and low-
carbon technologies, evolving energy systems, and increasing
exposure to physical climate hazards and extreme weather events.
The risks and opportunities presented by climate change have
been a key consideration in the development and implementation
of our strategy since our formation. Our CCAP provides the
framework through which we are responding. Building on our
inaugural 2022 CCAP, our CCAP 2025 is structured around two key
components:
– Taking climate action: Priority actions to support the transition
to a low-carbon, climate-resilient economy:
◦ position our portfolio for the energy transition
◦ reduce operational emissions
◦ support emissions reduction across our value chain
◦ strengthen resilience to climate impacts
– Key enablers: Capabilities and enabling conditions that support
implementation and management of key dependencies.
A non-binding advisory resolution on the 2025 CCAP received
strong shareholder support at our Annual General Meeting in
October 2025, with 90% of votes cast in favour.
Our CCAP also recognises that addressing climate change requires
coordinated action across governments, industry, communities and
capital providers. Government action, in particular, is an important
enabler for establishing policy frameworks, mobilising investment
and supporting decarbonisation at scale. Our approach to
government engagement, and climate change more broadly, is
guided by our Climate Change Positions.
Find our Climate Change Positions at www.south32.net.
Climate governance
Climate change is a material strategic, financial and governance
matter, overseen by our Board and its standing Committees.
Climate considerations are integrated into Board strategy
discussions. Where relevant to major transactions, climate-related
risks and opportunities are considered through due diligence,
governance and approval processes, with analysis provided to the
Board and relevant Committees as appropriate.
The Board considers trade-offs associated with climate-related
risks and opportunities, including implications for capital allocation,
portfolio decisions, operational resilience and long-term value.
Relevant matters are escalated through established governance
processes, including via the Sustainability Committee and Risk and
Audit Committee.
Refer to the Sustainability Governance section on page 59-60 for
further information on climate-related governance and page 133 for
information on the 2026 Board skills matrix: Environment and Climate
Change.
Climate-related risks and opportunities
The table below identifies our climate-related risks and opportunities and the extent of exposure across our commodity portfolio. Refer to
pages 90 to 103 for more detailed disclosures, including how we identify and assess these risks and opportunities.
Type
Time horizon
21
Portfolio exposure
Transition-related commodity demand growth: The energy
transition is expected to increase demand for commodities used in
renewable and low-carbon technologies, electrification and energy
infrastructure, supporting favourable market conditions across our
portfolio, in particular for copper, zinc and aluminium.
Opportunity
Short, medium
and long-term
Decarbonisation constraints: Constraints relating to energy systems
and low-carbon technologies may affect the pace, cost and
feasibility of operational decarbonisation, particularly within our
alumina and aluminium operations.
Risk
Short, medium
and long-term
Emissions-limiting regulations: Emissions-limiting regulations,
including carbon taxes, emissions trading systems, the Australian
Safeguard Mechanism and carbon border mechanisms, may
increase costs, affect demand for emissions-intensive products and
influence the competitiveness of our operations.
Risk
Short, medium
and long-term
Extreme weather disruption: Increasing intensity, frequency and
variability of extreme weather events, together with longer-term
changes in temperature, rainfall patterns and sea level rise, may
disrupt our operations, infrastructure and value chain, and affect our
ability to operate safely, reliably and efficiently.
Risk
Short, medium
and long-term
KEY: TO1 Transition Opportunity TR1 Transition Risk 1 TR2 Transition Risk 2 PR1 Physical Risk 1
Alumina Aluminium Copper Manganese Zinc-lead-silver
South32 Annual Report 2026
78 Strategic Report
Sustainability continued
21.
Time horizons are defined as short-term (0–2 years), medium-term (2–5 years) and long-term (5+ years).
OUR CLIMATE CHANGE ACTION PLAN AT A GLANCE
Our CCAP 2025 provides a three-year framework for responding to climate-related risks and opportunities
applicable to our portfolio as at 30 June 2026, informing strategy and decision-making.
Taking climate action
22
FY27 review of our CCAP 2025
in response to aluminium value
chain assets sale
23
Contribute to the transition to a low-carbon, climate-resilient economy:
Position our portfolio for the energy transition
〉 Produce minerals and metals critical to the world’s energy transition
〉 Advance our pipeline of base metals development options
〉 Explore for our next generation of base metal mines
〉 Continue to assess our portfolio resilience, using two future climate scenarios
Reduce our operational emissions to mitigate transition risk and protect value
〉 Halve our net operational emissions by FY35 from FY21 levels and pursue our
goal of net zero operational emissions by 2050
〉 Focus on our highest-emitting operations:
▪ Hillside Aluminium: Pursue multi-stakeholder collaboration to establish an
affordable, low-carbon electricity solution
▪ Worsley Alumina: Progress fuel switching as an interim step, while advancing
our steam electrification study
〉 Invest in low-carbon technology innovation and collaborate with others to
study, develop and scale solutions
Support emissions reduction across our value chain
〉 Contribute to the reduction of Scope 3 emissions to reach our net zero goal
〉 Engage 80% of key suppliers and customers to align ambitions, support data
improvements and knowledge sharing, and identify strategic collaborations
〉 Support the International Maritime Organization's goal of net-zero
greenhouse gas emissions from international shipping by or around 2050
Strengthen our resilience to climate impacts
〉 Present-day resilience:
▪ Enhance extreme weather decision-support tools
▪ Strengthen our climate-informed insurance approach
〉 Future resilience:
▪ Embed adaptation into key business processes
▪ Support climate-resilience in communities
Supporting a just transition: Address social- and nature-related risks and opportunities
arising from our response and continue embedding our just transition guiding principles.
Key enablers
Government engagement: Help shape effective climate policies and enabling conditions for
delivery of our CCAP.
Governance and reporting: Maintain robust climate governance and transparent reporting to
ensure accountability and drive continuous improvement.
Risk management: Continue to embed climate-related risks and opportunities into our Group
risk management framework.
South32 Annual Report 2026
79 Strategic Report
22.
This graphic is reproduced from the CCAP 2025 and has been updated solely to reflect changes arising from Mozal Aluminium being placed into care and maintenance in 2026.
23.
More details are provided in the 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.
On 1 July 2026, we announced our
entry into a binding conditional
agreement to sell our aluminium
value chain assets (excluding
Mozal Aluminium) to Alcoa
Corporation for an implied
enterprise value of up to US$5.6
billion, plus related rehabilitation
provisions of approximately
US$1.1 billion (the Transaction).
The Transaction is expected to
complete in H2 FY27, subject to
satisfaction or waiver of
conditions precedent, including
South32 shareholder approval.
This Sustainability Report has
been prepared based on
South32's portfolio as at 30 June
2026 and does not reflect the
implications of the proposed
Transaction. Accordingly, the
climate-related disclosures
presented in this report reflect
our portfolio as at that date.
Completion of the Transaction
would materially change our
portfolio, emissions profile,
energy use and exposure to
certain climate-related risks and
opportunities. It would also affect
the assumptions and
dependencies underpinning our
CCAP 2025 and FY35 operational
emissions reduction target.
In FY27, we will assess the
implications of the Transaction for
our climate-related risks and
opportunities and the response
set out in our CCAP. This review
will include our FY35 target and
the decarbonisation pathways,
assumptions, initiatives,
governance and performance
measures that underpin our
climate change approach and
disclosures. Any resulting
changes will be reflected in future
reporting, as appropriate.
CCAP 2025 PROGRESS UPDATE
Our CCAP focuses on continuing to position our portfolio for the energy transition, emissions reduction within our operations
and broader value chain, and strengthening resilience to physical climate impacts.
Positioning our portfolio for the
energy transition
We continue to reshape our portfolio towards minerals and metals
critical to the world's energy transition. Key actions in FY26
included:
– advancing construction of Hermosa, a regional-scale
development project with the potential to produce zinc, silver,
copper and battery-grade manganese over several decades
– progressing options at Sierra Gorda copper mine to increase
processing capacity and support future production growth
– completing the divestment of Cerro Matoso in response to
structural changes in the nickel market.
As outlined on page 79, on 1 July 2026 we announced a step
change for our business through the sale of our aluminium value
chain assets (excluding Mozal Aluminium) to Alcoa. Completion of
the Transaction will reposition South32 as an upstream base metals
focused company while reducing exposure to energy-intensive
processing
24
.
Learn more about our strategic context on page 18.
Allocating capital towards Transition Materials
Under the Climate Action 100+ Net Zero Standard for Diversified
Mining, all commodities in our portfolio are classified as Transition
Materials
25
, reflecting their expected role in supporting the
transition to a low-carbon economy. In FY26, capital expenditure
relating to these commodities included US$711 million in growth
expenditure at Hermosa, and US$241 million in safe and reliable
and improvement and life extension expenditure at Sierra Gorda.
We also committed US$34 million to greenfield exploration
opportunities targeting base metals in highly prospective regions.
This allocation is consistent with our strategy and focus on
commodities critical to the world's energy transition.
Refer to page 104 for more Transition Materials metrics.
FY26 Group capital expenditure by commodity
26
14%
6%
17%
52%
8%
4%
Alumina
Aluminium
Copper
Manganese
Battery-grade manganese
Zinc-lead-silver
Developing Hermosa
Hermosa is a key component of our growth strategy, with multiple
pathways to create long-term value through the development of
the Taylor zinc-lead-silver deposit and future opportunities at the
adjacent Peake copper and Clark manganese deposits.
Taylor is a multi-decade zinc-lead-silver operation under
development, with first production expected in H2 FY28. The
project has been designed to support future expansion, including
potential development of the nearby Peake copper deposit, where
ongoing exploration continues to support future production and
mine life extension. The Clark deposit also presents a future
opportunity to produce battery-grade manganese through a
phased development approach.
FY26 progress highlights include:
– advanced construction at Taylor, with significant progress
across underground works and surface infrastructure
– completed the exploration decline at Clark and identified an
opportunity to extend the decline to provide additional access
to the Taylor orebody, improving operational flexibility
27
– continued exploration at the Peake prospect, with drilling results
supporting future development potential
27
.
Subsequent to year-end, Hermosa achieved a significant
permitting milestone when the United States Forest Service issued
its Final Record of Decision, completing the federal National
Environmental Policy Act (NEPA) environmental review and
approval process for ancillary infrastructure on National Forest
Service land.
As development progresses, we continue to evaluate opportunities
to reduce Hermosa's future operational emissions through:
– next-generation mine design: application of automation and
technology to improve efficiency and lower emissions intensity
– fleet electrification: phased deployment of battery-electric
vehicles, forming part of Taylor’s underground fleet
– low-carbon energy supply: engagement with utilities and power
providers to assess low-carbon electricity supply options.
Further details on Hermosa's development, growth opportunities
and project outlook are provided in the market release Hermosa
Project Update dated 30 April 2026, available at www.south32.net.
Learn more about how Hermosa is managing environmental impacts
and contributing value to society at www.south32.net.
South32 Annual Report 2026
80 Strategic Report
Sustainability continued
24.
Details are provided in the 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.
25.
Excludes gold which is produced as a by-product of copper concentrate production at Sierra Gorda. The contribution of gold to Group revenue averaged 0.9% over FY24 to FY26.
26.
Includes Mozal Aluminium up to March 2026, and excludes Cerro Matoso as well as capital expenditure for exploration, intangibles, Group and unallocated capital. The sum of figures
may vary due to rounding.
27.
Further details are provided in our '2026 Half Year Financial Results' presentation dated 12 February 2026.
US$1,365m
Unlocking value at Sierra Gorda
Located in Chile’s Antofagasta region, Sierra Gorda is a large-scale,
long-life copper mine powered by renewable electricity. During
FY26, we worked with our joint venture partner to improve
performance and unlock further value, including:
– approving a fourth grinding line project, expected to increase
processing capacity and support long-term production growth
28
– advancing exploration in the Sierra Gorda district, including
identifying further resource growth potential at the Catabela
Northeast prospect adjacent to the Catabela pit
29
– assessing opportunities to unlock value from oxide stockpiles
– entering into a non-binding memorandum of understanding
with BHP's Minera Spence for the purpose of identifying and
evaluating opportunities for operational collaboration.
Base metals exploration
We maintain a broad portfolio of exploration projects, partnerships,
strategic alliances and equity interests targeting base metals.
Our 50% interest in the Ambler Metals joint venture provides
exposure to the Ambler Mining District, which includes the Arctic
deposit, a high-grade polymetallic resource; the Bornite deposit,
comprising open pit and underground copper resources, and
additional regional base metals targets supporting further
exploration potential. In FY26, the joint venture progressed
permitting activities for Arctic, including acceptance into the
FAST-41 federal permitting framework, and advanced exploration
drilling and development studies.
Beyond Ambler, exposures to prospective mineral belts and
development opportunities globally include:
– San Juan copper district (Argentina): provides exposure to
large-scale copper porphyry systems through our interests in
Minsud Resources and Aldebaran Resources
– North America (US and Canada): exploration targeting copper
systems, including projects in Nevada and Arizona and equity
exposure to the NAK copper-gold project in British Columbia
– Kalahari Copper Belt (Southern Africa): strategic alliance and
copper exploration projects across Namibia and Botswana
– Northern Australia: copper and zinc exploration targets,
including areas with geological similarities to Cannington.
Mozal Aluminium: Care and Maintenance
In March 2026, Mozal Aluminium was placed into care and
maintenance after the operation was unsuccessful in
securing a sufficient and affordable long-term electricity
supply, despite extensive engagement with key
stakeholders. While energy use and associated emissions
have reduced significantly, residual emissions continue to be
reported because the smelter remains under our
operational control.
Learn more about support for our workforce and community
through Mozal Aluminium's transition on page 70.
Reducing operational emissions
FY26 operational emissions
FY26 operational emissions were 20.5 Mt CO
2
-e, 1.0% lower than
FY25 and 17.1% above the FY21 baseline of 17.5 Mt CO
2
e. The
increase relative to the FY21 baseline primarily reflects drought
conditions in Southern Africa over FY25 and FY26, which reduced
the availability of hydroelectricity supplied to Mozal Aluminium and
increased reliance on coal-fired Eskom electricity.
In FY26:
– Scope 1 emissions decreased 16.9% (1.3 Mt CO
2
-e) from FY25,
primarily reflecting the divestment of Cerro Matoso and
placement of Mozal Aluminium into care and maintenance
– Scope 2 emissions increased 8% (1.1 Mt CO
2
-e) from FY25,
reflecting higher consumption of Eskom-supplied electricity by
Mozal Aluminium and an increase in Eskom’s emissions factor
30
.
Excluding Mozal Aluminium, Hillside Aluminium and Worsley
Alumina accounted for over 95% of our FY26 operational emissions:
– Hillside accounted for more than 75% of those emissions.
Approximately 90% of the smelter’s emissions are Scope 2
emissions associated with electricity purchased from Eskom,
which is predominantly generated from coal-fired sources
– Worsley Alumina accounted for around 20% of those emissions,
the majority of which arise from the combustion of coal and
natural gas to generate the high-pressure steam required for
alumina refining. Additional emissions arise from the high-
temperature heat required for calcination.
Both operations are part of the Transaction announced on 1 July
2026 and, on completion, will no longer form part of our portfolio.
Operational emissions (total operations)
Mt CO₂-e
22.0
21.7
20.3
20.7
20.5
10.1 10.3 9.4 7.4 6.2
11.9
11.4
10.9
13.3
14.4
Scope 1 Scope 2
FY22 FY23 FY24 FY25 FY26
0.0
5.0
10.0
15.0
20.0
25.0
South32 Annual Report 2026
81 Strategic Report
28.
Further details are provided in the market release titled 'Final Investment Approval for Sierra Gorda 4th Grinding Line' dated 1 July 2026.
29.
For further information on the Catabela Northeast Exploration Target, refer to our 2026 Half Year Financial Results announcement dated 12 February 2026.
30.
Emissions arising from our operations’ consumption of electricity generated in South Africa varies when Eskom’s emissions factor changes. With our large-scale demand for
electricity supplied by Eskom, small changes in Eskom’s emission factor can have a significant impact on our total operational emissions.
FY26 operational emissions by operation and source
(Continuing operations
31,32
, excluding Mozal Aluminium)
Mt CO₂-e
77%
19%
4%
Coal & Coke Distillate & Other
Electricity Natural Gas
Hillside
Aluminium
Worsley Alumina
Other
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
Our FY35 operational emissions reduction target
We have a target to halve our net operational emissions by FY35,
measured against an adjusted FY21 baseline, and a longer-term
goal to achieve net zero operational emissions by 2050. These
commitments reflect our focus on reducing emissions, noting that
progress is unlikely to be linear and may vary year-to-year due to
operational changes, investment timing and other external factors
outside of our control.
Our FY35 target covers 100% of our operational emissions. The
FY21 target baseline, adjusted to reflect divestments and
acquisitions completed to date, is 17.5Mt CO
2
-e.
As outlined on page 79, completion of the Transaction would
materially change our portfolio, the composition of our operational
emissions, and the assumptions, pathways and dependencies
underpinning our FY35 target. For context, had the aluminium
value chain assets not formed part of our portfolio during the FY21
baseline year, our FY21 operational emissions baseline would have
been approximately 1.7 Mt CO₂-e.
Given the timing of the Transaction announcement relative to this
reporting period, we have not yet completed an assessment of the
implications for our FY35 target. In FY27, we will undertake that
assessment, including recalculating our FY21 operational emissions
baseline to reflect the divestment of the aluminium value chain
assets, reviewing whether the FY35 target remains appropriate for
the residual portfolio, and reassessing the pathways, assumptions
and initiatives underpinning its achievement, including the potential
role of carbon credits.
Potential pathways to achieving the FY35 target prior to
announcement of the Transaction
Prior to announcement of the Transaction, we identified multiple
potential pathways to achieving the FY35 target, each with
different implications for emissions outcomes, cost and reliance on
external enablers, such as carbon credits. All pathways were
contingent on strategic decisions and actions relating to Hillside
Aluminium.
Our preferred pathway was to transition the smelter's electricity
supply to low-carbon sources. Achieving this outcome requires
coordinated multi-stakeholder collaboration and remains subject to
external dependencies, including the development of multiple
gigawatts of renewable electricity supply, substantial grid
infrastructure upgrades, and enabling regulatory and market
conditions to support an affordable, reliable and large-scale low-
carbon electricity supply solution beyond 2031.
An alternative pathway was to close the smelter upon expiry of the
current electricity agreement in 2031 if a feasible low-carbon
electricity solution was not secured. This pathway formed the basis
for certain long-term financial reporting assumptions
33
.
Between these two pathways were a range of potential scenarios
for the supply of low-carbon electricity to the smelter over FY32 to
FY35 and beyond, influencing the extent to which emissions
reductions from other operations would be required to achieve the
target and the potential need to offset any residual emissions.
Carbon credits for offsetting emissions
Our approach to operational decarbonisation focuses on emissions
avoidance and reduction. Subject to economic feasibility, carbon
credits may be used to offset residual emissions where reduction
opportunities are not technically or commercially feasible, or
cannot be implemented within the required timeframe.
Carbon credits used towards net emissions reporting or
achievement of our FY35 target achievement must be issued by a
national government or internationally recognised body and are
subject to appropriate due diligence. While we have acquired
carbon credits to meet regulatory obligations, including under the
Australian Safeguard Mechanism, we have not, to date, acquired
carbon credits for the purpose of offsetting emissions in our net
emissions reporting or supporting achievement of our FY35 target.
Prior to announcement of the Transaction, neither our preferred
pathway nor the alternative pathway was expected to require
voluntary carbon credits to achieve the FY35 target. On this basis,
our associated gross emissions reduction target was the same as
our net target. However, our net target provides flexibility to use
carbon credits to address any residual shortfall where economically
feasible; for example, if there is a small shortfall in low-carbon
electricity supply to Hillside Aluminium by FY35.
If the Transaction completes, the assessment of our FY35 target
and associated pathways may indicate a role for carbon credits in
achieving the current FY35 target or any recalibrated target. This is
because adjusting the baseline to exclude the aluminium value
chain assets would materially alter both the starting point and
supporting pathways that previously underpinned achievement of
the target.
Carbon credits may contribute to achieving our 2050 net zero goal,
particularly for residual hard-to-abate emissions where viable low-
carbon technologies are unavailable or not economically feasible.
Refer to page 104 and to the Climate-related Reporting Methodology
2026 for additional information about our FY35 target and approach
to carbon credits.
South32 Annual Report 2026
82 Strategic Report
Sustainability continued
31.
Assets covered by the Transaction announced on 1 July 2026 are treated as continuing operations, notwithstanding that it is expected they will cease to be part of the portfolio
during FY27 upon completion of the Transaction.
32.
Other is comprised of Australia Manganese (1%), Cannington (1%), South Africa Manganese (1%) and Other (1%, including Hermosa Project).
33.
Refer to Financial Report Note 11. Property, Plant & Equipment (Key estimates, assumptions and judgements); Note 13. Impairment of Non-Financial Assets; and Note 15(b). Closure
and Rehabilitation.
FY26 progress update
Hillside Aluminium (Hillside)
Hillside's decarbonisation progress is highly dependent on
developments in South Africa’s energy system and long-term
access to reliable, affordable low-carbon electricity. It is also
exposed to evolving international carbon regulation through
exports to Europe, including the European Union’s Carbon Border
Adjustment Mechanism (EU CBAM).
During FY26, we progressed engagement with Eskom on a
potential affordable, low-carbon electricity supply solution for
Hillside beyond expiry of the current power contract in 2031.
Activities included establishing a joint working group to progress
technical, commercial and policy matters, holding technical and
commercial workshops on Hillside’s operational and energy
requirements, and establishing an expanded cross-divisional
Eskom deal team, including representatives from Eskom's
renewable energy business unit, Eskom Green.
Engagement focused on renewable electricity supply pathways,
firming requirements, grid and transmission considerations,
contracting structures, and relevant electricity market and policy
developments. As part of the working group's initial activities,
Eskom undertook a site visit to gain an appreciation of operational
and system integration considerations, and Hillside’s economic and
social contribution.
Energy and emissions intensity
Improving energy efficiency remains an important component of
Hillside’s decarbonisation approach. As at FY26-end, AP3XLE
energy efficiency technology has been installed in 66% of Hillside’s
pots, supporting improved electricity efficiency of 13.51 MWh/t Al
and reduced emissions intensity.
During FY26, we continued to assess Eskom’s nuclear-derived
environmental attribute certificates (EACs), including their potential
relevance under the EU CBAM. Ongoing uncertainty regarding the
treatment and recognition of these attributes meant we did not
actively pursue this option further during FY26.
Worsley Alumina (Worsley)
Worsley’s decarbonisation progress is closely linked to the
development and deployment of low-carbon technologies and
enabling energy infrastructure. Key dependencies include access
to reliable and cost-competitive low-carbon electricity,
transmission capacity within the South West Interconnected
System (SWIS), and policy and market settings. Decarbonisation
planning also needs to consider Western Australia’s broader energy
transition, including the phased retirement of coal-fired power
generation and development of renewable energy and
transmission infrastructure.
In FY26, we progressed a range of initiatives to support the
development of potential decarbonisation pathways for Worsley.
Coal alternative steam supply
Historically, steam generation has relied on a combination of three
coal-fired boilers and a multi-fuel co-generation facility with two
boilers that consume mostly coal, as well as biomass and diesel.
Worsley has begun reducing this system's reliance on coal, with
two of the five boilers converted to natural gas in FY24, reducing
the operation's annual emissions by approximately 10% relative to
the FY21 baseline.
An alternative steam supply study is assessing the conversion of
the remaining boilers from coal to natural gas as an interim
measure ahead of longer-term electrification. In FY26, we
progressed the study, including confirming preferred infrastructure
configurations, capacity requirements and sequencing aligned to
maintenance cycles. This involved consideration of a range of
factors, including evolving energy market and infrastructure
conditions, capital allocation priorities, and the need to maintain a
reliable and cost-competitive energy supply.
We also considered the planned retirement of Western Australia's
coal-fired power generation and the timing of replacement capacity
— including renewable generation, storage, firming capability and
supporting transmission infrastructure — alongside recent Western
Australian Government measures to extend domestic coal supply
to support energy security during the transition.
Biomass consumption
Biomass can partially displace coal in existing multi-fuel co-
generation facility boilers, providing a low-carbon fuel alternative
within current infrastructure. In FY26, the refinery's biomass
consumption nearly doubled, supported by improved resource
availability, contributing to a 3% reduction in Scope 1 emissions
year-on-year.
While biomass reduces emissions from electricity and steam
generation, its contribution to overall emissions reduction remains
constrained by the capacity of existing boiler and fuel handling
systems.
Steam electrification
Electrification of steam generation and calcination is considered
the long-term pathway to reduce emissions at Worsley.
In FY25, we secured A$4.4 million from the Australian Renewable
Energy Agency, to be matched by Worsley, to support a pre-
feasibility study into technologies for partial steam electrification. In
FY26, the first phase of the study was completed, advancing the
assessment of potential technology pathways and their integration
with existing refinery processes.
The study identified a technically feasible pathway for partial steam
electrification. However, high capital intensity and current electricity
market conditions remain significant barriers to implementation.
These findings reinforce the need for a phased approach to
decarbonisation aligned with the availability of reliable and
affordable low-carbon electricity. A report on the completed study
is expected to be published on the Australian Renewable Energy
Agency website in 2026.
Renewable energy and transmission engagement
Access to renewable electricity is critical to enabling electrification
pathways at Worsley. In FY26, we continued engaging with energy
and carbon market participants, including Western Power, to
assess renewable energy supply options and the infrastructure
required to support potential electrification pathways. We also
progressed power system modelling and connection planning to
better understand electricity and transmission requirements for
potential electrification scenarios.
Worsley’s decarbonisation pathway continues to evolve, reflecting
developments in energy markets, enabling infrastructure and the
maturity and commercial viability of low-carbon technologies.
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CASE STUDY
FY26 activities supporting a just transition
We believe that action to address climate change should
consider socioeconomic impacts, risks and opportunities to
help mitigate potential adverse effects on people and
communities.
South Africa
Hillside is a significant employer and economic contributor
in KwaZulu-Natal and plays an important role in South
Africa’s aluminium industry.
We continue to engage with Eskom, government and
industry stakeholders to support a just energy transition in
South Africa. In FY26, we participated in national and
provincial government discussions and industry forums,
such as the KwaZulu-Natal Energy Indaba, South Africa
Investment Conference, Energy Intensive Users Group
(EIUG) and the 2026 Aluminium Conference hosted by the
Aluminium Federation of South Africa (AFSA).
Engagement focused on enabling South Africa's
decarbonisation ambitions while maintaining energy
security, industrial competitiveness and the long-term
viability of energy-intensive industries. Topics included
electricity pricing, market reform, transmission and
generation investment, and the policy and infrastructure
settings required to support industrial decarbonisation.
Learn more about Hillside's 30-year anniversary and
contribution to aluminium beneficiation in South Africa at
www.south32.net
Collie, Western Australia
Worsley Alumina is located near the town of Collie, where
the energy transition is reshaping both the regional
economy and energy system.
The Western Australian Government is progressing its Just
Transition framework for Collie, centred on the phased
retirement of state-owned coal-fired power generation by
2030. In February 2026, the Government released Collie’s
Just Transition Plan 2026–2030, focused on supporting
affected workers and attracting new industries and jobs.
Recognising the scale and complexity of the transition, the
Government has taken measures to support energy
security and reliability while replacement infrastructure is
developed. In 2026, the Griffin Coal State Agreement was
extended to June 2031 to support continued coal supply
during the transition period, providing short- to
medium-term certainty of domestic coal supply as the
energy system evolves.
Significant investment and planning is also underway across
the South West Interconnected System (SWIS) to support
renewable energy deployment, transmission expansion,
storage capacity and industrial electrification.
Worsley participates in the Collie Just Transition Working
Group, led by the Department of the Premier and Cabinet,
including through committees focused on workforce
transition and regional development. This engagement
supports our understanding of evolving regional,
infrastructure and policy settings relevant to Worsley’s
decarbonisation pathway.
Pathways to net zero
We have a long-term goal to achieve net zero operational
emissions by 2050. Prior to the Transaction announcement, we
expected our post-FY35 emissions to be concentrated in industrial
processes and energy-intensive operations where commercially
viable low-carbon technologies are not yet available, sufficiently
mature or deployable at scale. Progress beyond FY35 was
therefore expected to become increasingly dependent on the
development, availability and commercial deployment of emerging
decarbonisation technologies. These technologies face significant
technical, infrastructure and economic challenges, require
substantial upfront capital investment and often have long
development timeframes. Achievement of our long-term goal may
also require the use of carbon credits for offsetting. In light of the
sale of our aluminium value chain assets, we plan to review our
pathway to achieve net zero operational emissions by 2050.
In FY26, we continued to collaborate with others to explore
potential solutions, including through the following initiatives:
Heavy Industry Low-Carbon Transition Cooperative Research
Centre (HILT CRC)
HILT CRC is a collaborative venture between industry, government
and research organisations to develop, de-risk and accelerate
technologies for heavy industry decarbonisation. We remain a core
partner, with representation on its Steering Committee and
research advisory groups, supporting research aligned to our
decarbonisation and operational efficiency objectives.
A key focus of our engagement is AlumiNEXT, HILT’s alumina
program, which is evaluating options to reduce emissions at
existing refineries and supports the development of next-
generation process efficiency technologies. In FY26, this work
advanced modelling of energy use and emissions across alumina
refining and identified priority opportunities to reduce emissions in
heat and steam processes.
We are also the industry representative on projects focused on
biomass and waste-derived fuels as alternatives for high-
temperature heat, including calcination, and thermal upgrading
technologies aimed at improving ore and feedstock quality and
increasing process efficiency.
HILT also supports engagement with alumina customers on value
chain emissions reduction, as outlined on page 87.
BluVein
We participate in the BluVein collaboration, which is developing
dynamic energy transfer technology to support electrification of
heavy mining fleets, reducing the need for onboard batteries and
static charging bays in space- and ventilation-constrained
environments. The BluVein1 system enables in-motion charging of
battery electric vehicles and is particularly suited to underground
haulage. This technology has the potential to improve operational
efficiency, reduce emissions and diesel particulate matter, and
support broader deployment of battery electric vehicles in
underground mining environments.
In FY26, the project advanced beyond component testing into full-
scale system trials in an operational quarry environment, with
laboratory, mechanical and electrical validation completed. The
project is supported by funding from the Australian Renewable
Energy Agency’s (ARENA) Powering the Regions program, with
activities expected to continue into FY27, subject to achievement
of key technical milestones and validation of system performance.
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Sustainability continued
Processing of sold products
44%
5%
1%
50%
Alumina
Aluminium
Copper
Manganese
Supporting emissions reduction
across the value chain
FY26 Scope 3 emissions
FY26 Scope 3 emissions totalled 28.6 Mt CO
2
-e, 22% higher than
FY25
34
. The increase was primarily driven by higher emissions from
processing of sold products (Category 10), which increased 50%
due to higher alumina sales volumes and increased manganese ore
sales following the restart of operations at Australia Manganese.
Emissions from upstream transportation and distribution (Category
4) also increased due to higher shipment volumes associated with
Australia Manganese.
These increases were partly offset by lower emissions from
purchased goods and services (Category 1), which decreased 22%
due to portfolio changes, including the divestment of Cerro Matoso
and the transition of Mozal Aluminium to care and maintenance.
Emissions from fuel- and energy-related activities (Category 3)
decreased 5% for the same reasons, while downstream
transportation and distribution (Category 9) emissions decreased
20% due to fewer FOB shipments.
Following the divestment of Illawarra Metallurgical Coal in August
2024, emissions from use of sold production (Category 11) are no
longer applicable to South32, resulting in a year-on-year decrease
of 1.5 Mt CO₂e. Emissions from investments (Category 15)
remained broadly unchanged.
Our Scope 3 emissions inventory is available in our Sustainability
Databook 2026 and the calculation methodology is outlined in the
Climate-related Reporting Methodology 2026.
Scope 3 emissions (total operations)
Mt CO₂-e
67.4
65.0
54.2
23.6
28.6
FY22 FY23 FY24 FY25
FY26
0.0
25.0
50.0
75.0
Purchased goods and services (including capital goods)
Fuel and energy-related activities
Upstream transportation and distribution
Processing of sold products
Use of sold products
Investments
Other
The FY22 to FY25 emissions reductions shown above reflect the
sale of Illawarra Metallurgical Coal in August 2024 and Cerro
Matoso in December 2025, as well as calculation methodology
enhancements.
FY26 Scope 3 emissions by position in our value chain (continuing operations)
Purchased goods and services (including capital goods)
Fuel and energy-related activities
Upstream transportation and distribution
Downstream transportation and distribution
Processing of sold products
Investments
(Brazil Alumina - 59%, Brazil Aluminium - 27%, Sierra Gorda - 14%)
Upstream activities account for almost 20% of our Scope 3 emissions, with most of these emissions relating to purchased goods and
services (including raw materials) and fuel and energy-related activities. Downstream activities account for over 80% of Scope 3 emissions,
with a significant portion of these emissions arising from product processing — in particular, the smelting of alumina into aluminium ingots.
South32 Annual Report 2026
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34.
FY25 Scope 3 emissions have been restated following the identification of a third-party calculation error. FY25 total revised to 23.5 Mt CO
2
-e (previously 22.7 Mt CO
2
-e ).
UPSTREAM - 5.1 Mt CO
2
-e
(18%)
DOWNSTREAM - 23.4 Mt CO
2
-e
(82%)
23.5
Our approach and progress
The Scope 3 component of our net zero emissions by 2050 goal
recognises our responsibility to contribute to reducing value chain
emissions. As outlined in our 2025 CCAP, our approach to Scope 3
emissions focuses on targeted stakeholder engagement across
four priority areas aimed at supporting emissions reduction across
the value chain. This includes:
– measurable objectives to engage with 80% of key suppliers and
80% of key customers by the end of FY28
35
– a commitment to support global efforts to reduce emissions
from international shipping.
As part of the review of our 2025 CCAP described on page 79, we
will assess the implications of the Transaction for our Scope 3
commitments, including our net zero emissions by 2050 goal.
Engagement focus areas
Ambition
alignment
Data
improvements
Knowledge
sharing
Strategic
collaborations
We engage through multiple channels, including:
– collecting emissions data from suppliers through direct
engagement, contractual arrangements and publicly available
sources
– sharing technical knowledge directly, and through industry
initiatives and research partnerships
– engaging with key customers to exchange product-specific
emissions data and share insights on shared challenges
– collaborating with suppliers, customers and industry partners on
research, innovation and pilot projects.
FY26 progress update
Supplier engagement (upstream)
In FY26, we engaged with over 80% of key suppliers across energy
and fuels, transport and logistics, mining and maintenance
services, construction, and traded inputs. Engagement focused on
improving emissions data to strengthen understanding of
upstream emissions and support more targeted engagement.
Key observations include:
– while updated contract templates include emissions data
clauses, voluntary data sharing remains the most effective
approach in practice
– engagement in South Africa identified several lower-emissions
transport initiatives being progressed by suppliers, including
higher cargo utilisation and greater use of electric vehicles.
These insights reinforce the importance of relationship-based
engagement alongside contractual mechanisms. We will continue
to monitor supplier initiatives and assess opportunities to
participate where aligned with our operational and commercial
objectives.
Customer engagement (downstream)
In FY26, we engaged with over 90% of key customers across
alumina, aluminium, manganese and zinc-lead-silver,
complemented by participation in industry-led platforms and
research initiatives. Engagement focused on knowledge sharing
and ambition alignment to understand customer priorities and
inform future engagement.
Key insights include:
– economic constraints and limited willingness or ability to pay in
some market segments indicate that, despite growing interest,
downstream demand for low-carbon products is not yet
translating into a premium across markets
– as lower-cost abatement options are exhausted, further
downstream emissions reductions become more challenging
and may require higher-cost and/or less-mature technologies
– policy mechanisms such as the EU Carbon Border Adjustment
Mechanism are increasing scrutiny of embedded emissions,
particularly in aluminium, with potential implications for
customer preferences and market access
– opportunities exist to support emissions reductions through
contractual and logistics mechanisms, although appetite
remains constrained where these increase costs
– physical climate risks are shared across the value chain, with
growing customer interest in how these risks are identified and
managed.
Collectively, these insights indicate that while regulatory drivers
and transparency requirements are increasing, commercial
incentives for Scope 3 emissions reduction are not yet consistently
aligned across commodities. This reinforces our focus on:
– prioritising continued engagement where regulatory or
customer readiness to engage on decarbonisation is strongest
– supporting emissions reductions through operational and
logistics efficiencies (for example, slower sailing speeds and
maximising cargo stem size) where cost impacts are limited
– exploring collaborative initiatives and data-sharing
arrangements to strengthen capability and support readiness
for evolving market and regulatory expectations.
Technology and innovation collaboration
In FY25, we entered into a Memorandum of Understanding with
Taiyuan Guohong Ferroalloy Co. Ltd, a manganese smelting group,
to develop a pelletised manganese feedstock for use in electric
furnaces. The initiative aims to improve furnace efficiency and
reduce environmental impacts, including energy consumption,
emissions and dust generation.
The pelletisation trial was completed in FY26 and demonstrated
that pellets can replace sinter, an energy-intensive, processed
manganese feedstock, with lower energy use and emissions. Next
steps include progressing further testing and exploring research
collaboration opportunities relating to the recycling and reuse of
lower-grade manganese ore tailings.
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Sustainability continued
35.
Engagement percentage for our measurable objectives is tracked based on the number of key suppliers (upstream) and quantity of product sold (downstream). We define 'key
suppliers' as those with ongoing relationships that contribute to our upstream transition risk exposure, and 'key customers' as those with ongoing, high-value relationships.
Collaboration through research and industry bodies
In FY26, we continued to focus engagement with alumina
customers through the Heavy Industry Low-Carbon Transition
Cooperative Research Centre (HILT CRC), as outlined on page 84.
Through this platform, we collaborate with customers and industry
participants to share knowledge, discuss decarbonisation priorities
and explore opportunities for research and technology
development across the alumina value chain.
In FY26, we secured approval for a collaborative research project
with alumina customer Emirates Global Aluminium (EGA) through
the HILT CRC Opportunity Fund. Commencing in FY27, the project
will explore technologies that could support lower-emissions
alumina production and contribute to emissions reductions across
the value chain.
In FY26, we contributed to commodity Life Cycle Assessment (LCA)
initiatives, including a new International Zinc Association LCA study
and LCA refresh project by the International Manganese Institute,
with data contributed from Cannington and South Africa
Manganese. This work supports more consistent and transparent
measurement of product-level emissions as customers, regulators
and value chain frameworks place increasing focus on embedded
emissions and product transparency.
Shipping
We support the International Maritime Organization’s goal to
achieve net zero emissions from international shipping by or
around 2050
36
. We engage with freight providers, customers and
suppliers through industry collaboration, transparency initiatives
and commercial mechanisms that incentivise improved emissions
performance.
In FY26, we remained a signatory to the Sea Cargo Charter and
prepared a voluntary emissions report for CY25 based on 100%
actual data, improving transparency of our shipping emissions
performance. We also continued our membership of the
Sustainable Shipping Initiative.
Emissions-linked freight and collaborations
Since FY22, we have partnered with Klaveness Combination
Carriers (KCC) to apply a Carbon Adjustment Factor to selected
freight contracts. This mechanism links freight rates to emissions
performance against an agreed baseline and provides a financial
incentive for improved emissions performance, with associated
revenues intended to support vessel efficiency improvements.
Performance under this arrangement remained strong in CY25. The
majority of voyages (12 of 16) performed below their agreed
emissions baselines, with overall emissions approximately 4% lower
than target. During the year, KCC also progressed fleet efficiency
improvements, including retrofit activities.
For CY26, the emissions baseline has been further reduced
compared with CY25, reflecting ongoing fleet developments and
agreed operating parameters. Additional new-build vessels are
expected to support shipments, including one fitted with suction
sail technology to reduce fuel consumption and emissions through
wind-assisted propulsion.
We have expanded the use of emissions-linked mechanisms
beyond KCC. In FY25, we finalised a similar arrangement with MACS
Shipping for the transport of aluminium ingots from Hillside
Aluminium. In FY26, we established a further Carbon Adjustment
Factor arrangement for alumina shipments from Brazil Alumina to
Canada.
More broadly, we continue to work with customers, suppliers and
logistics providers to identify opportunities to improve freight
efficiency and reduce value chain emissions. During the year we:
– entered into a three-year agreement with China Aluminium
International Trading Group to increase parcel sizes, supporting
freight cost efficiencies and reduced maritime emissions
– progressed a digital partnership with TrimSAIL and Tarbit
Tankers B.V. for tankers carrying liquid pitch. In FY26, two
vessels were fitted with sensors to monitor vessel movement,
speed and fuel use. Data will be used to identify opportunities to
optimise voyage efficiency, costs and emissions
– entered into an agreement with Oldendorff Carriers for the
transport of manganese ore from South Africa to China, under
which Oldendorff is to report emissions for South32-nominated
voyages, enabling performance tracking and structured
data-sharing to support future emissions reduction.
Resourcing climate-related activities
Beyond capital allocated towards Transition Materials, we invest in energy efficiency and emissions reduction initiatives.
Decarbonisation expenditure is defined within our internal investment standard, considered as part of our broader capital allocation
framework and tracked through regular reporting. It is funded through a combination of operating cash flows and balance sheet
capacity. FY26 decarbonisation expenditure totalled US$3.4 million, including energy efficiency technology at Hillside Aluminium and
studies at Worsley Alumina.
We also incur operating expenditure to support CCAP implementation, including through sustainability, energy and carbon markets,
market analysis, and technology teams, as well as external affairs teams managing stakeholder engagement. This reflects a cross-
functional approach, with specialist capabilities across technical, commercial and stakeholder-facing functions contributing to the
management of climate-related risks and opportunities. We expect resourcing requirements, including workforce capabilities, to
evolve over time as studies progress, technologies mature and commercial arrangements for low-carbon electricity supply are
developed.
For such time as these assets remain part of our portfolio, developing on-balance-sheet renewables and related infrastructure at
Hillside and Worsley is not aligned with our strategy or core capabilities. Our focus remains on securing reliable, affordable and low-
carbon electricity supply through third-party arrangements, including engaging with utilities and counterparties on power purchase
agreements and other supply solutions. These arrangements, which may include long-term offtake agreements, can support the
development of low-carbon supply and may influence the timing and profile of future capital and operating expenditure.
South32 Annual Report 2026
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36.
As outlined in Strategic Direction 3 of the International Maritime Organization’s Strategic Plan for the Organization for the Six-Year Period (2024–2029), which focuses on responding
to climate change and reducing greenhouse gas emissions from international shipping. Learn more at www.imo.org.
Strengthening our resilience to
climate impacts
Our CCAP 2025 includes a Climate Adaptation and Resilience Plan, which comprises five key initiatives to strengthen preparedness,
resilience and adaptive capacity across our operations and value chain. The plan is informed by asset-level physical climate risk
assessments, including site-specific climate projections under SSP2-4.5 and SSP5-8.5 scenarios, and analysis of exposure pathways
through which physical climate hazards may affect our operations.
Key initiatives
Focus Areas
Strengthen present-day resilience
1
Embed enhanced weather forecast data and climate outlooks to strengthen operational extreme
weather decision-making.
■ ■ ■ ■
2
Integrate physical risk management insights into our insurance program.
■ ■
Strengthen capabilities for future resilience
3
Develop updated guidance and tools for assessing and managing physical climate risks, to enable
the embedding of adaptation into key business processes.
■ ■ ■ ■
4
Share information about local climate vulnerabilities with communities, supporting them to build
adaptive capacity and climate resilience.
■ ■
Continuously improve physical climate risk management
5
Incorporate climate expertise into material risk reviews, apply leading practices and support skill
building to enhance ongoing management of physical climate risks.
■ ■ ■ ■
Key Operational resilience Value chain Workforce and communities Nature
FY26 progress update
During FY26, we progressed a range of initiatives to strengthen
resilience to physical climate-related impacts.
Strengthening present-day resilience
As part of managing exposure to acute weather hazards, we
continued to enhance forecasting and response capabilities.
At Worsley Alumina, we commenced implementing risk-based
weather forecasts and associated automated severe weather alerts
to support refinery and port operational preparation and weather-
response processes. We also completed a risk assessment of
bushfire risk to critical conveyor infrastructure, informing mitigation
measures, such as vegetation management and optimisation of
protection zones, and supported regional emergency
preparedness initiatives to strengthen local bushfire response
capability.
At Australia Manganese, where operations span a large and
climatically variable area, forecasting capability was enhanced
through the introduction of location-specific forecasts for rainfall,
fog and dust, supporting more targeted operational planning and
risk mitigation.
Strengthening future resilience capabilities
To support consistent integration of climate-related assumptions in
long-term decision-making, we progressed the integration of
physical climate considerations into site planning, project design
and risk assessment processes. This included refining planning
assumptions used in life-of-operation planning and updating
project environment guidance to strengthen consideration of
physical climate risks across the project lifecycle.
In response to continued projections of declining cool season
rainfall and increasing intensity of short-duration rainfall events in
south-west Australia, we commenced a study in FY26 to better
understand hydrological variability at Worsley Alumina under
current and future climate scenarios.
The study is assessing potential impacts on water security,
extreme rainfall events and water management risks to support
longer-term adaptation planning and operational resilience.
At Hermosa, we progressed initial scoping to identify opportunities
to strengthen community engagement on climate risks and longer-
term adaptation planning.
Supporting communities to strengthen natural resource resilience is
one of our social investment focus areas. Learn more on page 65.
Continuously improving physical climate risk management
We continued to incorporate climate expertise into material risk
reviews during FY26. This included a review of supply chain risks to
assess the potential impacts of weather- and climate-related
disruptions on critical inputs. Existing controls, including critical
supplier and category management processes, were enhanced
through material stocking strategies designed to improve
resilience to supply disruptions during significant weather events.
Climate expertise was also incorporated into operation-led material
risk reviews, supporting the identification and assessment of
physical climate risks and the integration of these considerations
into risk management processes and controls.
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Sustainability continued
Using AI to assess climate risks across our value chain
We rely on third-party freight and logistics networks to transport
materials and products between our operations and customers
globally. These networks are inherently exposed to a range of
climate hazards. During FY26, we expanded our assessment of
physical climate risks across the value chain to include inland
logistics networks and customer regions, building on FY25
assessments of freight routes and discharge ports.
Generative AI tools supported a high-level assessment of climate
hazards (including temperature and rainfall variability, storms,
floods, drought, fire and sea level rise) and their potential impacts
across selected value chain elements. Key risks identified included
disruption to road and rail transport and reduced access to
customers under certain conditions. Mitigation actions have been
identified and are being incorporated into commercial planning.
To support ongoing assessment of evolving value chain exposures,
a structured approach has been established within marketing
processes to support periodic assessment and management of
physical climate risks.
CASE STUDY
Working to strengthen cyclone preparedness through
data-driven insights
Australia Manganese (GEMCO) operates in a highly active
tropical cyclone basin, where systems can form rapidly,
intensify quickly and change direction with limited
warning. Following the impacts of Tropical Cyclone Megan
in 2024, we have continued work to enhance our
preparedness and response capabilities for cyclones and
other severe weather events.
Key initiatives during FY26 included:
– enhancing forecasting and weather intelligence:
Forecast information from multiple sources was
monitored, supported by direct liaison with the
Australian Bureau of Meteorology, to inform
preparedness and planning
– operational response planning and preparedness:
Enhanced use of weather dashboards, operational
alerts and forecast information supported earlier
activation of response measures, including securing
equipment, workforce planning and staged operational
shutdown activities in line with newly developed
cyclone response plans. This included use of multiple
forecast models to support earlier planning and
coordination during Tropical Cyclone Narelle
– broadening focus beyond cyclones: Recognising that
disruption can arise from a range of weather systems,
including cyclones, tropical lows and extreme rainfall
events, updated wet weather response procedures
were developed to help strengthen preparedness
across a broader range of conditions.
Collectively, these initiatives improve situational awareness
and support more timely operational responses.
Government engagement
We engage with government through direct dialogue, participation
in policy consultations, and indirectly through industry associations
to advocate on shared issues. Our engagement is guided by our
Climate Change Positions (available at www.south32.net) and we
remain committed to conducting our direct and indirect advocacy
in alignment with them.
Contributing to policy development
During the year, we participated in consultations relating to climate
policy, carbon regulation and energy market reform, making
submissions relevant to our operational footprint and the
jurisdictions in which we operate.
– EU Carbon Border Adjustment Mechanism (EU CBAM): We
supported alignment between EU CBAM electricity emissions
methodologies and GHG Protocol Scope 2 guidance, recognition
of carbon costs already incurred in the country of origin, and
greater design clarity to reduce the risk of unintended
outcomes, such as potential penalisation of exporters and
adverse impacts on decarbonisation in developing economies.
– Australian Gas Market Review: We provided input on policy
settings intended to support reliable and affordable domestic
gas supply for industrial users, recognising the continued role of
natural gas in energy systems where low-carbon alternatives
are not yet scalable. We also provided input on market reforms
to improve pricing mechanisms, transparency and governance.
– GHG Protocol Scope 2 Consultation: We supported greater
clarity of Scope 2 accounting frameworks, while noting that
certain proposed requirements may increase complexity or
create misalignment with existing regulatory frameworks. We
encouraged practical implementation approaches that balance
accounting integrity, real-world impacts and feasibility across
diverse energy markets.
In addition, we engaged in policy-related discussions through
industry associations, including engagement on reforms to
Australia’s Environment Protection and Biodiversity Conservation
(EPBC) framework, and participation in industry forums on fuel
security and energy supply.
Direct government engagement
During the year, we continued to engage with governments, energy
providers and other stakeholders regarding potential avenues to
support access to reliable, affordable and lower-carbon energy
supply for Hillside Aluminium and Worsley Alumina, as outlined on
page 83.
In the United States, the government is working to strengthen its
position in the global critical minerals economy and secure supply
chains. As we advance Hermosa, we engage regularly with multiple
levels of government and local stakeholders.
Industry associations
Our Approach to Industry Associations outlines our framework for
industry association memberships and engagement, including how
we manage potential policy and advocacy misalignment.
We periodically assess the alignment between our Climate Change
Positions and the policy and advocacy of selected industry
associations of which we are a member. These reviews inform our
engagement with those associations and our consideration of
ongoing participation.
Our most recent review, undertaken as part of our CCAP 2025,
found that our Climate Change Positions and the advocacy of the
majority of assessed associations were aligned. Future reviews will
be undertaken as required and informed by our climate-related risk
management activities. More information about our FY25 review
and the industry associations that we belong to is available at
www.south32.net/industryassociations.
South32 Annual Report 2026
89 Strategic Report
CLIMATE-RELATED RISKS AND OPPORTUNITIES
Climate change and global responses to it create risks and opportunities that may affect our assets, cost base, markets, value
chain and portfolio positioning, and influence our prospects over time.
Identifying and assessing risks and opportunities
We use a range of tools, including climate scenario analysis, to
identify and assess how climate-related risks and opportunities
may affect our business. Assessments may include operated
assets, non-operated joint ventures and development projects,
depending on their nature and scope.
We assess climate-related risks and opportunities across three
defined horizons:
– Short-term (zero to two years): aligned with our two-year
budget cycle and 24-month mine and production planning,
supporting operational decision-making and financial planning.
– Medium-term (two to five years): supports the implementation
of strategy and initiatives beyond the annual planning cycle.
– Long-term (beyond five years): informs life-of-operations
planning, decarbonisation pathways, market outlooks (2040+)
and major capital decisions.
Climate resilience and scenario analysis
We use climate scenario analysis to assess the resilience of our
strategy and business model to climate-related changes and
uncertainties. Transition and physical climate scenarios are applied
for complementary but distinct purposes, reflecting the different
characteristics of transition and physical climate risks.
Our FY26 portfolio resilience conclusions are primarily informed by
transition scenario analysis developed in FY25. Physical climate
risks were assessed separately at an asset level in FY26, given the
location-specific nature of physical climate hazards.
Climate scenarios represent potential future climate states based
on sets of assumptions around changes in global behaviours. They
are not forecasts and may not be reflective of South32's own
expectations. It is difficult to predict which, if any, of the scenarios
discussed in this report might eventuate. The assumptions
underpinning a scenario may or may not prove to be correct, and
actual outcomes may be impacted by factors beyond the
assumptions disclosed.
Transition risk scenarios
Transition risks and opportunities are particularly relevant to our
business given their potential influence on commodity demand,
pricing, competitiveness and portfolio resilience. We use scenario
analysis to assess how these dynamics may evolve under different
transition pathways and to support strategic planning and our
resilience assessment. The scenarios consider a range of potential
developments, including regulatory and policy changes, technology
advancement, energy market dynamics and evolving stakeholder
expectations.
Scenario analysis assesses potential impacts on commodity
demand, pricing and portfolio resilience. The analysis informs our
identification and assessment of transition-related risks and
opportunities. These scenarios are not forecasts and do not directly
represent the assumptions used in asset-level financial modelling,
including life-of-operation planning or impairment testing.
We apply two scenarios in these assessments. These scenarios
were selected to assess portfolio resilience under a range of
plausible climate-related transition pathways relevant to our
operations and markets. Both scenarios are assessed across life-
of-operation horizons and consider our operating jurisdictions, as
well as global commodity and energy markets. Developed in FY25
and retained for the FY26 resilience assessment, they continue to
represent relevant and plausible transition pathways within the
current macroeconomic context.
Accelerated Transition (1.5°C)
Developed with external experts, this 1.5°C scenario reflects a rapid
and coordinated global decarbonisation pathway. It assumes
accelerated deployment of low-emissions technologies and
infrastructure, supported by strong policy and regulatory action,
increasing carbon prices and significant investment in clean energy
systems. This aligns with global climate agreements at the time of
development.
The scenario incorporates sector-specific analysis relevant to our
portfolio, including commodity demand drivers, scrap availability,
supply conditions and price impacts, together with assumptions
relating to energy markets, macroeconomic conditions and
technology uptake.
While current global emissions trajectories indicate that limiting
warming to 1.5°C is increasingly challenging, this scenario remains
an important reference point for assessing transition risks and
opportunities, portfolio resilience and potential impacts under a
rapid decarbonisation pathway.
Fragmented Transition (2.8°C)
This scenario reflects a slower and less coordinated global
transition pathway, characterised by delayed policy action, more
gradual uptake of low-emissions technologies and continued
reliance on fossil fuels across parts of the global economy.
Relative to the Accelerated Transition scenario, this pathway
assumes less coordinated international action, slower energy
efficiency improvements and lower levels of low-carbon
investment. Global emissions decline over time but do not reach
net zero by 2050, resulting in higher longer-term warming
outcomes.
The scenario has been informed by internal analysis, external
studies and observed market developments, including evolving
policy settings, emissions trajectories and investment trends. It
provides a reference point for assessing how market conditions
may evolve based on current stated policies and informs our
commodity demand and carbon price assumptions.
Key scenario assumptions and inputs are outlined on the next
page.
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90 Strategic Report
Sustainability continued
Accelerated Transition
Fragmented Transition
Temperature rise (2100)
1.5°C
2.8°C
Global CO
2
emissions
Global CO
2
emissions (including non-energy sources) fall
below zero by 2050 (i.e. net-negative).
Global CO
2
emissions decline but do not achieve net zero
by 2050.
Global explicit carbon price
(real July 2026)
US$208/t CO
2
by 2040 increasing to US$263/t CO
2
by 2050,
based on a combined influence of abatement cost and
policy.
US$71/t CO
2
from FY40 onwards.
Policy
Immediate policy action and international cooperation to
scale decarbonisation technologies with large-scale
investments (including in emerging economies).
Ad hoc and uncoordinated international cooperation, with
climate policies becoming more ambitious and effective
over time. Geopolitical tensions and protectionist policies
prevail.
Energy
Final energy consumption declines modestly over time,
supported by uptake of low-emissions technologies across
key sectors and improved energy efficiency.
Final energy consumption continues to rise, with energy
efficiency improvements and uptake of low-emissions
technologies occurring at a slower rate.
Electricity
Share of electricity in final energy consumption doubles,
exceeding 50% by 2050.
Electricity share rises, but more gradually, with a slower
transition away from fossil fuels.
Power generation
Near complete decarbonisation by 2050 and almost
tripling of power generation growth. Solar and wind
account for nearly 39% of total power generation in 2030,
and 80% by 2050.
Solar and wind generation increases, but at a moderated
pace aligned with existing energy and climate policy
action.
Electric vehicles (EVs)
Rapid EV adoption, 100% (79 million units) by mid-2030s.
Shared mobility substitutes some private car ownership.
Slower EV penetration due to weaker policy, infrastructure
limitations and regional disparities in affordability and
access.
Macroeconomic trends
Positive global and regional GDP growth, supported by
investment and productivity gains, and a reshaping of
commodity demand associated with electrification and
renewable energy deployment.
Positive global and regional GDP growth, supported by
investment and productivity gains, with slower transition
momentum and greater geopolitical fragmentation.
National/regional variables
Incorporates regional variation in policy settings (e.g.
carbon pricing), resource availability and demand growth.
Incorporates regional variation in policy settings, reflecting
uneven transition progress across regions.
Assessing resilience to transition risks
Our FY26 transition risk analysis indicates that:
– demand drivers, including GDP growth, electrification and the
energy transition, are expected to support demand growth for
most commodities in our portfolio, with copper, zinc and
aluminium particularly well-positioned given their role in
renewable energy systems, electrification and supporting
infrastructure
– recycling and circular economy dynamics may moderate
primary demand growth for some commodities over time, while
also creating opportunities associated with secondary supply
and evolving value chains
– across both transition scenarios, higher carbon prices, energy
costs and shifting customer and market preferences may
influence competitiveness, with outcomes influenced by
emissions intensity, energy sources and cost structures across
our operations and regions.
Overall, our portfolio is assessed as resilient under both scenarios,
notwithstanding specific asset-level exposures identified under
particular scenarios and time horizons.
In an Accelerated Transition, stronger demand and higher carbon
costs could support higher commodity prices relative to a
Fragmented Transition, supporting margins and market positioning
for most of our portfolio. However, outcomes for alumina and
aluminium operations remain dependent on access to affordable
low-carbon energy and the commercial availability of low-emissions
technologies. For Hillside Aluminium, future financial outcomes are
highly dependent on electricity supply arrangements and pricing
beyond the current contractual period.
Assessment outcomes are subject to uncertainty across several
dimensions, including the timing, coordination and design of
climate policy and carbon pricing mechanisms; the cost, scalability
and commercial readiness of low-carbon technologies; the pace of
energy system transformation and development of supporting
infrastructure; and variability in commodity demand, market
conditions and carbon cost trajectories under different transition
pathways.
Physical risk scenarios
We assess physical climate risks using a bottom-up, asset-level
approach to evaluate how changes in physical climate hazards may
affect our operations, infrastructure, value chain and closure
activities. Assessments focus on areas where there is a credible
pathway between climate hazards and potential impacts.
We use two IPCC aligned Shared Socioeconomic Pathways (SSPs),
SSP2-4.5 and SSP5-8.5, as physical climate scenarios to assess a
range of plausible physical climate outcomes. These scenarios are
used to assess potential changes in climate hazards, including
temperature, rainfall, sea level rise, and the frequency and severity
of extreme weather events relevant to our operations and value
chain. Scenario projections, derived from the latest generation of
global climate models, Coupled Model Intercomparison Project
Phase 6 (CMIP6), are downscaled to support site-specific hazard
assessments and stress test operational resilience over time.
Projections and methodologies are periodically updated as climate
science, datasets and modelling approaches evolve.
Recognising the uncertainty associated with long-term climate
projections, including downscaled hazard data and the translation
of projected hazards into asset-level impacts, we apply multiple
models and scenarios to support robust, decision-useful
assessments. Global climate model outputs may be supplemented
by locally derived or application-specific datasets, where
appropriate.
Refer to page 15 of the Climate-related Reporting Methodology 2026
for details of the key scenario assumptions and inputs underpinning
these physical risk scenarios.
South32 Annual Report 2026
91 Strategic Report
Physical climate vulnerability and adaptation considerations
The table below summarises projected changes in physical climate hazards for our operations by 2050 (relative to 2020). Operation-specific
hazard assessments consider operations operated by South32, reflecting the availability of site-specific exposure and vulnerability data.
While projected increases in hazards do not necessarily equate to material physical climate risk exposure, they provide a key input to life-
of-operations and closure planning. In the short- to medium- term, physical climate risk assessments do not indicate materially different
outcomes across scenarios, reflecting both the modest change in climate hazards compared to today and the relatively limited divergence
between scenarios over this period.
Over longer time horizons, hazard severity is expected to increase, particularly under higher-warming scenarios, which may increase
operating and capital costs, production variability, and the need for additional adaptation measures. However, material divergence in
outcomes between higher- and lower-emissions scenarios is only expected to become more consequential beyond 2050.
The extent of these impacts will depend on how climate hazards evolve, changes to our asset portfolio and operating context, and the
effectiveness of adaptation measures implemented over time. In response to these evolving hazards, physical climate considerations
inform operational risk management, project design, infrastructure planning and closure activities.
The projected changes in climate hazards summarised below inform our assessment of the identified physical climate-related risk
described in PR1 - Extreme weather disruption, on page 101. Risk exposure varies by asset, reflecting differences in location, asset
characteristics and operating context, with potential impacts primarily related to hydrological variability and water management,
infrastructure resilience, and extreme weather events. Assessment outcomes also depend on evolving asset configurations, exposure
pathways, infrastructure, and water and supply chain dependencies, as well as the timing and effectiveness of adaptation measures.
Accordingly, the timing and magnitude of potential financial effects remain subject to significant uncertainty.
Operation-level view of changing climate hazards
37
Operation
Changing climate hazards
Projected increase in climate hazards by 2050
Cannington
Australia Manganese
Worsley Alumina
Hermosa project
South Africa Manganese
Hillside Aluminium
Physical climate hazards
Heat: Annual number of days exceeding 35°C
Precipitation: Maximum 24-hour rainfall during a one-
in-100-year event
Drought: Level of total water stress
Storms: Number of days per year with conditions
conducive to severe thunderstorms
Wind: Peak 1-minute sustained wind speed during a one-
in-100-year event
Fire: Annual probability of wildfire occurrence
Minor increase, 0-5%
Moderate increase, 5-10%
Significant increase, 10-15%
Extreme increase, more than 15%
Our ability to respond
Our ability to respond to identified climate-related risks and opportunities is supported by our capital management framework, which
prioritises safe and reliable operations and a strong balance sheet to support delivery of our strategy. Following shareholder returns in line
with our dividend policy, we encourage competition for excess capital, which is allocated to our most value-accretive options.This provides
capacity and flexibility to allocate capital towards sustaining requirements, value-accretive growth opportunities and prioritised
decarbonisation initiatives while maintaining financial resilience.
Depending on market conditions, strategic priorities and asset-level circumstances, potential responses may include pursuing portfolio
opportunities, investing in emissions reduction initiatives, adapting or upgrading operations, strengthening infrastructure and water
management, or redeploying, repurposing, closing or divesting assets.
Our CCAP 2025 progress update outlines how we are positioning our business to strengthen resilience to climate-related risks and
opportunities over time. This includes actions to support portfolio positioning through the energy transition, reduce operational emissions,
and integrate physical climate considerations into operational risk management, project design, infrastructure planning and closure
activities. These actions support our capacity to identify, prioritise and respond to climate-related risks as conditions evolve.
Considering our planned actions and ability to respond, our FY26 resilience assessment did not identify a need for material changes to our
overall strategy, portfolio composition or medium- to long-term planning under the scenarios assessed. We will continue to monitor
climate-related risks and opportunities as policy, technology, market and physical climate conditions evolve.
South32 Annual Report 2026
92 Strategic Report
Sustainability continued
37.
Climate data used in this FY26 assessment is sourced from Jupiter Intelligence and is based on CMIP6 global climate model ensembles. Downscaled projections use proprietary
methods to provide asset-level insights. Data is presented for the SSP5-8.5 emissions scenario and reflects conditions projected by 2050 (relative to 2020). Some projected climate
hazard metrics have been updated since publication of the 2025 Climate Change Action Plan to reflect the latest available climate projection data.
Identified climate-related risks and opportunities
The disclosures on pages 94 to 103 provide detailed information on
our identified climate-related risks and opportunities. These
disclosures should be read together with our CCAP 2025 progress
update on pages 80 to 90, which outlines the actions we are taking
to address climate change, including our management of these
climate-related risks and opportunities.
Climate-related risks and opportunities may be interconnected,
and management responses to one climate-related risk or
opportunity may influence exposure to, or management of, others
across the portfolio and value chain.
The identification and assessment of climate-related risks and
opportunities is embedded within our broader risk management
framework, as outlined in the Risk Management section on page
103.
Significance and measurement uncertainty
We do not apply a single quantitative threshold when assessing
which climate-related risks and opportunities to disclose. Instead,
we use structured analysis and management judgement to identify
climate-related risks and opportunities that could reasonably be
expected to affect our prospects. This assessment considers both
quantitative and qualitative factors, including the nature,
magnitude, timing and uncertainty of potential impacts.
These judgements are informed by the work undertaken in
developing our CCAP 2025, external views and publications on
industry-relevant risks and opportunities, and the scenario analysis
undertaken. In identifying relevant climate-related risks and
opportunities, and determining what climate-related information is
material for disclosure, we consider impacts and dependencies
across the value chain that could reasonably be expected to affect
the Group’s strategy, business model or financial position.
The climate-related risks and opportunities identified reflect
information available at the reporting date and current
assumptions regarding how they may develop. As market
conditions, climate science, data availability and our business
evolve, the nature, significance and assessment of these risks and
opportunities may also change.
Where quantitative financial impacts are not disclosed, this reflects
data limitations, methodological uncertainty or challenges in
separately identifying impacts. In these circumstances, qualitative
information is provided where available.
Where impacts cannot be separately quantified, aggregated
information may be disclosed unless the level of measurement
uncertainty is too high for the information to be meaningful.
Based on our current assessment of climate-related risks and the
assumptions used in preparing the financial statements, we do not
expect a material adjustment to the carrying amounts of assets
and liabilities in FY27
38
.
South32 Annual Report 2026
93 Strategic Report
38.
This statement reflects the expected impact of climate-related risks and opportunities over the next annual reporting period. Assessment of climate-related risks and opportunities
for impairment testing considers potential impacts over the expected life of assets and operation. Refer to Financial Report Note 13. Impairment of Non-Financial Assets.
TO1: TRANSITION-RELATED COMMODITY DEMAND GROWTH
Classification:
Transition opportunity
Relevant time horizons:
Short-, medium- and long-term
Portfolio concentration:
Copper, zinc, aluminium, alumina
Value chain concentration:
Exploration, development, mining and processing activities, as well as supply into electrification
and energy infrastructure value chains.
Description
The energy transition is expected to increase demand for commodities used in renewable and low-carbon technologies, electrification and
energy infrastructure, supporting favourable market conditions across our portfolio, in particular for copper, zinc and aluminium.
Since our formation, we have progressively reshaped our portfolio towards commodities critical for the energy transition, increasing
exposure to base metals such as copper and zinc. Over time, continued execution of our strategy may further increase contribution of
these commodities to Group revenue and earnings, and influence growth capital allocation.
The extent to which these opportunities are realised will depend on the pace and coordination of the energy transition, technology
development, policy settings and infrastructure availability, as well as our ability to successfully develop, expand and operate assets across
our portfolio. These uncertainties are reflected in the scenario-specific assumptions used to assess commodity demand as part of our
transition scenario analysis and portfolio resilience assessment.
Projected commodity demand growth under transition scenarios
The table below presents the commodity-level compound annual growth rate (CAGR) for projected total and primary demand (2025–2040)
under each scenario, with triangles representing these estimates. Total demand comprises both primary and recycled (secondary)
materials and primary demand refers to demand met through new production, including mining, smelting or refining, and excludes
recycled or recovered material.
These estimates are based on scenario-specific assumptions (refer to page 91) and involve inherent uncertainty. Actual transition pathways
may differ from those modelled, resulting in materially different demand outcomes.
Accelerated Transition Fragmented Transition
Total demand Primary demand Total demand Primary demand
Copper
▲▲▲ ▲ ▲▲ ▲
Copper presents the most significant opportunity, driven by strong projected total demand growth (averaging 2–3% CAGR to 2040 in both
scenarios) and constrained new supply, contributing to favourable pricing outcomes.
Alumina/aluminium
▲▲ ▲ ▲▲ ▲▲
Aluminium is widely used in renewable energy infrastructure and increasingly used in EVs, supporting total demand growth of approximately 2%
CAGR (2025–2040) across both scenarios.
Zinc
▲▲ ▲▲ ▲▲ ▲▲
Zinc is used in renewable energy infrastructure and climate-resilient construction, supporting total demand growth of approximately 2% CAGR
(2025–2040 in both scenarios). Projected supply shortfalls may require new capacity additions, with additional upside from increased adoption of
zinc-based technologies in both scenarios.
Manganese
▲ ▲
▬ ▬
Manganese is used in steel for renewable infrastructure, EVs and urbanisation. Demand remains relatively steady under a Fragmented Transition
scenario, with total demand growth of around 1% CAGR to 2040 under an Accelerated Transition scenario, including potential upside from battery-
related demand.
Lead
▼▼▼▼▼ ▼ ▲ ▼
Primary demand declines in both scenarios as conventional vehicles are phased out and replaced with EVs.
Key:
▲
Positive
▼
Negative
▬
Neutral
Financial effects
Current financial effects
Copper, zinc-lead-silver and alumina/aluminium contributed materially to FY26 revenue, underlying EBITDA and capital allocation, including
investment in growth, life extension and exploration activities.
South32 Annual Report 2026
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Sustainability continued
Related Financial Disclosures
39
Metric (US$M)
40
Copper
41
Alumina/
aluminium Zinc-lead-silver
Total from
continuing
operations
Financial Report
– Note 4b – Segment
Information
Underlying revenue
1,154 5,388 852 7,915
Underlying Revenue contribution (% of total)
15% 68% 11% 93%
Underlying EBITDA
758 1,075 451 2,451
Underlying EBITDA contribution (% of total)
31% 44% 18% 93%
Financial Operating and
Performance Summary
– Capital expenditure excluding
exploration and intangibles
– Capitalised exploration
Improvement and life extension capital expenditure
8 106 1 129
Improvement and life extension capital expenditure
contribution (% of total)
6% 82% 1% 89%
Growth capital expenditure
– – 711 711
Growth capital expenditure as % of total
–% –% 100% 100%
Exploration expenditure capitalised
6 – 33 44
Exploration expenditure capitalised as % of total
14% –% 75% 89%
Anticipated future financial effects
Financial effects may arise through several channels as the energy
transition evolves:
– Prices and margins: Changes in commodity demand may
affect realised prices and margins across our portfolio
42
– Capital allocation and investment: Financial effects may arise
through capital allocation decisions and investment activities,
including expenditure associated with growth, life extension and
exploration
43
– Strategic portfolio actions: Acquisitions, divestments and
other strategic portfolio actions may alter the Group’s exposure
to transition-related commodities
44
– Asset lives and valuations: Shifts in demand may influence
asset lives and valuation assumptions over time, including
commodity price assumptions and discount rates applied to
long-life assets
45
.
Across the short-, medium- and long-term, demand growth may
influence portfolio composition and the contribution of transition-
related commodities, such as copper and zinc-lead-silver, to future
Group revenue and earnings
42
, including through the advancement
of copper growth options at Sierra Gorda and the development of
Hermosa. Short- to medium-term expected capital expenditure
43
associated with Sierra Gorda and Hermosa is outlined on page 80.
Additional information on expected capital expenditure for
Hermosa is outlined in our Hermosa Project Update dated 30 April
2026, available at www.south32.net.
In practice, demand for transition-related commodities is
influenced by factors beyond the energy transition, including
broader industrial growth and increasing demand associated with
AI and data infrastructure, making it difficult to isolate and reliably
quantify transition-specific financial effects. Scenario analysis and
commodity price sensitivities nevertheless provide directional
insight into potential exposure.
Illustrative commodity price sensitivities based on FY26 Underlying
EBIT are provided as an indication of the potential impact of
commodity price movements on earnings. These sensitivities do
not reflect future production growth, development projects or
changes in portfolio composition. The demand projections on the
previous page provide market context, while the sensitivities in the
table that follows illustrate the potential impact of commodity price
movements on FY26 Underlying EBIT.
Commodity
Increase in realised price
Impact on FY26 Underlying EBIT
US$M
42,46
Copper
41
10 % 110
Zinc
47
10 % 11
Alumina
48
10 %
180
Aluminium
48
10 % 357
How we are responding
Response
Cross-
reference
Positioning our portfolio to increase exposure to
commodities critical to the energy transition
Page 80
Allocating growth capital towards base metals, including at
Hermosa, where we are evaluating next-generation mine
design, automation, fleet electrification and renewable
energy integration to support productivity, cost
competitiveness and lower-emissions production
Page 80
Maintaining a broad portfolio of exploration projects,
partnerships, strategic alliances and equity interests
targeting base metals
Page 81
Engaging with governments, regulators, communities and
infrastructure providers on permitting, infrastructure and
supportive policy settings associated with development
and growth pathways across our portfolio
Page 89
Engaging with customers, suppliers and industry
participants to understand evolving demand, supply chain
expectations and market opportunities associated with
the energy transition
Page 86
Using market and scenario analysis to inform portfolio
planning, capital allocation and operational decision-
making
Page 90
Related metrics
We monitor exposure to this opportunity through production
volumes (copper, zinc-lead-silver and alumina/aluminium, CuEq
basis), contribution of these commodities to revenue and
underlying earnings, and capital expenditure allocated to copper,
zinc-lead-silver and alumina/aluminium. Find these metrics on page
104.
South32 Annual Report 2026
95 Strategic Report
39.
Financial Report disclosures include subsidiaries, operated and non-operated joint ventures at South32's share, excluding equity-accounted investments. Financial Operating and
Performance Summary disclosures include subsidiaries, operated and non-operated joint ventures at South32's share.
40.
Includes subsidiaries, operated and non-operated joint ventures at South32's share.
41.
Includes minor contributions from non-copper commodities at Sierra Gorda.
42.
Financial Report affects: Consolidated Income Statement (IS): Revenue — Group Production; Consolidated Cash Flow Statement (CFS): Profit/(loss) before tax from continuing
operations.
43.
Financial Report affects: IS - Expenses excluding finance costs); Consolidated Balance Sheet (BS) - Property, plant & equipment; CFS - (Profit/(loss) before tax from continuing
operations, Purchase of property, plant & equipment, Exploration expenditure and Exploration expenditure expense and included in operating cash flows.
44.
Financial Report affects: BS - Property, plant & equipment, Equity accounted investments - CFS: Payments for/proceeds from the acquisition/divestment of subsidiaries and joint
operations, net of their cash.
45.
Financial Report affects: IS - Expenses excluding finance costs; BS - Property, plant & equipment; CFS - Profit/(loss) before tax from continuing operations.
46.
The sensitivities reflect the annualised estimated impact on FY26 Actual Underlying EBIT of a 10% movement in FY26 actual realised prices applied to FY26 Actual Sales volumes.
47.
Net of Treatment and Refining charges.
48.
Excludes the Group consolidation impact of the inter-company alumina sold on index. Aluminium sensitivity is shown without any associated increase in alumina pricing.
TR1: DECARBONISATION CONSTRAINTS
Classification:
Transition risk
Relevant time horizons:
Short-, medium- and long-term
Portfolio concentration:
Aluminium and alumina
Value chain concentration:
Exposure arises through dependencies on electricity generation, transmission and distribution, fuel
and technology suppliers, and the broader pace of energy system transformation.
FY26 GHG emissions (ex. Mozal and CMSA) (t CO
2
-e,%)
FY26 Energy Consumption (ex. Mozal and CMSA) (PJ,%)
Description
Constraints relating to energy systems and low-carbon
technologies may affect the pace, cost and feasibility of operational
decarbonisation, particularly within our alumina and aluminium
operations. These constraints include the availability, affordability
and reliability of low-carbon electricity, including supporting
transmission and firming infrastructure, as well as the readiness
and scalability of low-carbon technologies. This may increase costs,
affect operational continuity and competitiveness, influence capital
allocation decisions, and constrain progress towards our FY35
operational emissions reduction target and goal to achieve net zero
operational emissions by 2050.
The nature of exposure differs by operation. Hillside Aluminium is
primarily exposed through Scope 2 emissions, which account for
approximately 90% of the smelter's operational emissions and arise
from carbon-intensive electricity supply. Aluminium smelting
requires large-scale, reliable electricity supply. As a result,
decarbonisation is highly dependent on the availability and
affordability of firmed low-carbon electricity within South Africa's
energy system, particularly beyond 2031 when Hillside's current
electricity supply arrangements expire.
Worsley Alumina is primarily exposed through Scope 1 emissions,
which account for approximately 99% of the refinery's operational
emissions, and arise from high-temperature alumina refining. Low-
carbon alternatives for industrial scale process heat, such as steam
electrification and calcination, remain under development and are
not yet commercially proven or viable for Worsley.
As major industrial energy users, decarbonisation pathways for
these operations also depend on broader energy system
transformation, including policy and regulatory settings that enable
the large-scale development of affordable, reliable low-carbon
electricity supply capable of meeting multi-gigawatt industrial
demand. Addressing these constraints and dependencies may also
require significant capital investment to modify existing operations
and support enabling energy infrastructure.
Given the hard-to-abate nature of alumina refining and the
dependence of aluminium smelting on access to large-scale,
reliable electricity supply, some decarbonisation pathways may
involve materially higher operating and capital costs. Their
commercial viability may therefore depend in part on carbon price
signals and sustained market demand for low-carbon products.
In an Accelerated Transition scenario, coordinated energy system
and technology development could improve access to low-carbon
electricity and decarbonisation pathways, reducing exposure over
time. Under a Fragmented Transition scenario, slower
infrastructure development, price volatility and supply uncertainty
could increase costs and delay emissions reduction progress.
Financial effects
Current financial effects
Current financial effects are concentrated in our alumina and
aluminium operations, reflecting their energy-intensive nature and
reliance on electricity supply and fuel-related inputs.
In FY26, total energy costs were US$1,091 million, representing 49%
of the Group's US$2.2 billion expenditure on market-traded
consumables and energy, with the majority attributable to our
aluminium value chain.
We also incurred capital expenditure of US$3.4 million during the
year, supporting progress against our FY35 operational emissions
reduction target.
South32 Annual Report 2026
96 Strategic Report
Sustainability continued
77%
20%
3%
1%
Aluminium
Alumina
Manganese
Zinc-lead-silver
47%
46%
4%
3%
Aluminium
Alumina
Manganese
Zinc-lead-silver
Related Financial Disclosures
49
Metric (US$M)
50
Alumina/aluminium Other commodities Total
Financial Report
– Note 5 - Expenses excluding
finance costs
Financial Operating and
Performance Summary
– Earnings Analysis
Electricity costs
777 43 820
Other energy costs
183 88 271
Total energy costs
960 131 1,091
% of total energy costs
88 % 12 %
Anticipated future financial effects
Future financial effects are expected to arise primarily through
energy costs, electricity supply arrangements and decarbonisation
investment requirements, particularly within our alumina and
aluminium operations
51
. Changes in electricity pricing and reliability
may increase cost variability and affect competitiveness in the
short-term
52
. Continued access to cost-competitive electricity
remains a key factor in the medium- to long-term for Hillside as the
current supply contract approaches expiry in 2031.
Energy system and technology constraints may also affect the
timing and feasibility of decarbonisation pathways, increasing
exposure to energy and carbon pricing, as well as affecting
competitiveness relative to lower-emissions producers
52
. In the
short-term, technology maturity and commercial viability
constraints are expected to be limited to studies, planning and
assessment activities. Over the medium-term, energy system and
technology constraints may affect the timing, sequencing and scale
of decarbonisation capital expenditure
53
, including interim fuel-
switching projects.
Over the long-term, the pace at which low-carbon technologies
become technically and commercially viable, and the extent to
which local energy systems are able to scale up supply of low-
carbon electricity solutions, are expected to influence
decarbonisation pathways, capital allocation, exposure to carbon
costs and long-term competitiveness of energy-intensive
operations within the portfolio
51
.
Where these constraints limit emissions reduction progress,
residual emissions may increase exposure to compliance
obligations and carbon costs associated with emissions-limiting
regulation
52
. This is outlined in more detail under TR2 - Emissions-
limiting regulations on page 98.
The magnitude and timing of financial effects remain uncertain and
depend on factors including energy system transition, technology
development, policy and regulatory settings, operational
requirements, and future carbon costs
52
. Completion of the
Transaction will also significantly impact anticipated future financial
effects of this risk, given that it involves divestment of South32's
aluminium value chain assets (excluding Mozal Aluminium). Given
these uncertainties, the level of measurement uncertainty involved
in estimating the financial effects is currently so high that the
resulting quantitative information would not be useful.
How we are responding
Response
Cross-
reference
Progressing decarbonisation initiatives at Hillside
Aluminium and Worsley Alumina
Page 83
Engaging with governments, utilities and industry
participants on energy policy, infrastructure development
and access to reliable, affordable low-carbon electricity
Page 86
Assessing low-carbon technologies and participating in
industry and research collaborations to support hard-to-
abate decarbonisation pathways
Pages 84
and 87
Engaging with suppliers and customers to support value
chain decarbonisation and respond to evolving market
expectations
Page 86
Using market and scenario analysis to inform portfolio
planning, capital allocation and operational decision-
making
Page 90
Related metrics
We monitor exposure to this risk through:
– energy consumption by source and intensity
– Scope 1 and Scope 2 emissions, including by source and
emissions intensity
– proportion of emissions classified as hard to abate
– concentration of emissions and energy consumption across our
operations
– decarbonisation-related capital expenditure.
Find these metrics on pages 104 to 113.
South32 Annual Report 2026
97 Strategic Report
49.
Financial Report disclosures referenced include subsidiaries, operated and non-operated joint ventures at South32's share, excluding equity-accounted investments. Financial
Operating and Performance Summary disclosures referenced include subsidiaries, operated and non-operated joint ventures at South32's share.
50.
Includes subsidiaries, operated and non-operated joint ventures at South32's share.
51.
Financial Report affects: Consolidated Income Statement (IS) - Expenses excluding finance costs; Consolidated Balance Sheet (BS) - Property, plant & equipment; Consolidated Cash
Flow Statement (CFS) - Purchase of property, plant & equipment.
52.
Financial Report affects: IS - Expenses excluding finance costs.
53.
Financial Report affects: BS - Property, plant & equipment; CFS - Purchase of property, plant & equipment and Impairment losses/(reversals) of non-financial assets.
TR2: EMISSIONS-LIMITING REGULATIONS
Classification:
Transition risk
Relevant time horizons:
Short-, medium- and long-term
Portfolio concentration:
Aluminium and alumina
Value chain concentration:
Electricity and fuel supply, transport and logistics, and trade-exposed export markets.
FY26 Scope 1 emissions under emission-limiting regulations (t CO
2
-e)
54
Description
Emissions-limiting regulations, including carbon taxes, emissions
trading systems, baseline-and-credit schemes and carbon border
adjustment mechanisms, may increase costs, affect demand for
emissions-intensive products and influence the competitiveness of
our operations. These impacts may arise through direct carbon and
compliance costs, higher input costs and trade-related measures
affecting market access and realised prices.
As described under TR1, the pace and extent of emissions
reductions achievable in response to regulatory requirements and
our climate-related commitments depend on the availability of
reliable low-carbon electricity and commercially viable low-carbon
technologies. Where these constraints persist, emissions-limiting
regulations may increase exposure to carbon and compliance
costs, particularly where limited abatement options restrict
emissions reduction pathways.
Regulatory measures vary across jurisdictions and may evolve over
time in response to differences in policy design, market structures
and climate ambition.
Key areas of exposure include:
– emissions-intensive operations: Exposure is concentrated
within our alumina and aluminium operations, where emissions
intensity, energy consumption, and carbon costs may influence
operating costs and competitiveness
– compliance obligations under emissions-limiting
regulations: Our operations are subject to a range of regulatory
mechanisms, including the Australian Safeguard Mechanism,
carbon taxes and emissions trading systems, which may result
in direct carbon and compliance costs
– carbon-related input costs: Carbon pricing mechanisms may
increase indirect costs embedded in electricity, fuels and other
goods and services across the value chain
– trade and market exposure: Trade-related measures,
including carbon border adjustment mechanisms, may affect
market access, realised prices, competitiveness and customer
preferences across downstream markets.
Regulatory frameworks continue to evolve across jurisdictions, with
differences in scheme design, coverage, carbon price trajectories
and implementation timeframes potentially increasing compliance
costs, complexity and cost variability.
In an Accelerated Transition scenario, broader and more
coordinated carbon pricing and regulatory alignment may increase
short- to medium-term compliance costs, while supporting more
consistent long-term market signals and decarbonisation
pathways. Higher carbon prices are assumed under this scenario,
reaching US$208/t CO
2
by 2040 and US$263/t CO
2
by 2050
55
.
In a Fragmented Transition scenario, uneven policy development
and inconsistent implementation may increase regulatory
uncertainty, cost variability and competitiveness impacts across
jurisdictions. The Fragmented Transition scenario incorporates a
centralised indicative carbon price assumption of US$71/t CO
2
from
2040 onwards
55
, informed by policy developments, market
benchmarks, technological change and abatement costs.
Under both scenarios, the extent to which the decarbonisation
constraints described in TR1 are resolved will influence the degree
to which compliance can be achieved through operational
emissions reduction rather than carbon cost absorption.
South32 Annual Report 2026
98 Strategic Report
Sustainability continued
54.
Scope 1 emissions from Cerro Matoso, Mozal Aluminium and Hermosa are not currently subject to emission-limiting regulations.
55.
Carbon prices are indexed to inflation (real July 2026).
23%
5%
51%
2%
19%
Aluminium
Manganese
Alumina
Zinc-lead-silver
Not under emission-limiting regulations
Financial effects
In FY26, emissions-limiting regulations resulted in operating and compliance costs across multiple jurisdictions.
Current financial effects
Related Financial Disclosures
56
Metric
Jurisdiction % of Scope 1 emissions covered US$M
Financial Report
– Note 5. Expenses excluding finance costs
Safeguard mechanism
57
Australia 56 % 3.7
South Africa carbon tax
58
South Africa 25 % 1.1
Other
59
Various N/A 1.5
Total
81 % 6.3
No EU CBAM costs have been disclosed as the mechanism only came into effect on 1 January 2026 and the first reporting period has not yet been completed. Estimated CBAM
compliance costs for calendar year 2026 cannot be reliably estimated due to the current uncertainty regarding emissions calculation methodologies and reliability of available
estimates.
Anticipated future financial effects
Future financial effects are expected to arise through direct carbon
and compliance costs, including costs associated with the
Australian Safeguard Mechanism, higher input costs where
emissions-related costs are embedded across the supply chain,
and trade-related measures that may affect market access,
realised prices and competitiveness
60
.
These costs are incurred in the short term and are expected to
continue over the medium- and long-term. Costs may increase
over the short term as regulatory baselines tighten and carbon
prices evolve. Over the medium- and long-term, the magnitude and
timing of these effects will depend on regulatory design, carbon
price trajectories, policy settings, emissions intensity, trade-related
measures, and the pace, cost and feasibility of the operational
decarbonisation pathways described under TR1.
Given uncertainty regarding the future design and operation of
emissions-limiting regulatory schemes, including potential changes
to the Australian Safeguard Mechanism, the level of measurement
uncertainty involved in estimating these medium- and long-term
financial effects is currently so high that the resulting quantitative
information would not be useful.
Carbon pricing
We incorporate carbon price assumptions into scenario analysis,
portfolio planning and investment evaluation, including sensitivity
analysis, to assess impacts on project economics, competitiveness
and portfolio resilience. Carbon pricing is also used to assess
exposure to emissions-limiting regulations and associated
compliance costs, and is not currently applied in internal transfer
pricing arrangements.
Our base case used for portfolio planning and investment
evaluation incorporates domestic carbon prices in our key
operating regions until FY39, based on current regulations in
jurisdictions where we operate and sell our products, and an
expectation that emissions allowances will reduce over time
59
.
From FY40, our base case assumes a single global carbon price of
US$71 per tonne CO
2
-e (real July 2026).
How we are responding
Response
Cross-
reference
Prioritising decarbonisation initiatives at Hillside
Aluminium and Worsley Alumina
Page 83
Submitting a Trade-Exposed Baseline-Adjusted
application under the Safeguard Mechanism for
Worsley Alumina
Page 100
Monitoring and engaging with governments on
emerging regulatory developments
Page 89
Engaging with value chain participants to improve
emissions transparency and support emissions
reduction initiatives
Page 86
Monitoring carbon market and regulatory
developments, and participating in carbon markets to
manage regulatory carbon liabilities
Incorporating carbon pricing assumptions into
planning and investment decisions
Related metrics
We monitor exposure to this risk through:
– Scope 1 and Scope 2 emissions and emissions intensity across
operations and products
– operational emissions subject to emissions-limiting regulations
– carbon pricing exposure and compliance costs
– carbon- and energy-related operating costs
– decarbonisation-related capital expenditure.
Find these metrics on pages 104 to 109.
South32 Annual Report 2026
99 Strategic Report
56.
Financial Report disclosures include subsidiaries, operated and non-operated joint ventures at South32's share, excluding equity-accounted investments.
57.
Safeguard Mechanism is reported on a financial year basis (1 July 2025 to 30 June 2026).
58.
South Africa Carbon Tax includes both the tax payable and the cost of offset purchases and is reported on calendar year basis (1 January 2025 to 31 December 2025).
59.
Other carbon taxes are disclosed using the reporting period prescribed by the relevant jurisdiction or scheme. Accordingly, reported periods include calendar year basis (1 January
2025 to 31 December 2025) and financial year basis (1 July 2025 to 30 June 2026).
60.
Financial Report affects: Consolidated Income Statement - Expenses excluding finance costs.
CASE STUDY
Worsley Alumina: Managing transition risks and
opportunities in a hard-to-abate industrial operation
Worsley Alumina is an integrated bauxite mining and alumina
refining operation in Western Australia. Alumina is a critical
input into primary aluminium, which is widely used in
electricity networks, renewable energy infrastructure and
electrified transport systems, supporting demand associated
with the energy transition.
As a large-scale, energy-intensive refinery producing a
globally traded commodity in externally priced markets,
Worsley is exposed to interconnected transition risks
associated with energy systems, carbon regulation and
decarbonisation economics.
Most of Worsley's operational emissions arise from the
combustion of coal and natural gas for high-pressure steam
generation and calcination, resulting in a predominantly
Scope 1 emissions profile. Continued reliance on these fuels
reflects technical constraints associated with alumina
refining, current limitations in low-carbon electricity
availability and the pace of energy system transition in
Western Australia.
FY26 Worsley energy mix (GJ, %)
Managing decarbonisation in a constrained
transition environment
Worsley is adopting a staged decarbonisation approach to
balance emissions reduction, operational reliability and long-
term competitiveness. Actions progressed to date include
two coal to natural gas boiler conversions and increased
biomass use, with further boiler conversions being assessed.
Longer-term opportunities include electrification of steam
generation and calcination, with implementation dependent
on the availability of reliable, cost-competitive low-carbon
electricity, sufficient transmission capacity, and improved
project economics.
Progress remains linked to broader developments in Western
Australia's energy system, including the transition of the
South West Interconnected System (SWIS) and the rollout of
renewable energy, storage and transmission infrastructure,
as well as transition planning for the town of Collie.
Regulatory environment
Worsley is planning to submit an application for a trade-
exposed baseline adjustment (TEBA) under the Safeguard
Mechanism. If approved, TEBA may reduce the annual rate of
baseline decline from 4.9% to as low as 1% for a three-year
period, reducing near-term compliance costs and providing
greater flexibility in the timing and sequencing of
decarbonisation investment. However, TEBA is time-limited,
subject to regulatory approval, and its availability beyond
2030 remains uncertain.
Worsley illustrates how transition-related risks and
opportunities may be interconnected within an energy-
intensive industrial operation. While alumina is expected to
benefit from demand associated with the energy transition,
Worsley’s ability to decarbonise is strongly influenced by
energy system constraints, emissions-limiting regulation and
the cost and feasibility of decarbonisation pathways. This
highlights how management responses to one climate-
related risk or opportunity may influence exposure to, or
management of, others.
Carbon pricing under Australia’s Safeguard Mechanism
introduces a direct cost on Scope 1 emissions, while
additional indirect costs may also be embedded in energy
and other inputs. As a price-taking refinery in globally traded
alumina markets, Worsley has limited ability to recover
increases in carbon and energy costs through pricing, which
may result in margin compression where costs increase more
rapidly than realised alumina prices. Financial performance is
therefore sensitive to changes in carbon costs, energy prices
and realised alumina prices.
South32 Annual Report 2026
100 Strategic Report
Sustainability continued
38%
3%
—%
56%
2%
Coal
Diesel
Electricity
Natural gas
Other
PR1: EXTREME WEATHER DISRUPTION
Classification:
Physical risk
Relevant time horizons:
Short-, medium- and long-term
Portfolio concentration:
Exposure is concentrated in operations reliant on water management and processing infrastructure,
and located in cyclone-, flood- and wildfire-exposed regions and areas subject to hydrological variability.
Value chain concentration:
Exposure arises across inbound and outbound logistics networks, suppliers of critical inputs and third-
party transport, energy, water and export infrastructure. Disruption to ports, shipping routes, roads and
rail networks may affect operational continuity and product delivery.
Description
Increasing intensity, frequency and variability of extreme weather events, together with longer-term changes in temperature, rainfall
patterns and sea level rise, may disrupt our operations, infrastructure and value chain, and affect our ability to operate safely, reliably and
efficiently. This risk includes both acute hazards, such as cyclones, floods, wildfires and storms; and chronic changes, including rising
temperatures, hydrological variability and sea level rise.
Given the geographic diversity of our portfolio, exposure varies by asset, location and operational context, including dependence on
coastal infrastructure, water systems and third-party logistics networks. All our operations (100%) are exposed to one or more physical
climate exposure pathways.
Physical climate hazards may disrupt operations, damage infrastructure and affect the availability of critical inputs, water resources and
transport routes. They may also affect supplier performance, logistics networks, product delivery and the ability to meet customer
commitments. Over time, these impacts may contribute to increased operational variability, higher operating and capital costs, and
increased adaptation and resilience requirements.
Operation-specific hazard assessments
We assess physical climate risk at operations that we operate through exposure pathways, describing how climate-related hazards may
affect our assets, infrastructure, logistics networks, water systems, supply chains and closure activities. This supports operation-level
exposure assessments and the prioritisation of adaptation and resilience activities under our Climate Adaptation and Resilience Plan; find
more information in our CCAP 2025.
Exposure pathway
Description
Relevant climate
hazards
Key exposed operations &
projects
Containment
breach or failure of
water or tailings
storage facilities
Extreme rainfall, flooding and other climate-related hazards may
increase pressure on water and tailings storage facilities, increasing
the risk of loss of containment, with potential safety, environmental,
operational, regulatory and legal consequences.
Rainfall, storms, flooding,
sea level rise
– Worsley Alumina
– Australia Manganese
– Cannington
– Hermosa
Hydrological
variability and
water security
Changes in hydrological conditions, including increased rainfall
variability, water scarcity and more intense rainfall events, may affect
water availability, operational continuity and water management
requirements across our operations.
Temperature increase,
rainfall, storms, flooding,
drought
– Worsley Alumina
– Australia Manganese
– South Africa Manganese
– Cannington
Damage to coastal
infrastructure
Sea level rise, storm surge and more intense coastal weather events,
including cyclones and dire weather conditions, may affect port
facilities and coastal infrastructure supporting our operations,
disrupting export and import activities and affecting infrastructure
reliability over time.
Rainfall, storms, flooding,
sea level rise, fire weather
– Worsley Alumina
– Australia Manganese
– Cannington
– Hillside Aluminium
Damage to critical
mining and
processing
infrastructure
Storm systems, flooding, wildfire and other climate-related hazards
may damage or disrupt critical mining and processing infrastructure,
affecting operational continuity, asset reliability and maintenance
requirements.
Temperature increase,
rainfall, storms, fire
weather
– Worsley Alumina
– Australia Manganese
– Cannington
– Hillside Aluminium
– Hermosa
Disruption to
transport routes
and supply chains
Severe weather events, including storm systems and flooding, may
disrupt third-party transport routes and supply chains supporting
operations and customer delivery, resulting in delays, increased
logistics complexity and reduced supply chain reliability.
All hazards
– Worsley Alumina
– Cannington
– Hillside Aluminium
– Hermosa
– South Africa Manganese
Safe and reliable
closure
Climate-related hazards may affect the safe and timely closure of
assets, including landform stability and rehabilitation outcomes. This
may result in increased rework, higher closure costs, extended
relinquishment timelines, and elevated regulatory, stakeholder and
reputational risks.
All hazards
– Worsley Alumina
– Australia Manganese
– Cannington
– South Africa Manganese
– Hermosa
Financial effects
Current financial effects
Direct attribution of financial impacts to physical climate hazards is inherently challenging, as outcomes reflect the combined influence of
weather conditions, mine plans, asset configurations and operational decision-making. As a result, it is not currently feasible to isolate and
quantify all financial effects attributable to specific climate-related physical hazards on a consistent and comparable basis across reporting
South32 Annual Report 2026
101 Strategic Report
periods. Historical severe weather events nevertheless provide insight into the types of financial impacts that may arise from physical hazards.
For example, Tropical Cyclone Megan, which impacted Australia Manganese in March 2024, resulted in operational disruption, recovery and
remediation activities and reduced earnings. Total approved external insurance recoveries relating to the event were US$503 million (100%
basis), including US$153 million agreed in Q1 FY26.
During the year, elevated site water levels and groundwater inflows, together with wet season rainfall, affected water management
capacity and mining activities at Australia Manganese, impacting production planning and operational performance. Water management
remains a focus, with work ongoing to progress approvals, infrastructure investments and mine planning activities to manage elevated
water volumes and support operational continuity. In FY26, we incurred US$5 million (100% basis) of capital expenditure on water
management-related projects at Australia Manganese
61
. Water-related operating costs and other current-period financial effects have not
been separately quantified because they cannot be reliably isolated from broader operating expenditure, attributed to physical climate
hazards, or quantified on a comparable basis.
Anticipated future financial effects
Extreme weather and hydrological variability may disrupt operations, affecting production, revenue, operating margins and cash flows over
the short-, medium- and long-term
62
. Physical climate impacts may also increase maintenance, recovery, insurance and water
management costs, and require additional capital expenditure to strengthen operational resilience
63
.
Over time, physical climate risks may affect expected operating lives, depreciation profiles and recoverability assumptions, where changing
operating conditions influence the expected economic performance of an asset. These effects would typically emerge over the medium- to
long-term
62
.
Extreme weather and hydrological events may also damage key infrastructure, resulting in repair, replacement, impairment or write-off
costs. While carrying value does not represent the cost of repairing or replacing infrastructure, it provides an indication of the scale of
assets potentially exposed to physical climate risks and therefore insight into the potential magnitude of future financial effects. The table
below presents the carrying value of the key infrastructure for selected operations where multiple physical climate risk themes co-occur,
providing insight into areas of concentrated exposure and the potential scale of future financial effects
62
.
Asset
Location
Climate-related Exposure
Property plant & equipment Carrying
value at 30 June 2026 (US$M)
Australia Manganese
Northern Territory, Australia
Cyclones, flooding
875
64
Worsley Alumina
Western Australia
Wildfire, drought
2,394
Cannington
Queensland, Australia
Flooding
362
Uncertainty and quantification
The magnitude and timing of anticipated financial effects remain
uncertain and depend on a range of factors, including the frequency,
severity and duration of climate hazards, the effectiveness of
mitigation and adaptation measures, and asset-specific
characteristics such as location, vulnerability and operational
exposure. Outcomes may also be influenced by broader market,
regulatory and operating conditions. Based on available information
and current assessments, however, the incremental change in
hazards attributable to climate change is not expected to have a
material impact over the short- to medium- term.
Our approach continues to evolve as understanding of physical
climate impacts improves, including use of risk transfer mechanisms
such as insurance, which may partially offset impacts but remain
subject to availability, cost and coverage limitations. These factors,
together with data limitations and challenges in translating physical
risks into financial outcomes, mean that anticipated future financial
impacts cannot currently be reliably quantified.
Accordingly, quantitative information regarding those effects has
not been provided, as it would not be useful given the level of
measurement uncertainty involved.
How we are responding
Our CCAP 2025 includes a Climate Adaptation and Resilience Plan,
which supports the management of physical climate change
impacts through adaptation and resilience measures, including:
– incorporating physical climate considerations into project
design, engineering standards, and operational planning,
informed by climate projections where relevant
– supporting the resilience of critical infrastructure, including
ports and processing facilities, through engineering integrity
and asset management programs
– enhancing weather forecasting, monitoring, operational alert
systems and severe weather preparedness to support
operational decision-making and emergency response
– strengthening business continuity and supply chain resilience
through contingency planning, inventory and logistics
preparedness
– incorporating physical climate risk considerations into enterprise
risk management and operational decision-making processes.
Other measures include enhancing water management capability
through water balance modelling, storage design, stress testing,
monitoring and operational controls to manage both water scarcity
and excess water conditions, and applying operational and
engineering controls to critical infrastructure, including tailings and
water storage facilities.
Activities undertaken during FY26 to support implementation of
our Climate Adaptation and Resilience Plan are outlined in the
CCAP 2025 Progress Update, pages 88 to 90.
Learn more about our approaches to water stewardship and tailings
management on pages 73 and 76, and at www.south32.net.
South32 Annual Report 2026
102 Strategic Report
Sustainability continued
61.
Includes selected FY26 water management-related projects at Australia Manganese for which expenditure could be reliably identified; excludes projects subject to further
assessment, approvals or stakeholder engagement.
62.
Financial Report affects: Consolidated Income Statement (IS) - Group production and Expenses excluding finance costs; Consolidated Cash Flow Statement (CFS) - Profit/(loss) before
tax from continuing operations.
63.
Financial Report affects: IS - Group production and Expenses excluding finance costs; CFS - Profit/(loss) before tax from continuing operations and Purchase of property, plant &
equipment; Consolidated Balance Sheet - Property, plant & equipment.
64.
Presented on a 100% ownership basis.
Climate-related risk management
We define risks as “the effect of uncertainty on our purpose,
strategy and business plans”, recognising that uncertainty may
give rise to both threats and opportunities.
Our approach to risk management is governed by our risk
management framework and delivered through our system of risk
management. This framework is applied to all risks, supporting
consideration of climate-related risks in a manner consistent with
our broader risk management approach.
Climate-related risks are identified, assessed, managed and
monitored through the same governance structures, risk processes
and control frameworks applied to other enterprise risks. At the
same time, we recognise the distinctive characteristics of climate-
related exposures, including longer time horizons, interconnectivity,
external dependencies and heightened uncertainty, requiring
supplementary methodologies, including scenario analysis, climate
modelling and other targeted analytical tools.
This approach supports integration of climate considerations into
strategy, capital allocation, business planning and operational
decision-making, and informs our assessment of climate-related
risks and opportunities that could reasonably be expected to affect
our prospects over the short, medium and long term.
Risk identification
Risk and opportunity identification is informed by defined inputs
and parameters, including internal operational data, external
climate and market datasets, climate-related scenario analysis,
strategy and planning processes, physical climate risk assessments
and operation and function-led baseline risk profile reviews.
Within our risk taxonomy, strategic risks provide a Group-level view
of risks that may affect our ability to achieve our strategic
objectives, while material risks are those risk events that may
materially affect achievement of our business plans and processes.
Climate Change and Environment is a strategic risk, with physical
risks and transition risks as defined risk categories. Climate-related
risks rarely occur in isolation and often act as amplifiers or
contributing factors to other strategic risks.
Risk assessment and prioritisation
Climate-related risks and opportunities are assessed in line with
our internal risk management standard. Material risks are assessed,
using defined impact and likelihood tables, according to their
inherent risk (maximum potential impact) and their residual risk
(residual risk rating), which considers the effectiveness of current
controls. For climate-related disclosure purposes, we separately
apply defined assessment principles to identify climate-related
risks and opportunities that could reasonably be expected to affect
our prospects.
Climate-related risk and opportunity assessments consider time
horizons, financial and non-financial impacts and strategic
relevance, supporting the identification and prioritisation of
climate-related risks and opportunities that may affect our
prospects.
Risk treatment
Risk treatment is embedded into strategic planning, capital
allocation, operational risk management and decarbonisation
initiatives, applying mitigation and adaptation measures
appropriate to the nature of the exposure.
Material climate-related risks are managed through defined
controls and actions, which are captured in our real-time risk
management tool, Global360. Opportunities with prioritised actions
are integrated into strategy, capital allocation and business
planning to support value realisation.
Climate-related scenario analysis is used to assess resilience and
inform decision-making. Where resilience thresholds are not met,
actions may include updates to asset strategy, controls, investment
decisions and adaptation planning.
Monitoring and reporting
Management uses defined processes, controls and procedures to
support oversight of climate-related risks and opportunities. These
include risk reviews and control effectiveness testing, supported by
structured reporting and monitoring processes. Climate-related
risk information is consolidated through Group risk reporting
processes and escalated in accordance with established risk
governance structures. Further information on our risk governance
approach is provided on page 49.
These processes, controls and procedures are integrated with
broader internal functions, including our risk management,
strategy, capital allocation and financial planning processes.
Outcomes from these processes inform risk treatment actions,
prioritisation of capital allocation and assessment of portfolio
resilience.
Identified climate-related risks and opportunities
We apply defined assessment principles and established risk
management processes to identify climate-related risks and
opportunities that could reasonably be expected to affect our
prospects. In accordance with applicable reporting requirements,
we disclose the climate-related risks and opportunities identified
through this process. In FY26, this process involved reviewing a
broad set of climate-related risks and opportunities disclosed in
our 2025 Annual Report, and refining them through internal
analysis and workshops.
During the assessment process, we considered evolving societal
expectations regarding climate action. While these expectations
may shape the context in which climate-related risks and
opportunities arise, they were not identified as a standalone
climate-related risk or opportunity. Instead, relevant impacts are
reflected within our identified climate-related risks and
opportunities where applicable. Stakeholder and sustainability-
related considerations are also addressed through our strategic
risks (pages 49 to 56) and sustainability disclosures (pages 57 to
76).
Continuous improvement
We recognise that climate-related risk management is an evolving
process. In FY26, we formalised guidance and an associated
improvement process to support ongoing refinement of our
methodologies, data inputs, assumptions and assessment
approaches. This supports a structured response to advances in
climate science, changes in existing and emerging regulatory
requirements, evolving reporting expectations and the needs of
our business.
South32 Annual Report 2026
103 Strategic Report
CLIMATE-RELATED TARGETS AND METRICS
Climate-related targets
Refer to the Climate-related Reporting Methodology 2026 (pages 5 to 6) for information on our climate-related targets.
Climate-related metrics
We use a range of climate-related metrics to monitor performance, assess progress against our Climate Change Action Plan 2025 and
support climate-related decision-making.
Refer to the Climate-related Reporting Methodology 2026, including the Operational emissions and energy consumption section (pages 7 to 8), for
information on the organisational boundaries and methodologies used to prepare our climate-related metrics.
Transition materials metrics
We have classified our commodities as Key Transition Materials (KTM) and Other Transition Materials (OTM), in line with the Climate Action
100+ Net Zero Standard for Diversified Mining. These Transition Materials represent 100% of our portfolio on a copper equivalent basis.
Emissions
intensity
(t CO
2
-e / t
CuEq)
65
Copper equivalent
production
66
Underlying
revenue Capital expenditure
Year Kilotonnes Percentage US$ million US$ million Percentage
COPPER
KTM
Sierra Gorda
(45% share, non-operated)
FY26 2.3 87 10 % 1,154 235 36 %
FY25 2.3 90 10 % 832 216 32 %
ZINC-LEAD-
SILVER
OTM
Cannington
(100% share, South32 operated)
FY26 2.1 59 7 % 852 42 6 %
FY25 1.8 67 7 % 659 49 7 %
MANGANESE
OTM
Australia Manganese
(60% share, South32 operated)
FY26 2.5 48 6 % 675 78 12 %
FY25 4.6 18 2 % 42 115 17 %
South Africa Manganese
(54.6% ore share, South32 operated)
FY26 3.5 32 4 % 364 27 4 %
FY25 3.6 33 4 % 353 44 7 %
Manganese total
FY26 NA 81 9 % 1,039 105 16 %
ALUMINA
OTM
Worsley Alumina
(86% share, South32 operated)
FY26 13.0 209 24 % 1,319 160 24 %
FY25 13.3 209 23 % 1,917 106 16 %
Brazil Alumina
(36% share, non-operated)
FY26 9.2 85 10 % 502 25 4 %
FY25 9.1 81 9 % 749 41 6 %
Alumina total
FY26 NA 294 34 % 1,821 185 28 %
ALUMINIUM
OTM
Brazil Aluminium
(40% share, non-operated)
FY26 11.1 40 5 % 441 15 2 %
FY25 11.9 39 4 % 355 9 1 %
Hillside Aluminium
(100% share, South32 operated)
FY26 58.8 211 24 % 2,236 63 10 %
FY25 56.5 212 23 % 1,989 67 10 %
Mozal Aluminium
(63.67% share, South32 operated)
67
FY26 33.1 75 9 % 890 9 1 %
FY25 21.3 107 12 % 979 21 3 %
Aluminium total
FY26 NA 327 38 % 3,567 87 13 %
South32 Annual Report 2026
104 Strategic Report
Sustainability continued
65.
Scope 1 and Scope 2 (market-based) emissions per tonne of CuEq production.
66.
Copper equivalent (CuEq) production is calculated by converting payable production volumes for each commodity into revenue and dividing the result by the copper price to derive
an equivalent copper tonnage. CuEq production is calculated using FY25 realised prices for all periods presented. Molybdenum and silver produced at Sierra Gorda (both OTMs), and
gold produced as a by-product of copper concentrate production, are excluded from the calculation. Gold contributed an average of 0.8% of Group revenue over FY24 to FY26 and is
not considered material to the calculation. CuEq production percentages exclude Cerro Matoso following its divestment 1 December 2025, and therefore do not total 100%.
67.
Mozal Aluminium in Mozambique was placed on care and maintenance on 15 March 2026. Refer to market release “Mozal Aluminium Placed on Care and Maintenance” dated 16
March 2026 for further details.
Operational emissions
Total GHG emissions (millions of tonnes of CO
2
-e) (total operations)
FY26 FY25 FY24
Scope 1
6.2 7.4 9.4
Scope 2 market-based
14.4 13.3 10.9
Scope 2 location-based
14.5 17.3 18.0
Total gross Scope 1 and 2 (market-based)
20.5 20.7 20.3
Total gross Scope 1 and 2 (location-based)
20.7 24.7 27.4
Refer to page 8 of the Climate-related Reporting Methodology 2026 for information on qualifying contractual instruments used in determining our
market-based Scope 2 emissions.
GHG emissions and intensity by operation (total operations)
68,69
FY26 FY25
Scope 1
(MtCO
2
-e)
Scope 2
market-based
(MtCO
2
-e)
S1+2 Total
(MtCO
2
-e)
Emission
intensity
(tonne CO2-e /
tonne
production)
Scope 1
(MtCO
2
-e)
Scope 2
market-based
(MtCO
2
-e)
S1+2 Total
(MtCO
2
-e)
Emission
intensity
(tonne CO2-e /
tonne
production)
Australia Manganese
0.2 0.0 0.2 0.0 0.1 - 0.1 0.1
Cannington
70
0.1 0.0 0.1 0.6 0.1 - 0.1 0.5
Hillside Aluminium
1.4 11.0 12.4 17.3 1.4 10.6 12.0 16.7
Mozal Aluminium
0.8 3.1 3.9 10.0 1.2 2.4 3.6 6.5
Worsley Alumina
3.1 0.0 3.2 0.7 3.2 - 3.2 0.8
South Africa Manganese
0.1 0.1 0.2 0.1 0.1 0.1 0.2 0.1
Greenfields projects and other
facilities
71
0.1 0.0 0.1 0 0 0
Divested operations
72
0.3 0.1 0.4 1.2 0.2 1.4
Total
6.2 14.4 20.5 7.4 13.3 20.7
Total GHG emissions (millions of tonnes of CO
2
-e) (continuing operations)
FY26 FY25 FY24
Scope 1
5.9 6.3 6.6
Scope 2 market-based
14.3 13.1 10.5
Scope 2 location-based
14.4 17.1 17.5
Total gross Scope 1 and 2 (market-based)
20.2 19.3 17.0
Total gross Scope 1 and 2 (location-based)
20.3 23.4 24.1
Disaggregation of GHG emissions (millions of tonnes of CO
2
-e) (continuing operations)
73
FY26 FY25
Scope 1
Scope 2
market-
based
Scope 2
location-
based
S1+2
(market-
based)
Total)
S1+2
(location-
based)
Total Scope 1
Scope 2
market-
based
Scope 2
location-
based
S1+2
(market-
based)
Total)
S1+2
(location-
based)
Total
Consolidated group
1.7 11.0 9.3 12.7 11.0 1.6 10.6 9.5 12.2 11.5
Investment in joint ventures
(under operational control)
4.2 3.2 5.2 7.5 9.4 4.7 2.5 7.6 7.2 12.6
Total
5.9 14.3 14.4 20.2 20.3 6.3 13.1 17.1 19.3 23.4
Emissions limiting regulations
Applicable emissions-limiting regulations are listed in our Climate-related Reporting Methodology 2026 available at www.south32.net.
FY26 FY25 FY24
Total Scope 1 GHG emissions covered under an emissions-limiting regulation (Mt CO2e)
5.0 5.5 7.2
% Scope 1 GHG emissions covered under an emissions-limiting regulation
81% 74% 76%
South32 Annual Report 2026
105 Strategic Report
68.
GHG emissions intensity is calculated as tonnes of Scope 1 and 2 emissions divided by tonnes of saleable product. Production figures are disclosed from page 20.
69.
The sum of the categories may vary to the total figure due to rounding.
70.
Zinc equivalent production used, based on FY25 realised prices. Previously reported years have been revised using FY25 realised prices for comparability purposes.
71.
Includes Hermosa project, Bayside and our corporate office in Perth which are immaterial contributors.
72.
Divested operations include: Cerro Matoso (FY25, FY26), Illawarra Metallurgical Coal (FY25).
73.
Joint ventures under our operational control include Australia Manganese, Worsley Alumina, South Africa Manganese and Mozal Aluminium.
Non-operated joint ventures (NOJVs)
We disclose operational emissions on an equity share basis to support transparency regarding emissions associated with NOJVs. Emissions
are reported based on information provided by the relevant operators and are not subject to reasonable assurance.
GHG emissions (millions of tonnes of CO
2
-e)
74
FY26 FY25
Total Total
Brazil Alumina
(36% share, non-operated)
0.8 0.7
Brazil Aluminium
(40% share, non-operated)
0.3 0.4
MRN
0.1 0.1
Sierra Gorda
(45% share, non-operated)
0.2 0.2
Total
1.4 1.4
Operational energy consumption
Operational energy consumption (total operations)
FY26 FY25
Energy Use
75
Energy Intensity Energy Use Energy Intensity
Australia Manganese
3 0.6 1.9 1.0
Cannington
76
2 11.2 2.3 9.9
Hillside Aluminium
49 68.6 48.9 68.0
Mozal Aluminium
27 69.2 39.0 70.1
Worsley Alumina
48 11.0 48.1 11.1
South Africa Manganese
2 0.4 1.7 0.4
Greenfields projects and other facilities
77
1 0.4
Divested operations
78
7 17.1
Total
138 159
Operational energy consumption by source (%) (total operations)
FY26 FY25 FY24
Coal and coke
27% 27% 28%
Distillate and gasoline
4% 3% 4%
Electricity
43% 45% 45%
Natural gas
25% 25% 23%
Other
1% —% —%
Total renewable sources
9% 16% 19%
Total fossil fuels
79
56% 55% 55%
Cross-industry metrics
The metrics below show the extent to which our assets and business activities are exposed to climate-related transition and physical risks,
and aligned with climate-related opportunities.
Cross-industry metrics
Reference
Assets or business activities aligned with
climate-related opportunities
% Underlying Revenue contribution of copper, zinc-lead-silver and alumina/aluminium
Page 95
% Underlying EBITDA contribution of copper, zinc-lead-silver and alumina/aluminium
Page 95
Assets or business activities vulnerable to
climate-related transition or physical risks
% of alumina/aluminium operational emissions
Page 96
% of Scope 1 GHG emissions covered under an emissions-limiting regulation
Page 98
% of our operations exposed to one or more physical climate exposure pathway
Page 101
Capital expenditure, financing or investment
deployed towards climate-related risks and
opportunities
Transition material capital expenditure
Page 104
Decarbonisation expenditure
Page 96
Internal carbon price
Page 99
Percentage of executive management remuneration linked to climate-related considerations
Page 59
South32 Annual Report 2026
106 Strategic Report
Sustainability continued
74.
The sum of the categories may vary to the total figure due to rounding.
75.
Energy use is displayed in petajoules. Energy intensity is calculated as gigajoules/tonne production.
76.
Zinc equivalent production used, based on FY25 realised prices. Previously reported years have been revised using FY25 realised prices for comparability purposes.
77.
Includes Hermosa project, Bayside and our corporate office in Perth which are immaterial contributors.
78.
Divested operations include: Cerro Matoso (FY25, FY26), Illawarra Metallurgical Coal (FY25).
79.
Excludes electricity generated from fossil fuels.
ORGANISATIONAL BOUNDARIES
South32 applies different organisational boundaries and, where relevant, presentation bases to its climate-related disclosures, reflecting
the nature and purpose of the information presented and the requirements of relevant reporting frameworks and standards.
Organisational boundaries determine what operations, investments or activities are included in a disclosure. Presentation bases determine
how that information is grouped or presented to support comparability and understanding.
For the purposes of our FY26 climate-related financial disclosures prepared in accordance with AASB S2, South32's reporting entity is the
same as that used for the related financial statements. The reporting entity establishes the population of entities included in our financial
statements. Organisational boundaries are then applied within that reporting entity to determine how climate-related information is
measured and reported.
This table summarises the organisational boundaries and presentation bases applied to our climate-related disclosures.
Disclosure or metric
Boundary / presentation basis
How to read the data
Energy consumption
and Scope 1 and 2
emissions
Operational control, in accordance
with the GHG Protocol
– Includes 100% of energy consumption and emissions from operations controlled by
South32, regardless of ownership interest, and excludes emissions from operations
that South32 does not control.
– For example, South32 includes 100% of emissions from Australia Manganese (60%
ownership) and Worsley Alumina (86% ownership) because these operations are
operated by South32. Emissions from non-operated joint ventures, such as Sierra
Gorda (45% ownership), are excluded from operational control reporting.
– This boundary applies to our reported operational emissions, emissions reduction
targets and associated baseline years.
– For Australian operations, operational control is determined in accordance with the
National Greenhouse and Energy Reporting Scheme. For operations outside
Australia, operational control is determined in accordance with the GHG Protocol
Corporate Accounting and Reporting Standard.
Equity share
– Supplementary emissions information may also be presented on an equity share
basis.
– Under this approach, emissions are reported in proportion to South32's ownership
interest in an operation or investment, including non-operated joint ventures.
– For example, South32 would report 60% of emissions from Australia Manganese
(operated) and 45% of emissions from Sierra Gorda (non-operated).
– Equity share information is outside South32's FY26 climate-related financial
disclosures prepared in accordance with AASB S2 and is not subject to assurance.
Scope 3 emissions
Category-specific methodology
– Scope 3 emissions are disclosed voluntarily and, consistent with the transitional
relief available for FY26, have not been prepared in accordance with AASB S2.
– Downstream Scope 3 emissions are estimated on an equity share basis, including
emissions associated with non-operated joint ventures.
– Upstream Scope 3 categories apply category-specific methodologies, having
regard to the minimum requirements of the GHG Protocol, the nature of the
activity, data availability and the calculation methodology applied.
– Our Scope 3 emissions inventory is disclosed in our Sustainability Databook 2026.
– The applicable methodology for each category is described in the Climate-related
Reporting Methodology 2026.
Climate-related metrics
and targets (where
applicable)
Total operations and continuing
operations presentation basis
– Where relevant, climate-related metrics and targets are presented on either a total
operations basis or a continuing operations basis. The applicable presentation basis
is identified alongside the disclosure.
– Total operations includes operations that formed part of South32's portfolio for all
or part of the reporting period, including operations divested or classified as
discontinued operations during the year.
– Continuing operations includes only operations remaining within South32's portfolio
at the reporting date.
– Where continuing operations information is disclosed, the same basis is applied to
comparative periods, baseline years and historical performance measures
presented alongside the disclosure to support comparability over time.
– Continuing operations energy consumption and Scope 1 and Scope 2 emissions
included in South32's climate-related financial disclosures prepared in accordance
with AASB S2 are subject to reasonable assurance.
South32 Annual Report 2026
107 Strategic Report
Disclosure or metric
Boundary / presentation basis
How to read the data
Climate-related risks
and opportunities
Financial reporting boundary
80
– Climate-related risks and opportunities are identified and assessed using the same
reporting boundary applied for South32's financial statements.
– This includes material equity-accounted investments and non-operated joint
ventures where climate-related risks or opportunities could reasonably be
expected to affect South32's prospects.
– Where relevant, associated effects are reflected in our strategy, risk management
and metrics disclosures. The organisational boundary applied to the effects may
differ depending on the nature of the disclosure and the availability of underlying
data, with the applicable basis identified alongside the relevant disclosure.
Financial effects of
climate-related risks
and opportunities
Financial reporting basis
64
or
segment reporting basis
81
– Financial effects are presented on either a financial reporting basis or segment
reporting basis, depending on the nature of the disclosure.
– The applicable basis is identified alongside the relevant disclosure.
– Disclosure-specific footnotes explain the applicable basis of preparation, scope,
and relevant Financial Report references.
– Where a segment reporting basis is used, the information is presented consistently
with Note 4 to the Financial Report.
South32 Annual Report 2026
108 Strategic Report
Sustainability continued
80.
Financial reporting boundary refers to the entities and investments included within South32's consolidated financial statements and related disclosures prepared in accordance with
applicable accounting standards. Refer to Financial Report Note 2(a) Basis of Preparation, Note 24 Subsidiaries and Note 26 Equity accounted investments for further details.
81.
Refer to Financial Report Note 4 Segment information for further details.
INDEPENDENT AUDITORS' REVIEW AND AUDIT REPORT
To the shareholders of South32 Limited
Report on specified Sustainability Disclosures of South32 Limited presented in the Sustainability Report (as defined below) prepared
in accordance with the Corporations Act 2001, for the year ended 30 June 2026.
Review Conclusion
We have conducted a review of the following specified Sustainability Disclosures in the ‘Addressing Climate Change’ section within the
Annual Report 2026, in other sections cross-referenced from that section, and in the Climate-related Reporting Methodology 2026, being
the Sustainability Report of South32 Limited for the year ended 30 June 2026 in accordance with Australian Standards on Sustainability
Assurance (ASSA) 5010 Timeline for Audits and Reviews of Information in Sustainability Reports under the Corporations Act 2001 issued by
the Auditing and Assurance Standards Board (AUASB):
specified Sustainability Disclosures
subject to review
Reporting requirement of Australian
Sustainability Reporting Standard AASB
S2 Climate-related Disclosures (AASB
S2) (including related general
disclosures required by Appendix D)
(the Criteria)
Locations in Sustainability Report
Governance disclosures
Paragraph 6
The following subsections in the “Our approach to
sustainability” section:
• Sustainability governance, page 59 (Sustainability
governance and remuneration subsection) and page
60 (exclude ‘Learn more’ references)
The following subsections in the “Addressing Climate
change” section:
• Climate governance (page 78)
• Climate-related risk management, monitoring and
reporting (Page 103)
The following subsections in the “Governance” section:
• 2026 Board skills matrix as at 30 June 2026
(Environment and climate change) (page 133)
• Sustainability Committee (page 139)
Strategy (risks and opportunities)
disclosures
Subparagraphs 9(a), 10(a) and 10(b)
• Identified climate- related risks and opportunities
section, the following subsections in pages 94-102
◦ TO1: Transition-related Commodity Demand
Growth – section titled ‘Classification’ and
‘Description’
◦ TR1: Decarbonisation Constraints – section titled
‘Classification’ and ‘Description’
◦ TR2: Emissions-Limiting Regulations – section titled
‘Classification’ and ‘Description’
◦ PR1: Extreme Weather Disruption – section titled
‘Classification’ and ‘Description’
The requirements of AASB S2 identified in the table above form the Criteria relevant to the specified Sustainability Disclosures subject to
review and apply under Division 1 of Part 2M.3 of the Corporations Act 2001 (the Act).
We have not become aware of any matter in the course of our review that makes us believe that the Governance and Strategy (risk and
opportunities) disclosures specified in the table above do not comply with Division 1 of Part 2M.3 of the Act.
South32 Annual Report 2026
109 Strategic Report
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.
Audit Opinion
We have conducted an audit of the following specified Sustainability Disclosures in the Sustainability Report of South32 Limited for the year
ended 30 June 2026 in accordance with ASSA 5010 issued by the AUASB:
specified Sustainability Disclosures
subject to audit
Reporting requirement of Australian
Sustainability Reporting Standard AASB
S2 Climate-related Disclosures (AASB
S2) (including related general
disclosures required by Appendix D)
(the Criteria)
Locations in Sustainability Report
Scope 1 greenhouse gas (GHG) emissions
Subparagraphs 29(a)(i)(1) to (2) and 29
(a)(ii) to (v)
Climate-related Reporting Methodology 2026,
‘Organisational boundary” in page 4 (as relevant to Scope 1
and 2), “Scope 1 emissions methodology” and “Scope 2
emissions methodology” in pages 7 – 8 and the following
information in the Climate-related targets and metrics
section in page 105 of the Annual Report:
• Total Scope 1 (continuing operations): 5.9Mt CO
2
-e
• Total Scope 2 market-based (continuing operations):
14.3Mt CO
2
-e
• Total Scope 2 location-based (continuing operations):
14.4Mt CO
2
-e
Scope 2 GHG emissions (location-based and
market-based)
The requirements of AASB S2 identified in the table above form the Criteria relevant to the specified Sustainability Disclosures and apply
under Division 1 of Part 2M.3 of the Act.
In our opinion the Scope 1 and Scope 2 emissions disclosures specified in the table above are prepared in accordance with the Act,
including the applicable requirements of:
(a) Subsection 296A(2) (contents of climate statements);
(b) Section 296C (compliance with Australian Sustainability Reporting Standard S2 Climate-related Disclosures issued by the Australian
Accounting Standards Board; and
(c) Section 296D (climate statement disclosures).
Basis for Conclusion and Opinion
Basis for Conclusion
Our review has been conducted in accordance with International Standard on Sustainability Assurance ISSA 5000 General Requirements for
Sustainability Assurance Engagements issued by the International Auditing and Assurance Standards Board (IAASB) (ISSA 5000) and ASSA
5000 General Requirements for Sustainability Assurance Engagements issued by the AUASB (ASSA 5000). Our review includes obtaining
limited assurance about whether the specified Sustainability Disclosures subject to review are free from material misstatement.
In applying the relevant Criteria, we note that subsection 296C(1) of the Act includes a requirement to comply with AASB S2.
Our conclusion is based on the procedures we have performed and the evidence we have obtained in accordance with ISSA 5000 and
ASSA 5000. The procedures in a review vary in nature and timing from, and are less in extent than for, an audit. Consequently, the level of
assurance obtained in a review is substantially lower than the assurance that would have been obtained had an audit been performed. See
the “Summary of the Work Performed“ section of our report.
Basis for Opinion
Our audit has been conducted in accordance with ISSA 5000 and ASSA 5000. Our audit includes obtaining reasonable assurance about
whether the specified Sustainability Disclosures subject to audit are free from material misstatement.
Basis for Opinion and Conclusion
Our responsibilities under ISSA 5000 and ASSA 5000 are further described in the “Auditors’ 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 Auditing Standard ASQM1 Quality Management for Firms that Perform Audits or Reviews of Financial Reports and Other
Financial Information, or Other Assurance or Related Services Engagements, issued by the AUASB. This standard requires 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 and opinion.
Other Matter
The Scope 1 and Scope 2 market-based and Scope 2 location-based emissions for the years ended 30 June 2025 and 30 June 2024,
presented as comparative information in the “Total GHG emissions (millions of tonnes of CO
2
-e) (continuing operations)” table on page 105
of the Annual Report, were not subject to our audit engagement and, accordingly, we do not express a conclusion or provide any
assurance on such information.
Our conclusion is not modified with respect to this matter.
South32 Annual Report 2026
110 Strategic Report
Other Information
The Directors of South32 Limited are responsible for the other information. The other information comprises the South32 Limited’s Annual
Report and Climate-related Reporting Methodology 2026 but does not include the specified Sustainability Disclosures and our review and
audit report thereon.
Our conclusion and opinion on the specified Sustainability Disclosures does not cover the other information and we do not express any
form of conclusion and opinion thereon, with the exception of the:
• The Financial Report, Remuneration Report and our respective audit reports thereon; and
• The “Select Sustainability Information”, as defined in our Report on Select Sustainability Information presented in the South32 Limited
2026 Reports, and our assurance report thereon.
In connection with our review and audit of the specified Sustainability Disclosures, our responsibility is to read the other information
identified above and, in doing so, consider whether the other information is materially inconsistent with the specified Sustainability
Disclosures, or our knowledge obtained when conducting the review and audit, 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.
Responsibilities for the specified Sustainability Disclosures
The Directors of South32 Limited are responsible for:
• The preparation of the specified Sustainability Disclosures in accordance with the Act;
• Designing, implementing and maintaining a system of internal control that it determines is necessary to enable the preparation of
specified Sustainability Disclosures in accordance with the Act that are free from material misstatement, whether due to fraud or error.
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 specified Sustainability Disclosures 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.
For climate risks and opportunities, there is inherent uncertainty as a result of using assumptions about future events and management’s
actions that may not occur.
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.
Auditors' Responsibilities
Our objectives are to plan and perform the review and audit to obtain limited and reasonable assurance about whether the specified
Sustainability Disclosures are free from material misstatement, whether due to fraud or error, and to issue a review and audit report that
includes our conclusion and opinion, respectively. Misstatements can arise from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence decisions of users taken on the basis of the specified Sustainability
Disclosures.
As part of our review and audit in accordance with ISSA 5000 and ASSA 5000, we exercise professional judgment and maintain professional
scepticism throughout the engagement. We also:
Limited assurance
• 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 disclosure level.
Reasonable assurance
• 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 assertion level for the disclosure, but not for the
purpose of providing an opinion on the effectiveness of the entity’s internal control.
• Design and perform procedures responsive to the assessed risks of material misstatement at the assertion level for the disclosure.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
South32 Annual Report 2026
111 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
Jane Bailey
Partner
Perth, Australia
27August 2026
Julia Bilyanska
Partner
Melbourne, Australia
27August 2026
South32 Annual Report 2026
112 Strategic Report
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
Safety and Health
Fatalities
1
Terms and definitions presented within the
Databook – Safety and Health tab available on
South32 Limited’s website.
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)
South32 Annual Report 2026
113 Strategic Report
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.
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 CO
2
-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
114 Strategic Report
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
115 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
Melbourne, Australia
27August 2026
Julia Bilyanska
Partner
South32 Annual Report 2026
116 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
117 Strategic Report
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.
1
South32 Annual Report 2026
118 Governance
Governance continued
1.
South32 divested the Metalloys manganese alloy smelter in FY25.
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 Metalloys’
1
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.
Above: Board and Lead Team members with Sicelo Clinic staff.
OUR BOARD
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 2026
2
.
Director
3
Appointment date
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
South32 Annual Report 2026
119 Governance
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.
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
120 Governance
Governance continued
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)
5
2
1
1
0-3 years
3-6 years
6-9 years
9-plus years
Gender diversity
(all Directors)
5
5
Female
Male
Location
(Non-Executive Directors)
6
1
2
Australia
Southern Africa
Americas
Ethnicity
(all Directors)
8
1
1
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
121 Governance
OUR BOARD MEMBERS
4
N R RA
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.
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.
South32 Annual Report 2026
122 Governance
Governance continued
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.
Committee membership key:
Chair appointment N Nomination and Governance Committee R Remuneration Committee
RA Risk and Audit Committee S Sustainability Committee
N R
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.
N S
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
123 Governance
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.
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.
South32 Annual Report 2026
124 Governance
Governance continued
Chair appointment N Nomination and Governance Committee R Remuneration Committee
RA Risk and Audit Committee S Sustainability Committee
N RA S
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.
N S
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
125 Governance
R N S
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.
RA N
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.
South32 Annual Report 2026
126 Governance
Governance continued
Committee membership key:
Chair appointment N Nomination and Governance Committee R Remuneration Committee
RA Risk and Audit Committee S Sustainability Committee
BOARD FOCUS AREAS AND KEY DECISIONS
Our Board’s activities in FY26
Our Board is focused on the safety and health of our people, the Group's operational, financial and sustainability performance,
implementation of our strategy, and setting the tone for our workplace culture. Some of these focus areas for FY26 are set out below.
Safety and performance
Nothing is more important than the safety and health of our
employees, contractors, visitors and communities.
After a contractor, Simon Mukwarami, was fatally injured at Worsley
Alumina in March 2026, our Board actively engaged with
management on our response.
Throughout FY26, our Board actively engaged on other safety and
health matters. These included:
– receiving updates on the fatality at the Alumar smelter in Brazil,
a non-operated joint venture
– monitoring the safe transition of Mozal Aluminium to care and
maintenance
– receiving updates on our response to the impact of Tropical
Cyclone Narelle at Australia Manganese, which included the
evacuation of non-essential workers from Groote Eylandt before
it made landfall
– maintaining oversight of our approach to serious injury risk
reduction through significant incident investigation reviews with
management and material safety risk deep-dives during visits to
our operations and projects, including consideration of the
effectiveness of critical controls
– monitoring progress on our Safety Improvement Program, a
multi-year program of work with the aim of achieving a step
change in our safety performance by shifting mindsets through
leadership, empowering our people to take responsibility for
their own safety and the safety of others, reducing risks with
effective controls, and enhancing our systems and metrics
– hearing directly from operational employees to gain a better
understanding of the safety routines and interactions that occur
at our operations, the practical deployment of our LEAD Safely
Every Day training program, safety interactions in the field, any
safety challenges, and the impact of our Safety Improvement
Program on employees and contractors
– receiving updates on the management of workplace sexual
harassment and management of psychosocial risk
– discussing safety performance at meetings of the Sustainability
Committee.
Strategy
Our Board oversees strategy development and implementation,
including alignment with our purpose and values, and recognises
the importance of considering strategy with a focus on safety and
through an informed view of societal trends and values.
In June 2026, our Board participated in a dedicated Strategy Day
led by our CEO, Matt Daley, and broader Lead Team which
provided an opportunity for the Board to collaborate with
management on our strategy and vision for the future.
During FY26, our Board evaluated, provided guidance on, approved
(as required) and oversaw the implementation of key matters
related to our strategy. This included:
– execution of a binding conditional agreement to divest the
Group's aluminium value chain assets to Alcoa Corporation for
consideration of up to US$5.6 billion, supporting the
simplification of the Group's portfolio and strategic focus on
base metals
– completion of the divestment of the Cerro Matoso ferronickel
operation in Colombia for up to US$100 million
– the safe transition of Mozal Aluminium to care and maintenance
after Mozal was unable to secure sufficient and affordable
electricity supply beyond March 2026
– oversight of the construction and execution progress of the
Hermosa project, as we continued construction of the Taylor
zinc-lead-silver project and completion of the exploration
decline at the Clark battery-grade manganese deposit
– consideration of the Hermosa project, including updates to
schedule and capital expenditure relative to the approved Final
Investment Decision, and the award of additional underground
and surface infrastructure packages
– approval of the execution of the fourth grinding line project at
Sierra Gorda following completion of a feasibility study,
supporting a future expansion in processing capacity and
production growth
– approval of a US$119.6 million investment for a Pot Tending
Assembly Replacement project at Hillside Aluminium
– continued oversight of investment in greenfield exploration
opportunities
– oversight of the simplification of the Group’s functional
structures to appropriately support our portfolio following the
divestment of Cerro Matoso and placing of Mozal Aluminium on
care and maintenance
– continued oversight of the alignment of our remuneration and
benefits framework with our purpose, strategy, values and
culture.
Our Board received briefings on global commodity and economic
developments and their impact on the Company and its operations,
including consideration of external market conditions affecting
performance. Directors also received briefings on technology and
innovation, climate change and nature matters, and the political
landscapes in the US, Australia, South America and South Africa.
Our strategy is underpinned by a disciplined approach to capital
allocation and a strong balance sheet. Our Board received regular
updates on our capital management activities throughout FY26,
including approving the payment of interim and final dividends.
In August 2025, the Board resolved to extend the existing on-
market share buy-back program to 11 September 2026. In
February 2026 the program was increased by US$100 million, with
US$209 million remaining to be returned to shareholders by 26
February 2027.
South32 Annual Report 2026
127 Governance
Culture
Our Board continued to work with our Lead Team to set the
direction and tone for a workplace culture that aligns with our
purpose, reflects our values, and supports the delivery of our
strategy. This included:
– receiving an external briefing on the management of
psychosocial risk and oversight of the management of this risk
– reviewing any material breaches of our Code and Anti-Bribery
and Corruption Policy, and any material concerns reported
under the Speak Up Policy
– overseeing the culture of the Group throughout our operations
and offices, using a ‘Culture Health Check’ tool to assist the
Board's assessment to better understand how aligned the
culture is to our purpose, strategy and values
– receiving key observations from leaders on our annual Your
Voice employee survey, reviewing the results, and evaluating
the actions taken by management to address improvement
areas
– continuing to monitor and assess our progress against our
inclusion and diversity measurable objectives, and overseeing
management’s inclusion and diversity action plan to build a
more inclusive and diverse workforce
– visiting our social investment initiatives to gain insights into our
contribution to surrounding communities. Learn about the
Board's visit to community initiatives in South Africa on page
118.
Governance
Our Board approves our corporate governance policies and
oversees our corporate governance practices, and in doing so
seeks to adopt high standards of corporate governance that meet
shareholder and other stakeholder expectations. Our Board also
oversees the Group’s systems for ethical and legal compliance.
Since 2015, our Director succession plan has been supported by an
annual review of the Board skills matrix and regular assessment of
the Board's skills and experiences. This has taken into account any
new requirements as we have transformed our portfolio to focus on
minerals and metals critical to the global energy transition,
invested in new geographical areas, and identified changes to
material and strategic risks.
In FY26, this Director succession plan resulted in the appointments
approved by our Board of Mr Geoff Healy and Ms Sinead Kaufman
as independent Non-Executive Directors.
As part of our Board succession process, two inaugural Directors,
Mr Frank Cooper AO and Dr Futhi Mtoba, retired at the AGM on 23
October 2025 and did not stand for re-election.
On the day of the AGM, Ms Karen Wood AM announced her
intention to retire from the South32 Board. Following a careful
planning process to support a smooth handover, Ms Wood stepped
down on 1 March 2026 and was succeeded as Chair by Mr Stephen
Pearce, who joined the Board as a Non-Executive Director on 1
February 2025. This handover also took into account our planned
CEO succession, which resulted in Matt Daley joining as Deputy
CEO on 2 February 2026 and assuming the role of CEO on 1 July
2026 after Graham Kerr stepped down from the role on 30 June
2026.
Our Board and Committees receive updates on governance
developments and briefings from internal and external experts on
topics including management of psychosocial risk, safety and
health, financial markets, exploration and cybersecurity.
Our climate reporting framework
Our Board is committed to providing clear, meaningful and
transparent disclosures on our sustainability performance,
including how we are addressing climate change.
Our climate-related disclosures are prepared in accordance
with AASB S2 Climate-related Disclosures and are aligned to
the Task Force on Climate-related Financial Disclosures (TCFD).
More information is available in the Addressing Climate
Change chapter of the Sustainability section, starting on
page 77.
South32 Annual Report 2026
128 Governance
Governance continued
STAKEHOLDER ENGAGEMENT
Engaging with our shareholders
Effective two-way communication is important for our shareholders
to exercise their rights as our owners. We maintain a program of
engagement involving our Directors, Lead Team and shareholders,
and the broader investment community, which for FY26 included:
– our new Chair meeting key investors in 2026
– briefings and presentations to analysts and institutional
investors, on matters including our FY25 full year and FY26 half
year financial results, and our Climate Change Action Plan 2025
– presentations at investment and industry conferences and
participation in corporate governance forums such as the Bank
of America Global Metals Mining & Steel Conference, with all
new and substantive presentations (including analyst
presentations) released to the market ahead of the presentation
and made available at www.south32.net
– meetings with investors and proxy advisers (attended by our
Chair, Chair of the Remuneration Committee, inaugural CEO,
Deputy CEO and/or other Lead Team members), covering
financial, operational, remuneration and ESG updates
– management-led meetings with civil society groups
– responses to investor correspondence.
Investor expectations on ESG-related issues continue to evolve,
with an emphasis on demonstrated action and performance. ESG-
focused engagement activities are included in our annual
engagement program.
Our Annual General Meeting
Our AGM provides shareholders with the opportunity for direct
updates from our Board and we encourage them to attend our
2026 AGM in person or virtually, so they can vote on resolutions
and ask questions. All substantive resolutions at our AGMs are
determined by a poll.
All Directors and Lead Team members are expected to attend the
AGM. The external auditor is also available to answer questions
relating to the Auditor’s Report or the conduct of the audit.
Our 2026 Notice of AGM will contain more information and be made
available at www.south32.net.
Engaging with our shareholders and other stakeholders
We provide information about our Company and communicate with
our shareholders and other stakeholders through our website and
social media platforms.
We encourage stakeholders to access information about us,
including our latest announcements and news, financial and
operational results, annual reports, presentations and speeches, at
www.south32.net. Shareholders and other stakeholders can also
contact us directly through our website, where they will also find
details of how we can be reached through our Investor Relations or
Media Relations teams.
Our shareholders can receive our communications electronically
and are periodically reminded of this option. Our shareholders can
also contact us and our share registries electronically.
Engaging with our people
Visiting our sites helps Directors better understand the working
environment of our people, and assess workplace culture.
In FY26, Directors visited our new head office in Perth, Western
Australia, our Hermosa project in Arizona, US, and our office in
Johannesburg, South Africa.
Outside of Board meetings, our inaugural CEO Graham Kerr made
three visits to Southern Africa in July, August and November 2025,
to discuss the future of Mozal Aluminium. He also visited
Cannington in September 2025 and our Hermosa project in April
and June 2026. Mr Kerr also undertook international stakeholder
engagement activities in support of the Hermosa project, including
engagement with government and strategic stakeholders in key
jurisdictions.
Matt Daley commenced as Deputy CEO on 2 February 2026 and
visited many of our operations to meet our people and see first-
hand what they do. In the first month he travelled to our
Johannesburg office and South Africa Manganese, our Hermosa
project, and the Sierra Gorda joint venture in Chile. In March, he
visited Australia Manganese, Worsley Alumina and Cannington, and
he returned to Hermosa in April and Worsley Alumina in June.
Mr Kerr and Mr Daley also visited Worsley Alumina in March 2026,
following the fatal injury of a contractor, Simon Mukwarami, to
support the team and the response. They provided regular updates
to Directors during their visit, including details of the support being
provided to impacted family members and colleagues.
Our Board formally engages with management via presentations to
Board meetings, and lunch and learn sessions. Lunch and learn
topics in FY26 included the Your Voice employee engagement
process, exploration, technology and innovation and application of
the Mobile Equipment Collision Avoidance at the Taylor project.
During FY26, our inaugural CEO, Deputy CEO and Lead Team
connected regularly with our employees to share updates and take
questions on business results, developments, our performance
(including safety performance), our portfolio, strategy and culture.
This included regular Group-wide live 'town hall' events.
Group-wide emails were sent in English, Spanish and Portuguese to
accommodate our diverse workforce, while other updates including
stories and videos were regularly shared via internal
communications channels.
In June 2026, the latest in our 'Conversations with the Board' series
was published on our intranet. In it, our new Chair Stephen Pearce
discussed his background, what our 'safety guarantee' means to
him, and his hopes for the future of South32.
Find out more about our stakeholders and our approach to industry
association participation in our Sustainability Databook 2026 at
www.south32.net.
South32 Annual Report 2026
129 Governance
Building relationships in Arizona
In December 2025, the Board visited our Hermosa project in
Arizona. While there, Directors attended a community
engagement breakfast in Nogales, the city where our remote
operating centre, Centro, is being built.
The breakfast offered our Board a chance to strengthen
relationships with, and hear directly from, our community
partners. Topics discussed included workforce skills
development, partnerships with industry and education
institutions, our community investment approach, and positioning
Nogales as a hub for industrial and economic growth.
Our Board later met with our US federal government advisers.
They received an update on topics that have the potential to
affect our North American assets, such as the US Midterm
Elections, permitting reform, and the current administration’s
focus on domestic critical minerals.
BOARD APPOINTMENT, RENEWAL AND EVALUATION
Director appointment process and Board renewal
The Nomination and Governance Committee oversees succession
planning for the Board, Board Chair, Board Committees, Committee
Chairs and the CEO. The Committee recommends to the Board
candidates it considers appropriate for appointment to the Board
and oversees the evaluation of prospective candidates. This
includes ensuring that appropriate checks are undertaken on their
character, experience, education, criminal record and bankruptcy
history, using an external firm as required.
Once selected, the successful candidate is offered a letter of
appointment setting out the terms and conditions of their
appointment, including fees payable and that the Director will
supply services personally (and not through an entity associated
with the Director).
As part of our Board renewal process:
– Mr Stephen Pearce was appointed Chair on 1 March 2026,
following the decision of Ms Karen Wood AM to retire from our
Board
– Matt Daley joined as Deputy CEO on 2 February 2026 and,
following a transition period, assumed the role of CEO on 1 July
2026 after Graham Kerr stepped down from the position on 30
June 2026
– inaugural directors Mr Frank Cooper AO and Dr Futhi Mtoba
retired from the Board at our AGM on 23 October 2025
– Mr Geoff Healy and Ms Sinead Kaufman were appointed Non-
Executive Directors on 2 December 2025 and 1 April 2026,
respectively.
Directors appointed by the Board (excluding the CEO) must stand
for election at the following AGM. They must also retire and seek
re-election, at every third AGM following their election or most
recent re-election. The Nomination and Governance Committee
assesses the performance and time commitments of each Director
due to stand for election or re-election, and endorses to the Board
whether it should recommend to shareholders that they vote in
favour of the election or re-election of each relevant Director.
Our Board has recommended that shareholders elect Mr Healy and
Ms Kaufman as Directors, and re-elect Dr Xiaoling Liu, Mr Carlos
Mesquita and Ms Jane Nelson as Directors, at our 2026 AGM. The
Company will provide shareholders with the basis of the Board's
recommendation in the 2026 Notice of AGM, along with all material
information known to the Board and relevant to a decision on
whether or not to elect or re-elect Directors. This Notice of AGM will
be made available at www.south32.net.
Director induction
Directors participate in a comprehensive induction program when
they join our Board, which is tailored for their background,
experience, and the Committee position(s) they will hold. This
includes briefings from management on significant business and
legal issues, current and future projects, economic conditions, and
the regulatory environments in which we operate.
Evaluating Board performance
The Nomination and Governance Committee oversees the
performance evaluation process for the Board, Committees and
individual Directors. An evaluation of at least one of the Board,
Committees or individual Directors is undertaken annually and may
be internally or externally facilitated.
The evaluation process generally includes a combination of:
– interviews with, or self-assessments by, Directors on their
individual performance and the effectiveness of the Board and
Committees
– peer reviews of each Director’s contributions to the Board and
relevant Committees
– feedback from management on issues relevant to the
performance evaluation.
Performance evaluation results are considered by the Nomination
and Governance Committee. Where individual Director
performance is assessed, each Director is provided feedback on
their strengths, opportunities to make enhanced contributions and
potential areas for further professional development.
Board, Committee and Director evaluation
Directors recognise the continued effort required to maintain the
Board’s high performance, and the ongoing work to enhance the
Board’s composition and prepare for the future. Our Board has
alternated year-on-year between an externally conducted formal
evaluation and an informal evaluation, coordinated internally. These
activities are also supplemented by the annual review of the
independence of Directors, and consideration of the Board's skills
as a collective.
For 2026, taking into account the changes in Board composition in
recent years, including the Chair transition in March 2026, an
informal evaluation of the Board was undertaken for a second year.
This included Committee effectiveness and Director check-ins
which drew on the 2024 external evaluation recommendations and
actions, and the 2025 internal evaluation findings. The process
included an online survey completed by Directors, Lead Team
members and select management.
The evaluation was conducted by our Company Secretariat team
and overseen by the Chair. The evaluation results were reviewed by
our Chair, discussed by the Nomination and Governance
Committee as a collective, and by the Chair individually with each
Director.
The evaluation results confirmed that the Board remains high
performing and continues to operate with a positive and
constructive culture. Directors agreed that the CEO and Chair
transitions during the year were managed effectively. Directors also
recognised that Board composition remains an ongoing focus to
ensure it is aligned with the Company’s size, operations and
strategic direction, with an appropriate balance between retaining
corporate knowledge and introducing fresh perspectives.
The evaluation identified opportunities to enhance the Board
program and reinforced the value of site visits in strengthening
engagement with employees and improving the Board’s
understanding and visibility of workplace culture.
For further details refer to our Executive reward practices and our
Non-Executive reward practices in our Remuneration Report on pages
157 and 169 respectively.
South32 Annual Report 2026
130 Governance
Governance continued
BOARD SKILLS, KNOWLEDGE AND EXPERIENCE
The Board annually reviews the skills it considers it requires from the Board to address existing and emerging business and
governance issues relevant to the entity.
The skills of our Directors as individuals and as a group are evaluated against those required skills, and this is documented in our Board
skills matrix.
The process includes a Director self-assessment, followed by moderation by the Chair and CEO to ensure the matrix reflects the skills of
the Board as a collective, and the results are incorporated into the Board’s composition review and succession planning. If skills gaps are
identified they help inform focus areas for our Board’s continuing education program.
Having reviewed the 2026 Board skills matrix completed during FY26 and set out on the following pages, our Board remains satisfied that,
as a collective, it has the skills, knowledge and experience needed to discharge its role and responsibilities and that there are no
immediate gaps that require addressing. Moreover, it considers that it has the capabilities necessary to effectively lead and govern the
Group, engage in strategy and deal with new and emerging business and governance issues.
2026 Board skills matrix as at 30 June 2026
5
Collective Board skill level
Description Relevance to South32
Leadership and culture
Leadership and corporate governance
Senior executive role or substantial board experience
in a listed company, with a proven track record of
leadership and overseeing culture and a demonstrable
understanding of and commitment to high standards
of corporate governance.
Demonstrating leadership and overseeing our
corporate governance practices are key
responsibilities of our Board. Our Board also oversees
that our culture aligns with our purpose, values and
strategy.
People and remuneration
Experience leading large, diverse, geographically
distributed workforces, including talent planning,
setting remuneration frameworks that attract and
retain talent, and promoting diversity, equality and
inclusion.
Our people are the foundation of our success, and we
need to attract, retain, develop and motivate talent.
Our Board oversees that our remuneration and
benefits framework aligns with our purpose, strategy
and values to drive desired culture and business
outcomes and attracts and retains key talent.
Industry
Mining and metals
Senior executive role or substantial board experience
in a mining and metals company, from exploration
through to the development and operations stages of
mining and metals projects. Expertise in geological,
engineering or geoscience matters.
Directors with expertise in geology, mining (open pit
and/or underground) and the production of our key
commodities contribute to our Board’s evaluation of
risks and opportunities as they relate to our
operations, the mining industry and the markets in
which we operate.
Smelting and processing
Senior executive role or substantial board experience
in a company involved in the smelting, refining and/or
processing of natural resources. Experience in
smelting or extractive metallurgy.
Directors with expertise in smelting and extractive
metallurgy contribute to our Board’s evaluation of risks
and opportunities as they relate to our operations, the
mining industry and the markets in which we operate.
Commodity and value chain
End-to-end commodity value chain knowledge and
experience, including understanding of marketing,
consumers, market demand drivers (including specific
geographic markets) and key aspects of responsible
commodity value chain management.
Directors with commodity value chain knowledge and
experience, including knowledge of related social and
environmental impacts, contribute to our Board’s
assessment of our response to evolving market
conditions.
Highly skilled – having or demonstrating a high degree of knowledge or skill; high level of expertise/mastery and experience in work that requires that skill.
Skilled – having or showing the knowledge, ability, or training to perform a certain activity or task well; trained or experienced in work that requires that skill.
Knowledgeable – well-informed, well conversant in the area in which he or she has gained knowledge and understanding.
South32 Annual Report 2026
131 Governance
5.
Based on Board composition at 30 June 2026
Collective Board skill level
Description Relevance to South32
Industry continued
Technology and innovation including artificial intelligence (AI)
Understanding of the risks and opportunities of AI, and
other forms of technology and innovation, including
how related developments may be leveraged to drive
transformation and respond to digital disruption.
Directors with knowledge of the risks and
opportunities of technology (including digital
technology risks such as cybersecurity and data
protection) and innovation (such as AI), as they relate
to our business and across other industries, support
our Board in assessing how we can leverage related
developments to implement change, manage risk and
realise opportunities.
Commercial capability
Strategy
Experience in long-term strategy development,
implementation or oversight, including establishing
effective capital management frameworks and
identifying and responding to strategic risks and
opportunities.
Our Board oversees the development and delivery of
strategy and that our allocation of capital supports our
strategic goals. As we continue to develop our
portfolio we will draw from Directors’ previous
experience, particularly at other companies that face
long industry cycles and commodity price volatility.
Financial acumen
Proficiency in financial accounting and reporting,
understanding of key drivers of financial performance
and the capability to evaluate the adequacy of
financial and risk controls.
Our Directors must be able to understand the financial
drivers of our business and evaluate our financial
statements and other periodic corporate reports,
including how sustainability factors can impact
financial performance and responsibly create long-
term value.
Capital projects
Experience with projects involving large-scale capital
outlays and long-term investment horizons in the
planning and execution phases.
Our Board needs to consider all project risks and
returns in the context of our strategy and capital
management framework.
Corporate development
Experience in business development, equity and debt
funding strategies, capital and debt raising and other
complex corporate transactions including mergers,
acquisitions and divestments.
Directors with experience assessing complex business
transactions contribute to our Board’s evaluation of
corporate development opportunities to support value
creation and drive competitive advantage.
Global business experience
Geographic experience
Experience working in multiple geographies,
understanding of global markets and exposure to
diverse political, economic, cultural and regulatory
business environments.
Strong knowledge of the markets we operate in now
and those we may enter in the future, contributes to
our Board’s oversight of strategy.
Highly skilled – having or demonstrating a high degree of knowledge or skill; high level of expertise/mastery and experience in work that requires that skill.
Skilled – having or showing the knowledge, ability, or training to perform a certain activity or task well; trained or experienced in work that requires that skill.
Knowledgeable – well-informed, well conversant in the area in which he or she has gained knowledge and understanding.
South32 Annual Report 2026
132 Governance
Governance continued
Governance and compliance
Risk management
Experience implementing or overseeing robust risk
management frameworks in large or medium-sized
organisations with global operations, and the ability to
identify, understand and oversee the management of
existing, new and emerging material and strategic
risks.
Our Board needs to be able to assess the adequacy of
our risk management framework and evaluate
management’s response to material and strategic
risks.
Public policy
Experience focused on public policy and interacting
with regulators.
Our Board needs to know what we can or should do to
shape public policy, as well as how public policy
changes may impact our strategy.
Regulatory and legal compliance
Familiarity with legal and regulatory compliance
(including security exchanges) and experience
monitoring and responding to changing legal and
regulatory landscapes.
Our Board oversees our internal controls and systems
for monitoring ethical and legal compliance, including
our stock exchange listings. Our Board needs to be
aware of, and anticipate, legal and regulatory risks that
may impact our operations, performance or social
licence to operate.
Collective Board skill level
Description Relevance to South32
Sustainability
Health and safety
Knowledge and experience in physical and
psychological health and safety management,
performance and governance, and building a strong
safety culture.
Nothing is more important than the health, safety and
wellbeing of our employees, contractors, visitors and
communities. Our Board oversees that our approach
to health and safety, culture and governance supports
our commitment to provide and maintain a safe
workplace.
Environment and climate change
Demonstrable understanding of the key
environmental risks and opportunities for a global
mining company, including fluency in the implications
of climate change.
We recognise the importance of managing climate
and nature-related risks and opportunities, and our
Board oversees that these factors are integrated into
our strategy, including mitigation and adaptation, and
the availability and protection of natural resources
such as water, air, biodiversity and ecosystems, not
only for our business but all relevant stakeholders.
Social performance
Experience managing or overseeing the social impacts
of business operations and partnering with
communities and other stakeholders to minimise
adverse impacts and create lasting social and
economic value.
Working with our communities and other stakeholders
to create shared value and achieve our shared goals is
integral to our purpose. Our Board oversees that our
approach to social performance and related
governance is in line with our purpose and supports
our objectives to create lasting social and economic
value where we operate, preserve cultural heritage
and respect human rights.
Highly skilled – having or demonstrating a high degree of knowledge or skill; high level of expertise/mastery and experience in work that requires that skill.
Skilled – having or showing the knowledge, ability, or training to perform a certain activity or task well; trained or experienced in work that requires that skill.
Knowledgeable – well-informed, well conversant in the area in which he or she has gained knowledge and understanding.
South32 Annual Report 2026
133 Governance
Supplementing the Board’s skills and experience
Our Board understands it must continue to educate itself on the
key and emerging issues, risks and opportunities facing our
business, and evolving community, societal and stakeholder
expectations.
Our Board supplements its skills and experience with the expertise
of management and external subject matter experts and advisers.
Director continuing education
Our program of continuing education for Directors, as overseen by
the Nomination and Governance Committee, is designed to
enhance the capabilities of our Board across a number of areas.
Topics are identified by the Company Secretary, management and
Directors. This includes:
– management presentations and discussions on safety and our
culture
– operational updates and site visits to our operations and local
communities
– updates on corporate governance trends, developments and
issues
– briefings on sustainable development topics
– sessions on cultural heritage and engagement with Indigenous,
Traditional and Tribal Peoples, and training on cultural
awareness
– opportunities to engage with other Directors, Lead Team
members and key personnel
– external briefings on select matters or topics
– internal compliance training on our Code, anti-bribery and
corruption, continuous disclosure, competition law and human
rights
– opportunities to participate in external courses and
conferences, including those offered by the Australian Institute
of Company Directors
– other reports and updates as required.
BOARD AND COMMITTEE MEETINGS
Board meetings
There are 10 scheduled meetings of our Board each year and
Committee meetings are also held during this time. Additional
meetings are convened as required to address business-critical
issues.
During FY26, there were 11 Board meetings. Six of these were held
face-to-face at one of our offices or geographic areas of operation.
The additional non-scheduled meeting consisted of a Board
subcommittee which considered the proposed sale of our
aluminium value chain assets to Alcoa Corporation, for which a
binding conditional agreement was entered into on 30 June 2026
6
.
Our Chair sets the agenda for each Board meeting, with the CEO
and the Company Secretary. The meetings typically include:
– Minutes of the previous meeting and matters arising
– Report from our Chair
– Update on governance matters
– CEO’s report
– Operational performance
– Taylor execution update
– Finance report
– Commercial report
– Reports on major projects and strategic matters
– Board Committee Chair reports
– Continuous disclosure checkpoint
– Closed sessions with Directors and closed sessions with Non-
Executive Directors only.
Our Directors receive regular updates from management on a
range of issues including safety (with a broad focus covering both
physical and psychosocial safety, as well as sexual harassment),
climate change, nature, evolving regulations and policy
developments, workplace culture, inclusion and diversity, cultural
heritage, community matters, business integrity and litigation.
Additionally, they receive reports for discussion on operational
performance, corporate culture and leadership, corporate
governance, and other business matters, including market updates
and research.
Between meetings, our Board receives regular reports from senior
management on matters, including (but not limited to):
– sustainability (including health and safety) performance
– financial and production performance
– AI, cybersecurity and privacy
– government relations and political affairs
– investor relations-hosted engagements (including ESG updates)
– project updates (including pending investment decisions) and
other significant business imperatives
– market and commodity updates
– relevant media coverage.
South32 Annual Report 2026
134 Governance
Governance continued
6.
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.
Board Committee meetings
Our Board has established four standing Committees:
– Nomination and Governance Committee
– Remuneration Committee
– Risk and Audit Committee
– Sustainability Committee.
When considered appropriate, our Board also convenes ad hoc committees to preside over particular matters.
Each standing Committee works within its Terms of Reference and operates in accordance with Board-approved committee processes
and procedures. Each of the Committee’s Terms of Reference was reviewed in FY26 and two were updated, for the Risk and Audit
Committee and the Sustainability Committee. These are available at www.south32.net.
Each Committee Chair reports to the Board on its activities and material matters arising out of Committee meetings and considers if any
should be advised to any other Committee.
All Directors are invited to attend and encouraged to participate in Committee meetings, provided there are no potential or actual conflicts
of interest. All Directors generally attend all Committee meetings.
The external audit engagement partner has a standing invitation to attend Risk and Audit Committee meetings, including to discuss audit
results. The Risk and Audit Committee can, and does, meet with the external auditor, with and without management present.
Our Company Secretary
Claire Tolcon (LLB, BComm, FGIA, GAICD) is our Head of Legal, Company Secretariat & Business Integrity. She was appointed Company
Secretary on 30 October 2020 and Vice President Legal in 2024 (with accountability for legal, company secretariat and business integrity).
Claire joined South32 in 2017 and was a corporate lawyer in our legal team before moving into company secretariat. Before joining
South32, Claire was a partner of a corporate law firm in Perth, then held the role of General Counsel and Company Secretary for a number
of ASX-listed entities. She holds a Bachelor of Laws and Bachelor of Commerce from Murdoch University, a Graduate Diploma of Applied
Finance and Investment from Kaplan Business School, and is a Fellow of the Governance Institute of Australia.
Our Company Secretary, through the Chair, is accountable to the Board on all matters relating to the proper functioning of the Board and
its Committees. You can find more information about the Company Secretary’s responsibilities in the Board Charter at www.south32.net.
Board and Committee meeting attendance in FY26
Committee
Appointments Board
Nomination and
Governance Committee Remuneration Committee
Risk and Audit
Committee
Sustainability
Committee
Attended / Eligible Attended / Eligible Attended / Eligible Attended / Eligible Attended / Eligible
K Wood AM (Chair)
7
8 / 8 5 / 5 4 / 4 6 / - 5 / -
S Pearce (Chair)
8
11 / 11 7 / 7 6 / 6 8 / 8 7 / -
G Kerr (CEO)
9
11 / 11 6 / - 6 / - 6 / - 6 / -
F Cooper AO
10
5 / 5 3 / 3 3 / 3 4 / 4 3 / -
G Healy
11
6 / 6 4 / 4 3 / 3 4 / - 4 / -
S Kaufman
12
3 / 3 2 / 1 2 / - 1 / - 2 / 1
X Liu
11 / 11 7 / 7 6 / - 8 / 8 7 / 7
C Mesquita
11 / 11 7 / 7 6 / - 8 / - 7 / 7
M Msimang
11 / 11 7 / 7 6 / - 8 / 8 7 / 7
N Mtoba
13
5 / 5 3 / 3 3 / - 4 / 4 3 / -
J Nelson
11 / 11 7 / 7 6 / - 8 / - 7 / 7
W Osborn
11 / 11 7 / 7 6 / 6 8 / - 7 / 7
S Warburton
14
10 / 11 7 / 7 6 / - 8 / 8 7 / -
C Chair Nomination and Governance Committee Remuneration Committee Risk and Audit Committee Sustainability Committee
Attended indicates the number of Board or Committee meetings the Director attended.
Eligible indicates the number of Board or Committee meetings held while the Director was a Board or Committee member.
South32 Annual Report 2026
135 Governance
7.
Ms Karen Wood AM served on the Board from 1 November 2017 and was Chair of the Board and the Nomination and Governance Committee from 12 April 2019 until she retired on 1
March 2026.
8.
Mr Stephen Pearce was appointed Chair of the Board and Chair of the Nomination and Governance Committee on 1 March 2026.
9.
Mr Graham Kerr was CEO and Managing Director from 21 January 2015 until he resigned on 30 June 2026.
10.
Mr Frank Cooper AO served on the Board from 7 May 2015 until he retired on 23 October 2025.
11.
Mr Geoff Healy was appointed to the Board, and the Nomination and Governance Committee and Remuneration Committee, on 2 December 2025.
12.
Ms Sinead Kaufman was appointed to the Board on 1 April 2026. She was appointed to the Nomination and Governance Committee and Sustainability Committee on 1 May 2026.
13.
Dr Ntombifuthi (Futhi) Mtoba served on the Board from 7 May 2015 until she retired on 23 October 2025.
14.
Ms Sharon Warburton was appointed Chair of Risk and Audit Committee on 23 October 2025.
C
C
C
C
C
C
NOMINATION AND GOVERNANCE COMMITTEE
Assists the board with reviewing its composition and evaluating its performance, succession planning and oversight of the
Group's corporate governance practices.
Composition requirements:
√ Minimum three members
√ Non-Executive Directors only
√ Majority independent Directors
√ Independent Director as Chair
Members:
〉 Ms K Wood AM (Chair until 1
March 2026)
〉 Mr S Pearce (Chair from 1 March
2026)
〉 Mr F Cooper AO (until 23
October 2025)
〉 Mr G Healy (from 2 December
2025)
〉 Ms S Kaufman (from 1 May
2026)
〉 Dr X Liu
〉 Mr C Mesquita
〉 Ms M Msimang
〉 Dr N Mtoba (until 23 October
2025)
〉 Ms J Nelson
〉 Mr W Osborn
〉 Ms S Warburton
Committee’s key responsibilities:
〉 Make recommendations to the Board on
matters of corporate governance,
including any proposed changes to
existing structures or practices, and
oversee the effectiveness of the Group’s
corporate governance framework and
practices.
〉 Review the size and composition of the
Board, including the mix of skills,
competencies, experience,
independence, knowledge and diversity.
〉 Oversee succession planning for the
Board, Board Chair, Committees,
Committee Chairs, CEO, Lead Team,
identified critical roles and key talent.
〉 Oversee Board, Committee and Director
performance evaluation.
〉 Oversee the training and development
program for Directors, including Director
induction programs and to address
potential gaps in skills, competencies,
knowledge and experience.
〉 Oversee the evaluation and
appointment process for prospective
Directors, including ensuring that
appropriate background and due
diligence checks are undertaken.
FY26 key activities and focus areas:
〉 Considered Chair, Director, Committee
and broader Board succession planning,
and endorsed the appointment of Mr
Pearce as Chair and the appointments
of Mr Healy and Ms Kaufman as Non-
Executive Directors.
〉 Endorsed the composition of each
Board Committee, including changes to
Committee membership and leadership.
〉 Endorsed the election of Ms Msimang
and Mr Pearce as Non-Executive
Directors at the 2025 AGM, taking into
consideration their performance, skills,
experience, independence and time
commitments.
〉 Endorsed the appointment of Ms
Warburton as Chair of the Risk and Audit
Committee.
〉 Considered the Deputy CEO induction
and transition plan.
〉 Maintained oversight of key talent within
the Group.
〉 Endorsed the Corporate Governance
chapter in the Annual Report 2025, and
2025 Notice of AGM.
〉 Considered the results of the 2026
Board, Committee and Director
evaluation.
〉 Considered the training and
development program for Directors.
〉 Considered governance developments
and emerging governance expectations
relevant to the Group.
South32 Annual Report 2026
136 Governance
Governance continued
REMUNERATION COMMITTEE
Assists the Board to oversee the Group's remuneration policy and the remuneration and benefits framework for all of South32.
Composition requirements:
√ Minimum three members
√ Non-Executive Directors only
√ Majority independent Directors
√ Independent Director as Chair
Members:
〉 Mr W Osborn (Chair)
〉 Mr F Cooper AO (until 23
October 2025)
〉 Mr G Healy (from 2 December
2025)
〉 Mr S Pearce
〉 Ms K Wood AM (until 1 March
2026)
The Committee’s key responsibilities:
〉 Oversee the Company’s remuneration
and benefits framework and its
application to the CEO, Lead Team, Non-
Executive Directors and employees as a
whole.
〉 Consider and endorse to the Board the
remuneration arrangements for the
Chair and Non-Executive Directors.
〉 Oversee and endorse to the Board the
Remuneration Report and advise on
remuneration-related resolutions for
shareholder approval.
〉 Endorse to the Board the annual
Business Scorecard and outcomes,
including for the CEO, and approve
outcomes for the Lead Team (as well as
application of any modifiers or
adjustments), including overseeing the
application of financial and non-financial
performance measures aligned to the
Group’s strategy and objectives.
〉 Determine annually whether awards will
be made under equity-based plans and
endorse to the Board total proposed
awards for the CEO, and approve
awards for the Lead Team and other
employees under the plans, having
regard to performance, risk outcomes
and alignment with long-term value
creation.
〉 Oversee remuneration outcomes and
practices across the Group to ensure
they remain fair, competitive and
aligned with the Group’s remuneration
framework and objectives.
〉 Consider the alignment of remuneration
outcomes with the Group’s risk
management framework and risk
appetite, including the appropriateness
of any adjustments or modifiers.
FY26 key activities and focus areas:
〉 Endorsed the FY25 Remuneration
Report.
〉 Endorsed the FY25 Business Scorecard
outcome and the FY26 Business
Scorecard update.
〉 Endorsed the CEO’s FY25 performance
and remuneration outcomes and FY26
remuneration arrangements.
〉 Endorsed the CEO’s FY25 equity grant
and approved the same for all other
employees.
〉 Considered the response to the strike
received to the Remuneration report at
the 2025 AGM, including appropriate
stakeholder engagement.
〉 Considered our gender and ethnicity
remuneration review outcomes and
actions to address identified issues.
〉 Considered the Executive Reward
Framework and proposed changes to
remuneration structures.
South32 Annual Report 2026
137 Governance
RISK AND AUDIT COMMITTEE
Assists the Board to oversee the corporate reporting, risk management and assurance practices of the Group.
Composition requirements:
√ Minimum three members
√ Independent Non-Executive
Directors only
√ Independent Director, that is not
the Board Chair, as Chair
√ At least one member with
appropriate financial and
accounting expertise, and the
members of the Committee as a
whole must have sufficient
understanding of the industry in
which the Group operates
Members:
〉 Mr F Cooper AO (Chair until 23
October 2025)
〉 Ms S Warburton (Chair from 23
October 2025)
〉 Dr X Liu
〉 Ms M Msimang
〉 Dr N Mtoba (until 23 October
2025)
〉 Mr S Pearce
The Committee's key responsibilities:
〉 Oversee corporate reporting processes
designed to safeguard the integrity of
corporate reporting and facilitate
independent verification, including
processes to verify the integrity of
material disclosures that are not subject
to external audit or review.
〉 Review and monitor the reporting of
related party transactions.
〉 Review asset valuation and impairment
trigger assessments and make any
necessary recommendations to the
Board.
〉 Monitor and review the independence
and performance of the external auditor,
including oversight of audit planning,
audit scope, audit fees, and
management’s response to audit
findings and recommendations.
〉 Oversee the effectiveness,
independence and objectivity of the
internal audit function, including the
implications of internal audit findings.
〉 Oversee management’s implementation
of the system of risk management
(including internal controls) having
regard to the risk appetite (and
endorsing it for Board approval),
including reviewing and assessing the
effectiveness of those systems and
reporting the outcomes of such reviews
to the Board.
〉 Review any material incident involving
fraud or a breakdown of risk controls
and the ‘lessons learned’.
〉 Review the effectiveness of the Group’s
policies, processes and reporting
systems for detecting, reporting and
preventing unethical, unlawful and
dishonest conduct, fraud, breaches of
anti-corruption laws and whistleblowing.
〉 Oversee the management of
cybersecurity, and review the
effectiveness of systems and processes
for detecting, reporting and responding
to cybersecurity and information loss
risks.
〉 Recommend to the Remuneration
Committee appropriate metrics for any
risk management component of the
annual Business Scorecard for the CEO
and the Lead Team, and determine the
outcome for recommendation to the
Remuneration Committee.
〉 Assist the Board with matters pertaining
to capital management, litigation,
acquisitions and divestments, mineral
resource and reserve estimates and tax
affairs of the Group, including oversight
of the Group’s capital structure and
funding arrangements.
〉 Consider any report or advice from the
Sustainability Committee on material
exposures to sustainability-related risks
and opportunities and associated
disclosures under applicable accounting
standards, including overseeing the
financial reporting implications of
sustainability-related risks and
opportunities and reviewing relevant
disclosures in the Group’s financial
statements.
FY26 key activities and focus areas:
〉 Assessed and endorsed the FY25
financial statements and Directors’
Report, and the FY26 half year financial
results, including consideration of key
accounting judgements and impairment
assessments.
〉 Endorsed the payment of the FY25 final
dividend and FY26 interim dividend.
〉 Endorsed the extension of the on-
market share buy-back program to 11
September 2026, and subsequently to
26 February 2027, and considered
broader capital management and
funding matters.
〉 Endorsed the FY25 Business Scorecard
outcome to the Remuneration
Committee.
〉 Endorsed the Risk Management chapter
of the 2025 Annual Report .
〉 Endorsed the Risk Monitoring Report
and amendments to the Risk Appetite
Statement, and considered the Risk and
Assurance Framework.
〉 Considered internal audit reports,
monitored delivery of the FY26 internal
audit plan and approved the FY27/FY28
internal audit plan.
〉 Monitored the performance and
independence of the external auditor,
including oversight of the half-year
review and year-end audit, and
consideration of key audit findings and
areas of judgement.
〉 Considered the non-cash impairment
expense for Mozal Aluminium in the
FY25 financial results.
〉 Provided oversight of tax matters
affecting the Group and its operations,
and other accounting matters.
〉 Approved the FY26 Sustainability
External Assurance approach and
scope.
〉 Considered management updates on
cybersecurity and privacy matters,
Litigation and Business Integrity
Reports, and Workplace Behaviour
Reports.
South32 Annual Report 2026
138 Governance
Governance continued
SUSTAINABILITY COMMITTEE
Assists the Board to oversee the sustainability management, performance, assurance and reporting practices of the Group.
Composition requirements:
√ Minimum three members
√ Non-Executive Directors only
√ Majority independent Directors
√ Independent Director as Chair
Members:
〉 Dr X Liu (Chair)
〉 Ms S Kaufman (from 1 May
2026)
〉 Mr C Mesquita
〉 Ms M Msimang
〉 Ms J Nelson
〉 Mr W Osborn
The Committee’s key responsibilities:
〉 Review and monitor the adequacy and
effectiveness of the management
systems and frameworks associated
with material sustainability matters.
〉 Oversee, in conjunction with the Risk
and Audit Committee, as appropriate,
the processes for identifying, assessing,
prioritising and managing the Group’s
sustainability-related risks and
opportunities, and the system for
compliance with applicable
sustainability-related laws, regulations
and other requirements.
〉 Review the Group’s performance in
relation to sustainability-related matters,
and material exposures to sustainability-
related risks and opportunities, and
advise the Board or the Risk and Audit
Committee, as appropriate.
〉 Provide advice to the Remuneration
Committee, as required, on the
incorporation of sustainability-related
considerations into executive
remuneration, including recommending
sustainability-related performance
measures and outcomes for the annual
Business Scorecard, the Chief Executive
Officer and the Lead Team.
〉 Endorse for Board approval the Group’s
material public sustainability
commitments (including climate-related
commitments) and monitor
performance against those
commitments.
〉 Review and endorse for Board approval
the sustainability-related disclosures in
the Group's Annual Report and the
Group's Modern Slavery Statement.
〉 Review and endorse to the Risk and
Audit Committee the scope of the
external sustainability assurance plan
and the sustainability-related
components of the annual internal audit
plan.
FY26 key activities and focus areas:
〉 Engaged with management on the
response after a contractor, Simon
Mukwarami, was fatally injured at
Worsley Alumina in March 2026.
〉 Monitored the progress of our Safety
Improvement Plan, and considered the
findings of significant health and safety
event investigations.
〉 Endorsed the sustainability component
of the FY25 Business Scorecard and the
proposed FY26 long-term incentive
climate change strategic measures.
〉 Endorsed for Board approval our FY25
Sustainability-related disclosures and
Modern Slavery Statement, considered
our Climate Change Action Plan 2025,
and reviewed updates on sustainability
governance and disclosure frameworks.
〉 Considered our Risk Management
Framework, and H2 FY25 and H1 FY26
Risk Monitoring Reports.
〉 Considered the sustainability-related
outcomes of the internal audit report.
〉 Considered updates on tailings
governance.
〉 Considered sustainability matters such
as climate change and environmental
performance, including emissions
trends, progress against the Climate
Change Action Plan and broader
environmental risks, and closure
oversight.
〉 Considered updates on sustainability
governance, including changes to the
Sustainability Policy, Committee Terms
of Reference and the broader
sustainability governance framework.
〉 Considered social and community
matters, including cultural heritage and
stakeholder engagement topics.
〉 Considered emerging sustainability-
related risks and external
developments.
South32 Annual Report 2026
139 Governance
SUSTAINABILITY AND CLIMATE GOVERNANCE
In the Sustainability section of this annual report you can read about sustainability
governance on page 60 and climate governance on page 78.
CORPORATE ETHICAL STANDARDS
Our Code
Our Code of Business Conduct (our Code) outlines the standards of behaviour expected of our employees, contractors, executive
management, Directors, suppliers and joint venture partners operating on our behalf. Employees must complete comprehensive
Code training every three years, and undertake an annual online assessment.
Speak Up
Our Speak Up Policy
encourages anyone to report a
business conduct concern. It
outlines how to do so, what
happens when a report is made,
and how we will protect the
reporter. Reports can be
anonymous and we do not
tolerate any form of retaliation
against a reporter.
Our Risk and Audit Committee
is informed of material incidents
reported, and material concerns
under the Policy are reported to
our Board.
Our employees are also
encouraged to be Active
Bystanders, calling out
inappropriate workplace
conduct.
All reported sexual harassment
events are investigated. In FY25,
we enhanced reporting so the
CEO and Sustainability
Committee are regularly
updated on the management of
sexual harassment risks,
including notification of any
events.
Anti-bribery and
corruption
Our Code prohibits fraud,
bribery and corruption in any
form, and requires compliance
with applicable anti-bribery and
corruption (ABC) laws wherever
we conduct business.
Our Code is supported by our
ABC Policy and our global risk-
based ABC compliance
program.
Employees identified as being
at higher risk of exposure to
bribery and corruption are
required to complete our ABC
compliance training, with
refresher training provided in
accordance with our internal
training plans.
Our Board and the Risk and
Audit Committee are informed
of material ABC concerns,
including material breaches of
our ABC Policy and related
procedures.
Competing fairly
Our Code requires that we
compete fairly, ethically and in
compliance with applicable
competition laws across the
world. It also outlines the
requirement that we actively
engage and cooperate with
competition authorities.
Our Code is supported by our
risk-based competition law
compliance program, which
includes training of people in
higher-risk roles.
Conflicts of interest
Our Code expects us to act in
the best interests of the Group
and not to be in conflict with
those interests.
It also sets out our
responsibilities for identifying,
avoiding, declaring, and
resolving actual, potential, or
perceived conflicts of interest.
Under Australian law, Directors
have a duty to avoid conflicts of
interest.
In accordance with the Board
Charter, our Directors are not
permitted to take an action that
has the effect of prioritising
their interests over the interests
of the Company.
Breaches of our Code
We view a breach of our Code as a serious matter. Actions and
behaviours misaligned to our expected behaviours and our
Code are managed through our disciplinary processes which
may, and have, resulted in disciplinary action up to and
including dismissal.
Our Business Conduct Committee, made up of senior leaders,
provides guidance and oversight on material business conduct
concerns. Such concerns are reviewed by our Business Conduct
Committee, with a focus on consistent application of our Code
and disciplinary outcomes.
All material cases (including sexual harassment) are reported to
the Business Conduct Committee and relevant Board
Committee. The Risk and Audit Committee receives biannual
reporting on workplace conduct matters, to support oversight
of trends and organisational risk.
Dealing in securities
Our Securities Dealing Policy provides guidance on dealing in
our securities, inside information, and the prohibition on insider
trading. It applies to our Directors, officers, employees,
contractors and secondees.
It specifically prohibits Directors and Lead Team members
from:
– trading in derivative products issued over or in respect of
our securities
– dealing in our securities on a short-term trading basis
– ‘short selling’ our securities
– entering into margin lending or other secured financing
arrangements with respect to our securities
– entering into any hedging arrangement that limits their
exposure to our securities.
Learn more about our Code (including our Speak Up Policy, competing fairly and conflicts of interest) and our Anti-bribery and Corruption Policy, in a
variety of languages, at www.south32.net.
South32 Annual Report 2026
140 Governance
Governance continued
INCLUSION AND DIVERSITY
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.
Our approach to this is overseen by our Board and is governed by
our Inclusion and Diversity Policy which applies to our Board
(including its Committees), employees and third parties who act on
behalf of South32, and those operations that are operated by
South32.
The Policy is implemented through:
– board-approved measurable objectives for inclusion and
diversity
– an annual inclusion and diversity action plan, approved by our
CEO, which defines our Group-level inclusion and diversity goals
for the financial year, aligned to our measurable objectives
– our internal inclusion and diversity standard, which outlines the
minimum requirements and expected practices across our
people management systems, including recruitment, talent
management and training, to create an inclusive culture and
promote performance.
Additionally, the Remuneration Committee reviews biennially
employee remuneration by gender and ethnicity, and actions taken
by management to address any identified issues. The Board also
conducts this review with regard to the outcomes of the relevant
Workplace Gender Equity Agency review.
The Nomination and Governance Committee assists the Board to
review its composition, including the diversity represented by
Directors.
Promoting leadership inclusion and diversity
We advocate for the benefits of inclusion and diversity within and
beyond South32. For example:
– we are a signatory to HESTA 40:40 Vision, an investor-led
initiative to achieve gender balance in executive leadership
across all ASX300 companies by 2030
– our Non-Executive Director Dr Xiaoling Liu and members of our
Lead Team are members of Chief Executive Women (Australia)
(CEW), a group which works to engage and influence all levels of
Australian business and government to achieve gender balance,
with several of our employees completing the CEW Leaders
Program each year
– all operations and many of our corporate locations have an
inclusion and diversity committee focused on progressing local
initiatives.
Learn more
– Our vision for diversity considers a broad definition of difference, including but not limited to gender, ethnicity, nationality,
cultural background, geographic location, language/accent, religious beliefs, socioeconomic background, neurodiversity,
disability, physical attributes, appearance, age, education, family responsibilities and sexuality.
– To find out how we embed inclusion and diversity into our culture and ways of working, about our inclusion and diversity
measurable objectives and how we have performed against these, and our diversity metrics, go to People and Culture in the
Sustainability section on page 63.
– Read our Inclusion and Diversity Policy at www.south32.net.
South32 Annual Report 2026
141 Governance
OTHER GOVERNANCE MATTERS
Risk management
Our Risk Management Policy sets our approach to risk
management so our strategic direction is appropriate in light of the
economic, social, political, legal and regulatory environments in
which we operate.
Our Board approves the risk appetite developed by management
and reviews our risk profile, determining the nature and extent of
risks we are prepared to take in the pursuit of our objectives.
The Risk and Audit Committee reviews any significant changes to
material and strategic risks identified by management and
considers whether they remain within the risk appetite.
The Risk and Audit Committee also assists our Board to review the
adequacy of our risk management framework to satisfy itself that it
continues to be sound and that South32 is operating with due
regard to the risk appetite set by the Board.
The results of these reviews, which are conducted at least annually,
are reported to the Board. The FY26 review assessed our risk
management framework as effective.
Designing and improving the effectiveness of risk management is
performed by our Group Risk & Governance function which for
FY26 was overseen by our Vice President Health, Safety and Asset
Management. Oversight of the effectiveness of our risk
management framework is conducted by our Group Assurance
function which reports to our Chief Financial Officer.
During FY26, both the Group Manager Assurance and Vice
President Health, Safety & Asset Management were standing
attendees at Risk and Audit Committee meetings.
Internal audit
The Group Assurance function conducts internal audit reviews,
evaluating and identifying areas where management should
improve the effectiveness of its risk management, control,
compliance and governance processes. When conducting these
reviews, the function is supported by a combination of internal and
external resources.
The Risk and Audit Committee oversees the effectiveness,
independence and objectivity of the Group Assurance function,
including approving the annual internal audit plan. The Group
Manager Assurance meets with the Risk and Audit Committee on a
periodic basis without the presence of management.
Learn more
– Our Risk Management Policy can be found at
www.south32.net.
– Details about our current strategic risks, and our
three lines of accountability for risk management, are
in our Risk management section on page 49.
– Our approach to managing the sustainability aspects
of our risks is in the Sustainability section on page 58.
Corporate reporting matters
Before approving the financial statements for the FY26 half year
and FY26 full year, the Board received a declaration from the CEO
and CFO stating that:
– in their opinion, the Group’s financial records have been properly
maintained and that the financial statements comply with the
relevant accounting standards and give a true and fair view of
the Group’s financial position and performance
– the opinion has been formed based on a sound system of risk
management and internal control which is operating effectively.
Both management and the Directors have provided appropriate
sign-offs in relation to the mandatory climate-related disclosures in
the Sustainability Report.
Verification
We complete a documented internal verification of our periodic
corporate reports that are released to the stock exchanges on
which our shares are listed, including those corporate reports that
are not audited or reviewed by external auditors.
The content of these corporate reports is verified with reference to,
as appropriate, reliable, written source materials and data or sign-
off from the identified content owner. It progresses through a
hierarchy of reviews and approvals designed to support the
accuracy and completeness of disclosures before release to the
relevant exchange.
Financial reporting risk is a focus area for our Board, the Risk and
Audit Committee and our Lead Team, and the effectiveness of our
internal controls for managing financial reporting risk is reviewed
regularly. Even effective controls can only provide reasonable
assurance of attaining their design objectives.
Information about our financial risk management objectives and
policies is set out in Note 19.(b) Financial risk management
objectives and policies to the financial statements on page 213.
Market disclosure
Our Market Disclosure and Communications Policy governs our
commitment to continuous disclosure to keep the market fully
informed and provide all investors with equal and timely access to
material information. The Policy, as approved by our Board, sets out
the roles and responsibilities to achieve compliance with our
disclosure obligations.
Announcements are subject to approval protocols set out in the
Policy. Our Board is responsible for compliance with our disclosure
obligations and approves market announcements about certain
matters. The Board receives copies of other material
announcements promptly after their release.
Read the Market Disclosure and Communications Policy at
www.south32.net.
South32 Annual Report 2026
142 Governance
Governance continued
OUR LEAD TEAM
Working under the guidance and supervision of the CEO, our Lead Team’s role is to progress the Group’s strategy in a way
that aligns with our purpose, values and Code, and the risk appetite developed by management and approved by our Board.
Although each Lead Team member leads a specific part of our business, they work as a collective towards our business goals.
The CEO and Lead Team regularly report to our Board on progress towards, and matters material to, our strategy, performance (including
safety, operational, financial and ESG matters), our people and culture, risk management and assurance, and compliance with our Code.
Meetings between members of our Board and Lead Team help the Board to carry out its responsibilities and strengthen its relationship
with management.
Lead Team appointments
Appointment process
Appointments to the Lead Team are approved by our Board and
appropriate checks are undertaken prior to appointment.
Lead Team members are employed directly under a written
executive services agreement, which sets out their role and
responsibilities and the terms and conditions of their employment.
FY26 changes
During FY26 there were a number of changes to the composition of
our Lead Team, the most significant of which was Matt Daley's
appointment as Deputy CEO in February 2026 and his subsequent
succession to Graham Kerr as CEO on 1 July 2026.
Following the end of FY26, South32 announced further changes to
its Lead Team and operating model to support the next phase of
the Company's transformation after entering into the agreement to
sell its aluminium value chain assets. These changes included:
– David Palmer joining as Chief Technical Officer on 3 August 2026
(with that role expanding to Chief Technical and Operating
Officer – Base Metals on 1 September 2026)
– Noel Pillay assuming the role of Chief Operating Officer
responsible for the Aluminium Business Unit, which is subject to
a sale to Alcoa Corporation. In this role he reports to Matt Daley
and is no longer a member of the Lead Team.
Erwin Schaufler also announced his decision to leave South32 and
commenced the transition of Technical and Commercial
responsibilities in advance of his departure.
Certain Group functions were also realigned as part of a broader
simplification of our operating model and these portfolio changes
are reflected in the Lead Team biographies on pages 144 and 145.
Lead Team evaluation
Evaluation process
On recommendation of the Remuneration Committee, our Board
annually evaluates the CEO’s performance and approves the CEO’s
individual performance score, including outcomes and awards to
be made under our short-term incentive (STI) and long-term
incentive (LTI).
The individual performance of Lead Team members is evaluated
annually by our CEO as part of the Group’s employee performance
review process and the Remuneration Committee considers and
approves the outcomes and awards to be made to them under the
STI and LTI.
FY26 evaluation outcomes
For FY26, the performance of the CEO was reviewed by the
Remuneration Committee and approved by the Board. The
performance of other members of the Company’s Lead Team
during FY26 was reviewed by the CEO and approved by the
Remuneration Committee.
For further details, refer to the FY26 Executive KMP remuneration
outcome summary and our Executive reward practices in the
Remuneration Report, which starts on page 150.
LEAD TEAM COMPOSITION
We measure our inclusion and diversity progress through a set of measurable objectives which are approved annually by our Board. One of
these objectives is to maintain representation of women in our Lead Team at a minimum of 40%
15
.
Gender diversity as at 30 June 2026
16
(all Lead Team and Company Secretary)
3
5
Ethnicity as at 30 June 2026
16
(all Lead Team and Company Secretary)
7
1
South32 Annual Report 2026
143 Governance
15.
Female representation on the Lead Team was below the 40% objective at 30 June 2026. Following changes to Lead Team composition after year end, female representation
increased to 40% effective 3 August 2026.
16.
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.
White British or other White (including
minority-white groups)
Asian/Asian British
Female
Male
OUR LEAD TEAM
17
Matt Daley
BE (Mining) (Hons), GradDip
Chief Executive Officer and Managing
Director
See page 122 for Matt Daley’s qualifications
and experience.
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.
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.
South32 Annual Report 2026
144 Governance
Governance continued
17.
This section provides details of our Lead Team as at the date of this Report
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.
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
145 Governance
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 Colombia
18
, and Mozal
Aluminium in Mozambique was placed on care and maintenance on
15 March 2026
19
.
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
billion
20
.
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 Matoso
18
– Mozal Aluminium being placed on care and maintenance
19
– entering into a binding conditional agreement to sell our
aluminium value chain assets
20
– 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
expansion
21
.
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
South32 Annual Report 2026
146 Governance
Governance continued
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$5.6b 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.
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
147 Governance
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.
South32 Annual Report 2026
148 Governance
Governance continued
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.
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
149 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
150 Governance
CREATING
STAKEHOLDER
VALUE
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
151 Governance
From the Remuneration Committee Chair
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
152 Governance
Remuneration Report
RESPONSE TO FY25 REMUNERATION STRIKE
The Board engaged with major shareholders and proxy advisors to understand the key feedback that led to a strike against our 2025
Remuneration Report. A summary of these key themes and South32's response are presented below.
Key feedback
Response
Reference
Salary
Quantum of increase in
fixed pay for Graham
Kerr as CEO for FY26
South32 competes for executive talent with global companies, and the remuneration framework must be
globally competitive to attract, retain and engage high-calibre executives to deliver our strategy and
maintain strong operational performance.
The separation of salary and superannuation is in line with our benchmarking and the increase of
superannuation from 1 July 2025 aligned with the broader South32 workforce, with STI and LTI opportunity
calculated on salary only.
The Board additionally reviewed Graham Kerr's salary and considered the 7.8% increase effective 1
September 2025 appropriate with respect to the following:
– a 10% salary differential between Matt and Graham was appropriate considering Graham had led
South32 for more than a decade as the inaugural CEO
– that Graham remained as CEO throughout FY26 to continue delivering on critical strategic project
responsibilities including the finalisation of the proposed sale of our aluminium value chain assets to
Alcoa. The transition period also enabled Matt to understand the Company’s assets and its people, as
well as establish the critical investor and stakeholder relationships that are vital to the Company’s
ongoing success.
The Board believes our approach to remuneration has been both prudent and restrained over a long period.
In reaching the decision, the Board was motivated to achieve a fair and appropriate salary review outcome
both for shareholders and Graham.
Page 159
Short-term incentive (STI)
Misalignment of STI
outcomes with company
performance
Each year the Business Scorecard is reviewed and approved by the Board to ensure alignment between STI
metrics and company performance. The Board also assesses the individual performance of the CEO and
other executives against key performance indicators set for the period.
Further, the Board considers the application of a Business Modifier and, over the past 10 years, the Board has
applied downward discretion to Executive KMP on eight occasions to reflect company performance and
executive accountabilities.
Taking into consideration the Business Scorecard outcome, the Board believes Graham's STI outcome, which
included a negative modifier of 20%, was appropriate in the circumstances and reflected company
performance in FY25.
Page 160
Insufficient disclosure of
Business Scorecard
targets and outcomes,
and CEO individual
performance
In recent years, the Board has materially reduced the number of performance metrics and increased
transparency to simplify and enhance the Business Scorecard.
Building on this approach, the FY26 Business Scorecard discloses threshold and maximum performance
levels, and utilises the relevant unit of measure for financial metrics. In addition, descriptions for each
performance metric have been expanded to include their rationale, the basis for setting performance levels,
calculation methods, and references to further detail in the Annual Report.
These changes, including expanded disclosure of the CEO's individual performance, are designed to support
understanding of the design and determination of STI outcomes.
Page 161
Long-term incentive (LTI)
Inclusion of qualitative
strategic measures in
the LTI
Since 2021, the LTI design has comprised 80% quantitative measures (Total Shareholder Return (TSR)) and
20% strategic measures focused on portfolio management and response to climate change. These measures
complement TSR by incentivising management to deliver the strategic portfolio and climate outcomes that
underpin the Company's overall strategy.
The Board considers it important that the LTI includes both quantitative and non-quantitative measures to
provide a balanced assessment of performance. While TSR measures value delivered to shareholders, the
strategic measures recognise progress against key Company priorities delivered over an extended period.
Given the complexity of the strategic measures, the Board considers a qualitative assessment to be the most
appropriate approach. This enables a holistic evaluation of performance over the four-year performance
period and ensures management is appropriately incentivised and accountable for delivering outcomes
aligned to the Company's strategy and stakeholder expectations.
For the FY27 LTI, the strategic measure component will be retained as 20% of the overall performance
assessment, but the Board will make a holistic assessment of performance against portfolio and climate
priorities over the performance period rather than considering them as two separate components. The Board
considers this to be appropriate given climate priorities and outcomes will continue to be shaped by the
decisions South32 makes with respect to its portfolio transformation.
Page 165
South32 Annual Report 2026
153 Governance
FY26 PERFORMANCE AT A GLANCE
The diagrams and table below set out key company performance, shareholder returns, and incentive outcomes for the most recent five
financial years.
Five-year performance summary
Five-year CEO STI and LTI outcomes, share price and dividends
FY22 FY23 FY24 FY25 FY26
STI % of maximum
74 42 73 65 66
LTI % of maximum
0 0 33 15 15.5
Closing share price at end of the financial year (A$)
1
3.94 3.76 3.66 2.91 3.90
Dividends/special dividends paid (US cents per share)
14.2 21.9 3.6 6.5 6.5
CEO incentive outcomes compared to Underlying earnings
This diagram illustrates the CEO’s incentive outcomes alongside
the company’s Underlying earnings attributable to members over
the past five years.
As the Business Scorecard includes measures that are within
executives' control, the Business Scorecard outcome will not always
mirror underlying South32 financial outcomes.
However, the Board has designed the STI, including the use of the
Business Modifier and Individual Outcomes, so that executives are
rewarded for delivering strong performance across areas within
their control, taking into account overall business performance and
shareholder experience.
As the LTI primarily rewards TSR performance over four years it
does not reflect one-year shareholder returns or financial
outcomes.
US$M
% of Maximum
74%
42%
73%
65%
66%
0% 0%
33%
15%
15.5%
Underlying earnings STI LTI
FY22 FY23 FY24 FY25 FY26
0
500
1,000
1,500
2,000
2,500
3,000
0%
25%
50%
75%
100%
South32 Annual Report 2026
154 Governance
Remuneration Report continued
1.
The closing share price for FY21 was A$2.93.
Underlying EBITDA (US$M)
4,755
2,534
1,802
1,928
2,462
FY22 FY23
FY24 FY25 FY26
Underlying earnings
attributable to members
(US$M)
2,602
916
380
666
1,032
FY22 FY23
FY24 FY25 FY26
Basic Underlying earnings
per share (US cents)
56.0
20.0
8.4
14.8
23.0
FY22 FY23
FY24 FY25 FY26
Net cash/(debt) (US$M)
538
-483
-762
123
283
FY22 FY23 FY24
FY25 FY26
TRIF
5.3
5.9
5.1
3.7
3.4
FY22 FY23 FY24 FY25 FY26
Four-year TSR (up to and
including 30 June)
37.0%
41.0%
109.0%
19.6%
12.7%
FY22 FY23 FY24
FY25 FY26
FY26 EXECUTIVE KMP REWARD OVERVIEW
Salary
CEO salary increase
was 7.8%
The separation of salary and superannuation and increase of superannuation from 1 July 2025
to align to the broader South32 workforce provided for a 12.3% movement in salary and
superannuation for Graham Kerr and between 10.2% and 12.5% for our other Executive KMP.
Furthermore, Graham Kerr received a 7.8% salary increase effective 1 September 2025 to
recognise his skill set, tenure and leadership of critical projects and responsibilities. Sandy
Sibenaler received a 4.0% salary increase effective 1 January 2026 due to an increase in her
accountabilities. No other Executive KMP received a salary increase in FY26.
Refer to
page 159
STI
CEO FY26 STI was
66% of maximum
Performance against the Business Scorecard measures resulted in an outcome of 108.0%.
The Board determined to apply a negative Business Modifier to all Executive KMP in
recognition of the tragic fatality at Worsley Alumina as well as the adjustment to the timelines
and growth capital associated with the Hermosa Taylor project. This resulted in a Business
Modifier of -20% for Graham Kerr and Matt Daley, and -10% for Noel Pillay and Sandy Sibenaler.
After assessment of individual performance and behaviours, the overall STI outcome for
Graham Kerr was 66% of maximum, with other Executive KMP outcomes ranging from 60% to
73% of maximum.
Refer to
page 160
LTI
FY23 LTI vesting
outcome was 15.5%
South32 delivered TSR of 12.7% over the four-year performance period, which did not meet
the threshold required for either of the TSR vesting conditions.
The Board assessed the strategic measures and approved vesting outcomes of 9% for
portfolio management and 6.5% for climate change.
Accordingly, the Board approved 15.5% of the FY23 LTI award to vest, with the remaining
84.5% to lapse.
Refer to
page 164
Realised pay
CEO realised pay
was A$5.8M
For FY26, realised pay for Graham Kerr increased compared to the previous year primarily due
to higher salary, superannuation and STI payment.
The Board reviewed all components of remuneration in considering whether the year's reward
outcomes aligned with the remuneration guiding principles and has determined that the FY26
realised pay for the CEO reflects Company performance both in the year and also across the
four-year performance period for the FY23 LTI.
Refer to
page 159
CEO transition
Following the end of the reporting period, on 1 July 2026 Matt Daley took over as CEO and Managing Director. Graham Kerr’s last day as
CEO and Managing Director was 30 June 2026. Graham’s employment with South32 will continue for a transitional period as Strategic
Advisor, with a focus on supporting engagements related to the divestment of our aluminium value chain to Alcoa. Graham’s terms and
conditions of employment remain unchanged in his Strategic Advisor role, except that he will not receive an LTI for FY27. No decisions have
yet been made regarding the treatment of Graham’s unvested equity incentives upon cessation of his employment (refer to page 171 for
rights held by Graham). Matt has not received a salary increase on transitioning into the CEO role.
FY26 Executive remuneration framework updates
As presented in the 2025 Remuneration Report, the Board undertook a review of the executive remuneration framework to ensure it
continues to attract and retain executive talent and align the interests of executives and shareholders. Extensive consultation with
shareholders and proxy advisers was conducted both before the changes were disclosed in the 2025 Remuneration Report and following
its release. The key changes are summarised below.
– Separation of fixed remuneration into salary and superannuation components to increase alignment with market practice among
mining peers and the remuneration structure applied across South32’s broader workforce. Executives retained their existing cash salary
and superannuation contributions were set in line with the local workforce. From FY26, STI and LTI opportunity levels are calculated on
salary only.
– STI shifted from a multiplier to an additive calculation to align with market practice while ensuring that STI outcomes continue to
reflect company and executive performance. From FY26, the Business Scorecard (including application of the business modifier) is
weighted at 70% of the STI outcome, and the individual performance component is weighted at 30% of the STI outcome.
– Replacement of the MSCI World Index with the S&P ASX 100 constituent group as the general comparator group for measuring
relative TSR in the LTI. Following a review of alternative indices, the S&P ASX 100 was selected given the majority of South32’s investors
are Australian-based, investors predominantly benchmark our performance against ASX peers compared to the MSCI, and the
composition of the MSCI World Index having changed significantly since incorporated into the LTI framework.
– Executive minimum shareholding requirement (MSR) increased to strengthen alignment between executive and shareholder interests
and better reflect mining peer practice. The CEO's MSR has increased from 100% of fixed remuneration to 400% of salary, and the MSR
for other Executive KMP has increased from 100% of fixed remuneration to 200% of salary.
– Transitional LTI awards removed in response to stakeholder feedback and reviewing market practice. These awards were previously
provided to address equity vesting gaps for employees promoted to the Lead Team. Transitional LTI awards previously granted will
continue on existing terms, with no new awards granted from FY26.
South32 Annual Report 2026
155 Governance
OUR REWARD FRAMEWORK
The pages of the Remuneration Report that follow (together with the KMP on page 152 and business performance on page 154) have been
prepared in accordance with section 300A of the Corporations Act 2001 (Cth) (the Act) and audited as required by section 308(3C) of the
Act. These sections relate to those persons who were KMP during the financial year.
Remuneration governance
Outlined below are the roles and responsibilities of the Board, Remuneration Committee, management and external advisors in relation to
remuneration for Non-Executive Directors, the Lead Team including the Executive KMP, and employees of South32.
Board
The Board maintains overall responsibility for overseeing the remuneration policy and the principles and
processes that underpin it. It approves the remuneration arrangements for the CEO and Non-Executive
Directors. Changes to the Director fee pool and equity grants to the CEO are approved by shareholders.
Remuneration Committee
The Remuneration Committee approves reward arrangements for the Lead Team, including those appointed
to Executive KMP roles (other than the CEO).
By taking advice from other Board Committees (such as the Sustainability and Risk and Audit Committees),
the Remuneration Committee helps the Board oversee the remuneration policy, its specific application to the
CEO, Lead Team, Non-Executive Directors and, in general, the employees of South32.
The Remuneration Committee provides oversight to gain assurance that remuneration arrangements are
equitable and aligned to the long-term interests of shareholders, operate within our risk framework and
support our purpose, strategy and values.
CEO and management
The CEO makes recommendations to the Remuneration Committee regarding the Lead Team, and how the
remuneration policy and framework applies to employees.
Management provides information and recommendations to the Remuneration Committee to help it
consider and implement approved arrangements.
External advisors
Independent external advisors may be engaged either directly by the Remuneration Committee or via
management. These advisors provide information on remuneration-related issues, including benchmarking
information and market data.
The Remuneration Committee did not receive remuneration recommendations from external advisors,
including remuneration consultants, in relation to KMP in FY26. While no external advisor was appointed in
FY26, an external advisor will be engaged in FY27.
We seek information and analysis from a range of data sources. This allows us to make decisions that are
informed, objective, aligned to the requirements of the Company, and consistent with our guiding principles.
South32 Annual Report 2026
156 Governance
Remuneration Report continued
Executive reward framework
Our remuneration objective
The South32 executive reward framework is designed to motivate performance and align executives to the creation of value for shareholders.
Our remuneration guiding principles
Aligned to our purpose,
strategy and values
Reward for performance Shareholder and executive
alignment
Attract, motivate and retain Simple and transparent
Components of reward for FY26
Salary and superannuation Short-term incentive (STI) Long-term incentive (LTI)
Purpose
Attract and retain executive talent to
lead South32 and remunerate
executives for their role and
responsibilities.
Reward performance against annual
business and individual performance
targets that reflect a balance of key
financial and non-financial measures, as
aligned to the business plan.
Align long-term reward outcomes to
shareholder value creation and strategic
priorities.
Structure
Salary as well as superannuation
provided in line with local workforce
provision.
Executives may elect to receive a
superannuation allowance, payable
upfront in cash, in lieu of employer
superannuation contributions above
statutory requirements.
Annual variable incentive opportunity
with STI outcome delivered:
– 50% in cash
– 50% in STI rights which vest into
South32 shares subject to a two-year
service condition. STI rights receive a
dividend equivalent cash payment
following vesting.
Performance rights to receive South32 shares
subject to meeting performance and service
conditions over a four-year performance
period. LTI is directly linked to:
– relative TSR so that outcomes are aligned
with the shareholder experience over the
longer term
– strategic measures so that outcomes are
aligned to the business priorities that
underpin the long-term success of
South32.
No holding lock applies to vested shares, but
a minimum shareholding requirement must
be met (see below).
Determination
Salary reviewed annually by the
Remuneration Committee considering:
– performance
– responsibilities, skills and
experience
– local workforce increases
– external benchmarking.
2
STI outcomes assessed on:
– Business Scorecard outcomes,
including the application of the
Business Modifier (70%)
– individual performance and
behaviours as aligned to our values
(30%).
LTI performance conditions include:
– total shareholder return (TSR) performance
against S&P Global Mining Index
constituents (53.3%) and S&P ASX 100
constituents (26.7%)
– strategic measures of portfolio
management and climate change (10%
each).
Opportunity
Superannuation of:
– Australia: 14% of salary
– South Africa: 12.5% of salary.
Target STI opportunity:
– 120% of salary.
Maximum STI opportunity:
– 180% of salary.
Maximum LTI opportunity:
– CEO and Deputy CEO: 200% of salary
– other executives: 133% of salary.
Reference
Page 159 Page 160 Page 164
Minimum
shareholding
requirement
To drive a long-term focus and alignment with our shareholders, the minimum shareholding requirement for executives is:
– 400% of salary for the CEO and 200% of salary for other executives
– obtained within five years of appointment to the Lead Team or the CEO role
– valued as the number of shares held (excluding rights) multiplied by the share price at time of assessment.
Refer to page 172 for MSR progress for Executive KMP as at 30 June 2026.
Executive KMP contract terms
Role
Term of agreement Notice period by Executive
3
Notice period by Company Post employment restraint
Executive KMP other
than Deputy CEO
No fixed term 6 months 6 months, with no notice for
serious misconduct
Up to 6 months
Deputy CEO
4
No fixed term 12 months 12 months, with no notice for
serious misconduct
Up to 6 months
South32 Annual Report 2026
157 Governance
2.
External benchmarking references the median of the peer groups who we compete with for talent. These are ASX 100 companies in the materials (metals and mining) or energy
sectors as per the Global Industry Classification Standard, and a global mining peer group comprising the following companies: Agnico Eagle, Alcoa, Anglo American, AngloGold
Ashanti, Antofagasta, Barrick, First Quantum, Fortescue, Freeport-McMoRan, Gold Fields, Kinross Gold, Lundin Mining, Mineral Resources, Newmont, Northern Star and Teck.
3.
One month notice is required by the Executive KMP where a fundamental change occurs that materially diminishes their status, duties, authority or terms and conditions (receiving
payment in lieu of notice). The employment contract for the CEO and Deputy CEO allows resignation without notice if a fundamental change occurs.
4.
Matt Daley became CEO on 1 July 2026. His contract terms remain unchanged.
FY26 remuneration mix
As company and individual performance over the performance period determine reward outcomes, the pay received by Executive KMP each year
will vary. The two diagrams below outline the remuneration mix of the CEO and other Executive KMP, which illustrate the focus on performance-
based remuneration.
5
CEO remuneration mix
6
100%
32%
23%
17%
18%
17%
18%
34%
41%
Minimum
Target
Maximum
Average of other Executive KMP remuneration mix
7
100%
36%
27%
19%
21%
19%
21%
26%
31%
Salary and superannuation STI (cash) STI (deferred rights) LTI
Minimum
Target
Maximum
Linking reward and environmental, social and governance (ESG) performance
The STI and LTI are performance-based components which align remuneration outcomes with our ESG performance as explained below.
– STI: The Business Scorecard includes a balance of financial and non-financial measures that reflect the key focus areas in the financial
year. For FY26, 35% of the Business Scorecard was assessed against sustainability measures, which included safety and health, people,
environment and social performance metrics. The overall Business Scorecard outcome is also subject to the Business Modifier and the
Board has a track record of applying the Business Modifier to reflect non-financial performance including ESG performance. Further
detail is included in the STI section starting on page 160.
– LTI: 20% of the LTI directly links executive reward to the transition of our portfolio towards minerals and metals critical to the world's
energy transition and our response to climate change. These two measures are inherently linked to climate change considerations and
ensure our leadership is incentivised to take a holistic, forward-looking approach that aligns portfolio management with long-term
sustainability outcomes. Detail on the strategic measures and our progress against them is outlined from page 164.
South32 Annual Report 2026
158 Governance
Remuneration Report continued
5.
Deferred STI and LTI in the target and maximum scenarios do not incorporate future share price movements or any dividend equivalent payments that may be made on vesting of
deferred STI rights.
6.
The proportion of at-risk remuneration for Matt Daley as Deputy CEO was 68% at target and 77% at maximum.
7.
The proportion of at-risk remuneration for other Executive KMP was: Sandy Sibenaler and Vanessa Torres 64% at target and 73% at maximum, and Noel Pillay 64% at target and 74%
at maximum.
68% at risk
77% at risk
64% at risk
73% at risk
Performance based
Performance based
Performance based
Performance based
FY26 EXECUTIVE KMP REWARD OUTCOMES
Realised pay for Executive KMP for FY26
Realised pay is the value of reward received by Executive KMP in relation to the financial year, rather than potential earnings or statutory
remuneration disclosures. We publish this information to enable shareholders to better understand the pay delivered to Executive KMP
through our reward framework and how this is aligned to the performance of South32. The intention of our reward framework is to deliver
realised pay outcomes that reflect company performance, the contribution of the Executive KMP to that performance, and the shareholder
experience. The Board and Remuneration Committee consider that realised pay outcomes reflect this objective.
FY26 realised pay for Executive KMP is outlined below and includes:
– salary and superannuation received in FY26
– other cash and non-monetary benefits earned in FY26
– FY26 STI earned, including cash and deferred rights (see page 160)
– LTI awards that vested based on performance and/or service conditions to 30 June 2026 (see page 164).
Realised pay is likely to vary substantially, either up or down, from statutory remuneration (see page 170) because a significant portion of
Executive KMP pay is based on performance outcomes. Furthermore, as the LTI is measured over a four-year performance period, vesting
outcomes will not always correlate to performance against TSR measures for a single year.
For FY26, realised pay for the CEO increased compared to the previous year primarily due to higher salary, superannuation and STI
payment.
Realised pay in respect of FY26 (A$’000) (unaudited)
Executive KMP
Salary and
superannuation
Other
8
STI cash STI deferred LTI
9
Total realised pay
Graham Kerr
FY26
2,459 114 1,313 1,313 565 5,764
FY25
2,055 53 1,202 1,202 553 5,065
Matthew Daley
FY26
938 2,430 443 443 — 4,255
FY25
— — — — — —
Sandy Sibenaler
FY26
1,018 32 604 604 32 2,290
FY25
903 7 627 627 124 2,288
Vanessa Torres
10
FY26
749 37 774 — 153 1,713
FY25
897 31 518 518 150 2,114
Noel Pillay
FY26
899 91 486 486 145 2,107
FY25
774 22 468 468 144 1,876
Salary for FY26
As detailed in the 2025 Remuneration Report and discussed on page 153, on 1 September 2025, Graham Kerr received a 7.8% increase in
salary as part of the FY26 salary review. No salary increases were awarded to other Executive KMP at this time. Subsequently, on 1 January
2026, Sandy Sibenaler received a 4.0% salary increase following an increase in her accountabilities.
Executive KMP salary
Executive KMP
Currency FY25 salary
11
FY26 salary Movement %
Graham Kerr
AUD 2,040,000 2,200,000 7.8
Matthew Daley
AUD — 2,000,000 0
Sandy Sibenaler
AUD 880,000 915,000 4.0
Vanessa Torres
AUD 872,000 872,000 0
Noel Pillay
ZAR 9,201,000 9,201,000 0
South32 Annual Report 2026
159 Governance
8.
Other includes such items as car parking, insurances and tax advice and dividend equivalent payments that are to be made on vesting of deferred STI rights on August vesting. For
Matt Daley in FY26 it also includes commencement benefits to compensate Matt for forfeiting benefits with his previous employer of a A$2,000,000 cash payment and 285,714
shares valued at the closing share price of South32 shares on 13 February grant date of A$4.42, as well as relocation benefits totalling A$427,973.
9.
Value of the vested LTI is based on a closing share price on 30 June 2026 of A$3.90 (FY26) and 30 June 2025 of A$2.91 (FY25).
10.
Vanessa Torres realised pay for FY26 reflects her service up to 27 March 2026. Vanessa also received termination benefits of A$990,533 not detailed in the table above.
11.
FY25 salary reflects salary after the separation of fixed remuneration into distinct salary and superannuation components from 1 July 2025.
Short-term incentive for FY26
Determination of STI awards
The STI is intended to focus and reward Executive KMP for delivering on key business priorities both in the financial year and into the
future. The Executive KMP STI outcome is determined by assessing the key inputs as described below.
+ =
Input
Description
Reference
Business Scorecard
Includes a balanced range of measures that consider both financial and non-financial performance, and
focuses our Executive KMP on outcomes that are within their control and a priority for the year.
Page 161
Business Modifier
Considers overall business outcomes or other factors that are not specifically contemplated in the Business
Scorecard, such as significant safety or environmental events, the shareholder experience, significant
reputational issues, and an assessment of risk, culture or any other item that the Board considers appropriate.
Based on Board judgement, the Business Modifier adjusts the Business Scorecard outcome so that STI
outcomes reflect business performance, including both what has been delivered and how it has been achieved.
The adjustment may be positive or negative and may be applied to Executive KMP on an individual or a group
basis depending on the factors under consideration.
Page 163
South32 Business
Outcome
Determined by the multiplication of the Business Scorecard and any application of the Business Modifier.
Individual Outcome
Measures the Executive KMP's performance based on delivery against the Company strategy and relevant
business plans as well as demonstrated behaviour aligned to our values (i.e. both on what is achieved and how
it is achieved).
Page 163
Overall STI Outcome
The Executive KMP's STI outcome is based on their STI opportunity calculated against 70% of the South32
Business Outcome and 30% of the Individual Outcome.
Page 164
South32 Annual Report 2026
160 Governance
Remuneration Report continued
South32 Business Outcome Individual Outcome
Overall STI Outcome
1A 1B 2 3
Business
Scorecard
0%-150%
Target 100%
Business
Modifier
Board
discretion +/-
X
Individual performance
and behaviours
0%-150%
0%-150%
70% weighting
30% weighting
1A
FY26 Business Scorecard
The below table details the FY26 Business Scorecard, before any Business Modifier is applied (refer to page 163) with the description for
each metric detailed on page 162.
Performance
measure
12
Performance metric Weighting
Threshold
(50%)
Target
(100%)
Maximum
(150%) Performance Outcome
Weighted
outcome
Safety and culture
25% 30.2%
Safety and
health
Coached workplace safety
interactions
2% 2.5% 5% 7.5% 7.2% 144% 2.8%
Significant hazard
frequency reporting
6% 120 150 200 245 150% 9.0%
Material health exposures
3% 472 378 330 333 147% 4.4%
Injuries and acute illnesses
associated with a potential
fatality
6% 6 3 0 5 67% 4.0%
Total recordable injury
frequency
3% 5.0 3.4 3.3 3.35 125% 3.8%
People
Women in leadership
2% 24.2% 24.7% 25.7% 24.9% 110% 2.2%
Local diversity targets
1% 33% 66% 100% 66% 100% 1.0%
Inclusion index score
2% 77.6% 80.2% 81.2% 82.8% 150% 3.0%
Environment and social
10% 11.1%
Environment
Environmental initiatives
5% 75% 85% 100% 91% 120% 6.0%
Social
Local economic
development plans
5% 75% 85% 100% 85.9% 103% 5.1%
Finance
57.5% 64.0%
Production
Copper equivalent
production (kt)
15% 554 616 647 612 97% 14.6%
Cost
Controllable cost savings,
relative to Budget
controllable costs (US$M)
10% -100 0 100 41 120% 12.0%
EBITDA
Adjusted Underlying
EBITDA (US$M)
32.5% 995 1,421 1,705 1,506 115% 37.4%
Major project delivery
7.5% 2.7%
Hermosa
project
Taylor surface civil works
construction
3%
Commenced
and engineering
at 90%
complete
Progressing to
plan and
engineering
complete
Surface civil
works completed
90% 90% 2.7%
Taylor shaft development
4.5%
Main and Vent
shaft progress
beyond initial
milestone level
Vent shaft
reaches the
defined
milestone level
Target plus Main
shaft progresses
beyond the initial
milestone level
with lateral
development
0% 0% 0.0%
Total
100% 108.0%
South32 Annual Report 2026
161 Governance
12.
Safety and Health metrics include Cerro Matoso and Mozal on a pro-rata basis except for material health exposures where Cerro Matoso and Mozal were excluded from the baseline;
People, Environment and Social metrics were revised to exclude Cerro Matoso and Mozal; Financial metrics (targets and outcomes) include Cerro Matoso for the five-month period of
ownership while Mozal's outcome has been adjusted for the impact of the operation's transition to care and maintenance.
FY26 Business Scorecard metric description
Measure
Scorecard metric Description Reference
Safety and
Health
Coached
workplace safety
interactions
Supports embedding the concepts of our Lead Safely Every Day (LSED) leadership program through a
continued emphasis on visible safety leadership activities by measuring the ratio of workplace safety
interactions that are coached by a more senior leader. Additionally, a base requirement of a Workplace
Interaction Frequency (WPIF) of 3,000 (which was met) ensures our leaders continued to undertake a
high level of workplace safety interactions. WPIF is measured by the number of interactions divided by
exposure hours, multiplied by 1,000,000. Using a ratio allows the performance of our larger and smaller
operations to be comparable, similar to other frequency measures like SHF and TRIF.
Page 14
and
pages
61 to 63
Significant
hazard
frequency
reporting
Incentivises hazard awareness and a proactive reporting culture by measuring the number of
significant hazards identified and reported in our risk management system. Required 75% of
operations to achieve a target outcome as an underpin for a maximum outcome, which was achieved,
so that a few overperforming operations could not inflate the total outcome. Measured by the number
of significant hazards reported divided by exposure hours, multiplied by 1,000,000.
Material health
exposures
Rewards actions to reduce our health exposures that are above 200% occupational exposure limit,
excluding welding fumes. Threshold is set at our FY25 baseline, target is a 20% reduction on the
baseline, and maximum a 30% reduction on the baseline. The 200% OEL threshold focuses attention on
the highest exposure risks alongside ongoing improvements to our exposure management approach.
Injuries and
acute illnesses
associated with a
potential fatality
As one of our key safety commitments, this metric drives the elimination of first aid and above injuries,
and acute illnesses associated with potential fatal significant incidents. The threshold is set at our FY25
baseline, target is half of the baseline, and maximum is for no injuries or illnesses associated with a
potential fatality.
Total recordable
injury frequency
(TRIF)
The metric focuses attention on all recordable injuries to ensure that we take the required actions
towards the elimination of the occurrence of injuries. The threshold is set at the 1st quartile of dss+
consulting's industry benchmarking, target is a 7% reduction on the FY25 baseline rate, and maximum
a 10% reduction on our FY25 baseline rate.
People
Women in
leadership
Reinforces our commitment to hiring, developing and retaining female leaders, which is essential for
building a more balanced and representative leadership team, and demonstrates the value we place
on gender equity. Threshold is set at our FY25 baseline, target is an absolute 0.5% increase from this
baseline, and maximum an absolute 1.5% increase.
Pages
63 to 64
Local diversity
targets
Promotes focus on building a workforce that reflects the communities in which we operate. Measures
representation across three priority areas: Aboriginal and Torres Strait Islander People’s, Black People
in management in South Africa and Black People in the total South African workforce. Threshold is
achieved by meeting one of the three targets, target is met by achieving two of the three targets, and
maximum is awarded for achieving all three targets.
Inclusion index
score
An inclusive culture and diverse workforce supports greater collaboration, innovation and
performance. Measured by our Your Voice annual perception survey of employees and a
representative group of contractors. Threshold is the most recent inclusion global mining benchmark
from the survey provider Qualtrics, target is a baseline of the FY25 outcome as our highest previous
outcome, and maximum is a 1% increase on target.
Environment
Environmental
initiatives
Ensures environmental performance is reflected in business outcomes through achievement of
nature-related milestones set across water, biodiversity and/or pollution initiatives as included in
Operational Business Plans.
Page 15,
18 and
71 to
105
Social
Local economic
development
plans
Drives and measures contributions to local economic development through targeted procurement,
business development, skills development, and related initiatives. Performance is measured as the
percentage of context-specific targets achieved as defined in Economic Development Plans and
aligned with the Social Performance Standard, regional requirements and local operation obligations.
Page 18
and 65
Production
Copper
equivalent
tonnes
Safe, stable and predictable performance of our operated operations is consistent with our intent to
optimise our resources. Threshold is set at 90% of Budget, target is achieving Budget, and maximum is
achieving 105% of Budget. Excludes non-operated entities.
Page 4
and 15
Cost
Controllable cost
savings
Promotes accountability and disciplined management and optimisation of our cost base. Controllable
cost measurement bases remove the impact of uncontrollable items such as commodity prices,
foreign exchange and price-linked costs. Threshold is set at negative 5% of Budget, target at Budget,
and maximum at positive 5% of Budget, where negative performance targets represent a cost overrun
relative to Budget, and positive performance targets represent a cost saving relative to Budget.
Excludes non-operated entities.
Page 15
EBITDA
Adjusted
Underlying
EBITDA
Measures operational performance and the company’s ability to generate cash flows, relative to our
Budget. Calculated as Underlying EBITDA (being Earnings before interest, tax, depreciation and
amortisation, including the proportional consolidation of our material equity accounted investments),
adjusted for uncontrollable impacts (commodity prices, foreign exchange, and price-linked costs) and
other adjustments. Threshold is set at 70% of Budget, target at Budget, and maximum at 120% of
Budget.
Page 27
Hermosa:
Taylor
Surface civil
works
construction
Assesses progress against the surface critical path civil works for the process plant at the Taylor
project. Threshold was set at construction commenced and engineering at 90%, target was that
construction was progressing to plan and engineering complete, and maximum set at construction
being complete.
Page 17
Shaft
development
Measures key shaft development milestones, assessing the advancement of the Main and Vent shafts
relative to defined depth targets and completion criteria. Threshold set at the Main and Vent shaft
both progressing beyond a threshold level, target required the Vent shaft to reach the target level,
and maximum required target to be achieved and also that lateral development is completed at the
Main shaft threshold level.
South32 Annual Report 2026
162 Governance
Remuneration Report continued
1B
FY26 Business Modifier
The Business Modifier is an integral component of the STI that considers overall business outcomes or other factors that are not
specifically contemplated in the Business Scorecard.
In considering the application of the Business Modifier for FY26, the Board first reflected on the tragic death of Simon Mukwarami at an
incident at Worsley Alumina in March 2026. That Simon did not return home safely following his shift has had a profound impact on his
colleagues and on everyone at South32.
We continue to reinforce our expectations that everyone at South32 is empowered to speak up about safety concerns and maintains a
relentless focus on safety in everything we do. The Board remains resolute that there is no acceptable outcome other than everyone going
home safe and well every day.
The Board also considered the requirement to place Mozal Aluminium on care and maintenance following over six years of work with the
relevant parties to secure a new electricity supply agreement. As aligned with last year's review, the Board confirmed that no Business
Modifier should be applied to any Executive KMP in reference to Mozal Aluminium being placed on care and maintenance. To the contrary,
the unavailability of hydro power was outside management control and management, and the team at Mozal Aluminium are to be
commended for safely placing it into care and maintenance.
Additionally, the Board reviewed the adjustment of the timelines and growth capital associated with the Hermosa Taylor project, including
the shaft sinking, and considered the elements that were within management's control.
Taking into consideration the above, the Board decided to apply a negative Business Modifier of -20% for Graham Kerr, -20% for Matt Daley,
and -10% for Noel Pillay and Sandy Sibenaler. The different adjustments are intended to reflect the level of accountability each member of
the Executive KMP had in respect of the relevant events.
2
FY26 Individual Outcome
The performance of the CEO in delivering our strategy is assessed by the Board Chair, with the Individual Outcome approved by the Board.
The individual performance of other Executive KMP is assessed by the CEO, with the Individual Outcome approved by the Remuneration
Committee. All performance assessments include a review of what was delivered and how it was delivered.
The Board awarded Graham an Individual Outcome of 130% taking into consideration the assessment in delivering the South32 strategy as
outlined below. Individual Outcomes applied to the other Executive KMP ranged from 100% to 140% as detailed in the FY26 overall STI
outcome section below.
Graham Kerr's FY26 performance assessment
Graham demonstrated exceptional leadership during a critical period for the Company, working closely with Matt to execute the CEO
transition plan while also leading the successful delivery of the agreement for the sale of our aluminium value chain assets to Alcoa,
extending his tenure to see both priorities through to completion. His performance assessment does not cover the fatality at Worsley
Alumina and the Hermosa Taylor project considerations included in the above Business Modifier section, which resulted in a -20% modifier.
OPTIMISE
OUR BUSINESS
– Continued to implement our Lead Safely Every day (LSED) safety improvement program in FY26 which supported
measurable improvements in safety performance across key indicators.
– Championed the advancement of our diversity and inclusion objectives.
– Achieved or exceeded production guidance for the majority of our operations.
– Maintained disciplined cost control as reflected in Operating unit cost outcomes, notwithstanding industry-wide
inflationary cost pressures and the Middle East conflict contributing to higher raw material input prices and freight
rates.
– Delivered the CEO transition plan with incoming CEO Matt Daley, as well as supporting the transition of the Board Chair.
UNLOCK
THE VALUE OF
OUR BUSINESS
– Supported the Sierra Gorda joint venture approval for the fourth grinding line project, which is expected to increase the
operation’s processing capacity by approximately 25%, delivering attractive financial returns.
– Increases in the Hermosa project's Taylor Mineral Reserve and Resource, as well as the Peake Mineral Resource.
– Increased Cannington's Ore Reserve by 28%, extending the reserve life by approximately two years and progressed
both underground and open pit potential growth options.
– Advanced the development of new mining areas at Worsley Alumina to underpin improved bauxite supply.
IDENTIFY
AND PURSUE
OPPORTUNITIES
– Executed a binding conditional agreement to sell South32's aluminium value chain assets to Alcoa for an implied
enterprise value of up to US$5.6B, unlocking value and simplifying our business.
– Completed the divestment of the Cerro Matoso ferronickel operation in Colombia for up to US$100M, following a
strategic review in response to structural changes in the nickel market.
– Advanced the Ambler Metals project with our joint venture partner, including acceptance of the high-grade Arctic
polymetallic deposit as a covered project under FAST-41.
– Continued investment in greenfield exploration to discover our next generation of base metal mines in highly
prospective regions.
South32 Annual Report 2026
163 Governance
3
FY26 Overall STI Outcome
Overall STI outcomes for FY26 are outlined below.
Executive KMP
Business
Scorecard
Outcome %
Business
Modifier %
Individual
Outcome %
Overall STI
Outcome
(% of Target)
Total STI
Awarded Cash
13
Deferred
rights
14
Percentage of max STI
Awarded Forfeited
(1A) (1B) (2)
70% of 1A x (1+1B)
+ 30% of 2 A$’000 A$’000 A$’000 % %
Graham Kerr
108.0 -20 130 99.5 2,626 1,313 1,313 66 34
Matthew Daley
108.0 -20 100 90.5 886 443 443 60 40
Sandy Sibenaler
108.0 -10 140 110.0 1,208 604 604 73 27
Vanessa Torres
15
100 — 100 100 642 642 — 67 33
Noel Pillay
108.0 -10 110 101.0 972 486 486 67 33
Long-term Incentive for FY26
The FY23 LTI was tested subject to performance conditions, as detailed in the below table, over a four-year period from 1 July 2022 to 30
June 2026 and continued service until the vesting date.
Sandy Sibenaler was granted a FY23 MSP Performance award prior to her appointment as a member of the Lead Team. This award has the
same performance and vesting conditions as the FY23 LTI award.
Percentage
Measure Weighting Summary of vesting condition Threshold Maximum
80%
Total
shareholder
return
53.3%
TSR performance relative to the TSR of the companies that
comprised the IHS Markit Global Mining Index at the start of the
performance period.
>50th
percentile
75th percentile
26.7% TSR performance relative to the TSR of the MSCI World Index. Index TSR
Index TSR +
23.9%
20%
Strategic
measures
10%
The transition of our portfolio towards commodities critical to a
low-carbon future.
Board assessment
10% Our response to climate change.
Total Shareholder Return measures
Our TSR of 12.7% ranked at the 18th percentile among the IHS Markit Global Mining peer group constituents and was below the TSR of the
MSCI World Index of 97% (see diagram below). As a result, our TSR did not meet the threshold level of performance against either measure,
resulting in the full portion of the LTI award measured against TSR (80%) lapsing.
South32 TSR relative to LTI comparator groups
South32 Annual Report 2026
164 Governance
Remuneration Report continued
13.
The cash portion of the STI will be paid in September 2026.
14.
The deferred rights to South32 shares are anticipated to be granted in or around December 2026 and will be eligible to vest in August 2028.
15.
Vanessa's STI reflects her period as an Executive KMP in FY26 and was paid entirely in cash.
Total Shareholder Return
South32 World Index Global mining index median constituent
July 2022 July 2023 July 2024 July 2025
(40)%
0%
40%
80%
120%
160%
July 2026
Strategic measures
LTI strategic measures directly link executive remuneration to long-term business priorities; namely the transition of our portfolio towards
minerals and metals critical to the world's energy transition and our response to climate change. Progressing these two critical and
interdependent priorities is central to delivering our strategy and reshaping our business for the future.
In the assessment of FY23 LTI strategic measures, the Board reviewed the material progression of FY23 strategic activities over the four-
year performance period as detailed in the below table. Taking these assessments into account, the Board approved a vesting outcome of
15.5% out of the possible 20% for the strategic measures portion of the LTI award.
FY23 LTI strategic measures performance assessment
Performance measure
Vesting activities over the four-year period Weighting
Weighted
Outcome
Portfolio Management
10% 9.0%
Building a high-quality portfolio
of greenfield and brownfield
exploration and development
options
– Greenfield activity included agreements to extend strategic alliances and create new partnerships, however
no portfolio interests were progressed to a development decision during the assessed performance period.
– We consolidated our position in the highly prospective San Juan mineral belt in Argentina during FY23,
exercising our earn-in right to acquire a 50.1% interest and operatorship in the Chita Valley copper exploration
project.
– We acquired a 14.8% equity position in Aldebaran Resources, owner of the Altar copper exploration-
development project in Argentina.
– Resource and exploration work at Hermosa continued with a market release made shortly after the end of
FY23, reflecting exploration work that continued during the year, confirming an increase to the Taylor
resource and drill results from the best intercept to date at the Peake prospect that has the potential to add
future copper production.
Optimising our existing portfolio
by responsibly transferring
ownership of non-core
operations or transitioning them
to closure
– Activity continued to reshape and strengthen our focus on base metals resulting in the anticipated
divestment of our aluminium value chain to Alcoa for up US$5.6B plus approximately US$1.1B in rehabilitation
provisions assumed by Alcoa. The divestment opportunity reflects the culmination of years of intensive work
and execution, which will deliver a transformational outcome that fundamentally reshapes the Company's
portfolio and strategic direction.
– We continued to assess our portfolio optimisation alternatives, while we completed the divestment of four
non-core base metals royalties in our portfolio that were ascribed no value for $185M in fixed consideration
(cash and shares) plus up to US$15M contingent consideration.
Developing or acquiring
operations which are cash
generative through the cycle,
improving the overall quality of
our business
– By the end of FY23 our revenue mix of base metals, including the aluminium value chain, was 71% compared
to 45% at demerger, demonstrating our progress in improving the quality of our portfolio by increasing
exposure to preferred commodities.
– We continued to survey the opportunity set of acquisition opportunities during the year, however our primary
focus was on embedding the material acquisition of a 45% interest in Sierra Gorda made during the prior year.
Maintaining discipline by
adhering to our proven capital
management framework
– Our balanced approach to capital management continued in FY23 with returns to shareholders totalling
US$586M, including US$218M through the continuation of our ongoing capital management program by way
of our on-market share buy-back.
Climate Change
10% 6.5%
Advancing conceptual projects
through our capital investment
tollgates, and the successful
commissioning of identified
emissions reduction projects
– Following conversion of two coal-fired burners to gas, Worsley Alumina progressed the Coal Alternative
Steam Supply project, from concept to completion of Prefeasibility-Define study. This confirmed the preferred
infrastructure location, capacity requirements and the deployment approach in addition to project economics
and security of supply considerations aligned to the Western Australian Government’s decarbonisation
strategy.
– Progressed the Waste Heat to digestion Prefeasibility study at Worsley Alumina. The study determined that
the capital intensity and expected emissions reduction were insufficient to justify investment.
– Completed the conversion of an additional 10% of pots to AP3XLE energy efficient technology at Hillside
Aluminium, for a total of 66% converted pots.
Assessing new technologies and
alternative energy sources
– Completed battery electric trials at Cannington, including light vehicles, a 20-tonne tool carrier and supporting
infrastructure. The outcomes informed the design for the safe deployment of electric vehicles underground at
Hermosa’s Taylor operation.
– Established a joint working group with Eskom to explore mechanisms to bring competitively priced renewable
energy into the national grid, backed by affordable firming capacity within the existing regulatory framework,
a critical enabler for Hillside Aluminium’s decarbonisation pathway. Identified indicative milestones associated
with the anticipated maturation of key external dependencies relevant to our FY35 emissions reduction
target.
Participation and direct
investment in research and
development partnerships
– Led the infrastructure workstream within the Electric Mine Consortium, an Australian-led collaboration of
mining companies, equipment suppliers, and service providers, driving infrastructure strategies and industry
alignment to support the transition to fully electrified, zero-carbon, and zero-particulate mine sites.
Total
20% 15.5%
South32 Annual Report 2026
165 Governance
FY23 LTI and MSP Performance award vesting outcomes
The Board approved a vesting outcome of 15.5% for the FY23 LTI and MSP Performance awards, with the remainder of each award to lapse
as summarised in the below table.
Measure
Vesting condition
TSR performance
16
Vesting
Performance
Measure
weighting
Weighted
outcome
Required for 40%
vesting
Required for 100%
vesting South32 outcome (C) (D) (C x D)
Total
shareholder
return
Global mining index
constituents
>50
th
percentile 75
th
percentile 18
th
percentile 0% 53.3% 0%
World index 97.2%
17
121.1%
18
12.7% 0% 26.7% 0%
Strategic
measures
Portfolio management - - - 90% 10% 9.0%
Climate change - - - 65% 10% 6.5%
Total
100% 15.5%
FY24 Transitional LTI award
An FY24 Transitional LTI award was granted to Sandy Sibenaler on her permanent appointment to the Lead Team. The award was
designed to address the potential shortfall in vesting in August 2026 that arises from the transition from the MSP, which includes Retention
awards with a three-year service period condition, to the four-year performance period of the LTI.
The FY24 Transitional LTI award was subject to the same TSR performance conditions as the FY24 LTI award, but over a three-year period.
Two-thirds of the award were assessed against the constituents of the IHS Markit Global Mining Index at the start of the performance
period, and one-third assessed against the MSCI World Index. For the three-year performance period from 1 July 2023 to 30 June 2026, our
TSR ranked at the 20th percentile among the global mining sector index constituents and underperformed the MSCI World Index. As a
result, the full FY24 Transitional LTI award lapsed.
Summary of LTI outcomes in FY26
A summary of the South32 LTI and MSP awards that have vested or lapsed for Executive KMP is detailed in the table below.
Executive KMP
Award
Number of
rights granted
Number of
rights vested
Number of
rights lapsed /
forfeited
Value at grant
(A$000)
19
Value lapsed /
forfeited
(A$000)
20
Value of share
price
movement
(A$000)
21
Value at
vesting
(A$000)
22
Graham Kerr
FY23 LTI 934,313 144,818 789,495 3,812 3,221 -26 565
Sandy Sibenaler
FY23 MSP Performance 53,522 8,295 45,227 218 185 -1 32
FY24 Transitional LTI 85,559 0 85,559 325 325 0 0
Vanessa Torres
FY23 LTI 270,563 39,210 231,353
23
1,104 944 -7 153
Noel Pillay
FY23 LTI 240,246 37,238 203,008 980 828 -7 145
LTI granted in FY26
FY26 LTI awards were granted to Executive KMP in December 2025 as detailed below. The awards are performance based, assessed over
a four-year performance period, and subject to performance hurdles (see page 157). Shareholders approved the grant of rights for the CEO
at the AGM on 23 October 2025.
FY26 LTI grants
24
Executive KMP
Award
Maximum value
(% of salary) Maximum value (A$’000)
Number of rights
granted
25
Anticipated vesting date
Graham Kerr
FY26 LTI
200 4,400 1,512,027 August 2029
Sandy Sibenaler
FY26 LTI
133 1,170 402,199 August 2029
Vanessa Torres
FY26 LTI
133 1,160 398,542 August 2029
Noel Pillay
26
FY26 LTI
133 1,041 357,590 August 2029
South32 Annual Report 2026
166 Governance
Remuneration Report continued
16.
TSR calculation uses June 2022 average return at the start and June 2026 average return at the end of the measurement period.
17.
Reflects the MSCI World Index TSR over the four-year performance period.
18.
Reflects the MSCI World Index TSR over the four-year performance period plus 23.9%.
19.
‘Value at grant’ is the number of rights granted multiplied by the grant determination price in June 2022 of A$4.08 (for the FY23 LTI/FY23 MSP Performance) and June 2023 of A$3.80
(for the FY24 Transitional LTI), based on the volume weighted average price (VWAP) of South32 Limited shares traded on the ASX over the last 10 trading days in June of 2022/2023.
20.
‘Value lapsed’ is the number of rights lapsed/forfeited based on performance relative to the performance measures, multiplied by the grant determination price as noted above.
21.
‘Value of share price movement’ is the number of shares that vested, multiplied by the difference between the grant determination price as noted above, and the share price at 30
June 2026 of A$3.90. This reflects the value added/(lost) due to the change in share price over the performance period.
22.
‘Value at vesting’ is the number of shares approved to vest, multiplied by the closing share price of South32 shares on 30 June 2026 of A$3.90.
23.
Includes 17,594 rights which lapsed on leaving the Group in March 2026.
24.
Matt Daley's FY26 LTI was awarded on 13 February 2026 on the same terms as other Executive KMP and is disclosed in the 'Commencement Awards granted in FY26' on page 167.
25.
The number of awards granted is calculated by dividing the maximum value by the VWAP of South32 shares over the last 10 trading days of June 2025, being A$2.91.
26.
Salary for Noel Pillay is denominated in ZAR and was converted to AUD using an exchange rate of AUD:ZAR 11.76 to determine his FY26 award.
Commencement Awards granted in FY26
Matt Daley commenced as Deputy CEO on 2 February 2026 and assumed the role of CEO on 1 July 2026. The Board formed the view that
providing a combination of Sign-on Shares to provide an immediate shareholding and alignment of interests, Service Rights to provide for
progressive equity vesting, and LTI Rights to align Matt’s incentives with those of other Lead Team members, was an appropriate way to
incentivise him and compensate him for forfeiting benefits with his previous employer. As such, on 13 February 2026 he was granted:
– 285,714 sign-on shares which were fully vested and not subject to any service or performance conditions (Sign-on Shares)
– 1,482,857 service-based Rights, 1,242,857 of which vest based on continued service until August 2027 and 240,000 which vest based on
continued service until August 2028 (together, the Service Rights)
– 1,714,286 performance Rights, 857,143 of which are subject to the same vesting conditions as South32’s FY25 LTI and 857,143 of which
are subject to the same vesting conditions as South32’s FY26 LTI (together, the LTI Rights).
Shareholders approved the grant of Sign-on Shares, Service Rights and LTI Rights to Matt at the AGM on 23 October 2025. Further
information on these awards can be found in the South32 2025 Notice of Meeting.
Terms and conditions of rights awarded under equity plans
Type of equity
We deliver deferred STI and LTI equity awards, including Transitional LTI and MSP awards, in the form of share rights. These
are rights to receive fully paid ordinary shares in South32 Limited (or at the Board’s discretion, a cash equivalent amount) with
each right entitling the holder to one share on vesting, subject to meeting specific performance and/or vesting conditions. As
the rights are an element of remuneration, no amount is payable by employees to be allocated the rights. If the rights vest, no
consideration or exercise price is payable for the allocation of shares. As rights are automatically exercised on vesting, they do
not have an expiry date.
Dividend and
voting rights
Rights carry no entitlement to voting or dividends. Deferred STI rights granted from December 2024 and Matt Daley's Service
Rights include an entitlement to a cash dividend equivalent payment paid in full at vesting (but only in respect of those
deferred STI rights and Service Rights that vest). No other rights carry a dividend equivalent payment entitlement.
Cessation of
employment
Unless the Board determines otherwise:
– all unvested rights lapse under resignation or termination for cause; and
27
– all unvested rights vest immediately under death, serious injury, disability or illness that prevents continued employment or
total permanent disability.
For all other circumstances, generally:
– deferred STI awards and Service Rights: all unvested rights vest immediately
– LTI and MSP Performance awards: all unvested rights are pro-rated and the reduced portion remains on foot and eligible
for vesting in the ordinary course, subject to any applicable performance hurdles; and
– MSP Retention awards: all unvested rights are pro-rated and the reduced portion vests immediately.
Where awards are pro-rated, the remaining portion lapses.
Change of control
The Board can determine the level of vesting (if any) having regard to the portion of the vesting period elapsed, performance
to date against any applicable performance conditions and other factors they deem appropriate. Deferred STI awards and
Service Rights will generally vest in full on a change of control.
Malus and
clawback
The Board can reduce or clawback all vested and unvested STI and LTI awards in certain circumstances so that executives do
not obtain an inappropriate benefit. These circumstances are broad, and can include:
– an executive engaging in misconduct
– a material misstatement of our accounts that results in vesting
– behaviours of executives that bring South32 into disrepute
– a significant unexpected or unintended consequence or outcome; and
– any other factor the Board deems justifiable.
Rights to
participate in new
issues
A participant cannot take part in new issues of securities in relation to their unvested rights. However, the relevant plan rules
include specific provisions dealing with rights issues, bonus issues and corporate actions, and other capital reconstructions.
South32 Annual Report 2026
167 Governance
27.
In relation to Matt Daley's Service Rights, if he resigns or is terminated summarily without notice in accordance with his contract of employment: (a) within 12 months of commencing
his employment, any unvested Service Rights will be forfeited; (b) prior to the applicable vesting date, any unvested Service Rights will be forfeited, unless the Board determines
otherwise.
Key terms and conditions of MSP and Transitional LTI awards
MSP
The MSP is the LTI plan for eligible employees below Lead Team level. The Plan has two elements:
– retention rights with a three-year vesting and service condition from 1 July to 30 June, vesting in August three years from
grant provided employees remain employed in the Group; and
– performance rights with a four-year performance and service period from 1 July to 30 June, vesting in August four years
from grant, subject to the same performance and vesting conditions as the LTI for Executive KMP for that year. There is no
retesting if the performance condition is not met and any rights that do not vest will immediately lapse.
MSP rights do not carry any entitlement to voting, dividends or dividend equivalent payments.
Transitional LTI
The Transitional LTI has been removed from the executive reward framework from FY26, with awards that were previously
granted to executives remaining on foot.
Transitional LTI awards were provided when an executive was promoted to a role in the Lead Team as they moved from the
MSP (three-year retention rights and four-year performance rights) to the LTI plan for the Lead Team (four-year performance
rights). The Transitional LTI was a one-off award that was granted to address the potential shortfall in vesting after three years.
These awards have the same TSR performance conditions as LTI awards granted in the same year except these awards have
a three-year performance period.
Transitional LTI rights do not carry any entitlement to voting, dividends or dividend equivalent payments.
South32 Annual Report 2026
168 Governance
Remuneration Report continued
FY26 NON-EXECUTIVE DIRECTOR REMUNERATION
Components of Non-Executive Director reward
Board fees
Committee fees
Travel allowance
Purpose
As a global company, it is important that
we offer competitive Non-Executive
Director fees to help us attract the
appropriate level of experience from a
diverse global pool.
Board fees reflect the size, complexity
and global nature of our business and
acknowledge the responsibilities of
serving on the Board.
To preserve the independence of Non-
Executive Directors, their remuneration
does not have an ‘at risk’ element.
We pay Committee fees to recognise the
additional responsibilities associated with
participating on the Risk and Audit,
Remuneration, and Sustainability
Committees.
No Committee Chair or member fees are
paid for participation on the Nomination
and Governance Committee.
Board meetings are ordinarily held in
Australia, South Africa, and North and South
America.
Site visits are also an important part of the
Board program, giving Directors:
– a better understanding of workplace
culture through interactions with site
based employees
– an improved understanding of local and
operational risks
– a chance to participate in ongoing
education
– on-the-ground experience.
As these meetings (site visits and other
engagements) take time and commitment,
particularly if they are in remote locations,
we provide Non-Executive Directors with a
travel allowance.
Structure
Board fee is inclusive of superannuation.
We pay a fixed fee to the Board Chair for
all responsibilities, including participation
on any Board Committees.
Other Non-Executive Directors receive
Committee Chair and member fees
(where applicable).
For air travel to a Board commitment that is
greater than three hours but less than 10
hours to the destination, a one-off allowance
of A$5,000 per trip applies. Where air travel
is greater than 10 hours to the destination,
the allowance per trip is A$10,000.
The travel allowance is only paid where
travel is undertaken and does not apply to
domestic travel to a scheduled Board
meeting.
Fee pool
The maximum aggregate amount we can pay Non-Executive Directors remains unchanged at A$3.9 million per annum (fee pool).
We will seek shareholder approval before making any changes to this fee pool.
Minimum
shareholding
requirement
To improve accountability and shareholder alignment, the minimum shareholding requirement for Non-Executive Directors is:
– 100% of Board fees
– obtained within a reasonable period
– valued at the cost to acquire the shares, except for shares acquired at demerger which are valued at the closing share price
on 18 May 2015 (A$2.05).
Refer to page 172 for minimum shareholding requirement progress for Non-Executive Directors as at 30 June 2026.
FY26 Non-Executive Director fees
Fees are reviewed annually and, effective 1 September 2025, Board fees remained unchanged, while Committee Chair and member fees
were increased by 8.7%. This adjustment reflected external benchmarking data and is the first increase in Committee fees since 2018.
Fee
Description
FY25 fee
(A$ per annum)
FY26 fee
(A$ per annum) Movement %
Board fees
Board of Directors
Chair of the Board 610,000 610,000 0
Other Non-Executive Directors 202,750 202,750 0
Committee fees
Risk and Audit, Remuneration, and Sustainability Committees
Committee Chair 46,000 50,000 8.7
Members 23,000 25,000 8.7
South32 Annual Report 2026
169 Governance
STATUTORY DISCLOSURES
The below tables set out the statutory disclosures required under the Act and in accordance with Australian Accounting Standards. The
amounts shown reflect remuneration that relates to their period of service as a KMP.
Non-Executive Director statutory remuneration (A$’000)
Non Executive Director
FY26 term
Short-term benefits Post-employment
Total
Board and
Committee fees
Non-monetary
benefits
28
Travel allowance and
cash benefits Superannuation
Stephen Pearce
Full year
FY26 341 – 20 30 391
FY25 88 – 15 11 114
Karen Wood AM
Part year
FY26 384 – 20 23 427
FY25 578 – 25 30 633
Frank Cooper AO
Part year
FY26 76 – – 9 85
FY25 241 – 25 29 295
Geoff Healy
Part year
FY26 116 – 20 16 152
FY25 – – – – –
Sinead Kaufman
Part year
FY26 49 – – 6 55
FY25 – – – – –
Xiaoling Liu
Full year
FY26 247 – 20 30 297
FY25 240 – 25 30 295
Carlos Mesquita
Full year
FY26 225 4 60 3 292
FY25 223 3 60 2 288
Mandla Msimang
Full year
FY26 249 3 50 3 305
FY25 99 – 20 1 120
Ntombifuthi Mtoba
Part year
FY26 69 3 20 2 94
FY25 222 3 50 2 277
Jane Nelson
Full year
FY26 225 3 55 3 286
FY25 223 2 45 2 272
Wayne Osborn
Full year
FY26 247 – 25 30 302
FY25 241 – 40 30 311
Sharon Warburton
Full year
FY26 245 – 20 – 265
FY25 224 – 25 – 249
Total
FY26 2,473 13 310 155 2,951
FY25 2,379 8 330 137 2,854
Executive KMP statutory remuneration (A$’000)
Short-term benefits
Post
employment Share based payments
29
Executive
KMP
Salary Cash bonus
Non-
monetary
benefits
Other
short-term
benefits
Super-
annuation
Termination
benefits
Other long-
term
benefits
30
STI LTI/MSP
Total
remuneration
31
Graham
Kerr
32
FY26 2,166 1,313 62 – 293 – 189 1,468 2,226 7,717
FY25 2,023 1,202 53 – 32 – 42 1,065 2,138 6,555
Matthew
Daley
33
FY26 823 443 2 2,428 115 – 76 1,333 2,311 7,531
FY25 – – – – – – – – – –
Sandy
Sibenaler
FY26 896 678 7 – 122 – 47 644 498 2,892
FY25 871 627 7 – 32 – 1 430 414 2,382
Vanessa
Torres
FY26 537 642 23 – 77 991 10 385 412 3,077
FY25 865 518 31 – 32 – 4 517 655 2,622
Noel
Pillay
FY26 801 486 73 – 98 – (4) 454 520 2,428
FY25 774 468 22 – — – 11 385 529 2,189
Total
FY26 5,223 3,562 167 2,428 705 991 318 4,284 5,967 23,645
FY25 4,533 2,815 113 – 96 – 58 2,397 3,736 13,748
South32 Annual Report 2026
170 Governance
Remuneration Report continued
28.
Includes tax return preparation as well as other fringe benefits and fringe benefits tax.
29.
Calculated in accordance with Australian Accounting Standards and are the amortised fair value of equity and equity-related instruments.
30.
Represents the accounting expense of annual and long-service leave accrued but unused in the year. A negative value is when more leave is used than was accrued.
31.
Performance based remuneration includes the short-term cash bonus and all share based payments.
32.
Graham Kerr’s FY26 share based payments include STI of A$276,869 and LTI of A$89,091 which reflect an estimate based on the latest available information regarding anticipated
tenure and good leaver status. The final amounts remain subject to Board discretion, future approval, and the timing of completion of the aluminium value chain asset sale.
33.
Matt Daley's FY26 other short-term benefits includes a commencement benefit of A$2,000,000 cash payment and relocation benefits totalling A$427,973, and his FY26 STI share
based payments includes a commencement benefit of 285,714 shares valued at the closing share price of South32 shares on 13 February grant date of A$4.42.
Details of rights held by Executive KMP
Refer to page 167 for terms and conditions of rights awarded under our equity plans. Further details regarding each of the prior year
equity grants are described in past Annual Reports which can be accessed via our website. No closely related parties of any Executive KMP
are issued rights.
Detail and movement of rights over South32 shares held by Executive KMP during FY26
Award
34
Opening balance
at 1 July 2025 Grant date
Grant date
fair value
Granted in
FY26 Vested in FY26
Lapsed / forfeited or
other change in FY26
Closing balance
at 30 June 2026
Anticipated
vesting date
Executive KMP
Number A$ Number Number
35
% Number % Number
Graham Kerr
4,959,019 1,878,568 423,598 28 1,076,963 72 5,337,026
FY25 Deferred STI
3-Dec-25 3.32 366,541 366,541 Aug-27
FY26 LTI
3-Dec-25 2.00 1,512,027 1,512,027 Aug-29
FY24 Deferred STI
348,186 3-Dec-24 3.75 348,186 Aug-26
FY25 LTI
1,128,065 3-Dec-24 2.28 1,128,065 Aug-28
FY23 Deferred STI
233,546 4-Dec-23 2.88 233,546 100 — Aug-25
FY24 LTI
1,047,894 4-Dec-23 1.54 1,047,894 Aug-27
FY23 LTI
934,313 8-Dec-22 2.37 934,313 Aug-26
FY22 LTI
1,267,015 6-Dec-21 2.35 190,052 15 1,076,963 85 — Aug-25
Matthew Daley
— 3,197,143 — — — — 3,197,143
FY26 LTI
13-Feb-26 3.04 857,143 857,143 Aug-29
FY25 LTI
13-Feb-26 2.29 857,143 857,143 Aug-28
Service Rights
13-Feb-26 4.57 240,000 240,000 Aug-28
Service Rights
13-Feb-26 4.57 1,242,857 1,242,857 Aug-27
Sandy Sibenaler
1,074,417 593,465 70,214 53 61,265 47 1,536,403
FY25 Deferred STI
3-Dec-25 3.32 191,266 191,266 Aug-27
FY26 LTI
3-Dec-25 2.00 402,199 402,199 Aug-29
FY24 Deferred STI
170,625 3-Dec-24 3.75 170,625 Aug-26
FY25 LTI
329,782 3-Dec-24 2.28 329,782 Aug-28
FY23 Deferred STI
27,290 4-Dec-23 2.88 27,290 100 — Aug-25
FY24 LTI
303,450 4-Dec-23 1.54 303,450 Aug-27
FY24 Transitional LTI
85,559 4-Dec-23 1.21 85,559 Aug-26
FY23 MSP Retention
32,113 8-Dec-22 3.85 32,113 100 — Aug-25
FY23 MSP Performance
53,522 8-Dec-22 2.37 53,522 Aug-26
FY22 MSP Performance
72,076 6-Dec-21 2.35 10,811 15 61,265 85 — Aug-25
Vanessa Torres
36
1,504,994 556,612 185,729 39 291,997 61 1,583,880
FY25 Deferred STI
3-Dec-25 3.32 158,070 158,070 Aug-27
FY26 LTI
3-Dec-25 2.00 398,542 398,542 Aug-29
FY24 Deferred STI
126,373 3-Dec-24 3.75 126,373 Aug-26
FY25 LTI
326,882 3-Dec-24 2.28 326,882 Aug-28
FY23 Deferred STI
134,201 4-Dec-23 2.88 134,201 100 — Aug-25
FY24 LTI
303,450 4-Dec-23 1.54 303,450 Aug-27
FY23 LTI
270,563 8-Dec-22 2.37 270,563 Aug-26
FY22 LTI
343,525 6-Dec-21 2.35 51,528 15 291,997 85 — Aug-25
Noel Pillay
1,288,038 507,567 127,204 31 280,468 69 1,387,933
FY25 Deferred STI
3-Dec-25 3.32 149,977 149,977 Aug-27
FY26 LTI
3-Dec-25 2.00 357,590 357,590 Aug-29
FY24 Deferred STI
123,658 3-Dec-24 3.75 123,658 Aug-26
FY25 LTI
272,642 3-Dec-24 2.28 272,642 Aug-28
FY23 Deferred STI
77,710 4-Dec-23 2.88 77,710 100 — Aug-25
FY24 LTI
243,820 4-Dec-23 1.54 243,820 Aug-27
FY23 LTI
240,246 8-Dec-22 2.37 240,246 Aug-26
FY22 LTI
329,962 6-Dec-21 2.35 49,494 15 280,468 85 — Aug-25
South32 Annual Report 2026
171 Governance
34.
At the time of vesting, the quantum of all awards that vest based on performance and/or service conditions will automatically convert to South32 ordinary shares, in the participant’s
name, for nil consideration (unless the Board exercises its discretion to settle awards in cash instead of allocating shares). Any rights that do not vest will immediately lapse, hence
there is no expiry date associated with the awards. As rights are subject to service and/or performance conditions, the minimum possible total value of rights granted under South32
equity plans for future financial years is nil and an estimate of the maximum possible total value is the number of rights multiplied by the grant date fair value as determined in
accordance with the Accounting Standards.
35.
Rights that vested in FY26 converted to South32 ordinary shares for nil consideration on 29 August 2025. The South32 closing share price on this date was A$2.72.
36.
The closing balance for Vanessa Torres is as of the 9 February 2026 when she ceased to be an Executive KMP.
Shareholdings of KMP
The minimum shareholding requirement for Non-Executive Directors and Executive KMP is detailed on pages 169 and 157 respectively.
South32 shares held by each member of KMP either directly, indirectly or beneficially, including their related parties
Held at 1 July 2025
Received as
remuneration
Received on vesting
of rights
Other net changes
(Purchase, sales and
transfers)
Held at 30 June
2026
37
Progress against
minimum shareholding
requirement
38
Non-Executive Directors
Stephen Pearce
30,000 — — 100,000 130,000 60%
Karen Wood AM
367,825 — — — 367,825 124%
Frank Cooper AO
128,010 — — — 128,010 97%
Geoff Healy
— — — — — 0%
Sinead Kaufman
— — — — — 0%
Xiaoling Liu
66,000 — — — 66,000 106%
Carlos Mesquita
177,440 — — — 177,440 179%
Mandla Msimang
— — — — — 0%
Ntombifuthi Mtoba
71,386 — — — 71,386 96%
Jane Nelson
40,000 — — — 40,000 60%
Wayne Osborn
174,104 — — — 174,104 144%
Sharon Warburton
67,870 — — — 67,870 111%
Executive KMP
Graham Kerr
3,081,102 — 423,598 (199,092) 3,305,608 146%
Matthew Daley
— 285,714 — — 285,714 28%
Sandy Sibenaler
57,176 — 70,214 (33,001) 94,389 20%
Vanessa Torres
556,515 — 185,729 (87,293) 654,951 146%
Noel Pillay
478,773 — 127,204 (57,243) 548,734 134%
Transactions with KMP
There are no amounts payable to any KMP and there are no loans with any KMP as at 30 June 2026.
During FY26, there were no transactions between KMP or their close family members and the Group other than as described in this report.
A number of Directors of the Group have control or joint control of other entities (also known as personal entities). During the year, there
have been no transactions between those entities and the Group, and no amounts were owed by or to the Group from those entities.
This Remuneration Report was approved by the Board on 27 August 2026.
South32 Annual Report 2026
172 Governance
Remuneration Report continued
37.
For individuals who ceased to be KMP during the financial year, the reported closing share balance represents their shareholdings at their respective dates of cessation.
38.
Calculated based on Board fees and Executive KMP salary at 30 June 2026 with the closing South32 share price on 30 June 2026 of A$3.90 used for Executive KMP valuation. Values
at 100% or more indicate the relevant minimum shareholding requirement has been met.
FINANCIAL
REPORT
Consolidated income statement
174
Consolidated statement of comprehensive income
175
Consolidated balance sheet
176
Consolidated cash flow statement
177
Consolidated statement of changes in equity
178
Notes to financial statements – Basis of preparation
179
1.
Reporting entity
179
2.
Basis of preparation
179
3.
New standards and interpretations
183
Notes to financial statements – Results for the year
184
4.
Segment information
184
5.
Expenses excluding finance costs
194
6.
Tax
194
7.
Dividends
197
8.
Earnings per share
197
Notes to financial statements – Operating assets and liabilities
198
9.
Trade and other receivables
198
10.
Inventories
198
11.
Property, plant and equipment
199
12.
Intangible assets
202
13.
Impairment of non-financial assets
203
14.
Trade and other payables
207
15.
Provisions
207
Notes to financial statements – Capital structure and financing
210
16.
Cash and cash equivalents
210
17.
Interest bearing liabilities
210
18.
Net finance income/(costs)
211
19.
Financial assets and financial liabilities
211
20.
Share capital
217
Notes to financial statements – Other notes
218
21.
Auditor's remuneration
218
22.
Employee share ownership plans
218
23.
Contingent assets and liabilities
220
24.
Subsidiaries
221
25.
Equity accounted investments
222
26.
Interests in joint operations
224
27.
Key management personnel
224
28.
Related party transactions
225
29.
Parent entity information
226
30.
Disposal of subsidiaries
227
31.
Subsequent events
229
Consolidated entity disclosure statement
230
Directors’ declaration
232
Lead auditor’s independence declaration
233
Independent auditor’s report
234
South32 Annual Report 2026
173 Financial report
US$M | Note | FY26 | FY25 |
Continuing operations | |||
Revenue: | |||
Group production | |||
Third party products and services | |||
4 | |||
Other income | |||
Expenses excluding finance costs | 5 | ( | ( |
Share of profit/(loss) of equity accounted investments | 25 | ||
Operating profit/(loss) from continuing operations | |||
Comprising: | |||
Group production | |||
Third party products and services | |||
Operating profit/(loss) from continuing operations | |||
Finance income | |||
Finance costs | ( | ( | |
Net finance income/(costs) | 18 | ||
Profit/(loss) before tax from continuing operations | |||
Income tax (expense)/benefit | 6 | ( | ( |
Profit/(loss) for the year from continuing operations | |||
Discontinued operations | |||
Profit/(loss) after tax from discontinued operations | 30 | ( | |
Profit/(loss) for the year | |||
Attributable to: | |||
Equity holders of South32 Limited | |||
Non-controlling interests | ( | ( | |
Profit/(loss) for the year from continuing operations attributable to equity holders of South32 | |||
Limited: | |||
Basic earnings/(loss) per share (cents) | 8 | ||
Diluted earnings/(loss) per share (cents) | 8 | ||
Profit/(loss) for the year attributable to equity holders of South32 Limited: | |||
Basic earnings/(loss) per share (cents) | 8 | ||
Diluted earnings/(loss) per share (cents) | 8 |
The accompanying notes form part of the consolidated financial statements.
South32 Annual Report 2026
174 Financial report
Consolidated income statement
for the year ended 30June 2026
US$M | Note | FY26 | FY25 |
Profit/(loss) for the year | |||
Other comprehensive income | |||
Items that may be reclassified to the Consolidated income statement: | |||
Translation of foreign operations | ( | ||
Share of other comprehensive income/(loss) of equity accounted investments | 25 | ||
Total items that may be reclassified to the Consolidated income statement | ( | ||
Items that will not be reclassified to the Consolidated income statement: | |||
Investments in equity instruments designated as fair value through other comprehensive income | |||
(FVOCI): | |||
Net fair value gains/(losses) | |||
Income tax (expense)/benefit | ( | ( | |
Share of other comprehensive income/(loss) of equity accounted investments | 25 | ( | |
Gains/(losses) on pension and medical schemes | 15 | ( | |
Total items that will not be reclassified to the Consolidated income statement | |||
Total other comprehensive income/(loss) | |||
Total comprehensive income/(loss) | |||
Attributable to: | |||
Equity holders of South32 Limited | |||
Non-controlling interests | ( | ( |
The accompanying notes form part of the consolidated financial statements.
South32 Annual Report 2026
175 Financial report
Consolidated statement of comprehensive income
for the year ended 30June 2026
US$M | Note | FY26 | FY25 |
ASSETS | |||
Current assets | |||
Cash and cash equivalents | 16 | ||
Trade and other receivables | 9 | ||
Other financial assets | 19 | ||
Inventories | 10 | ||
Current tax assets | |||
Other assets | |||
Assets held for sale | 30 | ||
Total current assets | |||
Non-current assets | |||
Trade and other receivables | 9 | ||
Other financial assets | 19 | ||
Inventories | 10 | ||
Property, plant and equipment | 11 | ||
Intangible assets | 12 | ||
Equity accounted investments | 25 | ||
Deferred tax assets | 6 | ||
Other assets | |||
Total non-current assets | |||
Total assets | |||
LIABILITIES | |||
Current liabilities | |||
Trade and other payables | 14 | ||
Interest bearing liabilities | 17 | ||
Current tax payables | |||
Provisions | 15 | ||
Deferred income | |||
Liabilities directly associated with assets held for sale | 30 | ||
Total current liabilities | |||
Non-current liabilities | |||
Interest bearing liabilities | 17 | ||
Other financial liabilities | 19 | ||
Deferred tax liabilities | 6 | ||
Provisions | 15 | ||
Total non-current liabilities | |||
Total liabilities | |||
Net assets | |||
EQUITY | |||
Share capital | 20 | ||
Treasury shares | 20 | ( | ( |
Reserves | ( | ( | |
Retained earnings/(accumulated losses) | ( | ||
Total equity attributable to equity holders of South32 Limited | |||
Non-controlling interests | |||
Total equity |
The accompanying notes form part of the consolidated financial statements.
South32 Annual Report 2026
176 Financial report
Consolidated balance sheet
as at 30June 2026
US$M | FY26 | FY25 |
Operating activities | ||
Profit/(loss) before tax from continuing operations | ||
Profit/(loss) before tax from discontinued operations | ( | |
Adjustments for: | ||
Significant items 1 | ( | |
Depreciation and amortisation expense | ||
Impairment losses/(reversals) of financial assets | ( | |
Impairment losses/(reversals) of non-financial assets | ||
Employee share awards expense | ||
Net finance (income)/costs | ( | ( |
Share of (profit)/loss of equity accounted investments | ( | ( |
(Gains)/losses on disposal of subsidiaries and joint operations | ( | |
| Unrealised (gains)/losses on derivative instruments and fair value movements on contingent consideration | ||
| measured at fair value through profit or loss (FVTPL) | ( | |
Other non-cash or non-operating items | ||
Changes in assets and liabilities: | ||
Trade and other receivables | ||
Inventories | ( | |
Trade and other payables | ( | ( |
Provisions and other liabilities | ||
Cash generated from operations | ||
Interest received | ||
Interest paid | ( | ( |
Income tax paid | ( | ( |
Dividends received | ||
Dividends received from equity accounted investments | ||
Net cash flows from operating activities | ||
Investing activities | ||
Purchase of property, plant and equipment | ( | ( |
Purchase of intangible assets | ( | ( |
Proceeds from sale of property, plant and equipment and intangible assets | ||
Exploration expenditure | ( | ( |
Exploration expenditure expensed and included in operating cash flows | ||
Investment in financial assets | ( | ( |
Proceeds from financial assets | ||
Payments for the acquisition of subsidiaries and joint operations, net of their cash | ( | |
Proceeds from the disposal of subsidiaries and joint operations, net of their cash | ||
Payments for preference shares issued by equity accounted investments | ( | ( |
Proceeds from redemption of preference shares issued by equity accounted investments | ||
Net cash flows from investing activities | ( | ( |
Financing activities | ||
Proceeds from interest bearing liabilities | ||
Repayment of lease liabilities | ( | ( |
Repayment of other interest bearing liabilities | ( | ( |
Purchase of shares by Employee Share Ownership Plan (ESOP) Trusts | ( | ( |
Share buy-back | ( | ( |
Dividends paid | ( | ( |
Contributions from non-controlling interests | ||
Net cash flows from financing activities | ( | ( |
Net increase in cash and cash equivalents | ||
Cash and cash equivalents, net of overdrafts, at the beginning of the year 2 | ||
Effect of foreign exchange rate changes on cash and cash equivalents | ||
Cash and cash equivalents, net of overdrafts, at the end of the year 2 |
1. Includes non-cash significant items recognised during the year, refer to note 4(b)(ii) Significant items, and cash flows relating to significant items recognised in prior years.
2. FY25 cash and cash equivalents included US$80 million classified as held for sale as part of the Cerro Matoso disposal group. Refer to note 30 Disposal of subsidiaries.
The accompanying notes form part of the consolidated financial statements.
South32 Annual Report 2026
177 Financial report
Consolidated cash flow statement
for the year ended 30June 2026
| Attributable to equity holders of South32 Limited | |||||||||
| Retained | |||||||||
| Financial | Employee | earnings/ | Non- | ||||||
| Share | Treasury | assets | share awards | Other | (accumulated | controlling | Total | ||
US$M | capital | shares | reserve 1 | reserve 2 | reserves 3 | losses) | Total | interests 4 | equity |
Balance as at 1July 2025 | ( | ( | ( | ( | |||||
Profit/(loss) for the year | ( | ||||||||
Other comprehensive income/(loss) | ( | ||||||||
Total comprehensive income/(loss) | ( | ||||||||
Transactions with owners: | |||||||||
Dividends | ( | ( | ( | ||||||
Shares bought back and cancelled | ( | ( | ( | ||||||
Employee share entitlements for unvested awards, net of tax | |||||||||
Employee share awards vested and lapsed, net of tax | ( | ( | ( | ||||||
Purchase of shares by ESOP Trusts | ( | ( | ( | ||||||
Equity issued to holders of non- controlling interests | ( | ( | |||||||
Balance as at 30June 2026 | ( | ( | |||||||
Balance as at 1July 2024 | ( | ( | ( | ( | |||||
Profit/(loss) for the year | ( | ||||||||
Other comprehensive income/(loss) | ( | ( | |||||||
Total comprehensive income/(loss) | ( | ( | |||||||
Transactions with owners: | |||||||||
Dividends | ( | ( | ( | ||||||
Shares bought back and cancelled | ( | ( | ( | ||||||
Employee share entitlements for unvested awards, net of tax | |||||||||
Employee share awards vested and lapsed, net of tax | ( | ( | ( | ||||||
| Purchase of shares by ESOP Trusts | ( | ( | ( | ||||||
| Transfer of cumulative fair value loss | |||||||||
on an investment in equity instruments designated as FVOCI | ( | ||||||||
Equity issued to holders of non- controlling interests | ( | ( | |||||||
Balance as at 30June 2025 | ( | ( | ( | ( |
1. Represents the fair value movement of investments in equity instruments designated as FVOCI, net of tax.
2. Represents the accrued employee entitlements to share awards that have not yet vested, net of tax.
3. Primarily consists of the common control transaction reserve of US$3,56 9 million, which reflects the difference between consideration paid and the carrying value of assets and
liabilities acquired, as well as the gains/losses on disposal of entities, as part of the Group's demerger from BHP Billiton in 2015.
4. Relates to the minority shareholder (49.9 per cent) of Minera Sud Argentina S.A., which holds the Chita Valley copper porphyry exploration project in Argentina.
The accompanying notes form part of the consolidated financial statements.
South32 Annual Report 2026
178 Financial report
Consolidated statement of changes in equity
for the year ended 30June 2026
Key estimates, assumptions and judgements | |
Recognition of deferred taxes | note 6 |
Uncertain tax matters | note 6 |
Useful economic lives of assets | note 11 |
Impairment of non-financial assets | note 13 |
Closure and rehabilitation provisions | note 15 |
Expected credit loss on credit-impaired financial assets | note 19 |
South32 Annual Report 2026
179 Financial report
Notes to financial statements – Basis of preparation
2. Basis of preparation continued
(c) Key estimates, assumptions and judgements continued
South32 Annual Report 2026
180 Financial report
Notes to financial statements – Basis of preparation continued
2. Basis of preparation continued
(c) Key estimates, assumptions and judgements continued
Climate-related risks and opportunities continued
South32 Annual Report 2026
181 Financial report
2. Basis of preparation continued
(c) Key estimates, assumptions and judgements continued
Climate-related risks and opportunities continued
South32 Annual Report 2026
182 Financial report
Notes to financial statements – Basis of preparation continued
2. Basis of preparation continued
(c) Key estimates, assumptions and judgements continued
South32 Annual Report 2026
183 Financial report
8.
This section focuses on the financial performance of the Group, covering both profitability and the resulting return to shareholders via
earnings per share.
Operating segment | Principal activities |
Sierra Gorda | Copper mine in Chile |
Cannington | Silver, lead and zinc mine in Australia |
Hermosa | Base metals exploration and development project in the United States |
Australia Manganese | Manganese ore mine in Australia |
South Africa Manganese | Manganese ore mines in South Africa |
Worsley Alumina 1 | Integrated bauxite mine and alumina refinery in Australia |
Brazil Alumina 1 | Integrated bauxite mine and alumina refinery in Brazil |
Brazil Aluminium 1 | Aluminium smelter in Brazil |
Hillside Aluminium 1 | Aluminium smelter in South Africa |
Mozal Aluminium 2 | Aluminium smelter in Mozambique |
Cerro Matoso 3 | Integrated laterite ferronickel mine and smelting complex in Colombia |
Illawarra Metallurgical Coal 4 | Metallurgical coal mines in Australia |
South32 Annual Report 2026
184 Financial report
Notes to financial statements – Results for the year
4. Segment information continued
(b) Segment results continued
South32 Annual Report 2026
185 Financial report
4. Segment information continued
(b) Segment results continued
| FY26 | Australia | South Africa | |||
US$M | Sierra Gorda 1 | Cannington | Hermosa | Manganese 1 | Manganese 1 |
Revenue from customers | 1,074 | 810 | – | 678 | 359 |
Other revenue 4 | 80 | 42 | – | (3) | 5 |
Total underlying revenue | 1,154 | 852 | – | 675 | 364 |
Comprising: | |||||
Group production | 1,154 | 852 | – | 675 | 364 |
Third party products and services 5 | – | – | – | – | – |
Inter-segment revenue | – | – | – | – | – |
Total underlying revenue | 1,154 | 852 | – | 675 | 364 |
Underlying EBITDA | 758 | 451 | (39) | 229 | 30 |
Underlying depreciation and amortisation | (197) | (87) | (7) | (86) | (28) |
Underlying EBIT | 561 | 364 | (46) | 143 | 2 |
Comprising: | |||||
Group production | 567 | 365 | (46) | 147 | 2 |
Exploration expenditure expensed | (6) | (1) | – | (4) | – |
Third party products and services 5 | – | – | – | – | – |
Share of profit/(loss) of equity accounted investments | – | – | – | – | – |
Underlying EBIT | 561 | 364 | (46) | 143 | 2 |
Underlying net finance costs | |||||
Underlying income tax expense | |||||
Underlying royalty related tax expense | |||||
Underlying earnings | |||||
Total adjustments to profit/(loss) 6 | |||||
Profit/(loss) for the year | |||||
Underlying exploration expenditure | 12 | 4 | 30 | 5 | – |
Underlying capital expenditure 7 | 235 | 42 | 711 | 78 | 27 |
Underlying equity accounted investments | – | – | – | – | – |
Total underlying assets 8 | 2,125 | 535 | 3,001 | 744 | 359 |
Total underlying liabilities 8 | 242 | 489 | 218 | 554 | 148 |
South32 Annual Report 2026
186 Financial report
Notes to financial statements – Results for the year continued
Continuing operations | Discontinued operations | ||||||||
| Group | |||||||||
| Group and | underlying | ||||||||
| unallocated | results from | Illawarra | Group | ||||||
| Worsley | Brazil | Hillside | Mozal | items/ | continuing | Metallurgical | underlying | ||
Alumina | Brazil Alumina | Aluminium | Aluminium | Aluminium 2 | eliminations | operations 1 | Cerro Matoso 3 | Coal 3 | results 1 |
1,320 | 503 | 441 | 2,216 | 890 | (518) | 7,773 | 193 | – | 7,966 |
(1) | (1) | – | 20 | – | – | 142 | – | – | 142 |
1,319 | 502 | 441 | 2,236 | 890 | (518) | 7,915 | 193 | – | 8,108 |
686 | 355 | 441 | 2,236 | 890 | – | 7,653 | 193 | – | 7,846 |
– | – | – | – | – | 262 | 262 | – | – | 262 |
633 | 147 | – | – | – | (780) | – | – | – | – |
1,319 | 502 | 441 | 2,236 | 890 | (518) | 7,915 | 193 | – | 8,108 |
181 | 29 | 27 | 655 | 183 | (53) | 2,451 | 11 | – | 2,462 |
(176) | (56) | (7) | (74) | (1) | (26) | (745) | – | – | (745) |
5 | (27) | 20 | 581 | 182 | (79) | 1,706 | 11 | – | 1,717 |
9 | (11) | 20 | 581 | 182 | (63) | 1,753 | 12 | – | 1,765 |
(4) | – | – | – | – | (34) | (49) | (1) | – | (50) |
– | – | – | – | – | 18 | 18 | – | – | 18 |
– | (16) | – | – | – | – | (16) | – | – | (16) |
5 | (27) | 20 | 581 | 182 | (79) | 1,706 | 11 | – | 1,717 |
(171) | (4) | – | (175) | ||||||
(454) | – | – | (454) | ||||||
(58) | – | – | (58) | ||||||
1,023 | 7 | – | 1,030 | ||||||
36 | – | 19 | 55 | ||||||
1,059 | 7 | 19 | 1,085 | ||||||
4 | – | – | – | – | 38 | 93 | 1 | – | 94 |
160 | 25 | 15 | 63 | 9 | 4 | 1,369 | 8 | – | 1,377 |
– | – | – | – | – | – | – | – | – | – |
2,712 | 743 | 157 | 1,248 | 48 | 3,891 | 15,563 | – | – | 15,563 |
1,007 | 181 | 83 | 390 | 144 | 2,393 | 5,849 | – | – | 5,849 |
South32 Annual Report 2026
187 Financial report
4. Segment information continued
(b) Segment results continued
| FY25 | Australia | South Africa | |||
US$M | Sierra Gorda 1 | Cannington | Hermosa | Manganese 1 | Manganese 1 |
Revenue from customers | 821 | 644 | – | 46 | 366 |
Other revenue 3 | 11 | 15 | – | (4) | (13) |
Total underlying revenue | 832 | 659 | – | 42 | 353 |
Comprising: | |||||
Group production | 832 | 659 | – | 42 | 353 |
Third party products and services 4 | – | – | – | – | – |
Inter-segment revenue | – | – | – | – | – |
Total underlying revenue | 832 | 659 | – | 42 | 353 |
Underlying EBITDA | 482 | 281 | (41) | (105) | 46 |
Underlying depreciation and amortisation | (164) | (77) | (4) | (20) | (22) |
Underlying EBIT | 318 | 204 | (45) | (125) | 24 |
Comprising: | |||||
Group production | 318 | 206 | (45) | (120) | 24 |
Exploration expenditure expensed | – | (2) | – | (5) | – |
Third party products and services 4 | – | – | – | – | – |
Share of profit/(loss) of equity accounted investments | – | – | – | – | – |
Underlying EBIT | 318 | 204 | (45) | (125) | 24 |
Underlying net finance costs | |||||
Underlying income tax expense | |||||
Underlying royalty related tax expense | |||||
Underlying earnings | |||||
Total adjustments to profit/(loss) 5 | |||||
Profit/(loss) for the year | |||||
Underlying exploration expenditure | 13 | 6 | 35 | 5 | – |
Underlying capital expenditure 6 | 216 | 49 | 517 | 115 | 44 |
Underlying equity accounted investments | – | – | – | – | – |
Total underlying assets 7 | 1,982 | 576 | 2,228 | 737 | 385 |
Total underlying liabilities 7 | 213 | 445 | 196 | 497 | 133 |
South32 Annual Report 2026
188 Financial report
Notes to financial statements – Results for the year continued
Continuing operations | Discontinued operations | ||||||||
| Group | |||||||||
| Group and | underlying | ||||||||
| unallocated | results from | Illawarra | Group | ||||||
| Worsley | Brazil | Hillside | Mozal | items/ | continuing | Metallurgical | underlying | ||
Alumina | Brazil Alumina | Aluminium | Aluminium | Aluminium | eliminations | operations 1 | Cerro Matoso 2 | Coal 2 | results 1 |
1,918 | 746 | 355 | 1,995 | 980 | (893) | 6,978 | 484 | 145 | 7,607 |
(1) | 3 | – | (6) | (1) | (1) | 3 | 1 | (1) | 3 |
1,917 | 749 | 355 | 1,989 | 979 | (894) | 6,981 | 485 | 144 | 7,610 |
877 | 525 | 355 | 1,989 | 979 | – | 6,611 | 485 | 116 | 7,212 |
– | – | – | – | – | 370 | 370 | – | 28 | 398 |
1,040 | 224 | – | – | – | (1,264) | – | – | – | – |
1,917 | 749 | 355 | 1,989 | 979 | (894) | 6,981 | 485 | 144 | 7,610 |
795 | 283 | (92) | 154 | 125 | (134) | 1,794 | 84 | 50 | 1,928 |
(176) | (57) | (5) | (69) | (70) | (27) | (691) | (26) | – | (717) |
619 | 226 | (97) | 85 | 55 | (161) | 1,103 | 58 | 50 | 1,211 |
621 | 233 | (97) | 85 | 55 | (144) | 1,136 | 59 | 50 | 1,245 |
(2) | – | – | – | – | (35) | (44) | (1) | – | (45) |
– | – | – | – | – | 18 | 18 | – | – | 18 |
– | (7) | – | – | – | – | (7) | – | – | (7) |
619 | 226 | (97) | 85 | 55 | (161) | 1,103 | 58 | 50 | 1,211 |
(173) | (13) | (2) | (188) | ||||||
(315) | (17) | (14) | (346) | ||||||
(14) | – | – | (14) | ||||||
601 | 28 | 34 | 663 | ||||||
(286) | (119) | (48) | (453) | ||||||
315 | (91) | (14) | 210 | ||||||
2 | – | – | – | – | 35 | 96 | 1 | 1 | 98 |
106 | 41 | 9 | 67 | 21 | 20 | 1,205 | 30 | 57 | 1,292 |
– | 15 | – | – | – | – | 15 | – | – | 15 |
2,767 | 842 | 130 | 1,157 | 353 | 3,259 | 14,416 | 330 | – | 14,746 |
1,060 | 204 | 59 | 369 | 201 | 2,246 | 5,623 | 266 | – | 5,889 |
South32 Annual Report 2026
189 Financial report
4. Segment information continued
(b) Segment results continued
FY26 | Continuing | Discontinued | ||
US$M | Note | operations | operations 1 | Total |
Underlying EBIT | 1,706 | 11 | 1,717 | |
Significant items | 4(b)(ii) | (122) | – | (122) |
Joint venture adjustments 2,3 | (613) | – | (613) | |
Exchange rate gains/(losses) on restatement of monetary items 4 | (7) | (1) | (8) | |
Impairment (losses)/reversals of financial assets 4 | 19 | 249 | – | 249 |
Gains/(losses) on the disposal of subsidiaries 5 | 30 | – | 16 | 16 |
Gains/(losses) on non-trading derivative instruments and contingent consideration | ||||
measured at FVTPL 4,6 | 146 | – | 146 | |
Operating profit/(loss) | 1,359 | 26 | 1,385 | |
Underlying net finance costs | (171) | (4) | (175) | |
Joint venture adjustments 2,3 | 218 | – | 218 | |
Exchange rate variations on net cash/(debt) | (39) | 1 | (38) | |
Net finance income/(costs) | 8 | (3) | 5 | |
Underlying income tax expense | (454) | – | (454) | |
Underlying royalty related tax expense | (58) | – | (58) | |
Tax effect of significant items | 4(b)(ii) | (2) | – | (2) |
Joint venture adjustments relating to income tax expense 2,3 | 144 | – | 144 | |
Joint venture adjustments relating to royalty related tax expense 2,3 | 58 | – | 58 | |
Tax effect of other adjustments to derive Underlying EBIT | (31) | – | (31) | |
Tax effect of other adjustments to derive Underlying net finance costs | 11 | – | 11 | |
Exchange rate variations on tax balances | 24 | 3 | 27 | |
Income tax (expense)/benefit | (308) | 3 | (305) | |
Underlying earnings | 1,023 | 7 | 1,030 | |
Total adjustments to profit/(loss) | 36 | 19 | 55 | |
Profit/(loss) for the year | 1,059 | 26 | 1,085 | |
Underlying earnings attributable to: | ||||
Equity holders of South32 Limited | 1,025 | 7 | 1,032 | |
Non-controlling interests | (2) | – | (2) |
South32 Annual Report 2026
190 Financial report
Notes to financial statements – Results for the year continued
4. Segment information continued
(b) Segment results continued
(i) Underlying results reconciliation continued
FY25 | Continuing | Discontinued | ||
US$M | Note | operations | operations 1 | Total |
Underlying EBIT | 1,103 | 108 | 1,211 | |
Significant items | 4(b)(ii) | 71 | – | 71 |
Joint venture adjustments 2,3 | (122) | – | (122) | |
Exchange rate gains/(losses) on restatement of monetary items 4 | (4) | (4) | (8) | |
Impairment (losses)/reversals of financial assets 4 | 19 | (27) | – | (27) |
Impairment (losses)/reversals of non-financial assets 4 | 13 | (346) | (118) | (464) |
Gains/(losses) on the disposal of subsidiaries 5 | 30 | – | (47) | (47) |
Gains/(losses) on non-trading derivative instruments and contingent consideration | ||||
measured at FVTPL 4,6 | (121) | – | (121) | |
Operating profit/(loss) | 554 | (61) | 493 | |
Underlying net finance costs | (173) | (15) | (188) | |
Joint venture adjustments 2,3 | 225 | – | 225 | |
Exchange rate variations on net cash/(debt) | 13 | (1) | 12 | |
Net finance income/(costs) | 65 | (16) | 49 | |
Underlying income tax expense | (315) | (31) | (346) | |
Underlying royalty related tax expense | (14) | – | (14) | |
Tax effect of significant items | 4(b)(ii) | 1 | – | 1 |
Joint venture adjustments relating to income tax expense 2,3 | (3) | – | (3) | |
Joint venture adjustments relating to royalty related tax expense 2,3 | 14 | – | 14 | |
Tax effect of other adjustments to derive Underlying EBIT | 4 | 1 | 5 | |
Tax effect of other adjustments to derive Underlying net finance costs | (3) | – | (3) | |
Exchange rate variations on tax balances | 12 | 2 | 14 | |
Income tax (expense)/benefit | (304) | (28) | (332) | |
Underlying earnings | 601 | 62 | 663 | |
Total adjustments to profit/(loss) | (286) | (167) | (453) | |
Profit/(loss) for the year | 315 | (105) | 210 | |
Underlying earnings attributable to: | ||||
Equity holders of South32 Limited | 604 | 62 | 666 | |
Non-controlling interests | (3) | – | (3) |
South32 Annual Report 2026
191 Financial report
4. Segment information continued
(b) Segment results continued
(i) Underlying results reconciliation continued
| Group | Discontinued | |||
FY26 | underlying | Joint venture | operations | Group statutory |
US$M | results | adjustments | adjustments 1 | results |
Total revenue 2 | 8,108 | (2,099) | (193) | 5,816 |
Depreciation and amortisation | 745 | (311) | – | 434 |
Share of profit/(loss) of equity accounted investments | (16) | 105 | – | 89 |
Exploration expenditure 3 | 94 | (17) | – | 77 |
Capital expenditure 3 | 1,377 | (340) | – | 1,037 |
Equity accounted investments | – | 596 | – | 596 |
Total assets | 15,563 | (1,072) | – | 14,491 |
Total liabilities | 5,849 | (1,072) | – | 4,777 |
| Group | Discontinued | |||
FY25 | underlying | Joint venture | operations | Group statutory |
US$M | results | adjustments | adjustments 1 | results |
Total revenue 2 | 7,610 | (1,201) | (629) | 5,780 |
Depreciation and amortisation | 717 | (206) | (26) | 485 |
Share of profit/(loss) of equity accounted investments | (7) | 106 | – | 99 |
Exploration expenditure 3 | 98 | (18) | – | 80 |
Capital expenditure 3 | 1,292 | (375) | – | 917 |
Equity accounted investments | 15 | 575 | – | 590 |
Total assets | 14,746 | (1,019) | – | 13,727 |
Total liabilities | 5,889 | (1,019) | – | 4,870 |
FY26 | |||
US$M | Gross | Tax | Net |
Mozal Aluminium care and maintenance impacts | (122) | (2) | (124) |
Total significant items | (122) | (2) | (124) |
FY25 | |||
US$M | Gross | Tax | Net |
Worsley access compensation agreement | 97 | 1 | 98 |
Mozal Aluminium inventory write-down | (26) | – | (26) |
Total significant items | 71 | 1 | 72 |
South32 Annual Report 2026
192 Financial report
Notes to financial statements – Results for the year continued
4. Segment information continued
Revenue 1 | Non-current assets | |||
US$M | FY26 | FY25 | FY26 | FY25 |
Australia | 479 | 279 | 3,283 | 3,352 |
Bahrain | 131 | 346 | – | – |
Brazil | 335 | 294 | 645 | 725 |
China | 459 | 248 | – | – |
Italy | 311 | 268 | – | – |
Japan | 442 | 415 | – | – |
Mozambique | 270 | 357 | 33 | 34 |
Netherlands 2 | 812 | 887 | 1,407 | 1,554 |
South Africa | 523 | 422 | 906 | 959 |
United States of America | 421 | 530 | 3,067 | 2,299 |
Rest of Africa | 10 | – | – | – |
Rest of Asia | 561 | 631 | 82 | 72 |
Rest of Europe | 634 | 545 | 8 | 8 |
Rest of Middle East | 99 | 144 | – | – |
Rest of North America | 241 | 286 | 35 | 19 |
Rest of Oceania | 88 | 128 | – | – |
Rest of South America | – | – | 287 | 236 |
Unallocated assets 3 | – | – | 868 | 670 |
Total | 5,816 | 5,780 | 10,621 | 9,928 |
South32 Annual Report 2026
193 Financial report
US$M | Note | FY26 | FY25 |
Changes in inventories of finished goods and work in progress | 21 | 28 | |
Raw materials and consumables used | 2,407 | 2,316 | |
Wages, salaries and redundancies | 655 | 561 | |
Pension and other post-retirement obligations | 52 | 46 | |
External services (including transportation) | 843 | 944 | |
Third party products and services | 324 | 362 | |
Depreciation and amortisation | 434 | 485 | |
Exchange rate (gains)/losses on restatement of monetary items | 7 | 4 | |
(Gains)/losses on derivative instruments and contingent consideration measured at FVTPL | (141) | 111 | |
Government and other royalties paid and payable | 86 | 68 | |
Exploration expenditure expensed | 39 | 39 | |
Impairment losses/(reversals) of financial assets | 19 | (249) | 27 |
Impairment losses/(reversals) of non-financial assets | 13 | – | 346 |
Short-term, low-value and variable lease rentals | 62 | 58 | |
All other operating expenses | 130 | 132 | |
Total | 4,670 | 5,527 |
US$M | Note | FY26 | FY25 |
Current income tax (expense)/benefit | (333) | (319) | |
Deferred income tax (expense)/benefit | 28 | (13) | |
Total income tax (expense)/benefit | (305) | (332) | |
Income tax (expense)/benefit attributable to: | |||
Continuing operations | (308) | (304) | |
Discontinued operations | 30 | 3 | (28) |
Total income tax (expense)/benefit | (305) | (332) |
US$M | Note | FY26 | FY25 |
Profit/(loss) before tax from continuing operations | 1,367 | 619 | |
Profit/(loss) before tax from discontinued operations | 30 | 23 | (77) |
Deduct: Share of profit of equity accounted investments included in continuing operations | 89 | 99 | |
Profit/(loss) subject to tax | 1,301 | 443 | |
Income tax on profit/(loss) calculated at 30 per cent | (390) | (133) | |
Tax rate differential on non-Australian income | 22 | (100) | |
Exchange variations and other translation adjustments | 27 | 14 | |
Withholding tax on distributed earnings | (12) | – | |
Derecognition of future tax benefits | (20) | (28) | |
Non-deductible impairment charges 1 | – | (42) | |
Prior year adjustments | (4) | 7 | |
Other | 72 | (50) | |
Total income tax (expense)/benefit | (305) | (332) |
South32 Annual Report 2026
194 Financial report
Notes to financial statements – Results for the year continued
6. Tax continued
| Deferred tax (charged)/credited | ||||||
| to the Consolidated income | ||||||
Deferred tax assets | Deferred tax liabilities | statement 1 | ||||
US$M | FY26 | FY25 | FY26 | FY25 | FY26 | FY25 |
Type of temporary difference | ||||||
Depreciation | 84 | 84 | 80 | 98 | 17 | (6) |
Employee benefits | 51 | 47 | (6) | (5) | 2 | – |
Closure and rehabilitation | 308 | 278 | – | (7) | 19 | 32 |
Other provisions | 6 | 17 | (3) | (3) | (12) | 3 |
Deferred charges | – | – | – | – | – | (4) |
Non tax-depreciable fair value adjustments, revaluations | ||||||
and mineral rights | (23) | (17) | – | 5 | 4 | (12) |
Tax-effected losses | 80 | 82 | – | – | (2) | (12) |
Brazil deferral incentive 2 | – | – | 95 | 88 | (7) | (27) |
Leases | 33 | 19 | – | (1) | 13 | (1) |
Other | (42) | (24) | – | – | (6) | 14 |
Total | 497 | 486 | 166 | 175 | 28 | (13) |
US$M | FY26 | FY25 |
Unrecognised deferred tax assets | ||
Tax-effected losses 1 | 829 | 308 |
Mineral rights | 349 | 587 |
Impairment of investments in subsidiaries | 1,125 | 1,228 |
Closure and rehabilitation | 73 | 64 |
Depreciable assets | 28 | 30 |
Other temporary differences | (9) | 3 |
Total unrecognised deferred tax assets | 2,395 | 2,220 |
Unrecognised deferred tax liabilities | ||
Taxable temporary differences associated with investments and undistributed earnings in subsidiaries | 18 | 36 |
Total unrecognised deferred tax liabilities | 18 | 36 |
South32 Annual Report 2026
195 Financial report
6. Tax continued
(e) Tax consolidation
South32 Limited and its 100 per cent owned Australian resident subsidiaries have formed a tax consolidated group with effect from 25 May
2015. South32 Limited is the head entity of the tax consolidated group. Members of the Group have entered into a tax sharing agreement
in order to allocate income tax expense to the wholly-owned subsidiaries on a stand-alone basis. The tax sharing arrangement provides for
the allocation of income tax liabilities between the entities should the head entity default on its tax payment obligations. The possibility of
such a default is considered remote at the date of this report.
Members of the tax consolidated group have also entered into a tax funding agreement. The Group has applied its allocation approach in
determining the appropriate amount of current taxes to allocate to members of the tax consolidated group. The tax funding agreement
provides for each member of the tax consolidated group to pay or receive a tax equivalent amount to or from the head entity in
accordance with their notional current tax liability or current tax asset. Such amounts are reflected in amounts receivable from, or payable
to, the head entity in their accounts and are settled as soon as practicable after lodgement of the consolidated return and payment of the
tax liability.
(g) Tax transparency report
More detail of the Group’s tax outcomes, including country-by-country reporting is included in the 2026 Tax Transparency and Payments to
Government Report.
South32 Annual Report 2026
196 Financial report
Notes to financial statements – Results for the year continued
7. Dividends
US$M | FY26 | FY25 |
Prior year final dividend 1 | 117 | 140 |
Interim dividend 2 | 175 | 154 |
Total dividends declared and paid during the year | 292 | 294 |
1. On 28 August 2025, the Directors resolved to pay a fully franked final dividend of US 2.6 cents per share (US$117 million) in respect of the 2025 financial year. The dividend was paid
on 16 October 2025.
2. On 12 February 2026, the Directors resolved to pay a fully franked interim dividend of US 3.9 cents per share (US$175 million) in respect of the 2026 financial half year. The dividend
was paid on 2 April 2026.
Franking account
US$M | FY26 | FY25 |
Franking credits at the beginning of the financial year | 706 | 635 |
Credits arising from tax paid/payable by South32 Limited 1 | 49 | 207 |
Utilisation of credits arising from the payment of franked dividends | (122) | (127) |
Exchange rate variations | 34 | (9) |
Total franking credits available at the end of the financial year 2 | 667 | 706 |
1. Includes the Australia FY26 income tax liability of US$1 million.
2. The payment of the final franked FY26 dividend declared after 30 June 2026 will decrease the franking account balance by US$104 million. Refer to note 31 Subsequent events.
Profit/(loss) attributable to equity holders | |||
US$M | Note | FY26 | FY25 |
Continuing operations | 1,061 | 318 | |
Discontinued operations | 30 | 26 | (105) |
Profit/(loss) attributable to equity holders of South32 Limited (basic) | 1,087 | 213 | |
Profit/(loss) attributable to equity holders of South32 Limited (diluted) | 1,087 | 213 |
Weighted average number of shares | ||
Million | FY26 | FY25 |
Basic earnings/(loss) per share denominator 1 | 4,486 | 4,510 |
Shares contingently issuable under ESOPs | 17 | 14 |
Diluted earnings/(loss) per share denominator | 4,503 | 4,524 |
Earnings/(loss) per share | ||
US cents | FY26 | FY25 |
Continuing operations | ||
Basic earnings/(loss) per share | 23.6 | 7.0 |
Diluted earnings/(loss) per share | 23.5 | 7.0 |
Attributable to ordinary equity holders of South32 Limited | ||
Basic earnings/(loss) per share | 24.2 | 4.7 |
Diluted earnings/(loss) per share | 24.1 | 4.7 |
South32 Annual Report 2026
197 Financial report
This section shows the assets used to generate the Group’s trading performance and the liabilities incurred. Assets and liabilities relating
to the Group’s financing activities are addressed in the capital structure and financing section, notes 16 to 20.
9. Trade and other receivables
US$M | Note | FY26 | FY25 |
Current | |||
Trade receivables | 339 | 408 | |
Loans to equity accounted investments 1 | 28 | 374 | 233 |
Other receivables | 148 | 168 | |
Total current trade and other receivables 2 | 861 | 809 | |
Non-current | |||
Loans to equity accounted investments 1 | 28 | 1,574 | 1,737 |
Other receivables | 287 | 263 | |
Total non-current trade and other receivables 2 | 1,861 | 2,000 |
1. Includes the credit-impaired shareholder loan receivable from Sierra Gorda which is classified as current of US$374 million and non-current of US$1,406 million (FY25: current of
US$220 million and non-current of US$1,554 million). Refer to note 19 Financial assets and financial liabilities.
Trade receivables generally have terms of up to 30 days.
US$M | FY26 | FY25 |
Current | ||
Raw materials and consumables | 416 | 474 |
Work in progress | 222 | 296 |
Finished goods | 174 | 165 |
Total current inventories | 812 | 935 |
Non-current | ||
Raw materials and consumables | 32 | 36 |
Total non-current inventories | 32 | 36 |
South32 Annual Report 2026
198 Financial report
Notes to financial statements – Operating assets and liabilities
Land and buildings | Plant and equipment | ||||||||
| Other | Assets | Exploration | |||||||
FY26 | Right-of-use | Owned | Right-of-use | Owned | mineral | under | and | ||
US$M | Note | assets | assets | assets | assets | assets 1 | construction | evaluation | Total |
Cost | |||||||||
At the beginning of the year | 35 | 2,339 | 1,221 | 10,466 | 3,048 | 1,865 | 112 | 19,086 | |
Additions | 19 | – | 92 | – | – | 1,088 | 41 | 1,240 | |
Changes in closure and rehabilitation provisions | 15 | – | – | – | (121) | – | – | – | (121) |
Disposals | – | (4) | (17) | (47) | – | (3) | – | (71) | |
Transfers and other movements | – | 60 | (6) | 303 | 33 | (373) | (17) | – | |
At the end of the year | 54 | 2,395 | 1,290 | 10,601 | 3,081 | 2,577 | 136 | 20,134 | |
Accumulated depreciation and impairments | |||||||||
At the beginning of the year | 14 | 1,557 | 571 | 7,997 | 2,248 | 270 | – | 12,657 | |
Depreciation 2 | 9 | 61 | 120 | 291 | 20 | – | – | 501 | |
Disposals | – | (4) | (17) | (41) | – | – | – | (62) | |
At the end of the year | 23 | 1,614 | 674 | 8,247 | 2,268 | 270 | – | 13,096 | |
Net book value at the end of the year | 31 | 781 | 616 | 2,354 | 813 | 2,307 | 136 | 7,038 |
Land and buildings | Plant and equipment | ||||||||
| Other | Assets | Exploration | |||||||
FY25 | Right-of-use | Owned | Right-of-use | Owned | mineral | under | and | ||
US$M | Note | assets | assets | assets | assets | assets 1 | construction | evaluation | Total |
Cost | |||||||||
At the beginning of the year | 37 | 2,343 | 1,094 | 11,642 | 3,331 | 1,324 | 80 | 19,851 | |
Additions | 9 | – | 114 | – | – | 959 | 48 | 1,130 | |
Changes in closure and rehabilitation provisions | 15 | – | – | – | (147) | – | – | – | (147) |
Disposals | (11) | (14) | – | (53) | (29) | – | – | (107) | |
Reclassified as held for sale | 30 | – | (172) | – | (1,174) | (269) | (26) | – | (1,641) |
Transfers and other movements | – | 182 | 13 | 198 | 15 | (392) | (16) | – | |
At the end of the year | 35 | 2,339 | 1,221 | 10,466 | 3,048 | 1,865 | 112 | 19,086 | |
Accumulated depreciation and impairments | |||||||||
At the beginning of the year | 19 | 1,582 | 481 | 8,497 | 2,518 | 251 | – | 13,348 | |
Depreciation 2,3 | 6 | 70 | 86 | 354 | 15 | – | – | 531 | |
Net impairments | 13 | – | 75 | 4 | 340 | 8 | 19 | – | 446 |
Disposals | (11) | (4) | – | (49) | (26) | – | – | (90) | |
Reclassified as held for sale | 30 | – | (166) | – | (1,145) | (267) | – | – | (1,578) |
At the end of the year | 14 | 1,557 | 571 | 7,997 | 2,248 | 270 | – | 12,657 | |
Net book value at the end of the year | 21 | 782 | 650 | 2,469 | 800 | 1,595 | 112 | 6,429 |
South32 Annual Report 2026
199 Financial report
11. Property, plant and equipment continued
South32 Annual Report 2026
200 Financial report
Notes to financial statements – Operating assets and liabilities continued
11. Property, plant and equipment continued
Category | Useful life |
Buildings | 25 to 40 years straight-line |
Land | not depreciated, unless held for biodiversity offsets |
Plant and equipment | 3 to 30 years straight-line |
ROU assets | based on the shorter of the useful life or the lease term (straight-line) |
Other mineral assets | based on Ore Reserves on a units of production basis |
South32 Annual Report 2026
201 Financial report
FY26 | Other | ||
US$M | Goodwill | intangibles 1 | Total |
Cost | |||
At the beginning of the year | 139 | 188 | 327 |
Translation adjustments | – | 4 | 4 |
Additions | – | 20 | 20 |
Disposals | – | (40) | (40) |
At the end of the year | 139 | 172 | 311 |
Accumulated amortisation and impairments | |||
At the beginning of the year | – | 131 | 131 |
Amortisation | – | 6 | 6 |
Disposals | – | (40) | (40) |
At the end of the year | – | 97 | 97 |
Net book value at the end of the year | 139 | 75 | 214 |
FY25 | Other | |||
US$M | Note | Goodwill | intangibles 1 | Total |
Cost | ||||
At the beginning of the year | 139 | 352 | 491 | |
Translation adjustments | – | 2 | 2 | |
Additions | – | 6 | 6 | |
Disposals | – | (91) | (91) | |
Reclassified as held for sale | 30 | – | (81) | (81) |
At the end of the year | 139 | 188 | 327 | |
Accumulated amortisation and impairments | ||||
At the beginning of the year | – | 270 | 270 | |
Amortisation 2 | – | 9 | 9 | |
Net impairments | 13 | – | 18 | 18 |
Disposals | – | (90) | (90) | |
Reclassified as held for sale | 30 | – | (76) | (76) |
At the end of the year | – | 131 | 131 | |
Net book value at the end of the year | 139 | 57 | 196 |
Category | Useful life |
Software and licences | 5 years |
Contract based intangible assets | up to 35 years |
South32 Annual Report 2026
202 Financial report
Notes to financial statements – Operating assets and liabilities continued
US$M | Note | FY26 | FY25 |
Impairment | |||
Property, plant and equipment - owned assets | 11 | – | 442 |
Property, plant and equipment - ROU assets | 11 | – | 4 |
Intangible assets | 12 | – | 18 |
Total impairment 1 | – | 464 |
FY25 | Assumptions used | |
Alumina price (US$/t) | 340 to 410 | |
Aluminium price (US$/t) | 2,450 to | 2,750 |
Foreign exchange rates (ZAR to US$) | 17.5 to 18.5 |
South32 Annual Report 2026
203 Financial report
13. Impairment of non-financial assets continued
(a) Impairments - 30 June 2025 continued
Cerro Matoso
In July 2025, the Group announced its decision to enter into a binding agreement to sell Cerro Matoso and the sale completed on 1
December 2025. The related Cerro Matoso disposal group was reclassified as held for sale at 30 June 2025.
The recoverable amount of the Cerro Matoso disposal group, which includes the Cerro Matoso CGU, was assessed and as a result a
US$118 million impairment was recognised. The impairment of US$118 million includes US$107 million of property, plant and equipment
and US$11 million of intangible assets. The impairment of property, plant and equipment includes US$16 million recognised in land and
buildings, US$83 million recognised in plant and equipment and US$8 million recognised in other mineral assets.
The recoverable amount of the disposal group of US$51 million was determined using the FVLCD methodology, informed by the
consideration expected to be received, less costs of disposal, inclusive of the fair value of contingent price-linked consideration determined
to be US$6 million. Refer to note 30 Disposal of subsidiaries for further details.
(b) Impairment test for CGUs containing goodwill
The carrying amount of goodwill has been allocated to the following CGU:
US$M | Note | FY26 | FY25 |
Hillside Aluminium | 139 | 139 | |
Total goodwill | 12 | 139 | 139 |
The goodwill arose from the acquisition of Alusaf in Hillside Aluminium (Pty) Ltd and has been allocated to the Hillside Aluminium CGU
which comprises the Hillside aluminium smelter. As outlined in note 2(c) Key estimates, assumptions and judgements, the Group entered
into an agreement to sell its interests in the aluminium value chain assets, including Hillside Aluminium. Consistent with the treatment to
not classify the Group’s interests in the aluminium value chain assets as held for sale at 30 June 2026, the recoverable amount for the
Hillside Aluminium CGU at 30 June 2026 was determined using a consistent FVLCD methodology as applied in prior years.
The recoverable amount of the Hillside Aluminium CGU was determined based on a FVLCD calculation, using a real US$ post tax discount
rate of nine per cent applied to discount future cash flows expressed in real terms, and was categorised as a Level 3 fair value based on
the inputs to the valuation (refer to note 19 Financial assets and financial liabilities). The key assumptions used in the determination of
FVLCD were:
– Aluminium and alumina prices;
– Foreign exchange rates;
– Production volumes;
– Carbon pricing and timing; and
– Discount rate.
Aluminium and alumina prices, and foreign exchange rates – The aluminium and alumina prices, in real terms, and exchange rate forecasts
used in the FVLCD determinations were within the following ranges as published by market commentators, along with the sensitivity of the
recoverable amount of Hillside Aluminium to a reasonable possible change in these assumptions, based on unfavourably changing these
assumptions by 10 per cent whilst holding all other variables constant, are shown in the table below:
| Impact on recoverable | |||
FY26 | Assumptions used | amount (US$M) | |
Alumina price (US$/t) | 315 to 395 | (135) | |
Aluminium price (US$/t) | 2,860 to | 3,465 | (630) |
Foreign exchange rates (US$ to ZAR) | 16.9 to 17.5 | (285) |
Production volumes – Estimated production volumes are based on the life of the smelter as determined by management as part of its
LoOP. Production volumes are influenced by production input costs such as electricity prices, jurisdiction-based carbon pricing, and the
selling price of aluminium.
Carbon pricing and timing – In determining the FVLCD, the current jurisdiction's actual enacted scheme less allowable abatements, in real
terms, of ZAR334 to ZAR471 per tonne CO
2
-e was applied for the life of the smelter for Scope 1 and 2 emissions.
At 30 June 2026, the recoverable amount of the Hillside Aluminium CGU exceeds its carrying value and whilst changes in these key
assumptions could reduce the recoverable amount, a reasonably possible change in these assumptions would not result in the carrying
value exceeding its recoverable amount. The relationships between each key assumption are complex, such that a change in one may
cause a change in several other inputs.
South32 Annual Report 2026
204 Financial report
Notes to financial statements – Operating assets and liabilities continued
13. Impairment of non-financial assets continued
Future production | LoOPs based on Mineral Resource and Ore Reserve estimates, economic life of smelters and refineries |
| and, in certain cases, Exploration Targets and expansion projects. Refer to note 2(c) Key estimates, | |
| assumptions and judgements for further details regarding Mineral Resources and Ore Reserves as | |
| sources of estimation uncertainty. | |
| Costs of production and | Future costs of production and capital expenditure are derived from approved budgets and projections |
| capital expenditure | over the life of operation or development project. |
| Commodity prices and | Short-term price assumptions are based on an assessment of market signposts including observed |
| market traded | prices such as forwards, futures and reported transactions. Long-term price estimates are typically |
| consumables | developed based on the demand and supply drivers of a commodity, refer to note 2(c) Key estimates, |
| assumptions and judgements for further details regarding our base case commodity price outlook. | |
Exchange rates | Short-term exchange rate estimates are guided primarily by spot or forward exchange rates. Longer |
| term estimates are based on an assessment of available market data and economic indicators. | |
Discount rates | Risk-adjusted cost of capital appropriate to the operation. |
Regulatory approvals | LoOPs include assumptions associated with the successful application, and timing thereof, of ongoing |
| and future regulatory approvals. | |
Carbon prices | Carbon price assumptions are based on actual enacted schemes less allowable abatements, where |
applicable, and a long-term base case estimate of US$71 per tonne CO 2 -e (real) applied to all Scope 1 | |
| and 2 emissions from FY40 onwards. |
South32 Annual Report 2026
205 Financial report
13. Impairment of non-financial assets continued
Key estimates, assumptions and judgements continued
| Change in key | Impact on valuation (US$M) | ||
| FY26 | assumption | Favourable | Unfavourable |
Zinc price | 10% | 360 | (360) |
Lead price | 10% | 285 | (285) |
Silver price | 10% | 360 | (360) |
Discount rate | 100 basis points | 690 | (580) |
Pre-production capital expenditure | 10% | 155 | (155) |
South32 Annual Report 2026
206 Financial report
Notes to financial statements – Operating assets and liabilities continued
US$M | FY26 | FY25 |
Current | ||
Trade creditors | 672 | 752 |
Other creditors | 90 | 50 |
Total current trade and other payables | 762 | 802 |
US$M | FY26 | FY25 |
Current | ||
Employee benefits | 173 | 163 |
Closure and rehabilitation | 24 | 16 |
Other | 28 | 6 |
Total current provisions | 225 | 185 |
Non-current | ||
Employee benefits | 8 | 7 |
Closure and rehabilitation | 1,628 | 1,653 |
Post-retirement employee benefits | 21 | 15 |
Other | 12 | 9 |
Total non-current provisions | 1,669 | 1,684 |
| Post- | |||||
| retirement | |||||
FY26 | Employee | Closure and | employee | ||
US$M | benefits | rehabilitation | benefits | Other | Total |
At the beginning of the year | 170 | 1,669 | 15 | 15 | 1,869 |
Charge/(credit) to the Consolidated income statement: | |||||
Underlying | 145 | 9 | 1 | 67 | 222 |
Discounting | – | 99 | – | – | 99 |
Net interest expense | – | – | 2 | – | 2 |
Exchange rate variations | 6 | 11 | 1 | 4 | 22 |
Released during the year | (3) | (6) | – | (6) | (15) |
Amounts capitalised for change in costs and estimates | – | (93) | – | – | (93) |
Amounts capitalised for change in discount rate | – | (101) | – | – | (101) |
Foreign exchange amounts capitalised | – | 73 | – | – | 73 |
Amounts taken to retained earnings | – | – | 1 | – | 1 |
Utilisation | (137) | (9) | (2) | (40) | (188) |
Other movements 1 | – | – | 3 | – | 3 |
At the end of the year | 181 | 1,652 | 21 | 40 | 1,894 |
South32 Annual Report 2026
207 Financial report
15. Provisions continued
| Post- | ||||||
| retirement | ||||||
FY25 | Employee | Closure and | employee | |||
US$M | Note | benefits | rehabilitation | benefits | Other | Total |
At the beginning of the year | 166 | 1,867 | 30 | 20 | 2,083 | |
Charge/(credit) to the Consolidated income statement: | ||||||
Underlying | 141 | 1 | 1 | 11 | 154 | |
Discounting 1 | – | 106 | – | – | 106 | |
Net interest expense 2 | – | – | 3 | – | 3 | |
Exchange rate variations | 1 | 7 | – | – | 8 | |
Released during the year | (9) | (3) | (3) | – | (15) | |
Amounts capitalised for change in costs and estimates | – | 15 | – | – | 15 | |
Amounts capitalised for change in discount rate | – | (152) | – | – | (152) | |
Foreign exchange amounts capitalised | – | (10) | – | – | (10) | |
Utilisation | (122) | (4) | (5) | (6) | (137) | |
Reclassified as held for sale | 30 | (7) | (158) | (11) | (10) | (186) |
At the end of the year | 170 | 1,669 | 15 | 15 | 1,869 |
South32 Annual Report 2026
208 Financial report
Notes to financial statements – Operating assets and liabilities continued
15. Provisions continued
South32 Annual Report 2026
209 Financial report
This section outlines how the Group manages its capital and related financing activities.
US$M | FY26 | FY25 |
Cash | 956 | 681 |
Short-term deposits | 1,178 | 996 |
Cash and cash equivalents 1 | 2,134 | 1,677 |
US$M | Note | FY26 | FY25 |
Current | |||
Lease liabilities | 111 | 92 | |
Unsecured loans from equity accounted investments | 28 | 379 | 160 |
Unsecured other | 30 | 15 | |
Total current interest bearing liabilities | 520 | 267 | |
Non-current | |||
Lease liabilities | 637 | 621 | |
Senior unsecured notes | 694 | 693 | |
Unsecured other | – | 53 | |
Total non-current interest bearing liabilities | 1,331 | 1,367 |
| Other interest | Total interest | ||
FY26 | bearing | bearing | |
US$M | Lease liabilities | liabilities | liabilities |
At the beginning of the year | 713 | 921 | 1,634 |
Cash movements: | |||
Proceeds from interest bearing liabilities | – | 215 | 215 |
Repayment of interest bearing liabilities | (110) | (35) | (145) |
Interest paid | (59) | (51) | (110) |
Non-cash movements: | |||
Interest charged 1 | 59 | 51 | 110 |
Net increase/(decrease) of interest bearing liabilities | 111 | (3) | 108 |
Exchange rate variations | 34 | 5 | 39 |
At the end of the year | 748 | 1,103 | 1,851 |
| Other interest | Total interest | ||
FY25 | bearing | bearing | |
US$M | Lease liabilities | liabilities | liabilities |
At the beginning of the year | 672 | 894 | 1,566 |
Cash movements: | |||
Proceeds from interest bearing liabilities | – | 53 | 53 |
Repayment of interest bearing liabilities 1 | (75) | (26) | (101) |
Interest paid | (54) | (56) | (110) |
Non-cash movements: | |||
Interest charged 2 | 54 | 56 | 110 |
Net increase/(decrease) of interest bearing liabilities | 123 | – | 123 |
Exchange rate variations | (7) | – | (7) |
At the end of the year | 713 | 921 | 1,634 |
South32 Annual Report 2026
210 Financial report
Notes to financial statements – Capital structure and financing
US$M | FY26 | FY25 |
Finance income | ||
Interest on loans to equity accounted investments | 173 | 177 |
Other interest income | 85 | 82 |
Total finance income | 258 | 259 |
Finance costs | ||
Interest on borrowings | (55) | (61) |
Interest on lease liabilities | (55) | (52) |
Discounting on provisions and other liabilities | (101) | (94) |
Exchange rate variations on net cash/(debt) | (39) | 13 |
Total finance costs | (250) | (194) |
Net finance income/(costs) | 8 | 65 |
FY26 | Designated as | ||||
US$M | Note | Held at FVTPL | FVOCI | Amortised cost | Total |
Financial assets | |||||
Cash and cash equivalents | 16 | – | – | 2,134 | 2,134 |
Trade and other receivables 1 | 9 | 102 | – | 667 | 769 |
Other financial assets: | |||||
Contingent consideration receivable | 12 | – | – | 12 | |
Total current financial assets | 114 | – | 2,801 | 2,915 | |
Trade and other receivables 1 | 9 | – | – | 1,786 | 1,786 |
Other financial assets: | |||||
Investments in equity instruments designated as FVOCI | – | 231 | – | 231 | |
Contingent consideration receivable | 140 | – | – | 140 | |
Total non-current financial assets | 140 | 231 | 1,786 | 2,157 | |
Total financial assets | 254 | 231 | 4,587 | 5,072 | |
Financial liabilities | |||||
Trade and other payables 2 | 14 | 16 | – | 722 | 738 |
Interest bearing liabilities | 17 | – | – | 520 | 520 |
Total current financial liabilities | 16 | – | 1,242 | 1,258 | |
Interest bearing liabilities | 17 | – | – | 1,331 | 1,331 |
Other financial liabilities: | |||||
Contingent consideration payable | 22 | – | – | 22 | |
Total non-current financial liabilities | 22 | – | 1,331 | 1,353 | |
Total financial liabilities | 38 | – | 2,573 | 2,611 |
South32 Annual Report 2026
211 Financial report
19. Financial assets and financial liabilities continued
FY25 | Designated as | ||||
US$M | Note | Held at FVTPL | FVOCI | Amortised cost | Total |
Financial assets | |||||
Cash and cash equivalents | 16 | – | – | 1,677 | 1,677 |
Trade and other receivables 1 | 9 | 133 | – | 578 | 711 |
Other financial assets: | |||||
Derivative contracts | 7 | – | – | 7 | |
Total current financial assets | 140 | – | 2,255 | 2,395 | |
Trade and other receivables 1 | 9 | – | – | 1,927 | 1,927 |
Other financial assets: | |||||
Investments in equity instruments designated as FVOCI | – | 130 | – | 130 | |
Contingent consideration receivable | 54 | – | – | 54 | |
Total non-current financial assets | 54 | 130 | 1,927 | 2,111 | |
Total financial assets | 194 | 130 | 4,182 | 4,506 | |
Financial liabilities | |||||
Trade and other payables 2 | 14 | 2 | – | 796 | 798 |
Interest bearing liabilities | 17 | – | – | 267 | 267 |
Total current financial liabilities | 2 | – | 1,063 | 1,065 | |
Interest bearing liabilities | 17 | – | – | 1,367 | 1,367 |
Other financial liabilities: | |||||
Contingent consideration payable | 78 | – | – | 78 | |
Total non-current financial liabilities | 78 | – | 1,367 | 1,445 | |
Total financial liabilities | 80 | – | 2,430 | 2,510 |
South32 Annual Report 2026
212 Financial report
Notes to financial statements – Capital structure and financing continued
19. Financial assets and financial liabilities continued
(a) Fair value measurement continued
FY26 | ||||
US$M | Level 1 | Level 2 | Level 3 | Total |
Financial assets and liabilities | ||||
Trade and other receivables | – | 102 | – | 102 |
Trade and other payables | – | (16) | – | (16) |
Investments in equity instruments designated as FVOCI 1 | 218 | – | 13 | 231 |
Contingent consideration receivable | – | – | 152 | 152 |
Contingent consideration payable | – | – | (22) | (22) |
Total | 218 | 86 | 143 | 447 |
| FY25 | ||||
US$M | Level 1 | Level 2 | Level 3 | Total |
Financial assets and liabilities | ||||
Trade and other receivables | – | 133 | – | 133 |
Trade and other payables | – | (2) | – | (2) |
Derivative contract assets | 7 | – | – | 7 |
Investments in equity instruments designated as FVOCI | 119 | – | 11 | 130 |
Contingent consideration receivable | – | – | 54 | 54 |
Contingent consideration payable | – | – | (78) | (78) |
Total | 126 | 131 | (13) | 244 |
US$M | FY26 | FY25 |
At the beginning of the year | (13) | (8) |
Addition of financial assets | 6 | 115 |
Net gains/(losses) recognised in the Consolidated income statement 1 | 149 | (122) |
Net gains/(losses) recognised in the Consolidated statement of comprehensive income 2 | 1 | 2 |
At the end of the year | 143 | (13) |
| Impact on carrying amount | ||||
FY26 | Carrying | |||
US$M | amount | Significant inputs | Favourable | Unfavourable |
Financial assets | Coal price 1 | |||
Contingent consideration receivable | 147 | Production volumes 2 | 123 | (138) |
South32 Annual Report 2026
213 Financial report
19. Financial assets and financial liabilities continued
US$M | FY26 | FY25 |
Financial assets | ||
Cash and cash equivalents | 2,109 | 1,664 |
Trade and other receivables | 20 | 32 |
Financial liabilities | ||
Interest bearing liabilities | (409) | (190) |
Net exposure | 1,720 | 1,506 |
| Impact on profit/(loss) after tax | ||
US$M | FY26 | FY25 |
Increase of 100 basis points | 13 | 11 |
Decrease of 100 basis points | (13) | (11) |
US$M | FY26 | FY25 |
Australian dollar | (831) | (796) |
Brazilian real | (49) | (74) |
Canadian dollar | 147 | 110 |
British pounds | 78 | 37 |
South32 Annual Report 2026
214 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
(i) Market risk continued
Foreign currency risk continued
| Other comprehensive income, | ||||
| Profit/(loss) after tax | net of tax | |||
US$M | FY26 | FY25 | FY26 | FY25 |
10% strengthening in Australian dollar | (58) | (56) | – | – |
10% strengthening in Brazilian real | (5) | (7) | – | – |
10% strengthening in Canadian dollar | 1 | 3 | 14 | 8 |
10% strengthening in British pounds | – | – | 8 | 4 |
FY26 | |||
US$M | Available | Used | Unused |
Revolving credit facility 1 | 1,400 | – | 1,400 |
South32 Annual Report 2026
215 Financial report
19. Financial assets and financial liabilities continued
(b) Financial risk management objectives and policies continued
(ii) Liquidity risk continued
| On demand or | |||||
FY26 | Carrying | less than 1 | More than 5 | ||
US$M | amount | Total | year | 1 to 5 years | years |
Trade and other payables 1 | 738 | 738 | 738 | – | – |
Senior unsecured notes | 694 | 882 | 30 | 122 | 730 |
Lease liabilities | 748 | 1,131 | 165 | 381 | 585 |
Other interest bearing liabilities | 409 | 409 | 409 | – | – |
Other financial liabilities - contingent consideration payable | 22 | 28 | – | 28 | – |
Total | 2,611 | 3,188 | 1,342 | 531 | 1,315 |
| On demand or | |||||
FY25 | Carrying | less than 1 | More than 5 | ||
US$M | amount | Total | year | 1 to 5 years | 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 |
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
(iii) Credit risk continued
Shareholder loan receivable from Sierra Gorda continued
US$M | FY26 | FY25 |
At the beginning of the year | 1,774 | 1,814 |
Interest accrued | 158 | 163 |
Net impairment | 249 | (27) |
Repayment of accrued interest | (401) | (176) |
At the end of the year | 1,780 | 1,774 |
FY26 | Impact on profit/(loss) after tax | |||
US$M | Face value | Carrying value | Favourable | Unfavourable |
Trade and other receivables | ||||
Loans to equity accounted investments | 1,927 | 1,780 | 4 | (24) |
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) |
South32 Annual Report 2026
217 Financial report
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 |
Plan | Overview | Vesting conditions 1 | Vesting dates | |
Long-Term Incentive Plan 2 | Recurring long-term incentive plan for Lead | Awards subject to performance and service | August 2026 | |
(FY23 - FY26) | Team members. | conditions over a four-year vesting period. | August 2027 | |
| August 2028 | ||||
| August 2029 | ||||
Deferred Short-Term | Recurring short-term incentive plan for Lead | Awards subject to service conditions over a two- | August 2026 | |
Incentive Plan 3 | Team members. | year vesting period. | August 2027 | |
(FY24, FY25) | ||||
Management Share Plan 4 | Recurring long-term incentive plan for eligible | Retention rights: Awards subject to service | August 2026 | |
(FY23 - FY26) | employees below the Lead Team. The | conditions over a three-year vesting period. | August 2027 | |
| Management Share Plan comprises retention | Performance rights: Awards subject to | August 2028 | ||
| rights and performance rights. | performance and service conditions over a four- | August 2029 | ||
| year vesting period. | ||||
AllShare Plan 5 | Recurring employee share plan for employees | Awards subject to service conditions over a | August 2026 | |
(2023 - 2025) | not eligible to participate in the other employee | three-year vesting period in Africa and a two- | August 2027 | |
| share plans. Awards to the value of at least | year vesting period elsewhere. | August 2028 | ||
| US$1,250 per employee are granted annually. | ||||
Executive Transitional | A one-off grant made to Lead Team members in | Awards subject to performance and service | August 2026 | |
Award Plan 6 | recognition of their adjustment from the | conditions over a three-year vesting period. | August 2027 | |
(FY24, | FY25) | Management Share Plan (three-year retention | ||
| rights and four-year performance rights) to the | ||||
| four-year plan at the Group. | ||||
Management Share Plan | One-off grants made to employees on joining | Awards subject to service and/or performance | August 2026 | |
Sign-on Award 3 | the Group. Awards may comprise retention | conditions over two vesting periods. | August 2027 | |
(FY25, FY26) | rights and/or performance rights. | |||
Deputy CEO Service Rights | A one-off grant made to Matt Daley in | Awards subject to service conditions over two | August 2027 | |
Award 7 | recognition of benefits forfeited with his previous | vesting periods. | August 2028 | |
(FY26) | employer on joining the Group. | |||
| A one-off grant of retention rights made to | Awards subject to service conditions over two | January 2028 | ||
CFO Retention Award 8 | Sandy Sibenaler. The awards are based on an | vesting periods. | January 2029 | |
(FY26) | agreed cash value and will be settled in shares, | |||
| with the number of shares determined by | ||||
| reference to the share price at the vesting date. |
South32 Annual Report 2026
218 Financial report
Notes to financial statements – Other notes
22. Employee share ownership plans continued
No Dividend Equivalent Payment is made in respect of awards that have lapsed or have been forfeited. No other awards are eligible for a
Dividend Equivalent Payment.
| Risk-free | ||||||
| interest rate | ||||||
| Fair value at | Share price at | based on | ||||
| grant date | grant date | Expected | Expected life | government | ||
FY26 | (US$) | (US$) | volatility (%) | (in years) | 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 |
South32 Annual Report 2026
219 Financial report
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.
| Rights at | Granted | Forfeited | ||||
FY26 | beginning of | during the | Vested during | during the | Lapsed during | Rights at end |
Number of rights | the year | year | the year | year | the year | 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.
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 |
South32 Annual Report 2026
220 Financial report
Notes to financial statements – Other notes continued
| Country of | Effective interest % | |||
Material subsidiaries | incorporation | Principal activity | 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 | Investment holding company | – | 100 |
| Kingdom | ||||
South32 Southern Africa Holdings | United | Investment holding company | 100 | – |
Limited | Kingdom | |||
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 |
South32 Annual Report 2026
221 Financial report
| Ownership interest % | ||||
Material joint ventures | Country of incorporation | Principal activity | FY26 | FY25 |
Australia Manganese 1,2 | Australia | Manganese ore mine | 60 | 60 |
South Africa Manganese 1,3 | South Africa | Manganese ore mines | 60 | 60 |
Manganese Marketing 1,4 | Singapore | Sales, marketing and distribution | 60 | 60 |
Sierra Gorda 1,5 | Chile | Copper mine | 45 | 45 |
US$M | FY26 | FY25 |
At the beginning of the year | 590 | 396 |
Share of profit/(loss) | 89 | 99 |
Share of other comprehensive income/(loss) | (2) | 1 |
Dividends received | (12) | (2) |
Net funding and capital movements | (69) | 96 |
At the end of the year | 596 | 590 |
Carrying amount of equity accounted investments | ||
US$M | FY26 | FY25 |
Australia Manganese | 92 | 67 |
South Africa Manganese | 187 | 236 |
Manganese Marketing | 58 | 60 |
Sierra Gorda | 259 | 212 |
Individually immaterial 1 | – | 15 |
Total | 596 | 590 |
Share of profit/(loss) of equity accounted investments | ||
US$M | FY26 | FY25 |
Australia Manganese | 95 | (58) |
South Africa Manganese | (49) | 47 |
Manganese Marketing | 10 | (1) |
Sierra Gorda | 49 | 118 |
Individually immaterial 1 | (16) | (7) |
Total | 89 | 99 |
South32 Annual Report 2026
222 Financial report
Notes to financial statements – Other notes continued
25. Equity accounted investments continued
| Joint ventures | ||||
FY26 | Australia | South Africa | Manganese | |
US$M | Manganese 1 | Manganese 1 | 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) |
| Joint ventures | ||||
FY25 | Australia | South Africa | Manganese | |
US$M | Manganese 1 | Manganese 1 | Marketing 1 | Sierra Gorda |
Reconciliation of the carrying amount of equity accounted investments | ||||
Current assets | 370 | 223 | 131 | 548 |
Non-current assets | 860 | 604 | 60 | 4,858 |
Current liabilities | (183) | (119) | (91) | (336) |
Non-current liabilities | (936) | (203) | – | (4,598) |
Net assets - 100% | 111 | 505 | 100 | 472 |
Carrying amount of equity accounted investments | 67 | 236 | 60 | 212 |
Reconciliation of share of profit/(loss) of equity accounted investments | ||||
Revenue - 100% | 61 | 541 | 710 | 1,850 |
Profit/(loss) after tax - 100% | (97) | 79 | (2) | 261 |
Share of profit/(loss) of equity accounted investments | (58) | 47 | (1) | 118 |
Other balances of equity accounted investments presented on a 100% basis | ||||
Cash and cash equivalents 2 | – | 16 | – | 123 |
Current financial liabilities (excluding trade and other payables and provisions) | (5) | (34) | – | (22) |
Non-current financial liabilities (excluding trade and other payables and provisions) | (277) | (23) | – | (4,445) |
Depreciation and amortisation | (29) | (37) | (7) | (364) |
Interest income | 4 | 6 | 3 | 5 |
Interest expense | (50) | (28) | – | (425) |
Income tax (expense)/benefit | 14 | (5) | – | (77) |
Royalty related tax (expense)/benefit | 5 | – | – | (33) |
South32 Annual Report 2026
223 Financial report
Material joint | Country of | Effective Interest % | ||
operations | operation | Principal activity | FY26 | FY25 |
Ambler Metals | United States | Base metals exploration and development options | 50 | 50 |
Brazil Alumina 1 | Brazil | Integrated bauxite mine and alumina refinery | 36 | 36 |
Brazil Aluminium 1 | Brazil | Aluminium smelter | 40 | 40 |
Mozal Aluminium 2,3 | Mozambique | Aluminium smelter | 63.7 | 63.7 |
Worsley Alumina 1,3 | Australia | Integrated bauxite mine and alumina refinery | 86 | 86 |
27. Key management personnel
(a) Key management personnel compensation
US$’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$nil).
South32 Annual Report 2026
224 Financial report
Notes to financial statements – Other notes continued
Transactions with related parties | Joint ventures | Associates | ||
US$’000 | 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 | Joint ventures | Associates | ||
US$’000 | FY26 | FY25 | FY26 | FY25 |
Trade and sundry amounts owing to related parties | 7,418 | 4,354 | 8,983 | 13,199 |
Other amounts owing to related parties 1 | 378,621 | 159,969 | – | – |
Other amounts owing from related parties 2 | 600 | 13,495 | – | – |
Trade and sundry amounts owing from related parties | 38,561 | 28,797 | – | – |
Loan amounts owing from related parties 3,4,5 | 1,947,410 | 1,957,084 | – | – |
South32 Annual Report 2026
225 Financial report
29. Parent entity information
(a) Summary financial information
The individual financial statements for the parent entity, South32 Limited, show the following aggregate amounts:
US$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$30 million). One of the facilities expired on 11 August 2026 and has since been extended to 10 August 2028.
The parent entity is party to a Deed of Support with the effect that the Company guarantees debts in respect of South32 Group Operations
Pty Ltd.
South32 Annual Report 2026
226 Financial report
Notes to financial statements – Other notes continued
US$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) |
US$M | FY26 | FY25 |
Net cash flows from operating activities | 2 | 90 |
Net cash flows from investment activities | (22) | (30) |
South32 Annual Report 2026
227 Financial report
30. Disposal of subsidiaries continued
Cerro Matoso continued
US$M | FY26 |
Consideration | |
Upfront consideration, net of transaction costs | 7 |
Contingent price linked consideration | 5 |
Total consideration | 12 |
Net assets disposed of Cash and cash equivalents | 21 |
Trade and other receivables | 56 |
Inventories | 109 |
Property, plant and equipment | 86 |
Intangible assets | 5 |
Current tax assets | 9 |
Deferred tax assets | 2 |
Other assets | 1 |
Trade and other payables | (63) |
Interest bearing liabilities | (4) |
Provisions | (207) |
Net assets disposed of | 15 |
Loss on disposal | (3) |
Consideration received, net of transaction costs, satisfied in cash | 7 |
Cash and cash equivalents disposed of | (21) |
Net cash outflow | (14) |
South32 Annual Report 2026
228 Financial report
Notes to financial statements – Other notes continued
30. Disposal of subsidiaries continued
US$M | FY26 | FY25 |
Revenue: | ||
Group production | – | 116 |
Third party products and services | – | 28 |
– | 144 | |
Expenses excluding finance costs | – | (97) |
Gain/(loss) on disposal of the discontinued operation | 19 | (47) |
Operating profit/(loss) from a discontinued operation | 19 | – |
Finance costs | – | (3) |
Net finance income/(costs) | – | (3) |
Profit/(loss) before tax from a discontinued operation | 19 | (3) |
Income tax (expense)/benefit | – | (11) |
Profit/(loss) for the year from a discontinued operation | 19 | (14) |
Total comprehensive income/(loss) from a discontinued operation attributable to the equity holders of South32 Limited | 19 | (14) |
Basic earnings/(loss) per share (cents) | 0.4 | (0.3) |
Diluted earnings/(loss) per share (cents) | 0.4 | (0.3) |
US$M | FY26 | FY25 |
Net cash flows from operating activities | – | 86 |
Net cash flows from investment activities | 29 | 880 |
Net cash flows from financing activities | – | (1) |
31. Subsequent events
Capital management
On 27 August 2026, the Directors resolved to pay a fully-franked final dividend of US 5 .4 cents per share (US$24 2 million) in respect of the
2026 financial year. The dividends will be paid on 15 October 2026. The dividends have not been provided for in the consolidated financial
statements and will be recognised in the 2027 financial year.
On 27 August 2026, the Directors resolved to extend the existing on-market share buy-back program by six months. The program has
US$209 million remaining to be returned to shareholders by 10 September 2027.
No other matters or circumstances have arisen since the end of the 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.
South32 Annual Report 2026
229 Financial report
The following table provides a list of all entities included in the Group's consolidated financial statements. The ownership interest is only
disclosed for those entities which are a body corporate, representing the direct and indirect percentage share capital owned by the
Company.
African Metals (Pty) Ltd
Body Corporate South Africa Foreign South Africa 100
Aluminium Management Company of Mozambique (Pty)
Limited
Body Corporate South Africa Foreign South Africa 66
Ambler Metals LLC
Body Corporate United States Foreign United States 50
Gengro (Pty) Ltd
Body Corporate South Africa Foreign South Africa 100
Hillside Aluminium (Pty) Ltd
Body Corporate South Africa Foreign South Africa 100
Minera Sud Argentina S.A.
Body Corporate Argentina Foreign Argentina 50.1
Mozal Community Development Trust
Trust N/A Foreign Mozambique N/A
Mozal SA
Body Corporate Mozambique Foreign Mozambique 63.7
South32 (BMSA) Pty Ltd
Body Corporate Australia Australian N/A 100
South32 Africa (Pty) Ltd
Body Corporate South Africa Foreign South Africa 100
South32 Africa Holdings (Pty) Ltd
Body Corporate South Africa Foreign South Africa 100
South32 Aluminium (Holdings) Pty Ltd
Body Corporate Australia Australian N/A 100
South32 Aluminium (RAA) Pty Ltd
2
Body Corporate Australia Australian N/A 100
South32 Aluminium (Worsley) Pty Ltd
2
Body Corporate Australia Australian N/A 100
South32 Aluminium SA (Pty) Ltd
Body Corporate South Africa Foreign South Africa 100
South32 Americas Inc.
Body Corporate United States Foreign United States 100
South32 Argentina Holdings Pty Ltd
Body Corporate Australia Australian N/A 100
South32 Argentina S.A.
Body Corporate Argentina Foreign Argentina 100
South32 Arizona (Holdings) Pty Ltd
Body Corporate Australia Australian N/A 100
South32 Australia Investment 3 Pty Ltd
Body Corporate Australia Australian N/A 100
South32 Base Metals Ireland Limited
Body Corporate Ireland Foreign Ireland 100
South32 Canada Inc.
Body Corporate Canada Foreign Canada 100
South32 Cannington Proprietary Limited
Body Corporate Australia Australian N/A 100
South32 Chile Copper Holdings Pty Ltd
Body Corporate Australia Australian N/A 100
South32 Eagle Downs Pty Ltd
Body Corporate Australia Australian N/A 100
South32 Finance 1 B.V.
Body Corporate Netherlands Foreign Netherlands 100
South32 Finance 2 B.V.
Body Corporate Netherlands Foreign Netherlands 100
South32 Freight Australia Pty Ltd
Body Corporate Australia Australian N/A 100
South32 Group Operations Pty Ltd
Body Corporate Australia Australian N/A 100
South32 Hermosa Inc.
Body Corporate United States Foreign United States 100
South32 Holding 1 SpA
Body Corporate Chile Foreign Chile 100
South32 Holding 2 SpA
Body Corporate Chile Foreign Chile 100
South32 International Investment Holdings Proprietary
Limited
Body Corporate Australia Australian N/A 100
South32 International Investment Proprietary Limited
Body Corporate Australia Australian N/A 100
South32 Investment 1 B.V.
3
Body Corporate Netherlands Foreign Netherlands 100
South32 Jersey Limited
Body Corporate Jersey Australian N/A 100
South32 Limited (the Company)
Body Corporate Australia Australian N/A Parent
South32 Limited Employee Incentive Plans Trust
Trust N/A Australian N/A N/A
South32 Marketing Pte. Ltd.
Body Corporate Singapore Foreign Singapore 100
South32 Minerals SA
4
Body Corporate Brazil Foreign Brazil 100
South32 North America Projects ULC
Body Corporate Canada Foreign Canada 100
South32 Properties (Pty) Ltd
Body Corporate South Africa Foreign South Africa 100
South32 Royalty Investments Pty Ltd
Body Corporate Australia Australian N/A 100
Entity name
Legal structure
Country of
incorporation
Australian or foreign
tax resident
Jurisdiction
for foreign tax
residency
Ownership
interest %
1
South32 Annual Report 2026
230 Financial report
Consolidated entity disclosure statement
as at 30 June 2026
Entity name
Legal structure
Country of
incorporation
Australian or foreign
tax resident
Jurisdiction
for foreign tax
residency
Ownership
interest %
1
South32 SA (Pty) Ltd
Body Corporate South Africa Foreign South Africa 100
South32 SA Finance (Pty) Ltd
Body Corporate South Africa Foreign South Africa 100
South32 SA Holdings (Pty) Ltd
Body Corporate South Africa Foreign South Africa 100
South32 SA Manganese Holdings (Pty) Ltd
Body Corporate South Africa Foreign South Africa 100
South32 Sierra Gorda SpA
Body Corporate Chile Foreign Chile 100
South32 South African AllShare Trust
Trust N/A Foreign South Africa N/A
South32 Southern Africa Holdings Limited
Body Corporate United Kingdom Foreign United Kingdom 100
South32 Treasury (USA) Limited
Body Corporate Australia Australian N/A 100
South32 Treasury Limited
Body Corporate Australia Australian N/A 100
South32 USA Exploration Inc.
5
Body Corporate United States Foreign United States 100
South32 Worsley Alumina Pty Ltd
Body Corporate Australia Australian N/A 86
Southern Abatis Pte Ltd
Body Corporate Singapore Australian N/A 100
Taragon Valley Pty Limited
Body Corporate Australia Australian N/A 100
1. The ownership interest percentage has been rounded to one decimal place.
2. Participant in the Worsley Alumina joint operation which is included in the Group's consolidated financial statements.
3. Participant in the Mozal SA and Aluminium Management Company of Mozambique (Pty) Limited joint operations which are included in the Group's consolidated financial statements.
4. Participant in the Brazil Alumina and Brazil Aluminium joint operations which are included in the Group's consolidated financial statements.
5. Participant in the Ambler Metals LLC joint operation which is included in the Group's consolidated financial statements.
Determination of tax residency
This consolidated entity disclosure statement has been prepared as at 30June 2026 in accordance with subsection 295 (3A) of the
Corporations Act 2001. Under this subsection, an entity is considered an Australian resident at the end of a financial year if the entity is:
– An Australian resident (within the meaning of the Income Tax Assessment Act 1997) at that time;
– A partnership, with at least one partner being an Australian resident (within the meaning of the Income Tax Assessment Act 1997) at
that time; or
– A resident trust estate (within the meaning of Division 6 of Part III of the Income Tax Assessment Act 1936) in relation to the year of
income (within the meaning of the Income Tax Assessment Act 1936) that corresponds to the financial year.
The determination of tax residency involves judgement, as it is highly fact dependent and subject to various interpretations. These
interpretations can lead to differing conclusions on residency.
In determining tax residency, the Group has applied current legislation and judicial precedent, including having regard to the Commissioner
of Taxation’s public guidance in Tax Ruling TR 2018/5. Where necessary for foreign tax residency, the Group has used independent tax
advisers in foreign jurisdictions to assist in its determination of tax residency to ensure applicable foreign tax legislation has been complied
with. The Group confirms there were no dual tax residents for the year ended 30June 2026.
South32 Annual Report 2026
231 Financial report
Consolidated entity disclosure statement
as at 30 June 2026
In accordance with a resolution of the Directors of the Company, we state that:
1. In the opinion of the Directors:
(a) The consolidated financial statements and notes that are set out on pages 174 to 229 of the Annual Report are in accordance with
the Corporations Act, including:
(i) Giving a true and fair view of the Group’s financial position as at 30June 2026 and of its performance for the year ended on that
date; and
(ii) Complying with Australian Accounting Standards and Corporations Regulations 2001.
(b) The consolidated entity disclosure statement set out on pages 230 to 231 of the Annual Report, as required by Section 295(3A) of the
Corporations Act, is true and correct.
(c) There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
2. The Directors have been given the declarations required by Section 295A of the Corporations Act from the Chief Executive Officer and
Chief Financial Officer for the year ended 30June 2026.
3. The Directors draw attention to note 2 to the financial statements on page 179 which includes a statement of compliance with
International Financial Reporting Standards (IFRS) Accounting Standards.
Signed in accordance with a resolution of the Board of Directors.
Stephen Pearce
Chair
Matt Daley
Chief Executive Officer and Managing Director
South32 Annual Report 2026
232 Financial report
Directors’ declaration
LEAD AUDITOR'S INDEPENDENCE DECLARATION
UNDER SECTION 307C OF THE CORPORATIONS ACT 2001
To the Directors of South32 Limited
I declare that, to the best of my knowledge and belief, in relation to the audit of the financial report and the audit and review of specified
sustainability disclosures in the sustainability report of South32 Limited for the financial year ended 30June 2026 there have been:
1. no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit and review;
and
2. no contraventions of any applicable code of professional conduct in relation to the audit and review.
KPMG
Jane Bailey
Partner
Perth
27August 2026
South32 Annual Report 2026
233 Financial report
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.
INDEPENDENT AUDITOR’S REPORT
To the shareholders of South32 Limited
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report of South32Limited (the
Company).
In our opinion, the accompanying Financial Report of the
Company gives a true and fair view, including of the Group’s
financial position as at 30June 2026 and of its financial
performance for the year then ended, in accordance with the
Corporations Act 2001, in compliance with Australian Accounting
Standards and the Corporations Regulations 2001.
The Financial Report comprises:
• Consolidated balance sheet as at 30 June 2026;
• Consolidated income statement, Consolidated statement of
comprehensive income, Consolidated statement of changes in
equity, and Consolidated cash flow statement for the year
then ended;
• Consolidated entity disclosure statement and accompanying
determination of tax residency as at 30 June 2026;
• Notes, including material accounting policies; and
• Directors’ Declaration.
The Group consists of the Company and the entities it controlled
at the year end or from time to time during the financial year.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards and International Standards on Auditing. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial Report section
of our report.
We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical
requirements of the APES 110 Code of Ethics for Professional Accountants (including Independence Standards) issued by the Accounting
Professional & Ethical Standards Board Limited (the Code) that are relevant to audits of the financial report of public interest entities in
Australia. We have fulfilled our other ethical responsibilities in accordance with these requirements.
Key Audit Matters
The Key Audit Matters we identified are:
• Asset valuation; and
• Closure and rehabilitation provision.
Key Audit Matters are those matters that, in our professional
judgement, were of most significance in our audit of the Financial
Report of the current period.
These matters were addressed in the context of our audit of the
Financial Report as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
South32 Annual Report 2026
234 Financial report
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.
INDEPENDENT AUDITOR’S REPORT
Asset valuation (Property, plant & equipment US$7,038m, Intangible assets US$214m, Equity accounted
investments US$596m)
Refer to Note 13 Impairment of non-financial assets to the Financial Report
The key audit matter
How the matter was addressed in our audit
The assessment of whether impairment or impairment reversal
indicators or evidence exist at the aluminium value chain cash
generating units (CGUs), Manganese equity accounted
investments (EAIs) and the Hermosa – Taylor CGU is a key audit
matter due to:
• the size of the Group’s property, plant and equipment,
intangible assets and equity accounted investments;
• the risk and uncertainty related to key assumptions used in
Group’s assessment, including forecast commodity prices,
capital expenditure and future production; and
• the resultant level of auditor judgement and effort required in
challenging the Group’s determination that there were no
indicators of impairment or impairment reversal, requiring
involvement of valuation specialists alongside our senior audit
team members.
We focused on the key internal and external factors impacting
CGUs and EAIs, including:
• volatility in forecast commodity prices, which are subject to
greater volatility in the current economic environment;
• forecast development capital expenditure, based on internal
project estimates, which is subject to greater uncertainty in
the current economic environment;
• future production and related costs, as set out in the life of
operation; and
• the conditional agreement to sell the aluminium value chain
assets, including price-linked contingent consideration.
With involvement of valuation specialists, we performed the
following procedures, amongst others, to assess or challenge the
Group’s determination that no indicators or evidence of
impairment or impairment reversal were present:
• evaluated the Group’s assessment with reference to our
knowledge of the Group, our industry experience and current
economic conditions, and requirements of AASB 136
Impairment of Assets and AASB 128 Investments in Associates
and Joint Ventures;
• assessed the forecast commodity prices used in the Group’s
assessment by comparing them to, and considering changes
in, market observable price forecasts;
• compared forecast development capital expenditure for
Hermosa – Taylor to key contracts and third-party reports;
• compared the forecast production volumes and related costs
to the approved budgets and inquired of operational
management to check certain changes in assumptions; and
• assessed the Group’s assumptions underlying its estimate of
the potential consideration receivable under the conditional
agreement to sell the aluminium value chain assets, including
forecast commodity price and production assumptions used
to determine any contingent consideration.
We assessed the disclosures in note 13 of the Group financial
statements, using our understanding obtained from our testing,
against the requirements of the accounting standards.
South32 Annual Report 2026
235 Financial report
INDEPENDENT AUDITOR’S REPORT
Closure and rehabilitation provision (US$1,652m)
Refer to Note 15 Provisions to the Financial Report
The key audit matter
How the matter was addressed in our audit
Closure and rehabilitation provisioning was a key audit matter
due to the:
• size of the provision;
• inherent complexity in the Group’s estimation of future closure
and rehabilitation costs; and
• significant judgement applied by the Group, and effort for us
in gathering persuasive audit evidence on the costs and their
timing, particularly for those costs to be incurred years into
the future.
Closure and rehabilitation activities are governed by Group
policies based on operating, environmental and regulatory
requirements, which differ across the Group.
The estimate of the closure and rehabilitation provision is
influenced by the:
• complexity in environmental and regulatory requirements, and
the impact to the completeness of the closure and
rehabilitation provision;
• Group's policies and the nature of the costs incorporated into
the closure and rehabilitation provision; and
• expected timing of expenditure which is planned to occur
years into the future, and the associated discounting of costs
in the present value calculation of the closure and
rehabilitation provision.
The Group used third party and internal experts to assess closure
and rehabilitation obligations and associated estimates of future
costs.
We involved our valuation and closure specialists alongside our
senior audit team members in our testing.
Our procedures included:
• We evaluated key assumptions used in the closure and
rehabilitation provision, relevant to the key sites the Group
operates in, by:
◦ Working with our closure specialists, assessing the scope
and competence of the Group’s third party and internal
experts used in the determination of the closure and
rehabilitation provision estimate.
◦ Assessing significant updates to closure assumptions
against the closure and rehabilitation plan, internal expert
analysis and our industry knowledge, and evaluating the
Group's accounting policy and estimation methodology
against the requirements of AASB 137 Provisions,
Contingent Liabilities and Contingent Assets.
◦ Assessing the contingency applied within the closure
model to account for the complexity in environmental and
regulatory requirements for consistency with the Group's
policy and our industry knowledge.
◦ Comparing the timing of closure and rehabilitation
activities to the Group’s mineral resources and ore reserve
estimates underlying the expected production profile
contained in the life of operation plans.
◦ Working with our valuation specialists, comparing discount
rate assumptions to market observable data.
• We tested the mathematical accuracy of the closure and
rehabilitation provision.
• We evaluated the completeness of the closure and
rehabilitation provision against the Group’s closure plan and
our understanding of the Group’s operating, environmental
and regulatory requirements; and
• We assessed the disclosures in note 15 to the Financial Report
against accounting standard requirements.
Other Information
Other Information is financial and non-financial information in South32 Limited’s annual report which is provided in addition to the Financial
Report and the Auditor's Report. The Directors are responsible for the Other Information.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not express an audit opinion or any form
of assurance conclusion thereon, with the exception of the Remuneration Report, specified sustainability disclosures within the
Sustainability Report prepared in accordance with the Corporations Act, the Select Sustainability Information presented in the South32
Limited 2026 Reports being the Sustainability section of the Annual Report, the Sustainability Databook, and the Sustainability Standards
and Frameworks Index and our respective assurance opinions/conclusions.
In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing so, we consider whether
the Other Information is materially inconsistent with the Financial Report or our knowledge obtained in the audit, or otherwise appears to
be materially misstated.
We are required to report if we conclude that there is a material misstatement of this Other Information, and based on the work we have
performed on the Other Information that we obtained prior to the date of this Auditor’s Report we have nothing to report.
South32 Annual Report 2026
236 Financial report
INDEPENDENT AUDITOR’S REPORT
Responsibilities of the Directors for the Financial Report
The Directors are responsible for:
• preparing the Financial Report in accordance with the Corporations Act 2001, including giving a true and fair view of the financial
position and performance of the Group, and in compliance with Australian Accounting Standards and the Corporations Regulations
2001;
• implementing necessary internal control to enable the preparation of a Financial Report in accordance with the Corporations Act 2001,
including giving a true and fair view of the financial position and performance of the Group, and that is free from material misstatement,
whether due to fraud or error; and
• assessing the Group and Company’s ability to continue as a going concern and whether the use of the going concern basis of
accounting is appropriate. This includes disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless they either intend to liquidate the Group and Company or to cease operations, or have no realistic alternative but to
do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
• to obtain reasonable assurance about whether the Financial Report as a whole is free from material misstatement, whether due to fraud
or error; and
• to issue an Auditor’s Report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing
Standards and International Standards on Auditing will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of the Financial Report.
A further description of our responsibilities for the audit of the Financial Report is located at the Auditing and Assurance Standards Board
website at: https://www.auasb.gov.au/media/bwvjcgre/ar1_2024.pdf. This description forms part of our Auditor’s Report. These
responsibilities also apply to our audit performed in accordance with International Standards on Auditing.
Report on the Remuneration Report
Opinion
In our opinion, the Remuneration Report of South32 Limited for
the year ended 30 June 2026, complies with Section 300A of the
Corporations Act 2001.
Directors’ responsibilities
The Directors of the Company are responsible for the preparation
and presentation of the Remuneration Report in accordance with
Section 300A of the Corporations Act 2001.
Our responsibilities
We have audited the Remuneration Report included in pages 156
to 172 of the Directors’ report for the year ended 30 June 2026.
Our responsibility is to express an opinion as to whether the
Remuneration Report complies in all material respects with
Section 300A of the Corporations Act 2001, based on our audit
conducted in accordance with Australian Auditing Standards.
KPMG
Jane Bailey
Partner
Perth
27August 2026
South32 Annual Report 2026
237 Financial report
We report Mineral Resources and Ore Reserves in
accordance with the 2012 Edition of the Australasian Code
for Reporting of Exploration Results, Mineral Resources and
Ore Reserves (JORC Code) as required by Chapter 5 of the
Australian Securities Exchange (ASX) Listing Rules.
A ‘Mineral Resource’ is defined by the JORC code to be a
concentration or occurrence of solid material of economic interest
in or on the Earth’s crust in such form, grade (or quality), and
quantity that there are reasonable prospects for eventual
economic extraction. An ‘Ore Reserve’ is defined as the
economically mineable part of a Measured and/or Indicated Mineral
Resource.
A ‘Competent Person’ is defined by the JORC Code to be a minerals
industry professional who is a Member or Fellow of The
Australasian Institute of Mining and Metallurgy, or of the Australian
Institute of Geoscientists, or of a ‘Recognised Professional
Organisation’ (RPO), as included in a list available on the JORC and
ASX websites. They must have a minimum of five years of relevant
experience in the style of mineralisation or type of deposit under
consideration and the activity being undertaken. Each of our
Competent Persons involved in the preparation of information
relating to Mineral Resources and Ore Reserves in this report meet
those requirements. You can find more details on each of their
professional affiliations, employer and areas of accountability on
the page of deposit for which they are responsible, starting on
page 241. Unless we state otherwise, all Competent Persons listed
are full-time employees at South32, or at one of our related entities.
Declaration
We report:
– Mineral Resources and Ore Reserves in 100% terms and
represent estimates as at 30 June 2026.
– All quantities as dry metric tonnes, unless stated otherwise. It is
important to note that Mineral Resources and Ore Reserves are
estimations, not precise calculations. We have rounded tonnes
and grade information to reflect the relative uncertainty of the
estimate, which is why minor computational differences may be
present in the totals.
– The Measured and Indicated Mineral Resources are inclusive of
those Mineral Resources modified to produce the Ore Reserves.
Basis of estimation
We confirmed reasonable prospects for eventual economic
extraction for our reported Mineral Resource estimates. This also
includes technical and economic assessment for applied cut-off
assumptions.
Our Ore Reserves are based on Life of Operation Plans considering
a review of mining, metallurgical, infrastructure, marketing and
legal factors. Our long-range forecasts are the basis for the
commodity prices and exchange rates used to estimate the
economic viability of Ore Reserves.
Our planning processes consider the impacts of climate change on
our Ore Reserves estimates, including assessments of operating
costs and the impact of extreme weather events on the
expectation of economic extraction.
Our Ore Reserves are within existing permitted mining tenements.
Our mineral leases are of sufficient duration, or convey a legal right
to renew the tenure, to enable all Ore Reserves on the leased
properties to be mined in accordance with the current production
schedules. These Ore Reserves may include areas where additional
regulatory approvals are required, and we expect that such
approvals will be obtained within the timeframe needed for the
current production schedule. While future approval conditions may
be more onerous than current operating conditions, any such
conditions are expected to be reasonable, scientifically based and
aligned with prevailing legislation.
Our Mineral Resource and Ore Reserve estimates are peer
reviewed during data gathering, integration and assessment
stages to confirm alignment with industry best practice.
Competent Person Consent
Information in this report relating to Mineral Resources and Ore
Reserves is based on, and fairly represents, information and
supporting documentation prepared by our Competent Persons
listed on each deposit page starting from page 241.
Each of our Competent Persons have given consent to the
inclusion of the information relating to Mineral Resources and Ore
Reserves in this report in the form and context in which it appears
and have approved the inclusion of the Mineral Resources and Ore
Reserves statement as a whole in this report.
South32 Annual Report 2026
239 Resources and Reserves
At a glance - Resources and Reserves
Total Ore Reserve (Mt) Reserve Life Years
1
Total Mineral Resource (Mt)
Operations, development projects and options
As at 30 June 2026 As at 30 June 2025 As at 30 June 2026 As at 30 June 2025 As at 30 June 2026 As at 30 June 2025
Sierra Gorda
679 730 14 15 1,730 1,800
Cannington
11 10 7.0 6.0 71 78
Hermosa
Taylor 99 65 25 19 169 153
Clark 55 55
Peake
33 25
Ambler Metals
Arctic 43 43
Bornite 148 148
Australia Manganese
56 59 6.0 6.0 109 126
South Africa Manganese
2
71 89 34 43 183 190
Worsley Alumina
164 177 10 11 1,080 1,050
Brazil Alumina
34 41 3.0 3.2 498 495
Cerro Matoso
3
- 27 - 7 - 297
1. Scheduled extraction period in years for the total Ore Reserves in the approved Life of Operation Plan.
2. Reserve life for South Africa Manganese is reported as the life of scheduled Ore Reserves for Wessels. The Reserve life for each of the remaining operations is stated in the detailed
disclosures that follow.
3. Cerro Matoso was divested on 1 December 2025.
Our governance arrangements and internal controls
We have internal standards and governance arrangements that
cover regulatory requirements for public reporting. Our
comprehensive review and audit program is aimed at assuring our
Mineral Resource and Ore Reserve estimates. The frequency and
scope of the audits are generally a function of the perceived risks
and uncertainties associated with a particular Mineral Resource and
Ore Reserve. The review and audit program includes:
– annual risk review of Mineral Resources and Ore Reserves
estimates
– annual review of reconciliation performance metrics for
operating mines
– periodic internal mine planning and Ore Reserve audits
– independent audits of Exploration Results, Mineral Resources or
Ore Reserves that are new or have materially changed.
To facilitate correct and accurate public reporting with respect to
Mineral Resources and Ore Reserves, our governance processes
are managed by the Resource and Reserve Governance function in
coordination with the Company Secretariat function and
independently reviewed annually.
In FY26, we undertook:
– risk reviews for all reported Mineral Resources and Ore Reserves
with Competent Persons and relevant subject matter experts.
We scrutinised year-on-year changes, reviewed reconciliation
performance, verified that all mining tenements are in good
standing and assessed risks and opportunities and ESG
considerations
– two independent assurance audits of Mineral Resource
estimates and two independent assurance audits of Ore
Reserve estimates
– four internal mine planning and Ore Reserve assurance audits.
The accompanying tables, on pages 241 to 250, outline our Mineral
Resources and Ore Reserves holdings.
Our exploration, research and development
Our operations carry out exploration, research and development
necessary to support our activities. Our brownfield exploration
activities target the delineation and categorisation of mineral
deposits connected or adjacent to our existing operations. Our
greenfield exploration activities focus on the discovery and
delineation of opportunities outside of our operational footprint.
During FY26, we continued to expand our global exploration
footprint. We funded greenfield exploration in Australia, Argentina,
Botswana, Canada, Chile, Namibia, Norway and the United States.
Our exploration expenditure for FY26 was US$94 million (FY25:
US$98 million) of which US$26 million related to brownfield and
US$68 million related to greenfield (FY25: US$28 million and US$70
million respectively).
South32 Annual Report 2026
240 Resources and Reserves
Resources and Reserves continued
Sierra Gorda
Sierra Gorda is a large integrated copper mining and
processing operation located in the Antofagasta region of
northern Chile, 60km south-west of the city of Ca lama.
Operations commenced in 2014.
The porphyry copper deposit corresponds to a copper,
molybdenum and gold hydrothermal system with the presence of
breccias, veining and dissemination. The deposit is located in the
cretaceous central zone within three distinct metallogenic belts
related to hydrothermal systems. Mining is via conventional large
open pit and ore is delivered either directly to the crusher or to
stockpiles for future reclamation and blending. Ore is processed
through crushing, grinding and flotation circuits to produce a
copper concentrate with gold and silver credits and a separate
molybdenum concentrate. The concentrates are transported by
road and rail to a port in Antofagasta for export.
Competent Persons
Mineral Resources L.Vaccia, MAusIMM, employed by Sierra Gorda
S.C.M.
Ore Reserves E Ardiles, MAusIMM, employed by Sierra Gorda
S.C.M.
Mineral Resources
Deposit
Material Type
Mineral Resource
Mt % TCu g/t Au % Mo
Sierra Gorda
(1)(4)
OC Sulphide
Measured
317 0.40 0.07 0.026
(45% interest)
Indicated
475 0.34 0.06 0.013
Inferred
892 0.37 0.06 0.013
Total as at 30 June 2026
1,680 0.37 0.06 0.016
Total as at 30 June 2025
1,750 0.36 0.06 0.015
Stockpile
Measured
Indicated
52 0.27 0.05 0.012
Inferred
Total as at 30 June 2026
52 0.27 0.05 0.012
Total as at 30 June 2025
54 0.27 0.04 0.012
Ore Reserves
Deposit
Material Type
Ore Reserves
Mt % TCu g/t Au % Mo
Sierra Gorda
(1)(2)(3)(4)
OC Sulphide
Proved
291 0.41 0.07 0.026
(45% interest)
Probable
336 0.37 0.06 0.014
Total as at 30 June 2026
627 0.39 0.07 0.020
Total as at 30 June 2025
676 0.39 0.06 0.019
Stockpile
Proved
Probable
52 0.27 0.05 0.012
Total as at 30 June 2026
52 0.27 0.05 0.012
Total as at 30 June 2025
54 0.27 0.04 0.012
Reserve Life (Years) as at 30 June 2026
14
1. Cut-off: Net smelter return in US$/t
Mineral Resources
A
OC Sulphide
>0
Stockpile
No cut-off grade applied
Ore Reserves
T
OC Sulphide
>0
T
Stockpile
No cut-off grade applied
2. Ore delivered to process plant.
3. Metallurgical recoveries are 83% TCu, 54% Mo and 47% Au.
4. Since 30 June 2026, South32 has reported an updated Ore Reserve and Mineral Resource estimate for the Sierra Gorda, details of which are set out in the Company’s ASX
announcement titled “61% increase in Sierra Gorda Ore Reserve estimate” dated 25 August 2026. South32 is not aware of any new information or data that materially affects the
information contained in that announcement, and that all material assumptions and technical parameters underpinning the estimates contained in that announcement continue to
apply and have not materially changed.
South32 Annual Report 2026
241 Resources and Reserves
Cannington
Cannington is an integrated silver-lead-zinc mining and
processing operation located in north-west Queensland,
200km south-east of the town of Mount Isa. Operations at
the underground mine commenced in 1998.
The orebody is a Broken Hill type, complex, steeply dipping, high-
grade silver, lead and zinc deposit located within the Proterozoic
Mount Isa inlier. The operation utilises long-hole open stoping
methods to extract ore and voids are backfilled to maintain
stability. Ore is trucked to the surface via a decline. The ore is
subject to crushing, grinding and flotation to produce a silver-rich
lead concentrate and a zinc concentrate. Concentrate is
transported by road to a dedicated rail loading facility and exported
though the port of Townsville.
Competent Persons
Mineral Resources S Bowman, MAusIMM
Ore Reserves T Bailey, MAusIMM, employed by AMC
Consultants
Mineral Resources
Deposit
Material Type
Mineral Resource
Mt g/t Ag % Pb % Zn
Cannington
(1)(2)
UG Sulphide
Measured
33 168 4.84 2.98
(100% interest)
Indicated
8.9 100 3.10 2.81
Inferred
1.9 59 1.52 2.70
Total as at 30 June 2026
44 149 4.33 2.94
Total as at 30 June 2025
53 140 4.17 2.79
OC Sulphide
Measured
20 110 3.38 2.23
Indicated
5.0 55 2.17 2.24
Inferred
1.8 44 1.43 1.44
Total as at 30 June 2026
27 95 3.02 2.17
Total as at 30 June 2025
25 101 3.21 2.28
Ore Reserves
Deposit
Material Type
Ore Reserves
Mt g/t Ag % Pb % Zn
Cannington
(1)(3)(4)(5)
UG Sulphide
Proved
9.5 183 5.10 3.17
(100% interest)
Probable
1.9 211 5.11 1.41
Total as at 30 June 2026
11 188 5.11 2.88
Total as at 30 June 2025
10 177 5.30 2.93
Reserve Life (Years) as at 30 June 2026
7.0
1. Cut-off: Net smelter return in A$/t
Mineral Resources
A
UG Sulphide
170
OC Sulphide
58
Ore Reserves
T
UG Sulphide
170 to 250 (Variable)
2. Changes to Mineral Resource due to increase in operating cost and exchange rate resulting in increase of reporting NSR cut-off from A$130/ tonne.
3. Ore delivered to process plant.
4. Addition of Ore Reserve following re-optimisation of available Mineral Resource estimate.
5. Metallurgical recoveries are 88% Ag, 88% Pb and 86% Zn.
South32 Annual Report 2026
242 Resources and Reserves
Resources and Reserves continued
Hermosa
Hermosa consists of a series of polymetallic sulphide and
oxide deposits with development currently underway to
construct an integrated mining and processing facility. It is
located near the town of Patagonia in southern Arizona, US.
The primary orebodies at Hermosa include Taylor, a carbonate
replacement style zinc-lead-silver deposit; Clark, a manto style
manganese rich zinc-silver oxide deposit; and Peake, a lateral skarn
style copper rich zinc-lead-silver deposit within a Palaeozoic
sequence. Mining will utilise long-hole open stoping method to
extract ore accessed via a decline and shaft. Processing facilities
are currently under construction and will produce both zinc and
lead concentrates that will be transported by road either direct to
customers or to existing export facilities.
Competent Persons
Taylor
Mineral Resources P Garretson, MAusIMM, employed by Terra
Resources Consulting Group LLC
Ore Reserves K McCoy, MAusIMM
Clark & Peake
Mineral Resources P Garretson, MAusIMM, employed by Terra
Resources Consulting Group LLC
Mineral Resources
Deposit
Material Type
Mineral Resource
Mt % Zn % Cu % Pb % Mn g/t Ag
Taylor
(1)(2)
UG Sulphide
Measured
57 4.56 4.68 75
(100% interest)
Indicated
86 3.11 3.86 78
Inferred
26 2.48 2.18 67
Total as at 30 June 2026
169 3.51 3.88 76
Total as at 30 June 2025
153 3.53 3.83 77
Clarke
(1)
UG Oxide
Measured
0.4 1.77 8.11 56
(100% interest)
Indicated
35 2.40 9.49 58
Inferred
20 1.61 8.33 115
Total as at 30 June 2026
55 2.11 9.07 78
Total as at 30 June 2025
55 2.11 9.07 78
Peake
(1)(2)
UG Sulphide
Measured
(100% interest)
Indicated
Inferred
33 0.28 0.87 0.32 36
Total as at 30 June 2026
33 0.28 0.87 0.32 36
Total as at 30 June 2025
25 0.45 0.79 0.47 42
Ore Reserves
Deposit
Material Type
Ore Reserves
Mt % Zn % Pb g/t Ag
Taylor
(1)(3)(4)
UG Sulphide
Proved
41 5.02 5.12 79
(100% interest)
Probable
58 3.19 4.05 76
Total as at 30 June 2026
99 3.95 4.50 77
Total as at 30 June 2025
65 4.35 4.90 82
Reserve Life (Years) as at 30 June 2026
25
1. Cut-off: Net smelter return in US$/t
Mineral Resources
A
Taylor UG Sulphide
90
B
Clark UG Oxide
175
Peake UG Sulphide
90
Ore Reserves
T
Taylor UG Sulphide
90
2. Changes to Mineral Resource due to additional drilling.
3. Metallurgical recoveries are 89-92% for Pb, 85-92% for Zn, 76-83% for Ag.
4. Changes to Ore Reserves due to re-optimisation and material increase of Ag price.
South32 Annual Report 2026
243 Resources and Reserves
Ambler Metals
Ambler Metals consists of a series of high-grade polymetallic
sulphide deposits located in central Alaska, US. The Arctic
and Bornite deposits are located 260km and 275km west of
the Dalton Highway.
The two orebodies which are sufficiently defined to enable resource
declaration are Arctic, a volcanogenic massive sulphide, copper-
zinc deposit with associated lead, silver and gold; and Bornite, a
carbonate hosted copper-rich deposit of Devonian age. Further
definition and assessment is required prior to any development
decision.
Competent Persons
Arctic
Mineral Resources M Job, FAusIMM, employed by Cube Consulting
Bornite
Mineral Resources S Khosrowshahi, MAusIMM(CP), self-employed
T Fouet, MAusIMM(CP)
Mineral Resources
Deposit
Material Type
Mineral Resource
Mt % Cu % Zn % Pb g/t Ag g/t Au
Arctic
(1)
OC Sulphide
Measured
24 3.14 4.35 0.77 49 0.62
(50% interest)
Indicated
15 2.84 4.46 0.84 46 0.60
Inferred
3.7 1.84 3.24 0.70 39 0.40
Total as at 30 June 2026
43 2.93 4.30 0.79 47 0.59
Total as at 30 June 2025
43 2.93 4.30 0.79 47 0.59
Bornite
(1)
OC Sulphide
Measured
(50% interest)
Indicated
40 1.06
Inferred
38 1.03
Total as at 30 June 2026
78 1.04
Total as at 30 June 2025
78 1.04
UG Sulphide
Measured
Indicated
Inferred
70 2.29
Total as at 30 June 2026
70 2.29
Total as at 30 June 2025
70 2.29
1. Cut-off:
Arctic (Net smelter return in US$/t)
OC Sulphide
62
Bornite
OC Sulphide
0.5% Cu
UG Sulphide
1.5% Cu
South32 Annual Report 2026
244 Resources and Reserves
Resources and Reserves continued
Australia Manganese
Australia Manganese consists of the Groote Eylandt Mining
Company (GEMCO) with manganese mining and processing
operations located in the Gulf of Carpentaria, in the Northern
Territory of Australia. Operations commenced in the 1960s.
The orebody consists of relatively shallow stratiform massive to
disseminated sheet-like manganese deposits, consisting of
cretaceous sediments lapping onto Proterozoic basement
sandstones and quartzites. Mining is performed by conventional
open-pit strip mining techniques and ore is crushed and processed
on site to remove impurities. Secondary processing of tailings
materials (Sands) is undertaken through a dedicated circuit to
increase overall recovery. Ore is exported from the co-located port
facility.
Competent Persons
Mineral Resources A Byers, MAusIMM
Ore Reserves M Bryant, MAusIMM, employed by The
Minserve Group Pty Ltd
Mineral Resources
Deposit
Material Type
Mineral Resource
Mt % Mn % Yield
GEMCO
(1)
ROM
(2)
Measured
58 45.0 46
(60% interest)
Indicated
28 41.0 47
Inferred
15 45.2 43
Total as at 30 June 2026
101 43.9 46
Total as at 30 June 2025
115 43.6 46
Sands
(3)
Measured
Indicated
7.5 20.5
Inferred
Total as at 30 June 2026
7.5 20.5
Total as at 30 June 2025
11 19.8
Ore Reserves
Deposit
Material Type
Ore Reserves
Mt % Mn % Yield
GEMCO
(1)(4)(5)(6)
ROM
Proved
16 43.2 54
(60% interest)
Probable
37 40.9 50
Total as at 30 June 2026
52 41.7 51
Total as at 30 June 2025
53 42.0 57
Sands
Proved
Probable
3.7 40.0 22
Total as at 30 June 2026
3.7 40.0 22
Total as at 30 June 2025
6.0 40.0 20
Reserve Life (Years) as at 30 June 2026
6.0
1. Cut-off grade
Mineral Resources
ROM ≥35% Mn washed product
Sands >0% yield
Ore Reserves
ROM ≥36% average Mn washed product per ore mining block
Sands >6.7% yield
2. Mineral Resources tonnes are stated as in situ, manganese grades are stated as per washed ore samples and should be read together with their respective mass recovery
expressed as yield.
3. Mineral Resource tonnes and manganese grades are stated as in-situ.
4. Ore Reserves tonnes are stated as delivered to process plant, manganese grades are stated as expected product and should be read together with their respective mass yields.
5. Change to Ore Reserve due to optimisation of environmental buffers and ore recovery above cut-off parameters.
6. Plant recoveries: see yield in Ore Reserves table.
South32 Annual Report 2026
245 Resources and Reserves
South Africa Manganese
South Africa Manganese consists of two manganese mining
and processing operations, Mamatwan and Wessels, located
near the town of Hotazel in the Northern Cape province of
South Africa. Operations commenced in the 1960s.
The orebodies consist of shallow dipping, stratiform manganese
deposits interbedded with banded iron formations within the early
Proterozoic Transvaal supergroup. Mining at Mamatwan is via
conventional drill and blast open pit techniques, targeting the
shallower ore horizons. Mining at Wessels is via underground bord
and pillar techniques, targeting two mineralised horizons known as
the Upper and Lower bodies. Ore from Mamatwan and Wessels is
crushed and sized to produce different fractions and to create the
opportunity to blend to customer specifications. A portion of the
Mamatwan ore is sintered after floatation to produce a physically
strong and chemically stable product. Products from both the
mines are transported by road or rail to locations on the coast of
South Africa for export.
Competent Persons
Mamatwan
Mineral Resources O Nkuna, Pr. Sci. Nat., SACNASP
Ore Reserves A April, MAusIMM
Wessels
Mineral Resources O Nkuna, Pr. Sci. Nat., SACNASP
Ore Reserves M Rakhunwana, MAusIMM
Mineral Resources
Deposit
Material Type
Mineral Resource
Mt % Mn % Fe
Wessels
(1)(2)
Lower Body
Measured
23 41.2 14.3
(44.4% interest)
Indicated
14 39.2 22.5
Inferred
2.8 37.8 25.6
Total as at 30 June 2026
40 40.3 17.9
Total as at 30 June 2025
41 43.4 14.3
Upper Body
Measured
6.5 41.3 18.8
Indicated
67 40.1 19.4
Inferred
15 39.4 21.7
Total as at 30 June 2026
89 40.1 19.7
Total as at 30 June 2025
89 41.0 19.1
Ore Reserves
Deposit
Material Type
Ore Reserves
Mt % Mn % Fe
Wessels
(1)(3)(4)(5)
Lower Body
Proved
3.1 43.9 12.0
(44.4% interest)
Probable
0.3 43.8 13.2
Total as at 30 June 2026
3.4 43.9 12.0
Total as at 30 June 2025
13 43.6 14.3
Upper Body
Proved
3.3 42.4 17.6
Probable
35 41.4 17.9
Total as at 30 June 2026
38 41.5 17.9
Total as at 30 June 2025
42 41.3 18.6
Reserve Life (Years) as at 30 June 2026
34
South32 Annual Report 2026
246 Resources and Reserves
Resources and Reserves continued
Mineral Resources
Deposit
Material Type
Mineral Resource
Mt % Mn % Fe
Mamatwan
(1)(2)
M, C, N Zones
Measured
31 36.5 4.7
(44.4% interest)
Indicated
4.7 36.8 4.8
Inferred
Total as at 30 June 2026
36 36.6 4.7
Total as at 30 June 2025
39 36.7 4.5
X Zone
Measured
1.7 36.2 4.5
Indicated
Inferred
Total as at 30 June 2026
1.7 36.2 4.5
Total as at 30 June 2025
2.4 36.3 4.5
Top Cut (balance I&O)
Measured
14 29.5 5.9
Indicated
2.4 29.9 5.9
Inferred
Total as at 30 June 2026
16 29.5 5.9
Total as at 30 June 2025
19 29.5 5.8
Ore Reserves
Deposit
Material Type
Ore Reserves
Mt % Mn % Fe
Mamatwan
(1)(3)(5)
M, C, N Zones
Proved
18 36.1 4.6
(44.4% interest)
Probable
12 35.9 4.5
Total as at 30 June 2026
30 36.0 4.6
Total as at 30 June 2025
34 36.3 4.5
Reserve Life (Years) as at 30 June 2026
10
1. Cut-off grade
Mineral Resources
Wessels Reported within the mining section.
Mamatwan M,C,N Zones No cut-off grade applied
X Zone ≥35% Mn
Top Cut (balance I&O) ≥28% Mn
Ore Reserves
Wessels ≥37.5% Mn
Mamatwan M,C,N Zones ≥33% ROM Mn washed product
2. Mineral Resource tonnes and manganese grades are stated as in-situ.
3. Ore delivered to process plant.
4. Changes to Ore Reserves due to updated resource estimate.
5. Metallurgical recoveries
Wessels 97%
Mamatwan 93%.
South32 Annual Report 2026
247 Resources and Reserves
Worsley Alumina
Worsley Alumina is an integrated bauxite mining and alumina
refining operation in south-west Western Australia. The
bauxite mine is located near the town of Boddington, the
refinery near the town of Collie and alumina is shipped from
the port of Bunbury. Operations commenced in 1984.
The orebody consists of shallow lateritic bauxite deposits located
on the slopes of the Darling Range and formed by the weathering
of granites and greenstones of the Yilgarn Craton. The ore is
extracted by conventional truck and shovel open pit mining.
Bauxite is transported via overland conveyor and processed at the
refinery utilising the Bayer process to produce alumina powder for
export.
Competent Persons
Mineral Resources P Soodi Shoar, MAusIMM
Ore Reserves G Burnham, MAusIMM
Mineral Resources
Deposit
Material Type
Mineral Resource
Mt % A.Al
2
O
3
% R.SiO
2
Worsley
(1)
Laterite
Measured
304 27.9 1.7
(86% interest)
Indicated
390 29.2 2.2
Inferred
387 28.5 2.1
Total as at 30 June 2026
1,080 28.6 2.0
Total as at 30 June 2025
1,050 28.7 2.0
Ore Reserves
Deposit
Material Type
Ore Reserves
Mt % A.Al
2
O
3
% R.SiO
2
Worsley
(1)(2)(3)
Laterite
Proved
154 28.3 1.6
(86% interest)
Probable
10 28.0 1.6
Total as at 30 June 2026
164 28.3 1.6
Total as at 30 June 2025
177 28.2 1.6
Reserve Life (Years) as at 30 June 2026
10
1. Cut-off grade
Mineral Resources Variable ranging from A.Al
2
O
3
≥20-25% and R.SiO
2
≤5% for mineralised material and A.Al
2
O
3
≥28% and R.SiO
2
≤3% for blend material and ≥1m thickness
Ore Reserves Variable ranging from A.Al
2
O
3
≥22.5-29% and R.SiO
2
<3-5% and variable thickness ≥1-2m
2. Ore delivered to Worsley alumina refinery.
3. Metallurgical recovery is 93%.
South32 Annual Report 2026
248 Resources and Reserves
Resources and Reserves continued
Mineração Rio do Norte
Brazil Alumina consists of the Mineração Rio do Norte (MRN)
bauxite mine in northern Brazil and the Alumar alumina
refinery in north-eastern Brazil. The bauxite mine is located in
the district of Porto Trombetas and the refinery in São Luís.
Operations commenced in the 1980s.
The orebody consists of shallow lateritic bauxite deposits located on
plateaus within the sedimentary basin of the upper cretaceous Alter
do Chão formation. The ore is extracted via conventional open pit
mining techniques. Bauxite is processed on site to remove
impurities, reduce reactive silica and improve available alumina
before being transported by ship to Alumar, where it is refined
utilising the Bayer process to produce alumina powder for delivery
to local and export smelters.
Competent Persons
Mineral Resources R Aglinskas, MAusIMM(CP), employed by MRN
Ore Reserves G Coutinho, MAusIMM, employed by MRN
Mineral Resources
Deposit
Material Type
Mineral Resource
Mt % A.Al
2
O
3
% R.SiO
2
MRN
(1)(2)
Washed
Measured
458 47.3 5.3
(33% interest)
Indicated
3.5 49.0 2.6
Inferred
36 47.4 5.1
Total as at 30 June 2026
498 47.3 5.3
Total as at 30 June 2025
495 47.4 5.2
Ore Reserves
Deposit
Material Type
Ore Reserves
Mt % A.Al
2
O
3
% R.SiO
2
MRN
(1)(2)(3)(4)
Washed
Proved
28 46.8 5.9
(33% interest)
Probable
6.0 47.9 5.3
Total as at 30 June 2026
34 47.0 5.8
Total as at 30 June 2025
41 47.5 5.5
Reserve Life (Years) as at 30 June 2026
3.0
1. Cut-off grade
Mineral Resources A.Al
2
O
3
≥35% and mass recovery ≥50%
Ore Reserves Economic cut-off is agreed with JV partners based on net present value and internal rate of return.
2. Washed tonnes and grades represent the expected product based on forecast beneficiation yield
3. Ore delivered to Alumar alumina refinery.
4. Alumar metallurgical recovery is 91.0%.
South32 Annual Report 2026
249 Resources and Reserves
Cerro Matoso
1
Cerro Matoso is an integrated nickel mining and smelting
operation located in northern Colombia, approximately 20km
south-west of the town of Montelibano. Operations
commenced in the 1980s.
The orebody is a nickeliferous laterite deposit within the cretaceous
Cauca ophiolite complex. Mining is via traditional drill and blast
open pit mining methods using truck and shovel. Ore is sourced
and blended from the active mining areas and long-term stockpiles
and is crushed and sorted before being processed through the
plant which consists of rotary kilns and electric furnaces to produce
a ferronickel pellet product. The product is transported by road to
the port of Cartagena for export. On 1 December 2025, South32
completed the divestment of the Cerro Matoso.
Competent Persons
Mineral Resources J Florez, MAusIMM, employed by CoreX
Ore Reserves D Vasquez, MAusIMM, employed by CoreX
Mineral Resources
Deposit
Material Type
Mineral Resource
Mt % Ni
Cerro Matoso
Laterite
Measured
– –
(0% interest)
Indicated
– –
Inferred
– –
Total as at 30 June 2026
– –
Total as at 30 June 2025
253 0.9
Stockpile
Measured
– –
Indicated
– –
Inferred
– –
Total as at 30 June 2026
– –
Total as at 30 June 2025
44 0.9
Ore Reserves
Deposit
Material Type
Ore Reserves
Mt % Ni
Cerro Matoso
Laterite
Proved
– –
(0% interest)
Probable
– –
Total as at 30 June 2026
– –
Total as at 30 June 2025
15 1.0
Stockpile
Proved
– –
Probable
– –
Total as at 30 June 2026
– –
Total as at 30 June 2025
12 1.0
Reserve Life (Years) as at 30 June 2026
-
South32 Annual Report 2026
250 Resources and Reserves
Resources and Reserves continued
1.
Refer to market release “Completion of Cerro Matoso divestment” dated 1 December 2025 for further details.
Voting rights for shares
South32 Limited ordinary shares carry voting rights of one vote per share.
Shareholders may hold a beneficial entitlement to South32 Limited dematerialised ordinary shares, United Kingdom (UK) Depositary
Interests and American Depositary Shares (ADS) through the Central Securities Depositories of Strate (Strate), CREST and the Depository
Trust Company, respectively. Each share held dematerialised in Strate, or as a Depositary Interest held in CREST, entitles the holder to one
vote. Each ADS is represented by five ordinary shares, with ADS voting managed by South32 Limited’s ADS Depositary.
Substantial shareholders
The following table shows the substantial shareholders who, together with their associates, hold five per cent or more of the voting rights
in South32 Limited, as notified to South32 Limited under the Corporations Act, as at 31 July 2026.
Name
Date notice received Number of shares in notice Percentage of capital in notice
AustralianSuper Pty Ltd
29 January 2026 323,022,923 7.20
BlackRock Group
8 December 2021 318,403,413 6.84
(a)
State Street Corporation
16 June 2026 368,445,878 8.21
Vanguard Group
31 January 2024 276,360,221 6.10
(a) Based on the ‘Notice of change of interests of substantial holder’ dated 8 December 2021, BlackRock Inc. also holds 230 ADS representing an additional 0.11%.
Distribution of shareholdings and number of shareholders
The following table shows the distribution of South32 Limited shareholders by size of shareholding and number of shareholders and shares
as at 31 July 2026.
Size of holding
Number of shareholders Number of shares Percentage of capital
1 - 1,000
103,470 48,416,745 1.08
1,001 - 5,000
70,628 170,494,406 3.80
5,001 - 10,000
19,985 146,078,562 3.26
10,001 - 100,000
18,407 418,949,154 9.34
100,001 and over
635 3,702,546,871 82.53
Total
213,125 4,486,485,738 100.00
Distribution of rights holdings and number of rights holders
The following table shows the distribution of rights holders in South32 Limited by size of rights holding and number of rights holders and
rights as at 31 July 2026.
Size of holding
Number of rights holders Number of rights Percentage of rights on issue
1 - 1,000
712 533,830 1.19
1,001 - 5,000
5,422 8,508,654 18.98
5,001 - 10,000
32 270,484 0.60
10,001 - 100,000
113 4,967,395 11.08
100,001 and over
63 30,552,028 68.15
Total
6,342 44,832,391 100.00
South32 Annual Report 2026
252 Information
Shareholder information
Twenty largest shareholders in South32 Limited
The following table sets out the 20 largest shareholders of ordinary shares listed on the South32 Limited share register and the details of
their shareholding as at 31 July 2026.
Name
Number of fully paid shares Percentage of capital
1
HSBC Custody Nominees (Australia) Limited
1,264,738,417 28.19
2
J P Morgan Nominees Australia Pty Limited
931,040,550 20.75
3
Citicorp Nominees Pty Ltd
526,373,415 11.73
4
South Africa Control A/C
319,279,592 7.12
5
BNP Paribas Noms Pty Ltd
135,040,945 3.01
6
Citicorp Nominees Pty Limited <Citibank NY ADR Dep A/C>
85,782,930 1.91
7
Computershare Clearing Pty Ltd <CCNL DI A/C>
72,527,302 1.62
8
BNP Paribas Nominees Pty Ltd <Agency Lending A/C>
53,247,044 1.19
9
HSBC Custody Nominees (Australia) Limited <NT-Comnwlth Super Corp A/C>
32,836,000 0.73
10
BNP Paribas Nominees Pty Ltd <Hub24 Custodial Serv Ltd>
29,095,496 0.65
11
Netwealth Investments Limited <Wrap Services A/C>
14,728,387 0.33
12
HSBC Custody Nominees (Australia) Limited
12,845,571 0.29
13
BNP Paribas Nominees Pty Ltd <Clearstream>
9,865,202 0.22
14
BNP Paribas Noms Ltd <NZ>
8,890,688 0.20
15
Merrill Lynch (Australia) Nominees Pty Limited
7,915,153 0.18
16
BNP Paribas Nominees Pty Ltd <IB AU Noms Retailclient>
4,934,747 0.11
17
Palm Beach Nominees Pty Limited
4,863,155 0.11
18
HSBC Custody Nominees (Australia) Limited - A/C 2
4,771,964 0.11
19
CPU Share Plans Pty Ltd <S32 ASP Unallocated A/C>
4,646,267 0.10
20
HSBC Custody Nominees (Australia) Limited - GSCO ECA
4,595,008 0.10
Total
3,528,017,833 78.65
Restricted and escrowed securities
As at 31 July 2026, South32 Limited does not have any restricted
securities or securities subject to voluntary escrow on issue.
Shareholders with less than a marketable parcel
As at 31 July 2026, there were 7,795 shareholders on the Australian
South32 Limited register holding less than a marketable parcel
(A$500) based on the closing market price of A$4.57.
On-market purchases of South32 Limited Securities for
employee incentive plans
The Group purchased South32 Limited ordinary shares on-market
through the Company’s employee share plan trusts for the
purposes of the South32 Equity Incentive Plans.
During FY26, 1,574,079 shares were purchased on-market for the
Australian ESOP Trust and 378,000 were purchased for the South
African ESOP Trust. The average price at which the shares were
purchased was A$3.23 and ZAR34.73 respectively.
In addition, 118,120 shares were purchased on-market and
immediately distributed to Canadian based employees on vesting
of rights. The average price at which the shares were purchased
was A$2.71.
Dividend policy
Our dividend policy is determined by the Board at its discretion.
Our priorities for cash flow are to maintain safe and reliable
operations and an investment grade credit rating through the
cycle.
Our current dividend policy is that South32 Limited intends to
distribute a minimum of 40 per cent of Underlying earnings as
ordinary dividends to our shareholders following each six-month
reporting period. South32 Limited intends to distribute dividends
with the maximum practicable franking credits for the purposes of
the Australian dividend imputation system.
Dividend determination and payment
Our dividends are determined in United States (US) dollars.
Dividends for shareholders of South32 Limited on the Australian
register are paid by direct credit into shareholders’ nominated bank
account in Australian dollars, UK pounds sterling, New Zealand
dollars or US dollars, provided direct credit details and currency
election information is submitted no later than close of business on
the dividend record date as stated in the relevant Australian
Securities Exchange (ASX) announcement.
Dividends for shareholders of South32 Limited on the South African
branch register and UK Depositary Interest holders are paid by
direct credit in South African rand and UK pounds sterling,
respectively.
Refer to our Dividends and shareholder information page on our
website www.south32.net for further information about dividends.
South32 Annual Report 2026
253 Information
Shareholder information continued
Capital management program
As at 30 June 2026, we have returned a total of US$2.358 billion to
our shareholders under our capital management program,
comprising US$1.8 billion via our on-market share buy-back and
special dividends of US$525 million.
Our on-market share buy-back commenced in April 2017. Following
its cancellation in February 2024 to maintain financial flexibility, we
announced a US$200 million on-market share buy-back under our
capital management program in August 2024. In February 2026,
the buy-back was increased by a further US$100 million and the
execution period extended to 26 February 2027.
Subsequent to 30 June 2026, the Board approved a further
extension of the program to September 2027, reflecting the
Group's strong financial position and disciplined approach to capital
management and shareholder returns.
Between the commencement of purchasing under the on-market
share buy-back on 19 April 2017 and 30 June 2026, South32
Limited has purchased a total of 837 million shares, which
represented 15.73 per cent of share capital at the commencement
of the program.
During the year ended 30 June 2026, South32 Limited purchased
17 million shares under the on-market share buy-back, which
represented 0.38 per cent of share capital at the beginning of the
financial year. Total consideration paid for these shares was US$35
million. The shares have no par value. The shares purchased by
South32 Limited under the on-market share buy-back have been
cancelled.
Annual General Meeting (AGM)
Our 2026 AGM is scheduled to be held on Thursday 15 October
2026 at 12.00pm (midday) Australian Western Standard Time as a
hybrid meeting, providing shareholders with the opportunity to
attend physically or online. If it becomes necessary or appropriate
to make alternative or supplementary arrangements, we will
provide an update. Further details regarding the AGM will be made
available in September 2026, and shareholders are encouraged to
monitor securities exchange releases and www.south32.net for
information and updates.
Addresses delivered at the AGM, together with the results of
voting, will be provided to all stock exchanges where we are listed
and will be available at www.south32.net.
Stock exchanges
As at 31 July 2026, South32 Limited has a primary listing on the
ASX, a secondary listing on the Johannesburg Stock Exchange, is
admitted to listing in the equity shares (international commercial
companies secondary listing) category of the Official List of the UK
Financial Conduct Authority and its ordinary shares are traded on
the London Stock Exchange. South32 Limited also has a Level 1
American Depositary Receipts (ADR) program, which trades on the
United States over-the-counter market.
Shareholder enquiries
Shareholders can access their current holding details as well as
their transaction history, view dividend statements and payments
made, download statements and documents, change their
address, update their communication preferences and banking
details, and check their tax details online via Computershare’s
Investor Centre at www.investorcentre.com. Alternatively, refer to
the contacts listed under Share registries below.
Share registries
Australia
Computershare Investor Services Pty Limited
Yarra Falls 452 Johnston Street
Abbotsford Victoria 3067
Australia
Telephone (Australia): 1800 019 953
Telephone (International): +61 3 9415 4169
Facsimile: +61 3 9473 2500
South Africa
Computershare Investor Services (Pty) Limited
Rosebank Towers, 15 Biermann Avenue
Rosebank 2196
South Africa
Telephone: +27 11 373 0033
Facsimile: +27 11 688 5217
Email enquiries: web.queries@computershare.co.za
Holders of shares dematerialised into Strate should contact their
Central Securities Depository Participant or stockbroker.
United Kingdom
Computershare Investor Services PLC
The Pavilions, Bridgwater Road
Bristol BS99 6ZZ
United Kingdom
Telephone: +44 370 873 5884
Facsimile: +44 370 703 6101
Email enquiries: web.queries@computershare.co.uk
ADR
ADR holders should deal directly with Citibank Shareholder
Services.
Citibank Shareholder Services
PO Box 43077 Providence
Rhode Island 02940-3077
Telephone: +1 877 248 4237
(+1-877-CITIADR) (toll-free within US)
+1 781 575 4555 (outside of US)
Facsimile: +1 201 324 3284
Email enquiries: citibank@shareholders-online.com
Website: www.citi.com/dr
Branches
In accordance with DTR 4.1.11R(5), South32 Limited, through
various subsidiaries, has established branches in different
jurisdictions in which the business operates.
Registered office
South32 Limited’s Registered Office is Level 2, 100 St Georges
Information regarding South32’s other office locations is included
in the Corporate directory on page 266.
Electronic communications
Shareholders are encouraged to access all South32
communications electronically. Shareholders that wish to receive
electronic communications can update their preferences online or
by contacting the relevant Computershare Investor Centre. Refer to
the Investors section at www.south32.net for further details on how
to receive shareholder communications.
South32 Annual Report 2026
254 Information
ABC
Anti-bribery and corruption.
ADR
American Depositary Receipts.
AASB
Australian Accounting Standards Board.
AASB S2
Australian Accounting Standards Board
Standard S2 (Climate-related Disclosures).
Australia's mandatory reporting standard
that requires qualifying entities to disclose
consistent and decision-useful information
regarding climate-related risks,
opportunities, greenhouse gas emissions,
and strategic financial impact.
Absolute emissions
The total amount of GHGs emitted into the
atmosphere over a specific period
regardless of factors like economic output
or intensity.
Acid Rock Drainage (ARD)
Acidic water rich in heavy metals that can
occur during and after site operation as a
result of exposing naturally encapsulated
rock and soil to air and water.
Adjusted Underlying EBITDA
Calculated as Underlying EBITDA (being
Earnings before interest, tax, depreciation
and amortisation, including the
proportional consolidation of our material
equity accounted investments), adjusted
for uncontrollable impacts (commodity
prices, foreign exchange, and price-linked
costs) and other adjustments.
AGM
Annual General Meeting.
Air emissions
Air emissions are non-greenhouse gas air
emissions associated with our activities,
which include gaseous air emissions such
as sulphur oxides (SO
x
), nitrogen oxides
(NO
x
) and fluoride, and particulate matter
such as dust.
Alumina
Aluminium oxide (Al₂O₃). Alumina is
produced from bauxite in the Bayer refining
process. It is then converted (reduced) in an
electrolysis cell to produce aluminium
metal using the Hall-Héroult process.
American Depositary Receipts (ADR)
An ADR is a security that represents shares
of non-United States companies that are
held by a US depositary bank outside the
US.
AO
Officer of the Order of Australia.
Artificial intelligence
Artificial intelligence (AI) is the ability for
machines to complete tasks commonly
associated with human intelligence.
ASX
ASX Limited or Australian Securities
Exchange.
ASX Listing Rules
The rules governing the listing of an entity
and the quotation of its securities on the
ASX.
ASX Listing Rules (Chapter 5)
This chapter of the ASX Listing Rules sets
out additional reporting and disclosure
requirements for mining entities, oil and
gas entities, and other entities reporting on
mining and oil and gas activities.
Australian Carbon Credit Unit (ACCU)
A carbon offset credit issued by the
Australian Government under the
Australian Carbon Credit Unit Scheme. Each
ACCU represents one tonne of carbon
dioxide-equivalent emissions reduced or
abated by approved projects.
Australian Safeguard Mechanism
Australia's regulatory scheme for reducing
GHG emissions from large industrial
facilities through facility-specific emissions
baselines and compliance obligations.
Australian Securities and Investments
Commission (ASIC)
The independent Australian Government
body that is Australia’s integrated
corporate, markets, financial services and
consumer credit regulator.
Baseline water stress
The ratio of total annual water withdrawals
to total available renewable surface and
groundwater supplies, accounting for
upstream consumptive use. Higher values
indicate more competition among users.
The values and definition of baseline water
stress have been derived from World
Resources Institute (WRI) Aqueduct 4.0.
Base metal
A common metal that is not considered
precious, such as aluminium, copper, zinc
and lead.
Bauxite
The primary ore and commercial feedstock
of the aluminium industry, consisting
predominantly of aluminium hydroxide
minerals (gibbsite, boehmite and diaspore)
from which alumina (Al₂O₃) is refined via the
Bayer process.
B-BBEE
Broad-Based Black Economic
Empowerment.
Beneficiation
The process of physically separating ore
from gangue to produce a mineral
concentrate prior to subsequent
processing.
BHP
BHP, formerly known as BHP Billiton, is the
group of companies headed by, and
including, BHP Group Ltd and BHP Group
plc.
Biodiversity
Refers to the variety of living organisms
from all sources including terrestrial,
marine and other aquatic ecosystems and
the ecosystems of which they are a part.
Black People
As defined in the Broad-Based Black
Economic Empowerment Amendment Act
2013 (South Africa), a generic term
meaning Africans, Coloureds and Indians
who are citizens of the Republic of South
Africa by birth or descent; or who become
citizens of the Republic of South Africa by
naturalisation before 27 April 1994 or on or
after 27 April 1994 and who would have
been entitled to acquire citizenship by
naturalisation prior to that date.
Board
The Board of Directors of South32 Limited.
Brownfield
An exploration or development project
located within an existing mineral province,
which can share infrastructure and
management with an existing operation.
CAHRA
Conflict-affected and high risk areas.
Carbon Border Adjustment Mechanism
(CBAM)
A CBAM is a mechanism implemented by
governments to account for the carbon
cost of producing imported goods, with the
ultimate aim of reducing greenhouse gas
emissions and supporting global progress
towards net zero. The European Union
CBAM (EU CBAM) entered into force on 1
October 2023.
Carbon credit
An emissions unit that is issued by a carbon
crediting program and represents an
emission reduction or removal of
greenhouse gases. Carbon credits are
uniquely serialised, issued, tracked and
cancelled by means of an electronic
registry.
Catchment
The area of land from which all surface
runoff and subsurface water flows through
a sequence of streams, rivers, aquifers and
lakes into the sea or another outlet at a
single river mouth, estuary, or delta.
Catchments include associated
groundwater areas and might include
portions of waterbodies (such as lakes or
rivers). In different parts of the world,
catchments are also referred to as
‘watersheds’ or ‘basins’ (or sub-basins).
South32 Annual Report 2026
255 Information
Glossary of terms and abbreviations
CCAP
Climate Change Action Plan sets out our
approach to addressing risks and
opportunities presented by climate change.
Our CCAP is updated at least every three
years with progress reported annually and
is available at www.south32.net.
CEO
Chief Executive Officer.
CFO
Chief Financial Officer.
Climate-related Risks and Opportunities
Climate-related risks refers to the potential
negative effects of climate change on an
entity. These risks are categorised as
climate-related physical risks and climate-
related transition risks.
Climate-related opportunities refers to the
potential positive effects arising from
climate change for an entity. Efforts to
mitigate and adapt to climate change can
produce climate-related opportunities for
an entity.
Climate resilience
The capacity of an entity to adjust to
climate-related changes, developments or
uncertainties. Climate resilience involves
the capacity to manage climate-related
risks and benefit from climate-related
opportunities, including the ability to
respond and adapt to climate-related
transition risks and climate-related physical
risks. An entity’s climate resilience includes
both its strategic resilience and its
operational resilience to climate-related
changes, developments and uncertainties.
CO
2
-e
Carbon dioxide equivalent. The universal
unit of measurement to indicate the global
warming potential of each greenhouse gas,
expressed in terms of the global warming
potential of one unit of carbon dioxide. This
unit is used to evaluate releasing (or
avoiding releasing) different greenhouse
gases against a common basis.
Coking coal
Used in the manufacture of coke, which is
used in the steelmaking process by virtue
of its carbonisation properties. Coking coal
is a form of, and may also be referred to as,
metallurgical coal.
Community complaints and grievances
A community complaint is a verbal or
written notification made directly to a
South32 representative by a member of
the community relating to an actual or
perceived adverse impact on the
community from the Company’s activities
and/or employee or contractor behaviour in
part or in whole.
A community grievance is a complaint
relating to an adverse impact on a
community member(s) that has escalated
to the point where it requires third-party
intervention or adjudication to resolve.
Grievances may involve more than one
community member or family and relate to
disputes that have remained unresolved for
some time.
Competent Person
A minerals industry professional who is a
Member or Fellow of The Australasian
Institute of Mining and Metallurgy, or of the
Australian Institute of Geoscientists, or of a
‘Recognised Professional Organisation’, as
included in a list available on the JORC and
ASX websites. These organisations have
enforceable disciplinary processes,
including the powers to suspend or expel a
member. A Competent Person must have a
minimum of five years’ relevant experience
in the style of mineralisation or type of
deposit under consideration and in the
activity that the person is undertaking
(JORC Code).
Contractor
A contractor is an employee of a company
contracted by the employer to do work on
its behalf and under its control with respect
to location, work practices and application
of health and safety standards.
COO
Chief Operating Officer.
Copper equivalent production (CuEq)
Represents the payable copper equivalent
production in kilotonnes and is calculated
by accumulating revenue using average
realised prices for all operations and
dividing by the average realised price of
copper. In this Report, CuEq has been
calculated based on FY25 averaged
realised product prices for all years
included in FY25 reporting, to allow for
comparison between years.
Corporations Act
Corporations Act 2001 (Cth).
Cost, Insurance, and Freight (CIF)
A contractual term defining responsibilities
and division of cost and risk between buyer
and seller, in which the seller is responsible
for clearing the goods for export and bears
the cost of freight and insurance to the
named port of destination. The buyer
assumes all risks and costs for unloading
the goods and clearing the goods for
import. Risk passes from seller to buyer
once the goods are on board the vessel at
the port of shipment.
Coupled Model Intercomparison Project 6
(CMIP6)
The sixth phase of the Coupled Model
Intercomparison Project, CMIP6, is a global,
coordinated climate-modelling initiative led
by the World Climate Research
Programme. It supports standardised
comparisons of past, present and future
climate simulations to improve model
fidelity and analyse climate change under
multiple scenarios. CMIP6 builds on CMIP5
with improved models and new scenario
frameworks (SSPs) used in the IPCC's Sixth
Assessment Report (AR6).
Cut-off grade
The lowest grade, or quality, of mineralised
material that qualifies as economically
mineable and available in a given deposit. It
may be defined on the basis of economic
evaluation, or on physical or chemical
attributes that define an acceptable
product specification (JORC Code).
CYXX
Refers to the calendar year ending 31
December 20XX, where XX is the two digit
number for the year.
Decarbonisation
Avoiding or reducing the greenhouse gas
emissions associated with an activity.
Demerger
The separation of assets from BHP effected
in May 2015 to create a separate entity,
South32 Limited, listed on the ASX, LSE and
JSE.
Dewatering
Dewatering is the interception and removal
of water from operational areas.
DTR
UK Financial Conduct Authority’s Disclosure
Guidance and Transparency Rules. A
reference to DTR followed by a number is a
specific rule under the DTR.
EAI
Equity accounted interest.
EBIT
Earnings before interest and tax.
EBITDA
Earnings before interest, tax, depreciation
and amortisation.
South32 Annual Report 2026
256 Information
Glossary of terms and abbreviations continued
Ecosystem services
Contributions made by ecosystems that
benefit economic and other human activity.
These include provisioning services, such
as the provision of crops, wood or water,
and regulating and maintenance services,
such as water flow regulation and climate
regulation services.
Effective tax rate (ETR)
Income tax expense/benefit divided by
profit/loss subject to tax.
Emissions intensity
Refers to the amount of greenhouse gas
emissions produced per unit of economic
activity or production.
Emissions-limiting regulations
Regulations intended to limit or reduce
emissions directly, such as cap-and-trade
schemes, carbon tax/fee systems, and
other emissions control (e.g. command-
and-control approach) and permit based
mechanisms.
Employee
Any person in full-time, part-time or casual
employment engaged by South32 on a
temporary or permanent basis pursuant to
a contract of service.
Employee Share Ownership Plan (ESOP)
Trusts
The trusts which purchase and hold
South32 Limited shares for the purpose of
the South32 Equity Incentive Plans.
South32 has an Australian ESOP Trust and
South African ESOP Trust.
Energy consumption
Energy consumed where we have
operational control includes fuel consumed
for non-combustion and combustion
activities, regardless of the use, i.e.
stationary or mobile purposes. Where
energy is consumed to generate a
secondary energy stream (e.g. electricity
generation or transfer of unprocessed
natural gas to natural gas ready for
distribution), only the primary energy
consumption is reported.
Enterprise and Supplier Development
(ESD)
Enterprise and Supplier Development (ESD)
consists of two activities, Enterprise
Development and Supplier Development.
ESD is a priority element of the Broad-
Based Black Economic Empowerment (B-
BBEE) Codes of Good Practice and aims to
strengthen procurement from and support
the development of Black-owned small,
medium, and micro enterprises, thereby
increasing their participation in corporate
value chains and contributing to economic
transformation.
Supplier Development focuses on
businesses that are already part of an
organisation's supply chain, while
Enterprise Development supports
businesses that are not yet suppliers but
have the potential to become future
suppliers.
Environmental assets
The naturally occurring living and non-living
components of the Earth that make up the
biophysical environment and may provide
benefits to people and ecosystems.
Environmental incident
Any event with an impact to land,
biodiversity, ecosystem services, water
resources or air.
ESG
Environmental, social and governance.
EthicsPoint
A 24/7 confidential reporting hotline that is
serviced by an independent provider.
Executive KMP
Lead Team members who are classified as
KMP.
Exploration Results
Exploration Results include data and
information generated by mineral
exploration programs that might be of use
to investors but which do not form part of a
declaration of Mineral Resources or Ore
Reserves (JORC Code).
Exploration Target
An Exploration Target is a statement or
estimate of the exploration potential of a
mineral deposit in a defined geological
setting where the statement or estimate,
quoted as a range of tonnes and range of
grade (or quality), relates to mineralisation
for which there has been insufficient
exploration to estimate a Mineral Resource
(JORC Code).
External Auditor
KPMG.
Fatality
A health or safety event where an injury or
occupational illness has caused the death
of one or more person(s).
FAusIMM
Fellow of the Australasian Institute of
Mining and Metallurgy.
Firming
Firming refers to maintaining the output
from an intermittent power source for a
required length of time to ensure enough
energy is available to meet demand.
Flotation
A method of selectively recovering minerals
from finely ground ore using a froth
created in water by specific reagents. In the
flotation process, certain mineral particles
are induced to float by becoming attached
to bubbles of froth and the unwanted
mineral particles sink.
Free cash flow
Free cash flow represents operating cash
flows including distributions received from
equity accounted investments, and after
interest (paid)/received, tax (paid)/received
and capital expenditure.
Free On Board (FOB)
A contractual term defining responsibilities
and division of cost and risk between buyer
and seller, in which the seller is responsible
for clearing the goods for export and
loading them on board the vessel at the
named port of shipment. The buyer
assumes all risks and costs for goods from
this moment forward, including the cost of
freight and insurance.
FYXX
Refers to the financial year ending 30 June
20XX, where XX is the two-digit number for
the year.
GEMCO
Groote Eylandt Mining Company.
GHG
Greenhouse gas.
GHG Protocol
World Resources Institute and World
Business Council for Sustainable
Development Greenhouse Gas Protocol. A
globally recognised framework for
measuring and managing greenhouse gas
emissions.
GISTM
Global Industry Standard on Tailings
Management.
Global Reporting Initiative (GRI)
GRI is an international independent
organisation that has established an
international framework and standards for
sustainability reporting. South32's Group-
level sustainability-related disclosures are
prepared in accordance with the GRI
Sustainability Reporting Standards.
South32 Annual Report 2026
257 Information
Global Warming Potential
A factor describing the radiative forcing
impact (degree of harm to the atmosphere)
of one unit of a given greenhouse gas
relative to one unit of CO
2
.
Goal
An aspiration to deliver an outcome for
which we have not identified a pathway for
delivery, but for which efforts will be
pursued towards achieving that outcome,
subject to certain assumptions or
conditions.
Grade
Any physical or chemical measurement of
the characteristics of the material of
interest in samples or product (JORC Code).
Greenfield
An exploration or development project that
refers to a new venture or operation,
without any association or proximity to a
current operation.
Greenhouse gas (GHG) emissions
For our reporting purposes, GHG emissions
comprise emissions of carbon dioxide (CO₂),
methane (CH₄), nitrous oxide (N₂O),
hydrofluorocarbons (HFCs),
perfluorocarbons (PFCs) and sulphur
hexafluoride (SF₆), measured in carbon
dioxide equivalent (CO₂-e). HFC emissions
are currently not material to our operations.
Where relevant, reported emissions include
biogenic CO₂ emissions.
– Scope 1 emissions - Direct GHG
emissions from our operated assets and
activities, including electricity generated
at our sites.
– Scope 2 emissions - Indirect GHG
emissions from the generation of
purchased electricity consumed by our
operations.
– Scope 3 emissions - Other indirect GHG
emissions occurring in our value chain.
Gross Domestic Product (GDP)
Total monetary or market value of all the
finished goods and services produced
within a country’s borders in a specific time
period.
Hazard
Something that has the potential to cause
harm, ill health or injury, or damage to
property, plant, or the environment.
HMM
Hotazel Manganese Mines.
HPIIF
High-potential injury and illness frequency.
The number of high-potential injuries and
illnesses per million hours worked by
employees and contractors.
HRIAs
Human Rights Impact Assessments.
HRRSAs
Human Rights Risk Self-assessments.
Human rights
The universal and inalienable rights and
freedoms that every person is entitled to,
regardless of race, sex, nationality,
ethnicity, language, religion or any other
status. Human rights recognise the
inherent value of each person, based on
principles of dignity, equality and respect.
These rights are set out in the International
Bill of Human Rights (comprising the
Universal Declaration of Human Rights, the
International Covenant on Civil and Political
Rights and the International Covenant on
Economic, Social and Cultural Rights) and
the International Labour Organization
Declaration on Fundamental Principles and
Rights at Work.
H1 FYXX
Refers to the 6 months starting on 1 July
20XX and ending on 31 December 20XX,
where XX is the two-digit number for the
year.
H2 FYXX
Refers to the 6 months starting on 1
January 20XX and ending on 30 June 20XX,
where XX is the two-digit number for the
year.
ICMM
ICMM, previously referred to as the
International Council on Mining and Metals,
is an international organisation that leads
through collaboration to enhance the
contribution of mining and metals to
sustainable development. As a corporate
member, South32 commits to
implementing and reporting on the ICMM
Mining Principles, Performance
Expectations and mandatory requirements
set out in the Position Statements, which
define environmental, social and
governance requirements.
IMC
Illawarra Metallurgical Coal.
Inclusion index score
A measure of employees’ and contractors’
perceptions of inclusion, based on
responses to inclusion-related questions in
South32’s annual Your Voice survey. The
score reflects the extent to which
respondents feel respected, valued, and
able to contribute in an inclusive workplace.
Indicated Mineral Resource
That part of a Mineral Resource for which
quantity, grade (or quality), densities, shape
and physical characteristics are estimated
with sufficient confidence. This allows the
application of Modifying Factors in
sufficient detail to support mine planning
and evaluation of the economic viability of
the deposit (JORC Code).
Indigenous, Traditional and Tribal Peoples
Informed by definition and characteristics
described in Article 1 of ILO Convention No.
169 on Indigenous and Tribal Peoples, it
comprises:
– tribal peoples whose social, cultural and
economic conditions distinguish them
from other sections of the national
community, and whose status is
regulated wholly or partially by their own
customs or traditions or by special laws
or regulations
– peoples who are regarded as
Indigenous on account of their descent
from the populations which inhabited
the country, or a geographical region to
which the country belongs, at the time
of conquest or colonisation or the
establishment of present state
boundaries and who, irrespective of
their legal status, retain some or all of
their own social, economic, cultural and
political institutions and who self-
identify as Indigenous or Tribal.
Inferred Mineral Resources
That part of a Mineral Resource for which
quantity and grade (or quality) are
estimated on the basis of limited geological
evidence and sampling. Geological
evidence is sufficient to imply but not verify
geological and grade (or quality) continuity
(JORC Code).
Injury
An occupational injury occurs during a
single work shift or a single exposure to an
agent(s) causing an acute toxic effect,
which can be identified by time and place
resulting from direct contact with an object
following an instantaneous event. Examples
include cut, puncture, laceration, abrasion,
fracture, bruise, contusion, chipping tooth,
amputation, insect bite, electrocution, or a
thermal, chemical, electrical or radiation
burn. Sprain and strain injuries to muscles
joints connective tissue are classified as
injuries when they result from a slip, trip, fall
or other similar accidents.
Intergovernmental Panel on Climate
Change (IPCC)
The IPCC is the United Nations body for
assessing the science related to climate
change. Established in 1988 by the World
Meteorological Organization (WMO) and
United Nations Environment Program
(UNEP), the IPCC provides policymakers
with regular assessments of the scientific
basis of climate change, its impacts, future
risks, and options for adaptation and
mitigation.
International Financial Reporting
Standards (IFRS)
Accounting standards as issued by the
IASB (International Accounting Standards
Board).
South32 Annual Report 2026
258 Information
Glossary of terms and abbreviations continued
JORC
Joint Ore Reserves Committee comprising
representatives of The Australasian
Institute of Mining and Metallurgy
(AusIMM), Australian Institute of
Geoscientists (AIG) and Minerals Council of
Australia (MCA) as well as the Australian
Securities Exchange (ASX), the Financial
Services Institute of Australasia (FinSIA) and
the accounting profession, and an observer
from Association of Mining and Exploration
Companies (AMEC).
JORC Code
The Australasian Code for reporting of
Exploration Results, Mineral Resources and
Ore Reserves is a professional code of
practice that sets minimum standards for
Public Reporting of minerals Exploration
Results, Mineral Resources and Ore
Reserves. The current edition of the JORC
Code was published in 2012.
JSE
Johannesburg Stock Exchange.
Just transition
An approach to decarbonisation that seeks
to manage social impacts, risks and
opportunities by supporting a fair,
equitable and inclusive transition to a low-
carbon economy, particularly for workers,
communities and others most affected by
the transition.
KPI
Key Performance Indicator.
KMP
Key management personnel are people
who have authority and responsibility for
planning, directing and controlling the
activities of South32 either directly or
indirectly.
Landholdings
Total land owned, leased or managed by
South32 at the time of reporting. It includes
quarries, ports, load-out facilities,
desalination plants, wind farms, lease hold
land, freehold land, exploration leases,
agricultural land and offshore operations.
Land classified as disturbed
Total land at the time of reporting that is
physically impacted by the activities of the
business (e.g. mining pits, quarries, waste
rock dumps, tailings dams, infrastructure,
building/offices, processing plants, roads
and rails, camps, workshops, bore fields,
water dams, drill pads, ground subsidence
from underground mining that would be
subject to future rehabilitation, stream
diversions, topsoil stockpiles). Land
disturbed excludes: a) Rehabilitated land,
and b) Land disturbed by agricultural or
industrial activities not related to the
activities of the business but on land
owned by the business and leased to third
parties.
Land managed for conservation
Total land at the time of reporting
managed by South32 for biodiversity
conservation. It includes land formally
assigned and managed as a compensatory
action and other land protected from
disturbance and actively managed for
biodiversity conservation. It excludes
government-designated biodiversity
conservation areas that are not managed
by South32 as a compensatory action.
Land under progressive rehabilitation
Total land under progressive rehabilitation
at the time of reporting and includes:
– rehabilitated land where necessary
treatment has been undertaken to
achieve the pre-disturbance land use or
an alternate land use developed in
consultation with stakeholders and
where no future land disturbance is
planned other than maintenance
activities. Regulatory approval that the
rehabilitation is complete is not needed
– subsided land that is safe and with no
further work planned other than
maintenance activities
– disturbed land that has approval from a
regulatory authority that the
infrastructure or landform doesn’t
require further rehabilitation (e.g.
stabilised mining voids, retained
infrastructure such as roads, buildings).
Laterite
A residual soil or deposit formed by the
leaching of silica from rocks under specific
climatic conditions.
Leaching
The process by which a soluble metal can
be economically recovered from minerals in
ore by dissolution.
Leadership Roles
A Leadership Role is a position in the
organisational structure flagged as the
head of an organisational unit.
Lead Team
All Chief positions within South32.
Life of Operation Plan
The combination of an Optimised Base Plan
and incremental opportunities available to
the operation for maximising value.
Living wage
The remuneration received for a standard
work week by a worker in a particular place
sufficient to afford a decent standard of
living for the worker and their family.
Elements of a decent standard of living
include food, water, housing, education,
health care, transportation, clothing, and
other essential needs including provision
for unexpected events.
LME
London Metal Exchange.
Local procurement
Local procurement is the direct purchase of
goods and services within the local
communities in which South32 operates.
Suppliers are deemed as local based on
their proximity to our local communities,
including boundaries defined by local
government areas, provinces and states.
Local workforce diversity
Local workforce diversity is a metric
consisting of equally weighted sub-
performance metrics measuring local
workforce diversity across the regions in
which we operate. This includes Black
People in the total workforce in South
Africa, Black People in Management Roles
in South Africa, and Aboriginal and Torres
Strait Islander Peoples representation in
the Australian workforce.
Lost time injury
The sum of work-related (fatalities + injuries
that caused permanent impairment >30%
of body + lost time injuries). Lost time
injuries include injuries that result in one or
more lost work day after the day of the
event.
Lost Time Injury Frequency (LTIF)
(The sum of Lost Time injuries x 1,000,000)
÷ exposure hours, for employees and
contractors. This is stated in units of per
million hours worked for employees and
contractors. We adopt the United States
Government Occupational Safety and
Health Administration (OSHA) guidelines for
the recording and reporting of occupational
injuries and illnesses.
Low-carbon
Refers to substantially lower levels of GHG
emissions when compared to the current
state. Where used in relation to South32’s
products or portfolio, it refers to
enhancement of existing methods,
practices and technologies to substantially
lower the level of embodied GHG emissions
as compared to the current state.
LSE
London Stock Exchange.
LTI
Long-term incentive.
Management roles
Leadership positions filled by employees,
identified either by job grading or by the
requirements associated with their role.
Material Health Exposures
Material health exposures include potential
exposure to carcinogens and airborne
contaminants above an exposure limit.
Material sustainability topic
Topic that reflects a reporting
organisation’s significant economic,
environmental, and social impacts or that
substantively influences the assessments
and decisions of stakeholders.
South32 Annual Report 2026
259 Information
MAusIMM
Member of the Australasian Institute of
Mining and Metallurgy.
MAusIMM(CP)
Member of the Australasian Institute of
Mining and Metallurgy. Accredited
Chartered Professional status of members
of the AusIMM. These members have
undergone an assessment of their
competencies, which are maintained
through continuing professional
development activities.
MCA
Minerals Council of Australia.
Measured Mineral Resource
That part of a Mineral Resource for which
quantity, grade (or quality), densities, shape
and physical characteristics are estimated
with confidence sufficient to allow the
application of Modifying Factors to support
detailed mine planning and final evaluation
of the economic viability of the deposit
(JORC Code).
Metallurgical coal
Coal with properties suitable for
steelmaking, including coking coal used to
produce coke and non-coking coals used in
processes such as pulverised coal injection.
Mineral Resource
A concentration or occurrence of solid
material of economic interest in or on the
Earth’s crust in such form, grade (or
quality), and quantity that there are
reasonable prospects for eventual
economic extraction. The location, quantity,
grade (or quality), continuity and other
geological characteristics of a Mineral
Resource are known, estimated or
interpreted from specific geological
evidence and knowledge, including
sampling. Mineral Resources are
subdivided, in order of increasing
geological confidence, into Inferred,
Indicated and Measured categories (JORC
Code).
Mineralisation
Any single mineral or combination of
minerals occurring in a mass, or deposit, of
economic interest (JORC Code).
Mitigation hierarchy (Biodiversity)
Actions to be taken in order of priority
throughout a project lifecycle to anticipate
and avoid impacts on biodiversity. If
impacts do occur, efforts should be made
to minimise them and then restore the
affected features. Significant residual
losses should then be offset to achieve no
net loss of biodiversity as a minimum.
Modern slavery
The term modern slavery is used to
describe situations where coercion, threats
or deception are used to exploit victims
and undermine or deprive them of their
freedom. As defined by the Australian
Modern Slavery Act 2018 (Cth) modern
slavery includes eight types of serious
exploitation: trafficking in persons; slavery;
servitude; forced marriage; forced labour;
debt bondage; deceptive recruiting for
labour or services; and the worst forms of
child labour. The worst forms of child labour
means situations where children are
subjected to slavery or similar practices, or
engaged in hazardous work.
Modifying Factors
Considerations used to convert Mineral
Resources to Ore Reserves. These include,
but are not restricted to, mining,
processing, metallurgical, infrastructure,
economic, marketing, legal, environmental,
social and governmental factors (JORC
Code).
MRN
Mineração Rio do Norte.
Nationally Determined Contributions
(NDCs)
Countries’ self-defined national climate
pledges under the Paris Agreement,
detailing what they will do to help hold
global warming to well below 2°C above
pre-industrial levels and pursue efforts to
limit the increase to 1.5°C.
Nature-related impacts and
dependencies
Nature-related impacts and dependencies
describe the two-way relationship between
an organisation and nature.
Impacts refer to the changes, positive or
negative, that an organisation causes to
the state of nature through its actions,
whether directly, indirectly, or cumulatively.
Examples include land use, emissions, or
resource extraction.
Dependencies are aspects of
environmental assets and ecosystem
services that an organisation relies on to
function, such as water supply, pollination,
and climate regulation.
Nature-related risks and opportunities
Nature-related risks and opportunities arise
from an organisation’s impacts and
dependencies on nature.
Nature-related risks are potential threats
posed to an organisation that arise from its,
and wider society’s, dependencies and
impacts on nature. Risks can be physical
risks, transition risks or systemic risks.
Nature-related opportunities are activities
that create positive outcomes for
organisations and nature through positive
impacts or mitigation of negative impacts
on nature.
Near miss
An event that does not result in any injury,
illness, damage, or other loss but had the
clear potential to do so. Energy exchange is
not a requirement, thus when a rule or
control is breached it would be considered
a near miss if it had a clear potential to
result in undesirable consequences (e.g.
people were in the line of fire for a safety-
related event).
Net cash
Comprises cash and cash equivalents less
interest bearing liabilities.
Net debt
Comprises interest bearing liabilities less
cash and cash equivalents.
Net gain
The point at which losses in biodiversity
and ecosystem services are outweighed by
proportional gains (so that a net gain is
achieved) relative to a defined baseline
state.
Net operating assets
Represents operating assets net of
operating liabilities which predominantly
exclude the carrying amount of non-
material equity accounted investments,
cash, interest bearing liabilities, tax
balances and certain other financial assets
and liabilities.
Net zero
Net zero greenhouse gas emissions are
reached when anthropogenic emissions of
greenhouse gases to the atmosphere are
balanced by anthropogenic removals over
a specified period.
No net loss
The point at which losses in biodiversity
and ecosystem services are balanced by
proportional gains (so that no net loss
remains), relative to a defined baseline
state.
Non-operated joint ventures
Operations, development projects and
options, and exploration projects which are
not wholly owned by South32 Limited or its
subsidiaries and for which South32 does
not manage the operation, being Ambler
Metals, Brazil Alumina, Brazil Aluminium,
Sierra Gorda S.C.M, and Mineração Rio do
Norte S.A (MRN). Details of South32's
ownership interest can be found on page
267 of this Report and in the 'Reporting
boundaries' tab of our Sustainability
Databook 2026 at www.south32.net.
Net smelter return
An estimate of revenue derived from the
sale of products and concentrates following
the application of metallurgical recoveries
and deducting transport costs, treatment
and refining charges, penalties and
royalties. For Sierra Gorda, mining cost is
also included in the calculation.
South32 Annual Report 2026
260 Information
Glossary of terms and abbreviations continued
Occupational Exposure Limit (OEL)
The concentration of a substance or agent,
exposure to which, according to current
knowledge, should not cause adverse
health effects nor cause undue discomfort
to nearly all workers.
Occupational illness
An occupational illness is any abnormal
condition or disorder, other than one
resulting from an occupational injury,
caused or aggravated by exposures to
factors associated with employment. It
includes acute or chronic illnesses or
diseases which may be caused by
inhalation, absorption, ingestion, or direct
contact.
OECD
Organisation for Economic Co-operation
and Development.
Operated joint ventures
Operations, development projects and
options, and exploration projects which are
not wholly owned by South32 Limited or its
subsidiaries and for which South32
manages the operation, being, Australia
Manganese, South Africa Manganese,
Minera Sud Argentina, Mozal Aluminium
and Worsley Alumina. Details of South32's
ownership interest can be found on page
267 of this Report and in the 'Reporting
boundaries' tab of our Sustainability
Databook 2026 at www.south32.net.
Operational emissions
Scope 1 and 2 GHG emissions from our
operated assets.
Operating cost
Operating cost is Underlying revenue less
Underlying EBITDA.
Operating unit cost
Operating unit cost is Underlying revenue
less Underlying EBITDA, excluding third-
party products and services, divided by
sales volumes.
Operating margin
Comprises Underlying EBITDA excluding
third-party products and services EBITDA,
divided by Underlying revenue excluding
third-party products and services revenue.
Also referred to as Underlying EBITDA
margin.
Ore Reserve
The economically mineable part of a
Measured and/or Indicated Mineral
Resource. It includes diluting materials and
allowances for losses, which may occur
when the material is mined or extracted
and is defined by studies at Prefeasibility or
Feasibility level as appropriate that include
application of Modifying Factors. Such
studies demonstrate that, at the time of
reporting, extraction could reasonably be
justified (JORC Code).
Operational water efficiency
Percentage of water used for operational
activities which is reused/recycled water.
Calculated as the sum of reuse and
recycled water divided by the sum of water
used for operational activities.
Our people
As defined in our Code of Business
Conduct, our people includes South32
Directors, executive management,
employees and contractor staff.
Paris Agreement
A legally binding international treaty
adopted in 2015 by Parties to the United
Nations Framework Convention on Climate
Change (UNFCCC), committing
governments to progressively strengthen
national climate targets to limit warming to
well below 2°C (pursuing 1.5°C), while
enhancing adaptation and support for
developing countries.
Payable copper equivalent production (kt)
Calculated by aggregating revenues from
copper, molybdenum, gold and silver, and
dividing the total Revenue by the price of
copper. FY25 realised prices for copper
(US$4.18/lb), molybdenum (US$21.12/lb),
gold (US$2,877/oz) and silver (US$31.7/oz)
have been used for FY25 and FY26. FY26
realised prices for copper (US$5.92/lb),
molybdenum (US$25.90/lb), gold (US$4,462/
oz) and silver (US$70.6/oz) have been used
for FY27e and FY28e.
Payable zinc equivalent (kt)
Calculated by aggregating revenues from
payable silver, lead and zinc, and dividing
the total Revenue by the price of zinc.
FY25realised prices for zinc (US$2,648/t),
lead (US$1,883/t) and silver (US$31.9/oz)
have been used for FY25 and FY26.
FY26realised prices for zinc (US$3,000/t),
lead (US$1,944/t) and silver (US$66.4/oz)
have been used for FY27e and FY28e.
Physical risk
Physical climate risks are driven or
intensified by weather, climate variability or
climate change. They include acute risks,
resulting from increased frequency or
severity of extreme weather events (e.g.
drought or flood events) that can disrupt
operations, damage infrastructure and/or
interrupt supply chains; and chronic risks,
resulting from longer-term changes in
climate patterns (e.g. sustained higher
temperatures, changing rainfall patterns,
sea level rise) that can progressively affect
operational performance, natural resources
availability (e.g. water) and energy needs.
Primary demand
Demand met through new production,
including mining, smelting, or refining —
excluding recycled or recovered material.
Probable Ore Reserve
The economically mineable part of an
Indicated and, in some circumstances, a
Measured Mineral Resource. The
confidence in the Modifying Factors
applying to a Probable Ore Reserve is lower
than that applying to a Proved Ore Reserve
(JORC Code).
Proved Ore Reserve
The economically mineable part of a
Measured Mineral Resource. A Proved Ore
Reserve implies a high degree of
confidence in the Modifying Factors (JORC
Code).
RAP
Reconciliation Action Plan.
Realised sales price
Realised sales price is calculated as
Underlying revenue excluding third-party
products and services divided by sales
volume.
Recordable Illnesses
The sum of work-related (fatalities +
illnesses that caused permanent
impairment >30% of body + lost time
illnesses + restricted work illnesses +
medical treatment illnesses).
Recordable injuries
The sum of work-related (fatalities + injuries
that caused permanent impairment >30%
of body + lost time injuries + restricted
work injuries + medical treatment injuries).
Reserve Life
The scheduled extraction period in years
for the Total Ore Reserves in the approved
Life of Operation Plan.
Residual mix (emission factor)
The greenhouse gas emission factor
representing the emissions intensity of the
residual electricity supply within a defined
geographic market after the generation
attributes associated with all tracked
contractual instruments have been
claimed, retired or cancelled.
Return on invested capital (ROIC)
Return on invested capital (ROIC) is a key
measure that South32 uses to assess
performance. ROIC is calculated as
Underlying EBIT less the discount on
rehabilitation provisions included in
Underlying net finance costs, tax effected
by the Group’s Underlying effective tax rate
(ETR) including our material equity
accounted investments on a proportional
consolidation basis, divided by the sum of
fixed assets (excluding any rehabilitation
assets, the impact of any impairments or
impairment reversals, and unproductive
capital) and inventories.
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261 Information
Reused/recycled water
Water that has been used in an operational
task and is recovered and used again in an
operational task, either without (reuse) or
with (recycle) treatment.
ROM (Run of Mine product)
Product mined in the course of regular
mining activities.
RPO (Recognised Professional
Organisation)
Accredited organisations to which
Competent Persons must belong for the
purpose of preparing reports on
Exploration Results, Mineral Resources and
Ore Reserves for submission to the ASX (if
they are not members of the AusIMM or
AIG).
SACNASP
South African Council for Natural Scientific
Professions.
Salient human rights issues
As defined by the United Nations Guiding
Principles Reporting Framework, salient
human rights issues are those human
rights that stand out because they are at
risk of the most severe negative impact
through the company’s activities or
business relationships. This concept of
salience uses the lens of risk to people, not
the business, as the starting point, while
recognising that where risks to people’s
human rights are greatest, there is strong
convergence with risk to the business.
‘Safety guarantee’
Nothing is more important than the health,
safety and wellbeing of our people. At
South32, we are united by our belief that
everyone can go home safe and well, every
day. Our ‘safety guarantee’ is our internal
approach to creating a sense of chronic
unease to enhance our safety culture. We
ask our people to reflect on whether they
can guarantee both their safety and that of
their colleagues when executing their role.
If the answer is no, then the challenge is to
stop and ask what would need to be done
differently to provide that guarantee.
Sands
Tailings produced as a by-product during
beneficiation of ore.
SASB
Sustainability Accounting Standards Board.
Scope 1 emissions
GHG emissions from our own operations,
including the electricity we generate at our
sites.
Scope 2 emissions
Indirect GHG emissions from the
generation of purchased or acquired
electricity, steam, heating or cooling
consumed by an entity. Purchased and
acquired electricity is electricity that is
purchased or otherwise brought into an
entity’s boundary. Scope 2 greenhouse gas
emissions physically occur at the facility
where electricity is generated.
Scope 3 emissions
Indirect greenhouse gas emissions (not
included in Scope 2 greenhouse gas
emissions) that occur in the value chain of
an entity, including both upstream and
downstream emissions. Scope 3
greenhouse gas emissions include the
Scope 3 categories in the Greenhouse Gas
Protocol Corporate Value Chain (Scope 3)
Accounting and Reporting Standard (2011).
Significant event
Any event with Actual or Potential Health
Safety Severity of PL4 (Potential for Fatality)
or above.
Significant hazards frequency
(The sum of significant hazards x 1,000,000)
÷ exposure hours. This is stated in units of
per million hours worked for employees
and contractors. A significant hazard is
something that has the potential to cause
harm, ill health or injury with a potential
severity of PL4 (Potential for Fatality) or
above, or significant damage to property,
plant or the environment.
Significant hazard to significant event
near miss ratio
The ratio of reported significant hazards to
reported significant event near misses,
used to monitor proactive identification and
management of high-consequence risks.
Social investment
Contributions made to support the social,
economic, cultural or environmental
wellbeing of communities where we
operate or have an interest. This comprises
direct investment (including Enterprise
Development, a component of Enterprise
and Supplier Development), in-kind support
and administrative costs.
Source Pathway Receptor
A systematic approach used to identify air
emission sources and assess their potential
impacts on people and the environment. It
begins by identifying the source of air
emissions, followed by evaluating the
pathways through which pollutants may be
transported or dispersed in the
environment. The assessment then
considers the receptors, such as
communities, sensitive populations,
ecosystems, and environmental resources,
that may be exposed to and affected by
the emissions.
South32 Equity Incentive Plan
An equity incentive plan that allows the
Board to make offers to employees to
acquire securities in South32 Limited and
to otherwise incentivise employees.
South32, South32 Group or Group
Refers to South32 Limited and its
subsidiaries and operated joint ventures,
unless otherwise stated.
South32 share
South32’s ownership share of operations
are presented as follows: Worsley Alumina
(86% share), Brazil Alumina (36% share),
Brazil Aluminium (40% share),
HillsideAluminium (100%), Mozal Aluminium
(63.7% share), Sierra Gorda (45% share),
Cannington (100%), Hermosa (100%),
Australia Manganese (60% share) and South
Africa Manganese ore (54.6% share). Prior
to the divestment of Illawarra Metallurgical
Coal on 29 August 2024, South32's
ownership was 100%. Prior to the
divestment of South Africa Manganese
alloy on 3 June 2025, South32's ownership
was 60%. Prior to the divestment of Cerro
Matoso on 1 December 2025, South32's
ownership was 99.9%. Unless otherwise
stated: all metrics reflect South32’s share.
Stockpile
An accumulation of ore or mineral built up
when demand slackens or when the
treatment plant or beneficiation equipment
is incomplete or temporarily unable to
process the mine output; any heap of
material formed to create a buffer for
loading or other purposes, or material dug
and piled for future use.
STI
Short-term incentive.
Supply chain
The global network of suppliers that
support South32’s operations,
development options and exploration
programs through the flow of goods,
services and information.
Sustainability, sustainable development,
sustainably, sustainable
Our approach to sustainability aims to
balance environmental, social and
economic considerations in a way that
creates enduring value for our
stakeholders. We recognise that in many
cases these considerations will be
interdependent or may compete or conflict
with each other. References to
sustainability (including sustainable
development and sustainably) in the suite
or other disclosures do not mean that there
will be no adverse impact, or an absolute
outcome, in any one area.
South32 Annual Report 2026
262 Information
Glossary of terms and abbreviations continued
Sustainability-related risks and
opportunities
Risks and opportunities arising from
South32’s dependencies on, and impacts
on, the economy, environment and people
across its value chain that could reasonably
be expected to affect South32’s prospects.
Tailings
The left-over materials that remain after
the target mineral is extracted from ore.
Target
An intended outcome in relation to which
we have identified one or more pathways
for delivery of that outcome, subject to
certain assumptions or conditions.
Taskforce on Climate-Related Financial
Disclosures (TCFD)
The TCFD developed a framework for
climate-related financial disclosures
structured around four pillars: governance,
strategy, risk management, and metrics
and targets. The TCFD was disbanded in
October 2023 and its recommendations
have been incorporated and built upon in
AASB S2 Climate-related Disclosures.
Taskforce on Nature-Related Financial
Disclosures (TNFD)
The TNFD has developed a framework for
nature-related disclosures, including a set
of disclosure recommendations structured
around the four recommendation pillars of
governance, strategy, risk and impact
management, and metrics and targets.
Total demand
Combined demand for both primary
materials and recycled (secondary) content.
Total disturbed landholdings
Represents the total landholdings which
have been disturbed by our operations
over time, and is the sum of land classified
as disturbed and land that is under active
rehabilitation.
Total Ore Reserves
The sum of Proved Ore Reserves and
Probable Ore Reserves.
Total Recordable Injury Frequency (TRIF)
(The sum of recordable injuries x 1,000,000)
÷ exposure hours, for employees and
contractors. This is stated in units of per
million hours worked for employees and
contractors. We adopt the United States
Government Occupational Safety and
Health Administration (OSHA) guidelines for
the recording and reporting of occupational
injuries and illnesses.
Total Recordable Illness Frequency
(TRILF)
(The sum of recordable illnesses x
1,000,000) ÷ exposure hours, for employees
and contractors. This is stated in units of
per million hours worked for employees
and contractors. We adopt the United
States Government Occupational Safety
and Health Administration (OSHA)
guidelines for the recording and reporting
of occupational injuries and illnesses.
Total Shareholder Return (TSR)
TSR measures the return delivered to
shareholders over a certain period through
the change in share price and any
dividends paid. It is a measure used to
compare our performance to that of
relevant peer groups under the LTI.
Transformation
A national strategy in South Africa aimed at
attaining national unity, promoting
reconciliation through negotiated
settlement and non-racism.
Transition materials
The CA100+ Net Zero Standard for
Diversified Mining categorises transition
materials into Key Transition Materials
(KTMs) and Other Transition Materials
(OTMs). Examples of KTMs include lithium,
copper, nickel and cobalt, while examples
of OTMs include aluminium, alumina and
bauxite, silver, zinc, manganese and lead
(both lists are not exhaustive).
Transition risks
Risks that arise from efforts to transition to
a lower-carbon economy. Transition risks
include policy and legal, technology, market
and reputational risks. These risks could
carry financial implications for an entity,
such as increased operating costs or asset
impairment due to new or amended
climate-related regulations. The entity's
financial performance could also be
affected by shifting consumer demands
and the development and deployment of
new technology.
TSF
Tailings Storage Facility.
TSX
Toronto Stock Exchange.
Underlying earnings
Underlying earnings is profit/(loss) after tax
and earnings adjustment items from
continuing and discontinued operations.
Earnings adjustments represent items that
do not reflect our underlying operations. In
order to calculate Underlying earnings, the
following items are adjusted as applicable
each period, irrespective of materiality:
Exchange rate gains/losses on restatement
of monetary items; Impairment losses/
reversals; Gains/losses on disposal and
consolidation of interests in operations;
Gains/losses on non-trading derivative
instruments, contingent consideration and
other investments measured at fair value
through profit or loss; Major corporate
restructures; Joint venture adjustments;
Exchange rate variations on net cash/debt;
Tax effect of earnings adjustments; and
Exchange rate variations on tax balances.
In addition, items that do not reflect the
underlying operations of South32, and are
individually, or in combination with other
related earnings adjustments, significant to
the financial statements, are excluded to
determine Underlying earnings. When
applicable, significant items are detailed in
the Financial Report. We believe that
Underlying earnings provides useful
information, but should not be considered
as an indication of, or an alternative to,
profit or attributable profit as an indicator
of operating performance.
Underlying earnings attributable to
members
Underlying earnings attributable to
members is Underlying earnings net of
amounts attributable to non-controlling
interests.
South32 Annual Report 2026
263 Information
Underlying EBIT
UnderlyingEBIT is profit/loss before net
finance income/costs, tax and any earnings
adjustments, including impairments, from
continuing and discontinued operations.
The performance of each of the South32
operations and operational management is
assessed based on Underlying EBIT. In
order to calculate Underlying EBIT, the
following items are adjusted as applicable
each period, irrespective of materiality:
Exchange rate gains/losses on restatement
of monetary items; Impairment losses/
reversals; Gains/losses on disposal and
consolidation of interests in operations;
Gains/losses on non-trading derivative
instruments, contingent consideration and
other investments measured at fair value
through profit or loss; Major corporate
restructures; and Joint venture
adjustments. In addition, items that do not
reflect the underlying operations of
South32, and are individually, or in
combination with other related earnings
adjustments, significant to the financial
statements, are excluded to determine
Underlying EBIT. When applicable,
significant items are detailed in the
Financial Report.
Underlying EBIT margin
Comprises Underlying EBIT excluding third-
party products and services EBIT, divided
by Underlying revenue excluding third-
party products and services revenue.
Underlying EBITDA
Underlying EBITDA is Underlying EBIT
before Underlying depreciation and
amortisation. Underlying EBITDA per
operation excludes third-party products
and services EBITDA. Underlying
depreciation and amortisation is adjusted
for joint venture adjustments as applicable
each period, irrespective of materiality. In
addition, items that do not reflect the
underlying operations of South32, and are
individually, or in combination with other
related earnings adjustments, significant to
the financial statements, are excluded to
determine Underlying EBITDA. When
applicable, significant items are detailed in
the Financial Report.
Underlying EBITDA margin
Comprises Underlying EBITDA excluding
third-party products and services EBITDA,
divided by Underlying revenue excluding
third-party products and services revenue.
Also referred to as operating margin.
Underlying effective tax rate (ETR)
Underlying income tax expense/benefit
divided by Underlying profit/loss subject to
tax.
Underlying revenue
Underlying revenue includes revenue from
third-party products and services.
UN SDGs
United Nations Sustainable Development
Goals.
Value chain
The interrelated activities and systems
encompassing the full lifecycle and value
creation of our products and processes,
beginning with South32’s exploration and
development of commodities, followed by
processing, refining and smelting, and
culminating in the sale and distribution to
customers and the closure of mines.
Water consumption
Water that is removed by evaporation,
entrainment (in product or waste) or other
losses, and not released back to surface
water, groundwater, seawater or a third
party.
Water outputs/discharge
Water that is released from the operational
water system through discharge back to
the water environment or piping to third
parties, and/or through other outputs,
including water consumed (removed by
evaporation, entrainment in product, waste
or other losses) in an operational task or
activity.
Water risk
Water risk is the possibility of an entity
experiencing a water-related challenge (e.g.
water scarcity, water stress, flooding,
infrastructure decay, drought). The extent
of risk is a function of the likelihood of a
specific challenge occurring and the
severity of the challenge’s impact. The
severity of impact itself depends on the
intensity of the challenge, as well as the
vulnerability of the actor.
Water scarcity
Water scarcity refers to the lack of
sufficient available water to meet the water
usage demands of the region. This can be
from the lack of physical water and the lack
of financial means to gain access to water.
Water to tasks
The total flow of water to a task. A task is a
set of operational activities that use water.
Water inputs/withdrawal
Water that is drawn from the environment
(surface water, groundwater or seawater)
or purchased from third parties, for use in a
task or activity.
Yield
The percentage of material of interest that
is extracted during mining and/or
processing. A measure of mining or
processing efficiency (JORC Code). When
used in reference to the Mineral Resource
estimate, yield refers to the sample mass
recovery following beneficiation.
South32 Annual Report 2026
264 Information
Glossary of terms and abbreviations continued
Units of measure
%
percentage or per cent
A$/t
Australian dollars per tonne
CuEq
copper equivalent
dmtu
dry metric tonne unit
g/t
grams per tonne
ha
hectare
kdmt
thousand dry metric tonne
km
kilometre
koz
thousand ounces
kt
kilotonnes (metric)
kwmt
thousand wet metric tonnes
lb
pound
ML
megalitre
m
metre
Mt
million metric tonnes
MtCO
2
-e
million metric tonnes of carbon dioxide
equivalent
Mtpa
Million metric tonnes per annum
Mwmt
million wet metric tonnes
MW
megawatt
oz
ounce
t
Metric tonne
US$B
US dollars in billions
US$/lb
US dollars per pound
US$M
US dollars in millions
US$/oz
US dollars per ounce
US$/t
US dollars per tonne
Terms used in resources and
reserves
A.Al₂O₃
available alumina
Ag
Silver
Au
Gold
Cu/TCu
Copper/total copper
Fe
iron
Mn
manganese
Mo
molybdenum
Ni
nickel
OC
open-cut/open-pit/opencast
Pb
lead
R.SiO₂
reactive silica
UG
underground working
Zn
zinc
South32 Annual Report 2026
265 Information
Group Headquarters
Level 2, 100 St Georges Terrace
Perth WA 6000
Australia
Telephone: +61 8 9324 9000
Email: Company.Secretary@south32.net
South Africa Office
39 Melrose Boulevard
Melrose Arch
Melrose, Johannesburg 2076
South Africa
Telephone: +27 11 376 2000
Singapore Marketing Office
16 Collyer Quay
#18-00, Collyer Quay Centre
Singapore 049318
Singapore
Telephone: +65 6679 2600
London Marketing Office
Nova North
11 Bressenden Place
London SW1E 5BY
United Kingdom
Telephone: +44 20 7798 1700
North America Office
Suite 1780, 1066 West Hastings Street
Vancouver V6E 3X1
British Columbia
Canada
Telephone: +1 604 915 5680
Share Registrars and Transfer Offices
Contact details for the Company’s share registries in Australia,
South Africa and the United Kingdom are included on page 254.
Information about the American Depositary Receipts Depositary,
Transfer Agent and Registrar can also be found on page 254.
South32 Annual Report 2026
266 Information
Corporate directory
Printed copies of this Annual Report will only be posted to
those shareholders who have requested a printed copy. Other
shareholders are notified when the Annual Report becomes
available and given details of where to access it electronically.
Voluntary reporting frameworks
This report has been prepared with consideration to the
International Integrated Reporting Council’s (IIRC) International
Integrated Reporting Framework. This framework provides a useful
basis for disclosing how sustainable value is created for our
shareholders and other stakeholders over time.
This report has been prepared in accordance with the Global
Reporting Initiative (GRI) Sustainability Reporting Standards
(revised 2021 Universal Standards) and the ICMM Mining Principles
and mandatory requirements set out in the ICMM Position
Statements. This report also includes disclosures related to the
Financial Stability Board's Task Force on Climate-Related Financial
Disclosures voluntary disclosure framework in the Sustainability
section on pages 57 to 116 (with the balance sitting in the Climate
Change Action Plan 2025).
The disclosures in this report, the Climate-related Reporting
Methodology 2026 and the Frameworks and Standards Index, are
made with consideration of the Sustainability Accounting
Standards Board (SASB) standards. Our SASB index is included in
the Frameworks and Standards Index, which identifies the extent to
which each SASB disclosure requirement has been applied.
Forward-looking Statements
This report contains forward-looking statements in relation to the
South32 Group, including statements regarding the Group’s intent,
belief, goals, objectives, opinions, initiatives, commitments or
current expectations with respect to the Group’s business, market
and financial conditions, results of operations and risk
management practices and expectations regarding the
achievement of the Group's operational emissions reduction target
and other climate and sustainability goals. Forward-looking
statements can generally be identified by the use of words such as
‘forecast’, ‘estimate’, ‘plan’, ‘will’, ‘anticipate’, ‘may’, ‘believe’, ‘should’,
‘expect’, ‘intend’, ‘outlook’, ‘guidance’, ‘likely’, ‘aim’, ‘aspire’ and other
similar expressions. Similarly, statements that describe the Group’s
objectives, plans, goals, or expectations are forward-looking
statements.
Forward-looking statements in this report are based on South32’s
current expectations, best estimates and assumptions as at the
date of preparation, many of which are beyond South32’s control.
These forward-looking statements are not guarantees or
predictions of future performance, and involve known and unknown
risks and uncertainties, which may cause actual results to differ
materially from those expressed in the report.
Variables and external factors that could impact forward-looking
statements in this report include but are not limited to: financial
and economic conditions in various countries; fluctuations in
demand, price, or currency; operating results; development
progress including approvals; risks, including physical, technology
and carbon emissions reductions risks; industry competition; loss
of market for South32’s products; legislative, fiscal, and regulatory
developments; the conduct of joint venture participants and
contractual counterparties, and estimates relating to cost,
engineering, reserves and resources.
South32 cannot predict whether forward-looking statements, or
the assumptions on which they are based, will eventuate. Except as
required by applicable laws or regulations, South32 does not
undertake to publicly update or review any forward-looking
statements. Past performance cannot be relied on as a guide to
future performance.
Information prepared by third parties
Certain information contained in this report is based on information
prepared by third parties. While South32 considers the relevance
and appropriateness of such information, some third-party
information has not been subject to independent verification.
Operated joint ventures
Operations which are not wholly owned by South32 Limited or its subsidiaries and for which South32 manages the operation.
Operation
Ownership % Note
Australia Manganese
60.0%
South Africa Manganese
44.0%
Minera Sud Argentina S.A.
50.1% Non-IFRS financial information is presented on a 100% basis.
Excluded from environmental, people and community related performance data.
Mozal Aluminium
63.7%
Worsley Alumina
86.0%
Non-operated joint ventures
Operations which are not wholly owned by South32 Limited or its subsidiaries and for which South32 does not manage the operation.
Operation
Ownership % Note
Ambler Metals
50.0% Excluded from environmental, people and community related performance data.
Brazil Alumina
36.0%
People data includes South32 direct employees.
GHG scope 1 and 2 data is disclosed in South32 scope 3 data.
Brazil Aluminium
40.0%
Sierra Gorda
45.0%
Mineracao Rio do Norte SA
(MRN)
33.0% Excluded from Non-IFRS financial information.
People data includes South32 direct employees only.
GHG scope 1 and 2 data is disclosed in South32 scope 3 data.
South32 Annual Report 2026
267 Information
Information about this report
This page is intentionally blank
South32 Annual Report 2026
268
This Annual Report is printed on paper that is
FSC® (Forest Stewardship Council) certified and
manufactured from plantation-grown timber.
Both the paper manufacturer and printer are certified
to the highest possible internationally recognised
standard for environmental management.
www.south32.net
SUSTAINABILITY STANDARDS
AND FRAMEWORKS INDEX
2026
Our 2026 Annual Reporting Suite
This Sustainability Standards and Frameworks Index supplements
the 2026 Annual Reporting Suite. Together with the Tax
Transparency and Payments to Governments report, the following
documents form part of our 2026 Annual Reporting Suite and are
published separately:
Annual Report
Modern Slavery
Statement
Climate-related
Reporting
Methodology
Other documents supplementing our Annual Reporting Suite
include the:
– Sustainability Databook
– Tax Databook
You can view all the documents in our Annual Reporting Suite at
www.south32.net.
About this document
This Index identifies the location of our sustainability-related
disclosures across our 2026 Annual Reporting Suite and website at
www.south32.net. It also demonstrates alignment with applicable
reporting standards, frameworks and regulatory requirements, and
provides information on certifications held by our operations and
our assessment against selected ESG ratings and indices.
Contents
ESG Performance and Sustainability Certifications
1
ESG ratings and indices 1
Sustainability certifications 1
Standards and Frameworks alignment
2
United Nations Sustainable Development Goals (UN SDGs) 2
ICMM Mining Principles and Performance Expectations (ICMM PEs) 3
Global Reporting Index (GRI) index 6
Sustainability Accounting Standards Board Index 13
Task Force on Climate-related Financial Disclosures (TCFD) 15
Australian Accounting Standards Board (AASB) 17
Task Force on Climate-related Financial Disclosures (TCFD) 15
CA100+ Net Zero Benchmark 20
South32 Sustainability Standards and Frameworks Index 2026
About this index
ESG PERFORMANCE AND SUSTAINABILITY CERTIFICATIONS
ESG ratings and indices
The table below outlines the primary ESG ratings and indices we regularly engage with or monitor and is not intended to be exhaustive.
Unless otherwise indicated, ratings are current as at 30 June 2026.
Provider
Rating scale
(best to worst score)
FY26
FY25
FY24
Participation status and supporting
commentary
ESG rating providers
Sustainalytics ESG Risk Rating
Negligible (0) to
Severe (50+)
Medium -
21.55
Medium - 22.1
Medium - 23.5
Annual participation in rating
review processes and regular
monitoring.
MSCI ESG Rating
AAA to CCC
AA
A
A
ISS - Corporate Rating
A+ to D-
B-
B-
C+
ISS Quality Score - Environment
1 to 10
2
2
-
ISS Quality Score - Social
1 to 10
1
1
-
ISS Quality Score - Governance
1 to 10
4
1
-
CDP
South32 has not participated in CDP questionnaires for several years. Our disclosures (aligned with AASB,
GRI and TCFD) provide comprehensive coverage of climate, biodiversity and water-related matters.
Sustainability indices
FTSE4Good Index
5 to 0
3.9
3.8
3.8
Annual rating monitoring only.
S&P Global Corporate Sustainability
Assessment (CSA)
100 to 0
49
48
41
Sustainability certifications
The table below details sustainbility-related certifications attained by our operations and select non-operated joint ventures.
Issuing body
Certification
Level
Issue Date
Expiry
Certification reference
Aluminium
Stewardship
Initiative (ASI)
Worsley
Alumina
Performance Standard (v3 2022)
Full
Sep 2024
Sep 2027
Certificate #383
Chain of Custody (v2 2022)
Full
Nov 2024
Nov 2027
Certificate #409
Mineração Rio
do Norte
Performance Standard (v3 2022)
Full
Mar 2024
Mar 2027
Certificate #175
Chain of Custody (v2 2022)
Full
Mar 2024
Mar 2027
Certificate #256
Alumar refinery
(Brazil Alumina)
Performance Standard (v2 2017)
Provisional
Sep 2025
Sep 2026
Certificate #30
Chain of Custody (v2 2022)
Full
Jul 2024
Jul 2027
Certificate #72
International
Organisation for
Standardization
(ISO)
Hillside
Aluminium
ISO 9001 - Quality Management System
Full
Jun 2024
Jul 2027
Registration #LS 2564
ISO 45001 - Occupational Health and Safety
Management Systems
Full
Sep 2023
Sep 2026
Registration #OHS 180401
ISO 14001 - Environmental Management
Systems
Full
Aug 2024
Jul 2027
Registration #EM 140069
Worsley
Alumina
ISO 9001 - Quality Management System
Full
Oct 2023
Oct 2026
Certificate #AU99/1252
London Metals
Exchange (LME)
Responsible
Sourcing
Hillside
Aluminium
LME - Approved Brand
Listed: Hillside Aluminium
Approved brands | London
Metal Exchange - see
Hillside Aluminium
South32 Sustainability Standards and Frameworks Index 2026
1
ESG performance and sustainability certifications
STANDARDS AND FRAMEWORKS ALIGNMENT
United Nations Sustainable Development Goals (UN SDGs)
We focus on the UN SDGs where we can have the most meaningful impact through our activities.
UN SDG Annual Report 2026 (or other) reference location:
3 - Good Health and Wellbeing
Ensure healthy lives and promote well-being for all
at all ages.
– Safety and health (page 61)
– Community relationships (page 65)
4 - Quality Education
Ensure inclusive and equitable quality education
and promote lifelong learning opportunities for all.
– Community relationships (page 65)
– Sustainability Databook 2026 (Social investment; Attracting and retaining talent
tabs)
5 - Gender Equality
Achieve gender equality and empower all women
and girls.
– People and culture (page 63)
– Sustainability Databook 2026 (Workforce and diversity tab)
– Code of Business Conduct and Speak Up Policy
6 - Clean Water and Sanitation
Ensure availability and sustainable management of
water and sanitation for all.
– Water (page 73)
– Community relationships (page 65)
– Sustainability Databook 2026 (Water tab)
7 - Affordable and Clean Energy
Ensure access to affordable, reliable, sustainable
and modern energy for all.
– Addressing climate change (page 77)
– Sustainability Databook 2026 (Energy tab)
8 - Decent work and economic growth
Promote sustained, inclusive and sustainable
economic growth, full and productive employment
and decent work for all.
– People and culture (page 63)
– Delivering value to society (page 65)
– Human rights (page 68)
9 - Industry, innovation and infrastructure
Build resilient infrastructure, promote inclusive and
sustainable industrialisation and foster innovation.
– Delivering value to society (page 65)
– Managing our environmental impact (page 71)
– Addressing climate change (page 77)
– Sustainability Databook 2026 (Social investment; Our economic contributions
tabs)
10 - Reduced Inequalities
Reduce inequality within and among countries.
– People and culture (page 63)
– Delivering value to society (page 65)
– Code of Business Conduct and Speak Up Policy
11 - Sustainable Cities and Communities
Make cities and human settlements inclusive, safe,
resilient and sustainable.
– Delivering value to society (page 65)
– Managing our environmental impact (page 71)
12 - Responsible consumption and production
Ensure sustainable consumption and production
patterns.
– Our Approach to Value Chain Management
– Sustainability Databook 2026 (Modern slavery; Human rights tabs)
– Modern Slavery Statement 2026
13 - Climate Action
Take urgent action to combat climate change and
its impacts.
– Managing our environmental impact (page 71)
– Addressing climate change (page 77)
15 - Life on Land
Protect, restore and promote sustainable use of
terrestrial ecosystems, sustainably manage forests,
combat desertification, and halt and reverse land
degradation and halt biodiversity loss.
– Community relationships (page 65)
– Nature (page 71)
– Biodiversity (page 72)
16 - Peace, justice and strong institutions
Promote peaceful and inclusive societies for
sustainable development, provide access to justice
for all and build effective, accountable and inclusive
institutions at all levels.
– Human rights (page 68)
– Modern Slavery Statement 2026
17 - Partnerships for the Goals
Strengthen the means of implementation and
revitalise the Global Partnership for Sustainable
Development.
– Community relationships (page 65)
South32 Sustainability Standards and Frameworks Index 2026
2
Standards and frameworks alignment
ICMM Mining Principles and Performance Expectations (ICMM PEs)
We have been a member of the ICMM since 2015. The ICMM Mining Principles and Performance Expectations (PEs) establish
environmental, social and governance requirements at both the corporate and operational levels. In accordance with ICMM requirements,
our corporate function and operations completed self-assessments in 2022. These assessments are reviewed at least every three years
and are subject to third-party validation (TPV) on a risk-based schedule.
In FY26, we undertook a targeted review of our 2022 self-assessments to confirm whether existing ratings remained appropriate or had
improved. The results are summarised below.
ICMM PE conformance by operation (summary)
Operation
Meets
Partially
Meets
Does not
Meet
Not
Applicable
Overall
conformance
1
Last detailed
assessment Validation completed
Australia Manganese
70% 10% —% 20% 88%
FY23
TPV in FY23
Cannington
78% 3% —% 20% 97%
FY24
TPV in FY25
Worsley Alumina
78% 3% —% 20% 97%
FY23
TPV in FY23
Hillside Aluminium
75% 3% —% 23% 97%
FY24
TPV in FY25
South Africa Manganese
75% 5% —% 20% 94%
FY25
TPV in FY25
Corporate
75% —% —% 25% 100%
FY25
Internal validation in FY25
ICMM PE conformance by operation (detailed)
●
Meets
●
Partially Meets
●
Does not meet
⊗
Not applicable
Principle 1: Ethical Business
Apply ethical business practices and sound systems of corporate governance and transparency to support sustainable development.
1.1 Establish systems to maintain compliance with applicable law.
● ● ● ● ● ●
1.2 Implement policies and practices to prevent bribery and corruption, and to
publicly disclose facilitation payments.
● ● ● ● ● ●
1.3 Implement policies and standards consistent with the ICMM policy
framework.
⊗ ⊗ ⊗ ⊗ ⊗
●
1.4 Assign accountability for sustainability performance at the Board and/or
Executive Committee level.
⊗ ⊗ ⊗ ⊗ ⊗
●
1.5 Disclose the value and beneficiaries of financial and in-kind political
contributions whether directly or through an intermediary.
⊗ ⊗ ⊗ ⊗ ⊗
●
Principle 2: Decision Making
Integrate sustainable development in corporate strategy and decision-making processes.
2.1 Integrate sustainable development principles into corporate strategy and
decision-making processes relating to investments in the design, operation
and closure of facilities.
⊗ ⊗ ⊗ ⊗ ⊗
●
2.2 Support the adoption of responsible physical and psychological health and
safety, environmental, human rights and labour policies and practices by joint
venture partners, suppliers and contractors, based on risk.
● ● ● ● ● ●
Principle 3: Human Rights
Respect human rights and the interests, cultures, customs and values of employees and communities affected by our activities.
3.1 Support the UN Guiding Principles on Business and Human Rights by
developing a policy commitment to respect human rights, undertaking human
rights due diligence and providing for or cooperating in processes to enable
the remediation of adverse human rights impacts that members have caused
or contributed to.
● ● ● ● ● ●
3.2 Avoid the involuntary physical or economic displacement of families and
communities. Where this is not possible apply the mitigation hierarchy and
implement actions or remedies that address residual adverse effects to restore
or improve livelihoods and standards of living of displaced people.
● ● ● ● ●
⊗
3.3 Implement, based on risk, a human rights and security approach consistent
with the Voluntary Principles on Security and Human Rights.
● ● ● ● ●
⊗
3.4 Respect the rights of workers by: not employing child or forced labour;
avoiding human trafficking; not assigning hazardous/ dangerous work to those
under 18; eliminating all forms of harassment and discrimination; respecting
freedom of association and collective bargaining; and providing an appropriate
mechanism to address workers grievances.
● ● ● ● ● ●
ICMM Principle
Australia
Manganese Cannington
Hillside
Aluminium
South
Africa
Manganese
Worsley
Alumina Corporate
South32 Sustainability Standards and Frameworks Index 2026
3
1.
Overall conformance considers the total number of PEs that are rated 'Meets' against the PEs applicable to the operation only.
3.5 Equitably remunerate employees with wages that equal or exceed legal
requirements or represent a competitive wage within that job market
(whichever is higher) and assign regular and overtime working hours within
legally required limits.
● ● ● ● ● ●
3.6 Respect the rights, interests, aspirations, culture and natural resource-
based livelihoods of Indigenous Peoples in project design, development and
operation; apply the mitigation hierarchy to address adverse impacts; and
deliver sustainable benefits for Indigenous Peoples.
● ● ● ● ●
⊗
3.7 Work to obtain the free, prior and informed consent of Indigenous Peoples
where significant adverse impacts are likely to occur, as a result of relocation,
disturbance of lands and territories or of critical cultural heritage, and capture
the outcomes of engagement and consent processes in agreements.
● ● ● ● ●
⊗
3.8 Implement policies and practices to respect the rights and interests of
women that reflect gender-informed approaches to work practices and job
design, and that protect against all forms of discrimination and harassment,
and behaviours that adversely impact on women’s successful participation in
the workplace.
● ● ● ● ● ●
3.9 Implement policies and practices to respect the rights and interests of all
workers and improve workforce representation in the workplace so it is more
inclusive.
● ● ● ● ● ●
Principle 4: Risk Management
Implement effective risk-management strategies and systems based on sound science, and which account for stakeholder perceptions of risk.
4.1 Assess environmental and social risks and opportunities of new projects
and of significant changes to existing operations in consultation with interested
and affected stakeholders, and publicly disclose assessment results.
● ● ● ● ● ●
4.2 Undertake risk-based due diligence on conflict and human rights that aligns
with the OECD Due Diligence Guidance on Conflict Affected and High Risk
Areas, when operating in, or sourcing from, a conflict-affected or high-risk area.
● ● ● ● ● ●
4.3 Implement risk-based controls to avoid/prevent, minimise, mitigate and/or
remedy physical and psychological health, safety and environmental impacts to
workers, local communities, cultural heritage and the natural environment,
based upon a recognised international standard or management system.
● ● ● ● ●
⊗
4.4 Develop, maintain and test emergency response plans. Where risks to
external stakeholders are significant, this should be in collaboration with
potentially affected stakeholders and consistent with established industry
good practice.
● ● ● ● ●
⊗
Principle 5: Health and Safety
Pursue continual improvement in health and safety performance with the ultimate goal of zero harm.
5.1 Implement practices aimed at continually improving workplace physical and
psychological health and safety, and monitor performance for the elimination
of workplace fatalities, serious injuries, psychosocial hazards and prevention of
occupational diseases, based upon a recognised international standard or
management system.
● ● ● ● ● ●
5.2 Provide workers with training in accordance with their responsibilities for
physical and psychological health and safety and implement health surveillance
and risk-based monitoring programmes based on occupational exposures.
● ● ● ● ● ●
5.3 Safeguard the health of workers against exposure to diesel particulate
matter (DPM) emissions in all underground mining operations by implementing
a comprehensive DPM management programme.
⊗
●
⊗
●
⊗ ⊗
Principle 6: Environmental Performance
Pursue continual improvement in environmental performance issues, such as water stewardship, energy use and climate change.
6.1 Plan and design for closure in consultation with relevant authorities and
stakeholders, implement measures to address closure-related environmental
and social aspects, and make financial provision to enable agreed closure and
post-closure commitments to be realised.
● ● ● ● ● ●
6.2 Implement water stewardship practices that provide for strong and
transparent water governance, effective and efficient management of water at
operations, and collaboration with stakeholders at a catchment level to achieve
responsible and sustainable water use.
● ● ● ● ● ●
6.3 Design, construct, operate, monitor and decommission tailings disposal/
storage facilities using comprehensive, risk-based management and
governance practices in line with internationally recognised good practice, to
minimise the risk of catastrophic failure.
● ●
⊗
● ● ●
6.4 Apply the mitigation hierarchy to prevent pollution, manage releases and
waste, and address potential impacts on human health and the environment.
● ● ● ● ●
⊗
ICMM Principle
Australia
Manganese Cannington
Hillside
Aluminium
South
Africa
Manganese
Worsley
Alumina Corporate
South32 Sustainability Standards and Frameworks Index 2026
4
Standards and frameworks alignment continued
6.5 Implement measures to improve energy efficiency and contribute to a low-
carbon future, and report the outcomes based on internationally recognised
protocols for measuring CO2 equivalent (GHG) emissions.
● ● ● ● ● ●
Principle 7: Conservation of Biodiversity
Contribute to the conservation of biodiversity and integrated approaches to land-use planning.
7.1 Neither explore nor develop new mines in World Heritage sites, respect
legally designated protected areas, and design and operate any new
operations or changes to existing operations to be compatible with the value
for which such areas were designated.
● ● ● ● ● ●
7.2 Assess and address risks and impacts to biodiversity and ecosystem
services by implementing the mitigation hierarchy, with the ambition of
achieving no-net-loss of biodiversity.
● ● ● ● ● ●
Principle 8: Responsible Production
Facilitate and support the knowledge-base and systems for responsible design, use, re-use, recycling and disposal of products containing metals
and minerals.
8.1 In project design, operation and de-commissioning, implement cost-
effective measures for the recovery, re-use or recycling of energy, natural
resources, and materials.
● ● ● ● ● ●
8.2 Assess the hazards of the products of mining according to UN Globally
Harmonized System of Hazard Classification and Labelling or equivalent
relevant regulatory systems and communicate through safety data sheets and
labelling as appropriate.
● ● ● ● ● ●
Principle 9: Social Performance
Pursue continual improvement in social performance and contribute to the social, economic and institutional development of host countries and
communities.
9.1 Implement inclusive approaches with local communities to identify their
development priorities and support activities that contribute to their lasting
social and economic wellbeing, in partnership with government, civil society
and development agencies, as appropriate.
● ● ● ● ● ●
9.2 Enable access by local enterprises to procurement and contracting
opportunities across the project life cycle, both directly and by encouraging
larger contractors and suppliers, and also by supporting initiatives to enhance
economic opportunities for local communities.
● ● ● ● ● ●
9.3 Conduct stakeholder engagement based upon an analysis of the local
context and provide local stakeholders with access to appropriate and
effective mechanisms for seeking resolution of grievances related to the
company and its activities.
● ● ● ● ●
⊗
9.4 Collaborate with government, where appropriate, to support improvements
in environmental and social practices of local Artisanal and Small-scale Mining.
⊗ ⊗ ⊗ ⊗ ⊗ ⊗
Principle 10: Stakeholder Engagement
Proactively engage key stakeholders on sustainable development challenges and opportunities in an open and transparent manner, effectively
report and independently verify progress and performance.
10.1 Identify and engage with key corporate-level external stakeholders on
sustainable development issues in an open and transparent manner.
⊗ ⊗ ⊗ ⊗ ⊗
●
10.2 Publicly support the implementation of the Extractive Industries
Transparency Initiative (EITI) and compile information on all material payments,
at the appropriate levels of government, by country and by project.
● ● ● ● ● ●
10.3 Report annually on economic, social and environmental performance at
the corporate level using the GRI Sustainability Reporting Standards.
⊗ ⊗ ⊗ ⊗ ⊗
●
10.4 Each year, conduct independent assurance of sustainability performance
following the ICMM guidance on assuring and verifying membership
requirements.
⊗ ⊗ ⊗ ⊗ ⊗
●
ICMM Principle
Australia
Manganese Cannington
Hillside
Aluminium
South
Africa
Manganese
Worsley
Alumina Corporate
South32 Sustainability Standards and Frameworks Index 2026
5
Global Reporting Index (GRI) index
We report information cited in this index for the reporting period 1 July 2025 to 30 June 2026 in accordance with the GRI Standards.
GRI 2: General Disclosures 2021
2-1 Organisational details
– About this report (inside front cover)
– Shareholder Information (page 252)
– Where we operate and what we produce (page 8)
2-2 Entities included in the
organisation's sustainability reporting
– Note 2 to the financial statements (Basis of preparation) from page
– Sustainability Databook 2026 (Reporting boundaries tab)
2-3 Reporting period, frequency and
contact point
The reporting period is 1 July 2025 to 30 June 2026, with financial and
sustainability reporting periods aligned.
Publication dates are announced via our exchange releases.
Queries relating to our Annual Reporting Suite can be directed to
South32ESG@South32.net.
2-4 Restatements of information
Where relevant, restatements are disclosed in footnotes across the
Annual Reporting Suite.
2-5 External assurance
– Independent Assurance Report to the Directors of South32 Limited
(page 113).
2-6 Activities, value chain and other
business relationships
– Our purpose-led approach (page 2)
– Where we operate and what we produce (page 8)
– Our business model (page 10)
– Our stakeholders (page 12)
– Financial and operational performance summary (page 21)
– Modern Slavery Statement 2026
– Sustainability Databook 2026 (Reporting boundaries tab)
– Industry Associations and Memberships
2-7 Employees
– Sustainability Databook 2026 (Workforce and diversity tab)
2-8 Workers who are not employees
– Sustainability Databook 2026 (Safety and health tab)
2-9 Governance structure and
composition
– Sustainability governance (page 60)
– Corporate Governance Statement (page 117)
– Sustainability Committee Terms of Reference
2-10 Nomination and selection of the
highest governance body
– Corporate Governance Statement (page 117)
– Board Charter
2-11 Chair of the highest governance
body
2-12 Role of the highest governance
body in overseeing the management
of impacts
– Sustainability governance (page 60)
– Corporate Governance Statement (page 117)
– Board Charter and Committees Terms of Reference
2-13 Delegation of responsibility for
managing impacts
2-14 Role of the highest governance
body in sustainability reporting
2-15 Conflicts of interest
– Corporate Governance Statement (page 117)
– Our Board members (page 122)
– Financial Report - Note 28. Related party transactions (page 225)
– Board Charter and Code of Business Conduct (and Speak Up Policy)
2-16 Communication of critical
concerns
– People and culture (page 63)
– Ethics and business integrity (page 69)
– Corporate ethical standards (page 140)
Confidentiality constraints: Total
number and nature of material
business conduct cases reported
to our highest governance body.
2-17 Collective knowledge of the
highest governance body
– Corporate Governance Statement (page 117)
2-18 Evaluation of the performance of
the highest governance body
2-19 Remuneration policies
– Remuneration report (page 150)
– 2025 Annual General Meeting 23 October 2025 results of meeting
2-20 Process to determine
remuneration
2-21 Annual total compensation ratio
– Remuneration report (page 150)
– Sustainability Databook 2026 (Workforce and diversity tab)
2-22 Statement on sustainable
development strategy
– From the Chair (page 6)
– From the CEO (page 7)
Disclosure title
Annual Report 2026 (or other) reference location: Omissions
South32 Sustainability Standards and Frameworks Index 2026
6
Standards and frameworks alignment continued
2-23 Policy commitments
Details of our policy commitments and the governance, due diligence
and management processes that support their implementation are
provided throughout our Annual Report 2026 and supporting
documents available on our website.
2-24 Embedding policy commitments
2-25 Processes to remediate negative
impacts
– Ethics and business integrity (page 69)
– Corporate Governance Statement (page 117)
– Code of Business Conduct and Speak Up Policy
– 'Our Approach' documents
2-26 Mechanisms for seeking advice
and raising concerns
2-27 Compliance with laws and
regulations
– Sustainability Databook 2026 (Ethics and business integrity tab)
– Directors' Report (page 146)
2-28 Membership associations
– Our sustainability approach (page 58)
– Industry Associations and Memberships
2-29 Approach to stakeholder
engagement
– Our stakeholders (page 12)
2-30 Collective bargaining
agreements
– Sustainability Databook 2026 (Attracting, developing and retaining
talent tab)
Disclosure title
Annual Report 2026 (or other) reference location: Omissions
GRI 2: Material Topics 2021
3-1 Process to determine material
topics
– Material sustainability topics (page 59)
3-2 List of material topics
– Our sustainability approach (page 58)
– Material sustainability topics (page 59)
– Sustainability Databook 2026 - Disclosure references tab
3-3 Management of material topics
– Sustainability (from page 57)
– ‘Our Approach’ documents available at www.south32.net
Disclosure title
Annual Report 2026 (or other) reference location:
GRI 14: Mining Sector 2024
Safety and Health
3-3 Management of material topics
14.16.1
– Our sustainability approach (page 58)
– Safety and health (page 61)
– Risk management (page 51)
– Sustainability Databook 2026 (Safety and health tab)
– Our Code of Business Conduct (and Speak Up Policy)
GRI 403: Occupational Health and Safety 2018
403-1 Occupational health and safety
management system
14.16.2
– Safety and health (page 61)
– Sustainability Databook 2026 (Safety and health tab)
– Health and Safety webpage
– Our Code of Business Conduct (and Speak Up Policy)
– Supplier Minimum Requirements
Our internal health and safety standards apply to all South32
employees, contractors and visitors, across our operations,
functions, projects and exploration activities where we have
operational control.
403-2 Hazard identification, risk
assessment, and incident investigation
14.6.3
403-3 Occupational health services
14.6.4
403-4 Worker participation,
consultation and communication on
occupational health and safety
14.6.5
403-5 Worker training on occupational
health and safety
14.6.6
403-6 Promotion of worker health
14.6.7
403-7 Prevention and mitigation of
occupational health and safety
impacts directly linked by business
relationships
14.6.7
403-8 Workers covered by an
occupational health and safety
management system
14.6.9
403-9 Work-related injuries
14.6.10
403-10 Work-related ill health
14.6.11
GRI 14 - Additional sector disclosures:
Emergency preparedness and
response plans
14.15.4
– Sustainability Databook 2026 (Safety and health tab)
Disclosure
GRI 14
reference Annual Report 2026 (or other) reference location: Omissions
South32 Sustainability Standards and Frameworks Index 2026
7
People and culture
3-3 Management of material topics
14.17.1
– People and culture (page 63)
– Risk management (page 55)
– Our Code of Business Conduct (and Speak Up Policy)
– Our Approach to People and Culture
GRI 202: Market Presence 2016
202-1 Ratios of standard entry level
wage by gender compared to local
minimum wage
14.17.2
– Sustainability Databook 2026 (Workforce and diversity
tab)
– Our Code of Business Conduct (and Speak Up Policy)
– Supplier Minimum Requirements
202-2 Proportion of senior
management hired from the local
community
14.21.2
– Inclusion and Diversity Policy
– Sustainability Databook 2026 (Workforce and diversity
tab)
Where practicable, we employ local people in the areas in
which we operate. We aim to maintain a workforce that is
reflective of the communities in which we operate. We have
local employment commitments that form part of our
People and Culture performance Measures. Our strategic
focus for senior leadership is growing women leader
Information unavailable /
incomplete: All metrics
omitted
GRI 401: Employment 2016
401-1 New employee hires and
employee turnover
14.17.3
– Sustainability Databook 2026 (Attracting, developing and
retaining talent tab)
401-2 Benefits provided to full-time
employees that are not provided to
temporary or part-time employees
14.17.4
401-3 Parental leave
14.17.5
GRI 402: Labour Management Relations 2016
402-1 Minimum notice periods
regarding operational changes
14.17.6
Our approach to communicating significant operational
changes, including closures, is tailored to the timing, scale
and nature of the change. This typically includes leadership
briefings, formal announcements, consultation and
consideration of employee feedback. We provide support
such as employee assistance programs, career coaching, CV
and LinkedIn support, networking and interview preparation.
We comply with applicable legal requirements and aim to
engage impacted employees as early as practicable.
GRI 404: Training and Education 2016
404-1 Average hours of training per
year per employee
14.17.7
– Sustainability Databook 2026 (Attracting, developing and
retaining talent tab)
404-2 Programs for upgrading
employee skills and transition
assistance programs
14.17.8
– Our Approach to People and Culture
– People and Culture webpage
404-3 Percentage of employees
receiving regular performance and
career development reviews
– Sustainability Databook 2026 (Attracting, developing and
retaining talent tab)
GRI 405: Diversity and Equal Opportunity 2016
405-1 Diversity of governance bodies
and employees
14.21.5
– Sustainability Databook 2026 (Workforce and diversity
tab)
– Corporate Governance Statement (page 117)
405-2 Ratio of basic salary and
remuneration of women to men
14.21.6
– Sustainability Databook 2026 (Workforce and diversity
tab)
GRI 406: Non-discrimination 2016
406-1 Incidents of discrimination and
corrective actions taken
14.21.7
Confidentiality constraints: All
metrics omitted.
Economic contributions
3-3 Management of material topics
14.9.1
– Community relationships (page 65)
– Risk management (page 55)
– Our Code of Business Conduct (and Speak Up Policy)
– Our Approach to Partnering with Communities
– Tax Transparency and Payments to Governments Report
2026
Disclosure
GRI 14
reference Annual Report 2026 (or other) reference location: Omissions
South32 Sustainability Standards and Frameworks Index 2026
8
Standards and frameworks alignment continued
GRI 201: Economic Performance 2016
201-1 Direct economic value
14.9.2
– Financial report (from page 173)
– Sustainability Databook 2026 (Our economic
contributions tab)
– Tax Transparency and Payments to Governments Report
2026
201-4 Financial assistance received
from government
14.23.3
GRI 203: Indirect Economic Impacts 2016
203-1 Infrastructure investments and
services supported
14.9.3
– Community relationships (page 65)
– Sustainability case studies webpage
– Sustainability Databook 2026 (Our economic
contributions tab)
203-2 Significant indirect economic
impacts
14.9.4
GRI 207: Tax 2019
207-1 Approach to tax
14.23.4
– Tax Transparency and Payments to Governments Report
2026
207-2 Tax governance, control, and
risk
management
14.23.5
207-3 Stakeholder engagement and
management of concerns related to
tax
14.23.6
207-4 Country-by-country reporting
14.23.7
Community relationships
3-3 Management of material topics
14.11.1
– Community relationships (page 65)
– Risk management (page 55)
– Our Code of Business Conduct (and Speak Up Policy)
– Our Approach to Partnering with Communities
– Our Approach to Cultural Heritage
– Our Approach to Engagement with Indigenous,
Traditional and Tribal Peoples
GRI 411: Rights of Indigenous Peoples 2016
411-1 Incidents of violations involving
rights of indigenous peoples
14.11.2
There were no identified incidents of human rights violations
in FY26.
GRI 413: Local Communities 2016
413-1 Operations with local community
engagement, impact assessments,
and development programs
14.10.2
– Community relationships (page 65)
– Sustainability Databook 2026 (Community relationships
tab)
413-2 Operations with significant
actual and potential negative impacts
on local communities
14.10.3
GRI 14 Additional Sector Disclosures:
Local community grievances
14.10.4
– Sustainability Databook 2026 (Community relationships
tab)
Human rights
3-3 Management of material topics
14.20.1
– Human rights (page 68)
– Risk management (page 55)
– Our Code of Business Conduct (and Speak Up Policy)
– Our Approach to Human Rights
GRI 407: Freedom of Association and Collective Bargaining 2016
407-1 Operations and suppliers in
which the right to freedom of
association and collective bargaining
may be at risk
14.20.2
– Human Rights (page 68)
– Modern Slavery Statement 2026
– Human Rights webpage
– Supplier Minimum Requirements
– Our Code of Business Conduct (and Speak Up Policy)
– Our Approach to Human Rights
Confidentiality constraints:
Measures intended to support
rights to exercise freedom of
association and collective
bargaining.
GRI 408: Child Labour 2016
408-1 Operations and suppliers at
significant risk for incidents of child
labour
14.18.2
– Human Rights (page 68)
– Sustainability Databook 2026 (Human rights tab)
– Modern Slavery Statement 2026
Disclosure
GRI 14
reference Annual Report 2026 (or other) reference location: Omissions
South32 Sustainability Standards and Frameworks Index 2026
9
GRI 409: Forced or Compulsory Labour 2016
409-1 Operations and suppliers at
significant risk for incidents of forced
or compulsory labour
14.19.2
– Human Rights (page 68)
– Sustainability Databook 2026 (Human rights tab)
– Modern Slavery Statement 2026
GRI 410: Security Practices 2016
410-1 Security personnel trained in
human rights policies or procedures
14.14.2
– Sustainability Databook 2026 (Human rights tab)
Ethics and business integrity
3-3 Management of material topics
14.22.1
– Ethics and business integrity (page 69)
– Risk management (page 56)
– Our Code of Business Conduct (and Speak Up Policy)
– Anti-Bribery and Corruption Policy
GRI 205: Anti-corruption 2016
205-1 Operations assessed for risks
related to corruption
14.22.2
– Ethics and business integrity (page 69)
– Anti-Bribery and Corruption Policy
205-2 Communication and training
about anti-corruption policies and
procedures
14.22.3
Executive Lead Team and Lead Team members complete
Code of Business Conduct and Anti-Bribery and Corruption
(ABC) training in line with internal training plans. All new
employees complete Code of Business Conduct training,
with additional ABC training and refresher training provided
to higher-risk employees. The Business Integrity team also
delivers targeted ABC awareness sessions.
Our Code of Business Conduct is communicated and
available to all suppliers. Additional minimum supplier
standards are publicly available on our website.
205-3 Confirmed incidents of
corruption and actions taken
14.22.4
– Sustainability Databook 2026 (Ethics and cybersecurity
tab)
– Directors' Report (page 146)
Confidentiality constraints:
Confirmed corruption
incidents, related employee
disciplinary actions, and
contract terminations/non-
renewals.
GRI 206: Anti-competitive Behaviour 2016
206-1 Legal actions for anti-
competitive behaviour, anti-trust, and
monopoly practices
– Sustainability Databook 2026 (Ethics and cybersecurity
tab)
– Directors' Report (page 146)
GRI 415: Public Policy 2016
415-1 Political contributions
14.24.2
– Directors' Report (page 146)
Responsible value chain
3-3 Management of material topics
14.9.1
– Ethics and business integrity (page 69)
– Risk management (page 56)
– Our Code of Business Conduct (and Speak Up Policy)
– Our Approach to Value Chain Management
– Supplier Minimum Requirements
– Modern Slavery Statement 2026
GRI 204: Procurement Practices 2016
204-1 Proportion of spending on local
suppliers
14.9.5
– Sustainability Databook 2026 (Economic contribution tab)
308-1 New suppliers that were
screened using environmental criteria
– Our Code of Business Conduct (and Speak Up Policy)
– Supplier Minimum Requirements
Information unavailable /
incomplete: All metrics
omitted.
308-2 Negative environmental impacts
in the supply chain and actions taken
GRI 414: Supplier Social Assessment 2016
414-1 New suppliers that were
screened using social criteria
14.17.9
– Sustainability Databook 2026 (Modern slavery tab)
– Modern Slavery Statement 2026
414-2 Negative social impacts in the
supply chain and actions taken
14.17.10
Disclosure
GRI 14
reference Annual Report 2026 (or other) reference location: Omissions
South32 Sustainability Standards and Frameworks Index 2026
10
Standards and frameworks alignment continued
Closure
3-3 Management of material topics
14.8.1
– Closure (page 70)
– Risk management (page 49)
– Our Code of Business Conduct (and Speak Up Policy)
– Our Approach to Closure
GRI 14 Additional sector disclosures:
Closure planning status by operation
14.8.4, 14.8.5
– Sustainability Databook 2026 (Closure tab)
Biodiversity
3-3 Management of material topics
14.4.1
– Nature (page 71)
– Biodiversity (page 72)
– Risk management (page 52)
– Our Code of Business Conduct (and Speak Up Policy)
– Our Approach to Biodiversity
– Our Approach to Water
GRI 101: Biodiversity 2024
101-1 Policies to halt and reverse
biodiversity loss
14.4.2
Nature (page 69) Biodiversity (page 70) Our Approach to
Biodiversity We aim to achieve no net loss or a net gain of
biodiversity by completion of closure. A No Net Loss plan is
currently in place for the Eastern Leases at Australia
Manganese. Learn more on page 70.
Information unavailable /
incomplete: Biodiversity
management actions used to
evaluate progress, avoid and
minimise negative impacts,
and maximise positive
outcomes.
101-2 Management of biodiversity
impacts
14.4.3
101-4 Identification of biodiversity
impacts
14.4.4
101-5 Locations with biodiversity
impacts
14.4.5; 14.0.1
– Sustainability Databook 2026 (Landholdings; Biodiversity
tabs)
Information unavailable /
incomplete: Information on
the products and services in
our supply chain with the most
significant impacts on
biodiversity.
101-6 Direct drivers of biodiversity loss
14.4.6
– Nature (page 71)
– Biodiversity (page 72)
– Our Approach to Biodiversity
101-7 Changes to the state of
biodiversity
14.4.7
Information unavailable /
incomplete: All metrics
omitted.
101-8 Ecosystem services
14.4.8
Water
3-3 Management of material topics
14.7.1
– Water (page 73)
– Risk management (page 52)
– Our Code of Business Conduct (and Speak Up Policy)
– Our Approach to Water
GRI 303: Water and Effluents 2018
303-1 Interactions with water as a
shared resource
14.7.2
– Water (page 73)
– Sustainability Databook 2026 (Water tab)
– Our Approach to Water
303-2 Management of water
discharge-related impacts
14.7.3
– Water (page 73)
– Sustainability Databook 2026 (Water tab)
– Our Approach to Water
303-3 Water withdrawal
14.7.4
– Water (page 73)
– Sustainability Databook 2026 (Water tab)
303-4 Water discharge
14.7.5
303-5 Water consumption
14.7.6
Pollution
3-3 Management of material topics
14.3.1; 14.5.1
– Pollution (page 75)
– Risk management (page 52)
– Our Code of Business Conduct (and Speak Up Policy)
GRI 305: Emissions 2016
305-7 Nitrogen oxides (NOx), sulphur
oxides (SOx), and other significant air
emissions
14.3.2
– Sustainability Databook 2026 (Pollution and tailings
tab)
Information unavailable /
incomplete: Emissions from
Persistent organic pollutants
(POP), volatile organic
compounds (VOC), hazardous
air pollutants (HAP) and
particulate matter (PM).
Disclosure
GRI 14
reference Annual Report 2026 (or other) reference location: Omissions
South32 Sustainability Standards and Frameworks Index 2026
11
GRI 306: Waste 2020
306-1 Waste generation and
significant waste-related impacts
14.5.2
– Pollution (page 75)
– Sustainability Databook 2026 (Pollution and tailings tab)
We have not identified any significant spills in FY26
Information unavailable /
incomplete: Management of
waste managed by a third
party.
306-2 Management of significant
waste-related impacts
14.5.3
306-3 Significant spills
-
306-3 Waste generated
14.5.4
306-4 Waste diverted from disposal
14.5.5
306-5 Waste directed to disposal
14.5.6
Tailings management
3-3 Management of material topics
14.6.1
– Tailings management (page 76)
– Risk management (page 49)
– Our Approach to Tailings Management
GRI 14 Additional sector disclosures:
Tailings facilities and disposal methods
14.6.2; 14.6.3
– Tailings management (page 76)
– Our Approach to Tailings Management
– 2026 Tailings Storage Facilities Directory
Climate change
3-3 Management of material topics
14.1.1; 14.2.1
– Climate change (page 77)
– Risk management (page 52)
– Climate-related Reporting Methodology 2026
– Climate Change Action Plan 2025
– Our Code of Business Conduct (and Speak Up Policy)
GRI 201: Economic Performance 2016
201-2 Financial implications and other
risks and opportunities from climate
change
14.2.2
– Climate change (page 77)
– Risk management (page 52)
– Climate Change Action Plan 2025
GRI 302: Energy 2016
302-1 Energy consumption within the
organisation
14.1.2
– Sustainability Databook 2026 (Energy tab)
Information unavailable /
Incomplete: Heating, cooling
and steam consumption/sold,
and electricity sold.
302-2 Energy consumption outside of
the organisation
14.1.3
Information unavailable /
Incomplete: All metrics
omitted.
302-3 Energy intensity
14.1.4
– Sustainability Databook 2026 (Energy tab)
– Climate change (page 77)
302-4 Reduction of energy
consumption
-
302-5 Reductions in energy
requirements of
products and services
-
Information unavailable /
Incomplete: All metrics
omitted.
GRI 305: Emissions 2016
305-1 Direct (Scope 1) GHG emissions
14.1.5
– Climate change (page 81)
– Sustainability Databook 2026 (GHG emissions tab)
– Climate-related Reporting Methodology 2026
305-2 Energy indirect (Scope 2) GHG
emissions
14.1.6
305-3 Other indirect (Scope 3) GHG
emissions
14.1.7
– Climate change (page 85)
– Sustainability Databook 2026 (GHG emissions tab)
– Climate-related Reporting Methodology 2026
305-4 GHG emissions intensity
14.1.8
– Sustainability Databook 2026 (GHG emissions tab)
305-5 Reduction of GHG emissions
14.1.9
– Climate change (page 77)
– Sustainability Databook 2026 (GHG emissions tab)
– Climate-related Reporting Methodology 2026
– Climate Change Action Plan 2025
Disclosure
GRI 14
reference Annual Report 2026 (or other) reference location: Omissions
South32 Sustainability Standards and Frameworks Index 2026
12
Standards and frameworks alignment continued
SUSTAINABILITY ACCOUNTING STANDARDS BOARD (SASB) INDEX
This table summarises our alignment with the SASB Metals and Mining Sustainability Accounting Standard (version as at December 2023).
Safety and
health
EM-MM-320a.1.
(1) All-incidence rate, (2) fatality rate, (3)
near miss frequency rate (NMFR) and (4)
average hours of health, safety, and
emergency response training for (a) full-
time employees and (b) contract
employees
– Sustainability Databook 2026 (Safety
and health tab)
Information
unavailable /
Incomplete: All
incidence rate.
People and
culture
EM-MM-310a.1.
Percentage of active workforce covered
under collective bargaining agreements.
– Sustainability Databook 2026
(Attracting and retaining talent tab)
EM-MM-310a.2.
(1) Number and (2) duration of strikes and
lockouts
EM-MM-000.B
Total number of employees, percentage
contractors
– Sustainability Databook 2026 (Safety
and health; Workforce and diversity
tabs)
Community
relationships
EM-MM-210a.2
Percentage of (1) proved and (2) probable
reserves in or near indigenous land
– Resources and reserves (from page
238)
We report Mineral Resources and Ore
Reserves in accordance with the 2012
Edition of the Australasian Code for
Reporting of Exploration Results, Mineral
Resources and Ore Reserves (JORC Code)
as required by Chapter 5 of the Australian
Securities Exchange (ASX) Listing Rules.
Not applicable: All
requirements omitted.
EM-MM-210b.1.
Discussion of process to manage risks and
opportunities associated with community
rights and interests
– Community relationships (page 65)
– Human rights (page 68)
– Our Approach to Human Rights;
Indigenous, Traditional and Tribal
Peoples Engagement; Partnering with
Communities; and Cultural Heritage
EM-MM-210b.2.
Number and duration of non-technical
delays
– Sustainability Databook 2026
(Community relationships tab)
Ethics and
business
integrity
EM-MM-510a.1
Description of the management system
for prevention of corruption and bribery
throughout the value chain.
– Human rights (page 68)
– Ethics and business integrity (page 69)
– Code of Business Conduct (and Speak
Up Policy)
– Supplier Minimum Requirements
EM-MM-510a.2.
Production in countries that have the 20
lowest rankings in Transparency
International’s Corruption Perception Index
– Sustainability Databook 2026 (Ethics
and cybersecurity tab)
Human rights
EM-MM-210a.1
Percentage of (1) proved and (2) probable
reserves in or near areas of conflict
– Resources and reserves (from page
238)
We report Mineral Resources and Ore
Reserves in accordance with the 2012
Edition of the Australasian Code for
Reporting of Exploration Results, Mineral
Resources and Ore Reserves (JORC Code)
as required by Chapter 5 of the Australian
Securities Exchange (ASX) Listing Rules.
Not applicable: All
requirements omitted.
EM-MM-210a.3.
Discussion of engagement processes and
due diligence practices with respect to
human rights, Indigenous rights, and
operation in areas of conflict
– Community relationships (page 65)
– Human rights (page 68)
– Our Approach to Human Rights;
Indigenous, Traditional and Tribal
Peoples Engagement; Partnering with
Communities; and Cultural Heritage
– Modern Slavery Statement 2026
Responsible
value chain
EM-MM-000.A
Production of (1) metal ores and (2)
finished metal products
– Financial and operational performance
summary (from page 21)
Water
EM-MM-140a.1.
(1) Total fresh water withdrawn, (2) total
fresh water consumed, percentage of each
in regions with High or Extremely High
Baseline Water Stress
– Sustainability Databook 2026 (Water
tab)
EM-MM-140a.2.
Number of incidents of non-compliance
associated with water quality permits,
standards, and regulations
Our material topic
SASB metric Metric description Annual Report 2026 (or other) reference location: Omission
South32 Sustainability Standards and Frameworks Index 2026
13
Biodiversity
EM-MM-160a.1.
Description of environmental management
policies and practices for active sites
– Nature (page 71)
– Biodiversity (page 72)
– Water (page 73)
– Air emissions (page 75)
– Pollution (page 76)
– Our Approach to Biodiversity; Water
EM-MM-160a.2
Percentage of mine sites where acid rock
drainage is: (1) predicted to occur, (2)
actively mitigated, and (3) under treatment
or remediation
– Pollution (page 76)
– Sustainability Databook 2026 (Pollution
and tailings tab)
EM-MM-160a.3
Percentage of (1) proved and (2) probable
reserves in or near sites with protected
conservation status or endangered
species habitat
– Resources and reserves (from page
238)
– Sustainability Databook 2026
(Biodiversity tab)
Not applicable: All
requirements omitted.
Waste and
contamination
EM-MM-150a.4
Total weight of non-mineral waste
generated
– Sustainability Databook 2026 (Pollution
and tailings tab)
EM-MM-150a.5
Total weight of tailings produced
EM-MM-150a.6
Total weight of waste rock generated
EM-MM-150a.7
Total weight of hazardous waste
generated
EM-MM-150a.8
Total weight of hazardous waste recycled
EM-MM-150a.9
Number of significant incidents associated
with hazardous materials and waste
management
– Sustainability Databook 2026 (Safety
and health tab)
EM-MM-150a.10
Description of waste and hazardous
materials management policies and
procedures for active and inactive
operations
– Pollution (page 76)
– Sustainability Databook 2026 (Pollution
and tailings tab)
Air emissions
EM-MM-120a.1.
Air emissions of the following pollutants:
(1) CO, (2) NOx (excluding N2O), (3) SOx, (4)
particulate matter (PM10), (5) mercury (Hg),
(6) lead (Pb), and (7) volatile organic
compounds (VOCs)
– Sustainability Databook 2026 (Pollution
and tailings tab)
Information
unavailable /
incomplete: Reporting
of CO, PM10, Pb and
VOCs.
Tailings
EM-MM-540a.1
Tailings storage facility inventory table: (1)
facility name, (2) location, (3) ownership
status, (4) operational status, (5)
construction method, (6) maximum
permitted storage capacity, (7) current
amount of tailings stored, (8) consequence
classification, (9) date of most recent
independent technical review, (10) material
findings, (11) mitigation measures, (12)
site-specific EPRP
– Tailings management (page 76)
– Tailings Storage Facilities webpage
EM-MM-540a.2
Summary of tailings management systems
and governance structure used to monitor
and maintain the stability of tailings
storage facilities
EM-MM-540a.3
Approach to development of Emergency
Preparedness and Response Plans (EPRPs)
for tailings storage facilities
Addressing
climate change
EM-MM-110a.1.
Gross global Scope 1 emissions,
percentage covered under emissions-
limiting regulations
– Sustainability Databook 2026 (GHG
emissions tab)
– Climate-related Reporting
Methodology 2026
EM-MM-110a.2.
Discussion of long-term and short-term
strategy or plan to manage Scope 1
emissions, emissions reduction targets,
and an analysis of performance against
those targets
– Our climate change action plan at a
glance (page 78)
– Reducing operational emissions (##)
– Targets and metrics (page 104)
– Climate-related Reporting
Methodology 2026
EM-MM-130a.1.
(1) Total energy consumed, (2) percentage
grid electricity, (3) percentage renewable
– Sustainability Databook 2026 (Energy
tab)
Our material topic
SASB metric Metric description Annual Report 2026 (or other) reference location: Omission
South32 Sustainability Standards and Frameworks Index 2026
14
Standards and frameworks alignment continued
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES INDEX
In accordance with the UK Listing Rules as set by the UK Financial Conduct Authority, we consider our climate-related financial disclosures
to be consistent with the four recommendations and 11 recommended disclosures of the Task Force on Climate-related Financial
Disclosures (TCFD). Our TCFD disclosures are presented throughout the Annual Report 2026 (primarily within the Sustainability section)
and the Climate-related Reporting Methodology 2026, both of which are available on our website www.south32.net.
This TCFD index outlines each of the TCFD’s recommended disclosures and indicates where they are addressed across these publications.
Governance - The organisation’s governance around climate-related risks and opportunities.
Describe the board’s
oversight of climate-related
risks and opportunities.
– Board composition (page 121)
– Board focus areas and key decisions (page 127)
– Board skills, knowledge and experience (page 131)
– Board and committee meetings (page 134)
– Nomination and governance committee (page 136)
– Remuneration committee (page 137)
– Risk and audit committee (page 138)
– Sustainability Committee (page 139)
– Board Charter and Committee Terms of Reference
– Sustainability governance (page 59)
– Climate governance (page 78)
Describe management’s role
in assessing and managing
climate-related risks and
opportunities.
– Risk management: Climate change and
environment (page 52)
– Sustainability governance (page 59)
– Climate governance (page 78)
– Climate-related risk management (page 103)
– Sustainability Committee (page 139)
Strategy - The actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial
planning.
Describe the climate-related
risks and opportunities the
organisation has identified
over the short, medium, and
long term.
– Risk management: Climate change and
environment (page 52)
– Climate-related risks and opportunities (pages 78,
90, 94 - 102)
– Climate-related risk management (page 103)
– Notes to the Financial Statements: Note 2(c) (page
180 - 183)
Describe the impact of
climate-related risks and
opportunities on the
organisation’s businesses,
strategy, and financial
planning.
– Climate-related risks and opportunities (pages 78,
90, 94 - 102)
– Notes to the Financial Statements: Notes 2, 6, 11,
13, 15 (from page 180)
Describe the resilience of the
organisation’s strategy, taking
into consideration different
climate-related scenarios,
including a 2°C or lower
scenario.
– Strengthening present-day resilience (page 88)
– Strengthening future resilience capabilities (page
88)
– Climate resilience and scenario analysis (page 90)
– Assessing resilience to transition risks (page 91)
Risk Management- The processes used by the organisation to identify, assess, and manage climate-related risks.
Describe the organisation’s
processes for identifying and
assessing climate-related
risks.
– Climate-related risk management (page 103)
– Identifying and assessing risks and opportunities
(page 90)
– Climate resilience and scenario analysis (page 90)
– Climate-related risks and opportunities (pages 78,
90, 94 - 102)
– Managing risks to achieve our purpose (page 49)
– Risk management: Climate change and
environment (page 52)
– Notes to the Financial Statements: Note 2(c) (page
180 - 183)
Supporting recommended
disclosures
Annual Report 2026 reference location Other reports reference location
South32 Sustainability Standards and Frameworks Index 2026
15
Describe the organisation’s
processes for managing
climate-related risks.
– Risk management: Climate change and
environment (page 52)
– Climate-related risks and opportunities (pages 78,
90, 94 - 102)
– Climate-related risk management (page 103)
Describe how processes for
identifying, assessing, and
managing climate-related
risks are integrated into the
organisation’s overall risk
management.
– Risk management: Climate change and
environment (page 52)
– Climate-related risk management (page 103)
– Notes to the Financial Statements: Note 2(c) (page
180 - 183)
Metrics and Targets - The metrics and targets used to assess and manage relevant climate-related risks and opportunities.
Disclose the metrics used by
the organisation to assess
climate-related risks and
opportunities in line with its
strategy and risk
management process.
– Climate-related risks and opportunities (pages 78,
90, 94 - 102)
– Climate-related risk management (page 103)
– Remuneration Report: Long-term incentive (page
164)
– Climate-related targets (page 104)
– Cross-industry metrics (page 106)
– Sustainability Databook 2026:
◦ Addressing climate change tabs: Portfolio, GHG
emissions, Emissions Limiting Regulations, Energy
– Climate-related Reporting Methodology 2026:
◦ Climate-related metrics and targets (page 5-6)
Disclose Scope 1, Scope 2,
and, if appropriate, Scope 3
greenhouse gas (GHG)
emissions, and the related
risks.
– Reducing operational emissions (page 81)
– Supporting emissions reduction across the value
chain (page 85)
– Climate-related targets (page 104)
– Sustainability Databook 2026:
◦ Addressing climate change tabs: Portfolio, GHG
emissions, Emissions Limiting Regulations, Energy
– Climate-related Reporting Methodology 2026:
◦ Climate-related metrics and targets (page 5-6)
Describe the targets used by
the organisation to manage
climate-related risks and
opportunities, and
performance against targets.
– Climate-related risks and opportunities (pages 78,
90, 94 - 102)
– Climate-related risk management (page 103)
– Reducing operational emissions (page 81)
– Risk management: Climate change and
environment (page 52)
– Remuneration Report: Long-term incentive (page
164)
– Sustainability governance: Remuneration (page 59)
– Climate-related Reporting Methodology 2026:
◦ Climate-related metrics and targets (page 5-6)
Supporting recommended
disclosures
Annual Report 2026 reference location Other reports reference location
South32 Sustainability Standards and Frameworks Index 2026
16
Standards and frameworks alignment continued
Australian Accounting Standards Board (AASB) S2 Climate-related Disclosures
This index identifies where information relevant to the disclosure requirements of AASB S2 Climate-related Disclosures is reported within
our 2026 Annual Reporting Suite and supporting publications.
Governance
6(a)(i)-(v) - Governance Oversight of Climate-Related Risks and
Opportunities
– 6(a)(i) - Responsibilities in Governance Terms and Policies
– 6(a)(ii) - Skills and Competencies for Climate Oversight
– 6(a)(iii) - Frequency and Methods of Informing Oversight Bodies
– 6(a)(iv) - Integration of Climate-Related Risks and Opportunities in
Strategy and Risk Management
– 6(a)(v) - Oversight of Targets and Performance Metrics
– Sustainability governance (pages 59 - 60)
– Sustainability governance: Remuneration (page 59)
– Climate governance (page 78)
– 2026 Board skills matrix as at 30 June 2026:
Environment and Climate change (page 133)
– Sustainability Committee (page 139)
– Board Charter and Committee Terms of Reference
6(b)(i)-(ii) - Management's Role in Governance of Climate-Related Risks
and Opportunities
– Sustainability governance (page 60)
– Climate change steering committee (page 60)
– Climate governance (page 78)
– Climate-related risk management: Monitoring and
reporting (page 103)
– Sustainability Committee (page 139)
Risk
management
25(a)(i)-(vi) - Climate-Related Risk Processes
– Climate-related risk management (page 103)
– Identifying and assessing risks and opportunities
(page 90)
– Climate resilience and scenario analysis (page 90)
25(b) - Climate-Related Opportunity Processes
– Climate-related risk management (page 103)
– Identifying and assessing risks and opportunities
(page 90)
25(c) - Integration of Processes into Overall Risk Management
Processes
– Climate-related risk management (page 103)
– Climate change and environment strategic risk
(page 52)
Strategy
9(a) and 10 - Overview of Climate-Related Risks and Opportunities
– 10(a) - Description of Climate-Related Risks and Opportunities
– 10(b) - Classification of Climate-Related Risks
– 10(c) - Time Horizons for Climate-Related Risks and Opportunities
– 10(d) - Definitions of Time Horizons
– Climate-related risks and opportunities (page 78,
90 - 103)
9(b) and 13 - Effects of Climate-Related Risks and Opportunities on the
Business Model and Value Chain
– 13(a) - Current and Anticipated Effects on the Business Model and
Value Chain
– 13(b) - Concentration of Climate-Related Risks and Opportunities in
the Business Model and Value Chain
– Portfolio concentration, Value concentration and
Description for each climate-related risk and
opportunity (pages 94, 96, 98, 101)
– Climate-related risks and opportunities (page 78,
90)
– CCAP 2025 progress update (pages 80 - 89)
– Our value chain (page 10)
9(c ) and 14 - Effects of Climate-Related Risks and Opportunities on
Strategy and Decision-Making
– 14(a) - Strategic Responses to Climate-Related Risks and
– 14(b) - Resourcing for Climate-Related Activities
– 14(c) - Progress on Previously Disclosed Plans
– Description section for each climate-related risk
and opportunity (pages 94, 96, 98, 101)
– Worsley Alumina: Managing transition risks and
opportunities in a hard-to-abate industrial
operation (page 100)
– CCAP 2025 progress update (pages 80 - 89)
– Our Climate change action plan (page 79)
– Reducing operational emissions (page 81)
– Allocating capital towards Transition Materials
(page 80)
9(d) and15 (a)-(b) - Financial Effects of Climate-Related Risks and
Opportunities
– 16(a) - Current Financial Effects of Climate-Related Risks and
Opportunities
– 16(b) - Material Adjustments to Assets and Liabilities
– 16(c)(i)-(ii) - Expected Changes to Financial Position
– 16(d) - Expected Changes in Financial Performance and Cash Flows
– 21(a) - Explanation for Omitted Quantitative Disclosure
– 21(b) - Qualitative Disclosure for Omitted Quantitative Disclosure
– 21(c) - Combined Quantitative Disclosure for Omitted Quantitative
Disclosure
– Climate-related risks and opportunities - Financial
effects for each risk and opportunity (pages 94 -
102)
AASB S2 Pillar
Reference
Disclosure title summary Annual Report 2026 (or other) reference location:
South32 Sustainability Standards and Frameworks Index 2026
17
Strategy
9(e) and 22 - Climate Resilience of Strategy and Business Model
– 22(a) - Assessment of Climate Resilience
– 22(b) - Execution of Climate-Related Scenario Analysis
– Climate resilience and scenario analysis (page 90)
– Assessing resilience to transition risks (page 91)
– Climate-related risks and opportunities - Transition
risks and opportunities and physical risks (pages 94
- 103)
– Climate-related reporting methodology: Physical
risk scenarios 2026 (page 15)
Metrics and
targets
28(a) and 29 - Cross-Industry Metric Categories for Disclosure
– 29(a)(i)(1) - Scope 1 Greenhouse Gas Emissions
– 29(a)(i)(2) - Scope 2 Greenhouse Gas Emissions
– 29(a)(i)(3) - Scope 3 Greenhouse Gas Emissions
– 29(a)(iii) - Approach to Measuring Greenhouse Gas Emissions
– 29(a)(iv) - Disaggregation of Scope 1 and Scope 2 Emissions
– 29(a)(v) - Location-Based Scope 2 Emissions and Contractual
Instruments
– 29(a)(vi)(1) - Scope 3 Categories and Greenhouse Gas Protocol
Alignment
– 29(a)(vi)(2) - Additional Disclosure Requirements for Scope 3 Financed
Emissions
– Reducing operational emissions (page 81)
– Climate-related targets and metrics: Operational
emissions (page 105)
– Climate-related reporting methodology 2026 (page
3 - 15)
– Sustainability Databook 2026: GHG Emissions and
Other GHG Emissions tabs
29(b) - Assets and Activities Vulnerable to Transition Risks
29(c) - Assets and Activities Vulnerable to Physical Risks
29(d) - Assets and Activities Aligned with Climate Opportunities
– Targets & metrics: Cross-industry metrics (page
106)
– Physical climate vulnerability and adaptation
considerations (page 92)
– Decarbonisation constraints (Transition risk 1)
(page 96)
– Emissions-limiting regulations (Transition risk 2)
(page 98)
– Extreme weather disruption (Physical risk 1) (page
101)
– Transition commodity demand growth (Transition
opportunity) (page 94)
29(e) - Capital Deployed Towards Climate-Related Risks and
Opportunities
– Allocating capital towards Transition Materials
(page 80)
– Resourcing climate-related activities (page 87)
– Decarbonisation expenditure (page 96)
– Transition metal capital expenditure (page 104)
29(f)(i) - Application of Carbon Pricing in Decision-Making
– Carbon pricing (page 99)
29(f)(ii) - Carbon Price Used to Assess Emissions Costs
– Key scenario assumptions and inputs (page 91)
– Carbon pricing (page 98, 99)
29(g)(i) - Integration of Climate Considerations in Executive
Remuneration
29(g)(ii) - Percentage of Remuneration Linked to Climate Considerations
– Sustainability governance: Remuneration (page 59)
– Remuneration Report (page 150)
28(c) - Climate-Related Targets
– Climate-related targets (page 104)
– Climate-related Reporting Methodology (page 5 - 6)
33 - Quantitative and Qualitative Climate-Related Targets
– 33(a) - Metric Used to Set Targets
– 33(b) - Objective of the Target
– 33(c) - Target Coverage
– 33(d) - Target Period
– 33(e) - Base Period for Progress Measurement
– 33(f) - Milestones and Interim Targets
– 33(g) - Type of Quantitative Target
– 33(h) - Alignment with International Climate Agreements
– Climate-related targets (page 104)
– Climate-related reporting methodology (page 5 - 6)
– Our FY35 operational emissions reduction target
(page 82)
34 - Target Setting and Review Approach
– 34(a) - Third-Party Validation of Targets
– 34(b) - Processes for Reviewing Targets
– 34(c) - Metrics for Monitoring Progress
– 34(d) - Revisions to Targets
– Climate-related Reporting Methodology 2026 (page
5 - 6)
35 - Performance Against Climate-Related Targets
– CCAP 2025 progress update (pages 80 - 89)
– Climate-related targets and metrics (pages 104 -
106)
AASB S2 Pillar
Reference
Disclosure title summary Annual Report 2026 (or other) reference location:
South32 Sustainability Standards and Frameworks Index 2026
18
Standards and frameworks alignment continued
Metrics and
targets
36(a) - Greenhouse Gases Covered by Targets
– Climate-related Reporting Methodology (page 5 - 6)
36(b) - Emissions Scopes Covered by Target
– Climate-related targets (page 104)
– Climate-related Reporting Methodology (page 5 - 6)
36(c) - Gross vs. Net Greenhouse Gas Emissions Targets
– Our FY35 operational emissions reduction target
(page 82)
– Climate-related Reporting Methodology 2026:
Climate-related targets (page 5)
36(d) - Sectoral Decarbonisation Approach for Targets
– Climate-related Reporting Methodology (page 5 - 6)
36(e) - Planned Use of Carbon Credits for Net Emissions Targets
– 36(e)(i) - Reliance on Carbon Credits for Achieving Net Targets
– 36(e)(ii) - Verification of Carbon Credits by Third-Party Schemes
– 36(e)(iii) - Type of Carbon Credit Used
– 36(e)(iv) - Credibility and Integrity of Carbon Credits
– Carbon credits for offsetting emissions (page 82)
– Climate-related targets (page 104)
– Climate-related Reporting Methodology (page 5 - 6)
AASB S2 Pillar
Reference
Disclosure title summary Annual Report 2026 (or other) reference location:
South32 Sustainability Standards and Frameworks Index 2026
19
CA100+ NET ZERO COMPANY BENCHMARK
The table below identifies where disclosures relevant to the sub-indicators and metrics in Version 2.2 of the Climate Action 100+ Net Zero
Company Benchmark, published in October 2025, can be found within our 2026 Annual Reporting Suite.
Indicator 1: Net zero GHG emissions by 2050 (or sooner) ambition
1.1 The company has set an ambition to achieve net-zero GHG
emissions by 2050 or sooner.
– Our climate change action plan at a glance (page 79)
– Reducing operational emissions (page 81)
– Supporting emissions reduction across the value chain (page 85)
– Targets and metrics (page 104)
– Climate-related Reporting Methodology 2026 (page 5 - 6)
Indicator 2: Long-term (2036-2050) GHG emissions reduction targets
2.1 The company has set a long-term target for reducing its GHG
emissions in the period between 2036 and 2050.
– Our climate change action plan at a glance (page 79)
– Reducing operational emissions (page 81)
– Supporting emissions reduction across the value chain (page 85)
– Targets and metrics (page 104)
– Climate-related Reporting Methodology 2026 (page 5 - 6)
2.2 The company's long-term (2036 to 2050) GHG reduction target
covers at least 95% of its Scope 1 and 2 emissions and the most
relevant Scope 3 emissions (where assessed).
2.3 The company’s last disclosed carbon intensity OR its short-term
or medium-term targeted carbon intensity OR the company’s
expected carbon intensity derived from its long-term GHG reduction
target is aligned with or below the relevant sector trajectory needed
to achieve the Paris Agreement goal of limiting global temperature
increase to 1.5°C with low or no overshoot in 2050. This is equivalent
to IPCC’s Special Report on the 1.5°C pathway P1 or the IEA’s Net
Zero Emissions by 2050 Scenario.
– CA100+ NZCB latest assessment
– Transition Pathway Initiative's (TPI) latest assessment
Indicator 3: Medium-term (2029-2035) GHG emissions reduction targets
3.1 The company has set a medium-term (2029-2035) target to
reduce its GHG emissions.
– Reducing operational emissions (page 81)
– Supporting emissions reduction across the value chain (page 85)
– Targets and metrics (page 104)
– Climate-related Reporting Methodology 2026 (page 5 - 6)
3.2 The company's medium-term (2029 to 2035) GHG reduction
target covers at least 95% of its Scope 1 and 2 emissions and the
most relevant Scope 3 emissions (where assessed).
3.3 The company’s last disclosed carbon intensity OR its short-term
targeted carbon intensity target OR the company’s expected carbon
intensity derived from its medium-term GHG reduction target is
aligned with or below the relevant sector trajectory needed to
achieve the Paris Agreement goal of limiting global temperature
increase to 1.5°C with low or no overshoot in 2035. This is equivalent
to IPCC’s Special Report on the 1.5° Celsius pathway P1 or the IEA’s
Net Zero Emissions by 2050 Scenario.
– CA100+ NZCB latest assessment
– Transition Pathway Initiative's (TPI) latest assessment
3.4 The company already states its medium-term GHG reduction
target on an absolute basis OR converts its medium-term GHG
intensity target into projected absolute GHG emissions reductions.
– Targets and metrics (page 104)
– Climate-related Reporting Methodology 2026 (page 5 -6)
Indicator 4: Short-term (2025-2028) GHG emissions reduction targets
4.1 The company has set a short-term (2025-2028) target to reduce
its GHG emissions.
– Targets and metrics (page 104)
– Climate-related Reporting Methodology 2026 (page 5 - 6)
4.2 The company’s short-term (up to 2028) GHG reduction target
covers at least 95% of its Scope 1 and 2 emissions and the most
relevant Scope 3 emissions (where assessed).
4.3 The company’s last disclosed carbon intensity OR the company’s
expected carbon intensity derived from its short-term GHG
reduction target is aligned with or below the trajectory for its
respective sector to achieve the Paris Agreement goal of limiting
global temperature increase to 1.5°C with low or no overshoot in
2028. This is equivalent to IPCC’s Special Report on the 1.5° Celsius
pathway P1 or the IEA’s Net Zero Emissions by 2050 Scenario.
Indicator 5: Decarbonisation strategy
5.1 The company has a decarbonisation strategy that explains how it
intends to meet its medium- and long-term GHG reduction targets.
– Our climate change action plan at a glance (page 79)
– Reducing operational emissions (page 81)
– Supporting emissions reduction across the value chain (page 85)
– Targets and metrics (page 104)
5.2 The company’s decarbonisation strategy specifies the role of
climate solutions (i.e., technologies and products that will enable the
economy to decarbonise).
– Positioning our portfolio for the energy transition (page 80)
– Allocating capital towards transition metals (page 80)
– Pathways to net zero (page 84)
CA100+ Indicator
Annual Report 2026 (or other) reference location:
South32 Sustainability Standards and Frameworks Index 2026
20
Standards and frameworks alignment continued
Indicator 6: Capital allocation
6.1 The company is working to decarbonise its capital expenditures.
– Positioning our portfolio for the energy transition (page 80)
– Allocating capital towards transition metals (page 80)
– Decarbonisation expenditure (page 87, 96)
– Climate-related metrics (page 104)
6.2 The company explains how it intends to invest in climate
solutions (i.e., technologies and products that will enable the
economy to decarbonise).
Indicator 7: Climate policy engagement
7.1 The company commits to conducting its policy engagement
activities in accordance with the goals of the Paris Agreement.
– Climate Change Action Plan 2025: Government engagement (page 27-28)
– Our Approach to Industry Associations
Indicator 8: Climate Governance
8.1 The company’s Board has clear oversight of climate change.
– Sustainability governance (page 59 - 60)
– Board focus areas and key decisions (page 127)
– Board skills, knowledge and experience (page 131)
– Board and committee meetings (page 134)
8.2 The company’s executive remuneration scheme incorporates
climate change performance elements.
– Remuneration Report (from page 150)
8.3 The Board has sufficient capabilities/competencies to assess and
manage climate-related risks and opportunities.
– Sustainability governance (page 59 - 60)
– Climate-related risk management (page 103)
– Board skills, knowledge and experience (page 131)
Indicator 9: Just Transition
9.1 The company has committed to the principles of a Just
Transition.
– Climate Change Action Plan 2025: Supporting a just transition (page
25-26)
– Our Approach to Human Rights; Indigenous, Traditional and Tribal
Peoples Engagement, and Partnering with Communities
9.2 The company has disclosed how it is planning for and monitoring
progress towards a Just Transition
– Climate Change Action Plan 2025: Supporting a just transition (page
25-26)
Indicator 10: Climate-related disclosures
10.1 The company has publicly committed to implement the
recommendations of the Task Force on Climate-related Financial
Disclosures (TCFD) or the International Sustainability Standards
Board’s IFRS S2 Climate-related Disclosures.
– Our climate-related disclosures (page 77)
– Sustainability (from page 57)
10.2 The company employs climate-scenario planning to test its
strategic and operational resilience.
– Climate resilience and scenario analysis (page 90)
– Assessing resilience to transition risks (page 91)
– Climate-related risks and opportunities - Transition risks and
opportunities and physical risks (pages 94 - 103)
– Climate-related Reporting Methodology: Physical risk scenarios 2026
(page 15)
Indicator 11: Historical GHG emissions reductions
11.1 The company’s historical emissions intensity is decreasing.
– Reducing operational emissions (page 81)
– Supporting emissions reduction across the value chain (page 85)
– Targets and metrics (page 104)
– Sustainability Databook 2026 (GHG emissions tab)
11.2 The company’s absolute historical emissions are decreasing.
11.3 The company discloses the factors that have led to changes in
its historical emissions trajectory.
CA100+ Indicator
Annual Report 2026 (or other) reference location:
South32 Sustainability Standards and Frameworks Index 2026
21
www.south32.net