South32 : Financial Results and Outlook Year Ended 30 June 2017

(ABN 84 093 732 597)

This page and the accompanying 40 pages comprise the year end financial information given to the Australian Securities Exchange (ASX) under Listing Rule 4.3A. This statement includes the unaudited consolidated results of the South32 Group for the year ended 30 June 2017 compared with the year ended 30 June 2016 on a statutory basis.

US$M FY17 FY16 %

Revenue 6,950 5,812 up 20%

Profit/(loss) after tax 1,231 (1,615) N/A

Underlying earnings 1,146 138 up 730%

Net tangible assets per share

Net tangible assets per ordinary share were US$1.91 as at 30 June 2017 (US$1.72 as at 30 June 2016).

Dividends

The Board has resolved to pay a final dividend of US 6.4 cents per share (fully franked) for the year ended 30 June 2017 (record date 15 September 2017; payment date 12 October 2017).

Annual General Meeting

South32's 2017 Annual General Meeting will be held on Thursday, 23 November 2017 at 10.30am Australian Western Standard Time (AWST), Pan Pacific Hotel, 207 Adelaide Terrace, Perth, Western Australia 6000, Australia.

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24 August 2017 ASX, LSE, JSE Share Code: S32 ADR: SOUHY

"The combination of our high operating leverage and stronger commodity prices delivered a substantial increase in financial performance. Free cash flow more than tripled to US$1.9B and we finished the year with a net cash balance of US$1.6B.

"We announced a fully franked final dividend of US$334M, representing 50% of Underlying earnings in the second half and increased our capital management program to US$750M, which is 6% of our market capitalisation.

"Our aluminium smelters and refineries operated at their maximum technical capability and Mozal achieved record production. We adjusted production in our manganese business to take advantage of higher prices, consistent with our focus on value over volume. A review of our operating systems and practices at Illawarra Metallurgical Coal is continuing and we are working towards a staged and controlled ramp-up of operations at our Appin colliery, commencing in September.

"Looking to the year ahead, we will continue to unlock value within our existing operations, embed future options where we see value and stretch performance in a sustainable way."

Graham Kerr, South32 CEO

It is deeply regrettable that we lost one of our colleagues during the year in a work-related incident. In November 2016, a contractor was fatally injured during relining activities at the Oxygen Blown Converter at our Metalloys Manganese Smelter in South Africa. Our immediate response was to ensure that family and colleagues were offered our full support. We conducted a detailed investigation led by a member of our Executive Committee, which was reviewed by the Sustainability Committee of the Board, the CEO, and the management team to ensure we learned from what happened.

Nothing is more important to us than creating an environment where everyone goes home safe and well every day. Through our Care Strategy we are building an inclusive workplace with a strong culture of care and accountability, where work is well-designed and we continuously improve and learn. This focus has delivered an improvement in our Total Recordable Injury Frequency (TRIF) to 6.0 per million hours worked (FY16: 7.7).

A broad recovery in commodity prices and our portfolio's operating leverage combined to deliver a significant increase in return on invested capital to 11.4% and a US$1.3B increase in free cash flow to US$1.9B, including equity accounted investments. This strong improvement in financial performance and the disciplined application of our capital management framework allowed us to invest in our operations, create future options and substantially increase returns to shareholders.

Specific performance highlights included:

• Strong performance across our aluminium supply chain, including record production at Mozal Aluminium;

• A 19% increase in South Africa Manganese ore production as we responded to favourable market conditions;

• A US$360M reduction in controllable costs for a cumulative saving of approximately US$700M over two years;

• The unlocking of additional value with first ore delivered from the higher grade La Esmeralda deposit at Cerro Matoso, conclusion of the access agreement for the West Marradong bauxite mining area at Worsley Alumina and completion of the US$265M Klipspruit Life Extension (KPSX) project feasibility study;

• A US$81M investment in Arizona Mining (TSX:AZ), owner of the high grade zinc, lead and silver Taylor deposit;

• The creation of options beyond our portfolio with finalisation of the Trilogy Metals (TSX:TMQ) and AusQuest (ASX:AQD) greenfield exploration agreements, targeting base metals;

• A US$1.3B increase in our period end net cash balance to US$1.6B;

• A US$250M increase in our approved capital management program to US$750M, equating to 6% of our current market capitalisation(8); and

• A fully franked final dividend of US$334M, representing 50% of Underlying earnings in the June 2017 half year.