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2023

Integrated annual report

Contents

Overview

OUR 2023 SUITE OF REPORTS

Our business

African Rainbow Minerals (ARM) is a leading South African

OVERVIEW ABOUT

Our business

1

F2023 in review and investment case

2

About ARM

Where we operate

4

Business model

6

Value created

9

Stakeholder - hot topics in F2023

10

Strategy

14

Managing performance through

remuneration

18

Executive chairman's report

22

Protecting value through good

governance

26

Board of directors

28

Performance review

Operating environment

30

Approach to ESG performance

32

Sustainability performance for F2023

33

Value contribution

34

Managing our risks

35

Chief executive officer's report

38

Financial review

42

Operational reviews

58

ARM Platinum

58

ARM Ferrous

68

ARM Coal

80

Harmony Gold Mining

Company Limited

86

IAR

2023 integrated annual

report

A holistic assessment of ARM's ability to create sustainable value, with relevant extracts from the annual financial statements, the environmental, social and governance (ESG) report and Mineral Resources and Mineral Reserves report.

AFS

2023 annual financial

statements

The audited annual financial statements have been prepared according to International Financial Reporting Standards (IFRS).

ESG 2023 ESG report

A detailed review of our performance on key environmental, social and governance matters. The ESG report includes the full remuneration report and should be read in conjunction with the GRI Index.

CCW

2023 climate change

and water report

A detailed review of our performance on our key climate change and water matters, in line with the Task Force on Climate-related Financial Disclosures (TCFD).

Information available on our website www.arm.co.za

Information available elsewhere in our reports

KING

2023 King IVTM*

application register

A summary of how ARM implements the principles and practices in King IV to achieve the governance outcomes envisaged.

2023 Mineral Resources

MRMR and Mineral Reserves

report

In line with JSE Listings Requirements, ARM prepares Mineral Resources and Mineral Reserves statements for all its mining operations as per SAMREC guidelines and definitions (2016).

AGM 2023 notice

to shareholders

  • Notice of annual general meeting
  • Form of proxy
  • Commitment to good governance
  • Board of directors
  • Report of the audit and risk committee
  • Report of the social and ethics committee chairman
  • Summarised remuneration report
  • Summarised directors' report
  • Summarised consolidated financial statements

TM Copyright and trademarks are owned by the Institute of Directors in South Africa NPC and all its rights are reserved.

All monetary values in this report are in South African rand unless otherwise stated. Rounding may result

in computational discrepancies on management and operational review tabulations.

diversified mining and minerals company with operations in South Africa and Malaysia. ARM mines and beneficiates iron ore, manganese ore, chrome ore, platinum group metals (PGMs), nickel and coal. It also produces manganese alloys and has a strategic investment in gold through Harmony Gold Mining Company Limited (Harmony Gold).

4

100%

100%

10%

51%

12.1%

Harmony

Gold

PGMs

Iron ore

20%

Coal

41.5% Modikwa1

50% Khumani

Participative Coal

51%

54% Two Rivers

50% Beeshoek

Business (PCB)5

100% Bokoni2

Nickel, PGMs

Manganese

Coal

ore

Goedgevonden

and chrome

50% Nchwaning

(GGV)5

50% Nkomati3

50% Gloria

Manganese

ARM PERFORMANCE REVIEW

Summarised Mineral Resources and

Mineral Reserves report

88

Approach to reporting

96

Glossary

98

Contact details

100

How to navigate our reports

In F2023, we again reduce duplication in our reporting suite by cross-referencing to detail in other documents. These are hyperlinked for the users' convenience and denoted using the colour-coded icons above.

alloys

50% Cato Ridge Works

25% Cato Ridge Alloys

27% Sakura

  1. ARM's effective interest in Modikwa Mine is 41.5%, local communities hold an effective 8.5% interest.
  2. The acquisition of Bokoni Mine became effective on 1 September 2022. Qualifying employees, host communities and black industrialists will be allocated 15% in Bokoni Mine, with each group owning 5%.
  3. Nkomati Mine is on care and maintenance.
  4. ARM owns Machadodorp Works which is currently being used to develop more cost-effective and energy-efficient ways of smelting.
  5. ARM's effective interest in PCB is 20.2% and in GGV Mine is 26%.

INTEGRATED ANNUAL REPORT 2023

1

F2023 in review and investment case

OVERVIEW

ARM's quality diversified portfolio enabled the company to remain resilient in a volatile and challenging F2023, delivering strong full-year earnings and maintaining a robust financial position.

Key features of F2023 illustrate the effectiveness of our strategy and actions in managing short-term impacts while preserving longer-term value.

FINANCIAL

Headline earnings decreased by 21% to R9.0 billion (F2022: R11.3 billion)

Total dividend decreased to R26 per share (F2022: R32 per share)

Robust net cash of R9.8 billion

HEALTH AND SAFETY

One fatality at Two Rivers Mine

Lost-time injury frequency (LTIFR) rate improved to 0.27 per 200 000 man-hours (F2022: 0.31)

Total recordable injury frequency (TRIFR) rate improved to 0.62 (F2022: 0.69)

Black Rock Mine achieved

11 million fatality-free shifts

over 14 years

Khumani Mine achieved 5 million fatality-free shifts over eight years

OPERATIONAL

Iron ore, manganese ore and thermal coal volumes continued to be impacted by logistical challenges

Unit production costs remained under pressure, mainly due to logistics challenges, lower production volumes and above- inflation increases in the costs of diesel, explosives, electricity and consumables

ENVIRONMENTAL

Scope 1 and 2 emissions were reduced by 4% to 1.80Mt CO2e (F2022: 1.88Mt CO2e) through emission-reduction initiatives emissions (100% basis)

Progress was made on developing

decarbonisation pathways

Operational water withdrawn increased by 9% to 18.29 million m3 (F2022:16.80 million m3)

ARM, as a member of the International Council of Mining and Metals (ICMM), published its

progress towards conformance

with the Global Industry Standard on Tailing Management (GISTM) on 5 August 2023

In April 2023, signed purchase agreements to build a 100MW solar plant to power ARM's platinum operations

SOCIAL

R124 million (F2022:

R151 million) invested in corporate social responsibility

ARM Mining Consortium declared a R102 million (F2022:

R255 million) dividend to communities with an effective 8.5% shareholding in Modikwa Mine

R371 million (F2022:

R198 million) invested in skills

development and training

Continuing positive relationships with communities neighbouring our mines

Headwinds

  • Operational challenges on rail and port infrastructure
  • Security of water supply in the Northern Cape
  • Security of power supply at all our operations
  • Unit cost pressures
  • Volatile commodity markets
  • Commodity price declines in the second half of F2023, particularly PGMs, manganese ore, manganese alloys and coal

Tailwinds

  • Robust financial position
  • Pipeline of quality growth projects
  • Steady iron ore prices
  • Lower freight rates

Investment case

ABOUT ARM

Diversified portfolio of commodities

PERFORMANCE

Quality, long-life assets and orebodies

Robust financial position to create

REVIEW

and sustain value

Continuing positive relationships with

communities neighbouring our mines

Pipeline of quality growth projects

Focused on capital allocation to deliver

competitive shareholder returns and

ensure sustainability of the business

Integrated environmental, social and

governance (ESG) strategy

High standards of governance and

transparent reporting of operational,

financial and sustainability performance

ARM is a constituent of the

INTEGRATED

FTSE4Good Index Series

ANNUAL REPORT 2023

2

3

Where we operate

LIMPOPO

Bokoni1

Two Rivers

Modikwa

Participative Coal

Machadodorp

Business (PCB)

Nkomati

Goedgevonden (GGV)

OVERVIEW

ARM operations are located in the Northern Cape, Limpopo, Mpumalanga and

Malaysia

SABAH

South Africa

Nchwaning and Gloria

MPUMALANGA

Khumani

Beeshoek

ABOUT ARM

KwaZulu-Natal provinces

South China Sea

Kimberley

KWAZULU-NATAL

in South Africa. In Malaysia, the Sakura Ferroalloys smelter is in the Sarawak province.

Sakura

SARAWAK

NORTHERN CAPE

Cato Ridge

PERFORMANCE REVIEW

1 ARM Platinum acquired Bokoni on 1 September 2022.

ARM Platinum ARM Ferrous ARM Coal

KHUMANI

BEESHOEK

NCHWANING AND GLORIA

(collectively Black Rock)

MODIKWA

TWO RIVERS

MACHADODORP

IRON ORE

IRON ORE

MANGANESE ORE

◆

Open-pit mechanised mine

◆

Open-pit mechanised mine

◆

Underground mechanised mine

●

11.9Mt iron ore

●

2.5Mt iron ore

●

4.3Mt manganese ore

LoM

19 years

LoM

12 years

LoM

>30 years

EMPL

3 658

EMPL

1 199

EMPL

4 233

LTIFR

0.17

LTIFR

0.06

LTIFR

0.24

page 68.

page 68.

page 68.

6E PGM

6E PGM

◆

Underground mine

◆

Underground mechanised mine

◆

●

286 000 6E PGM ounces

●

295 000 6E PGM ounces

●

LoM

>21 years*

LoM

>23 years*

EMPL

EMPL

5 278

EMPL

6 060

LTIFR

LTIFR

0.47

LTIFR

0.21

page 58.

page 58.

FERROMANGANESE

Smelter

Currently being used to develop energy-efficient smelting

118

0.00

CATO RIDGE

SAKURA FERROALLOYS

NKOMATI

BOKONI

GOEDGEVONDEN (GGV)

PARTICIPATIVE COAL

BUSINESS (PCB)

FERROMANGANESE

FERROMANGANESE

NICKEL

(By-products including PGM, chrome, copper and cobalt)

PLATINUM

THERMAL COAL

THERMAL COAL

◆

Smelter

◆

Smelter

●

116 000t ferromanganese

●

253 000t ferromanganese

EMPL

635

EMPL

Not reported by ARM

LTIFR

0.00

LTIFR

Not reported by ARM

page 68.

page 68.

  • Open-pitmechanised mine
  • Currently on care and maintenance

LoM Currently on care and maintenance

EMPL 122

LTIFR 0.00

page 58.

  • Combined mineral resources
  • Not yet reported

LoM Not yet reported

EMPL 923

LTIFR Not yet reported

page 58.

◆

Open-pit mechanised mine

◆

Open-pit mechanised mine

●

6.6Mt saleable thermal coal

●

10.0Mt saleable thermal coal

LoM

24 years

LoM

12 years

EMPL

Not reported by ARM

EMPL

Not reported by ARM

LTIFR

Not reported by ARM

LTIFR

Not reported by ARM

page 80.

page 80.

INTEGRATED ANNUAL

◆ 

Mine/operation type 

LTIFR

F2023 lost-time injury frequency rate (LTIFR)

●

F2023 production volumes (100% basis) 

Mt 

per 200 000 man-hours

LoM 

Approximate life-of-mine

million tonnes 

t 

tonnes 

(* including resources not yet converted to reserves)

oz 

ounces

EMPL

Number of employees at 30 June 2023 (full-time

PGM 

platinum group metals

employees and contractors)

4

REPORT 2023

5

Business model

INPUTS - OUR CAPITALS

OUTPUTS1

OUTCOMES -

STAKEHOLDER VALUE

OVERVIEW ABOUT ARM

Impacts of the operating environment

  • Macro-economicfactors
  • Socio-economicenvironment
  • Commodity pricing, supply and demand
  • Regulatory environment
  • Environmental responsibility
  • Supply of water, electricity and infrastructure services
  • Advances in technology and information
  • Stakeholders and stakeholder expectations

See pages 30 to 32.

What differentiates ARM

ARM's investment case (page 3) is supported by our strategic pillars

Strategic objectives

•

Operate our portfolio of assets

safely, responsibly and

efficiently

•

Allocate capital to value-

HUMAN

  • Experienced management
  • Employee relations
  • Skilled workforce
  • Relationships with trade unions
  • Training and development
  • Ethical, equitable practices and fair pay

FINANCIAL

  • Net cash position
  • Operating cash flow
  • Debt funding
  • Equity funding

MANUFACTURED

  • Mining rights and exploration
  • Plant, property and equipment
  • Utilities

SOCIAL AND RELATIONSHIP

  • Social licence to operate
  • Human rights and ethics
  • Community relations
  • Relationship with government and regulators

NATURAL

  • Natural resources (energy, water, land and biodiversity)
  • Mineral Resources and Mineral Reserves

EXPLOREEXTRACTPROCESS

SELL

SALES VOLUMES

581 351

334 000t

6E PGM ounces

manganese alloys

14.2Mt

16.7Mt

iron ore

thermal coal

4.3Mt

289 641t

manganese ore

chrome concentrate

ENVIRONMENTAL OUTPUTS

5 869t

waste recycled

1.80Mt CO2e

scope 1 and scope 2 emissions

18.29 million m3

operational water withdrawn

SAFETY OUTCOMES

LTIFR improved by 13% to

0.27 per 200 000 man-hoursOne fatality at Two Rivers Mine

TRADE-OFFS

Financial capital

is prudently allocated to ensure sustainable value creation for our stakeholders. This enables continued quality growth and supports our ability to add value to all our other capitals.

Health, safety and skills development

underpin productivity, therefore, our priority is to keep people safe, healthy and reaching their full potential, while benefiting from higher productivity.

Our communities

grant our social licence to operate. We continue to invest to address community needs and contribute to improving the quality of life in communities neighbouring our operations.

Innovation and efficiency underpin the profitability and financial viability of modern mining operations and attract investment that, in turn, ensures sustainability.

HUMAN

  • R4.9 billion paid in salaries and wages
  • R371 million spent on skills development
  • Improved safety performance
  • 22 931 people employed
  • Stable and constructive relationship with employees and representative trade unions

FINANCIAL

  • Segmental EBITDA of R14.0 billion
  • Dividends of R5 841 million declared
  • Return on capital employed of 19.4%

MANUFACTURED

  • Segmental capital expenditure of R7 201 million

SOCIAL AND RELATIONSHIP

  • R124 million in corporate social responsibility (CSR) expenditure
  • R4.5 billion taxes and mineral royalties paid
  • Good partnerships with host communities
  • Good relationships with government

NATURAL

•

4% decrease in scope 1 and 2 emissions

•

Operational water withdrawn up 9% to

PERFORMANCE REVIEW

creating investments

• Focus on value-enhancing and

integrated growth

See page 14.

INNOVATION (INTELLECTUAL)

• Knowledge, experience and expertise

REHABILITATE

•

IT systems

•

Risk management processes

•

Research and development

1 100% basis and excluding Bokoni Mine.

Financial capital

is invested in natural capital which is essential to the sustainability of our business and protecting resources for future generations.

18.29 million m3

• Water reuse remained stable at 78%

INNOVATION (INTELLECTUAL)

  • Progress on research to develop energy-efficient smelting technology

INTEGRATED

6

Operating environment

Managing our risks

Strategy

See pages 30

See pages 35

See pages 14

to 31.

to 37.

to 17.

Operational reviews

See pages 58 to 87.

Protecting value through good governance

See page 26.

ANNUAL REPORT 2023

7

Business model continued

Outcomes: Our dependencies, impacts and influence on the capitals

Value created

OVERVIEW

Business model

INPUTS - OUR CAPITALS

OUTPUTS1

OUTCOMES -

STAKEHOLDER VALUE

OVERVIEW ABOUT ARM

The value created by our activities is distributed to a range of stakeholders. In F2023, we distributed R21.2 billion of fiinancial value on a segmental basis,

ABOUT ARM

Impacts of the operating environment

  • Macro-economicfactors
  • Socio-economicenvironment
  • Commodity pricing, supply and demand
  • Regulatory environment
  • Environmental responsibility
  • Supply of water, electricity and infrastructure services
  • Advances in technology and information
  • Stakeholders and stakeholder expectations

See pages 30 to 32.

What differentiates ARM

ARM's investment case (page 3) is supported by our strategic pillars

Strategic objectives

  • Operate our portfolio of assets safely, responsibly and efficiently
  • Allocate capital to value- creating investments
  • Focus on value-enhancing and integrated growth

See page 14.

6

HUMAN

•

Experienced management

•

Employee relations

•

Skilled workforce

EXPLORE

• Relationships with trade unions

•

Training and development

• Ethical, equitable practices and fair pay

FINANCIAL

•

Net cash position

•

Operating cash flow

EXTRACT

•

Debt funding

•

Equity funding

MANUFACTURED

• Mining rights and exploration

• Plant, property and equipment

•

Utilities

PROCESS

•

Social licence to operate

SOCIAL AND RELATIONSHIP

• Human rights and ethics

•

Community relations

• Relationship with government and

regulators

NATURAL

SELL

•

Natural resources (energy, water, land

and biodiversity)

• Mineral Resources and Mineral Reserves

INNOVATION (INTELLECTUAL)

REHABILITATE

• Knowledge, experience and expertise

•

IT systems

•

Risk management processes

•

Research and development

Operating environment

Managing our risks

Strategy

See pages 30

See pages 35

See pages 14

to 31.

to 37.

to 17.

SALES VOLUMES

581 351

334 000t

6E PGM ounces

manganese alloys

14.2Mt

16.7Mt

iron ore

thermal coal

4.3Mt

289 641t

manganese ore

chrome concentrate

ENVIRONMENTAL OUTPUTS

  • 869t waste recycled

1.80Mt CO2e

scope 1 and scope 2 emissions

18.29 million m3 operational water withdrawn

SAFETY OUTCOMES

LTIFR improved by 13% to

0.27 per 200 000 man-hoursOne fatality at Two Rivers Mine

100% basis and excluding Bokoni Mine.

Operational reviews

See pages 58 to 87.

TRADE-OFFS

Financial capital

is prudently allocated to ensure sustainable value creation for our stakeholders. This enables continued quality growth and supports our ability to add value to all our other capitals.

Health, safety and skills development

underpin productivity, therefore, our priority is to keep people safe, healthy and reaching their full potential, while benefiting from higher productivity.

Our communities

grant our social licence to operate. We continue to invest to address community needs and contribute to improving the quality of life in communities neighbouring our operations.

Innovation and efficiency underpin the profitability and financial viability of modern mining operations and attract investment that, in turn, ensures sustainability.

Financial capital

is invested in natural capital which is essential to the sustainability of our business and protecting resources for future generations.

HUMAN

  • R4.9 billion paid in salaries and wages
  • R371 million spent on skills development
  • Improved safety performance
  • 22 931 people employed
  • Stable and constructive relationship with employees and representative trade unions

FINANCIAL

  • Segmental EBITDA of R14.0 billion
  • Dividends of R5 841 million declared
  • Return on capital employed of 19.4%

MANUFACTURED

  • Segmental capital expenditure of R7 201 million

SOCIAL AND RELATIONSHIP

  • R124 million in corporate social responsibility (CSR) expenditure
  • R4.5 billion taxes and mineral royalties paid
  • Good partnerships with host communities
  • Good relationships with government

NATURAL

  • 4% decrease in scope 1 and 2 emissions
  • Operational water withdrawn up 9% to 18.29 million m3
  • Water reuse remained stable at 78%

INNOVATION (INTELLECTUAL)

  • Progress on research to develop energy-efficient smelting technology

Protecting value through good governance

See page 26.

PERFORMANCE REVIEW

INTEGRATED ANNUAL REPORT 2023

7

as illustrated below.

Total value distributed in

F2023: R21.2 billion

(F2022: R27.4 billion)

Distributed to:

PERFORMANCE REVIEW

FINANCIAL

MANUFACTURED

HUMAN/

SOCIAL

NATURAL

INTELLECTUAL

DEPENDENCIES: WHAT WE RELY ON FOR CAPITAL VALUE RETENTION/PROTECTION

Employee

Shareholder

Government taxes

Non-controlling

Finance

salaries

dividends

and royalties

interest1

costs

R4.9 billion

R6.7 billion

R4.5 billion

R1.2 billion

R0.3 billion

(F2022: R4.2 billion)

(F2022: R6.3 billion)

(F2022: R6.5 billion)

(F2022: R1.9 billion)

(F2022: R0.3 billion)

  • Cash flow
  • Robust financial position
  • Debt.
  • Efficient and reliable plant and machinery
  • Reliable operations across the value chain
  • Reliable infrastructure including rail, ports, energy and water.
  • A safe and healthy workforce
  • Diverse skills and talent
  • Innovative capability
  • Intellectual property
  • Capable service networks
  • Supplier ESG management.
  • Socio-economicstability
  • Good working relationships with the communities neighbouring our mines
  • Trust in the business sector
  • Relationships with government and regulators
  • Regulatory stability.
  • Access to land and minerals
  • Energy and water security
  • Mineral Resources and Reserves.

COPY TO COME

Reinvested in the business

R3.6 billion

(F2022: R8.2 billion)

1Profit attributable to non-controlling interests.

Contributions from ARM operations over the last fiive years

(100% basis unless otherwise stated):

IMPACTS: WHAT HAPPENS TO OUR CAPITAL STOCKS/FLOWS AS A RESULT OF WHAT WE DO

  • Profitability
  • Cash-flowgeneration
  • Robust financial position
  • Competitive shareholder returns
  • Sustainable income.
  • Sustaining capital expenditure
  • Growth capital expenditure
  • Disposals
  • Community infrastructure investment.

• Employee health

and safety

• Employment

(temporary/

permanent;

direct/indirect)

• Diversity and

inclusion

• Remuneration,

benefits

• Skills development

• Ethical working

conditions

• Fair pay for

performance

• Culture of high

governance

• Wealth creation

(local/national)

• Job creation

• Community health

impacts

• Community education

and skills development

• Infrastructure

development for

benefit of

communities

• Business stability/

resilience

• Local business

opportunities and

support

• Anti-corruption/fraud

  • Water use/impacts
  • Habitat/biodiversity impact
  • Atmospheric emissions
  • GHG emissions/ energy use
  • Waste generation
  • Rehabilitation activities
  • Product role in transition to low-carbon/circular economy.

R27.0 billion paid as taxes and royalties2

R750 million invested in

community development

1 024 bursaries provided

Paid R20.9 billion2 to employees as salaries, wages and benefiits

Invested R1.3 billion in training initiatives to improve the skills of employees

Preferential procurement at the operations aims to increase procurement of goods and services from historically disadvantaged South Africans (HDSA), women- and youth- owned companies

Providing employment for 22 931 employees and contractors (at 30 June 2023)

Improved historically disadvantaged representation

in management from 61% in F2018 to 72% in F2023

Provided adult education

and training to 343 employees and 1 017 community members at ARM facilities, increasing their confiidence and employability

INTEGRATED

standards

• Good working

relationship with

representative trade

unions.

• Local economic

development (LED)/

CSI initiatives.

2Segmental basis.

ESGRefer to ESG report for discussion on how ARM contributes to the SDGs.

ANNUAL REPORT 2023

8

9

Stakeholders - hot topics in F2023

Our ability to achieve our strategic goals depends on the value we create for others.

At the same time, the sustainability of our operations depends on balancing stakeholder needs, interests and expectations with those of the company.

Key stakeholder topics and our responses

SHAREHOLDERS, POTENTIAL SHAREHOLDERS, ANALYSTS AND OTHER INVESTORS

OVERVIEW

ABOUT

JOINT-VENTURE PARTNERS

ARM

TOPICS RAISED

RESPONSE

PERFORMANCE

•

Operational strategy and performance

•

ARM applies the highest ethical and governance

•

Financial performance

standards in dealing with all stakeholders, including

•

Environmental, social and performance matters

partners

•

Governance.

•

Continuous and open engagement on operational,

REVIEW

financial and ESG matters with partners

TOPICS RAISED

  • Capital allocation
  • Dividends
  • Perceived discount in trading value
  • Growth
  • Project execution risk, particularly related to the Bokoni Mine development in conjunction with the PGM market outlook
  • Logistics challenges
  • Above-inflationcost increase
  • Security of water supply to the Northern Cape operations
  • PGM market outlook.

RESPONSE

  • Focus on operating assets efficiently
  • Focus on disciplined allocation of capital
  • ARM's investor relations department communicates continually with institutional shareholders, potential investors, research analysts and the media in a timely, comprehensive and efficient manner
  • Discussions with management, the board and
    JV partners to raise awareness of the concerns and expectations of research analysts and institutional fund managers
  • Summaries of decisions at shareholder meetings are disclosed on our website after each meeting
  • Continued engagement with Transnet to implement sustainable solutions that are value accretive to all stakeholders
  • Containing unit cost escalations in line with inflation
  • The affected mines in the Northern Cape continue to engage with both the Vaal Central Water Board (VCWB) and the Department of Water and Sanitation (DWS) to address the water supply risk. The mines are contributing to the maintenance and the repairs of the Vaal Gamagara pipeline.

• Executive committees and boards include

representatives from joint-venture (JV) partners.

EMPLOYEES AND ORGANISED LABOUR

TOPICS RAISED

RESPONSE

•

Health and safety

•

Human resources strategies aim to make ARM

•

Safe working conditions

an employer of choice and maintain good

•

Training

relationships with trade unions

•

Remuneration

•

Commitment to fair treatment and remuneration

•

Transformation.

of employees

•

Focus on skills development and career-planning

programmes to assist employees to develop their full

potential

•

Recognition agreements with unions where required

representation levels are reached

•

Investing in building a talent pipeline.

COMMUNITIES, CIVIL SOCIETY AND NON-GOVERNMENTAL ORGANISATIONS

BANKERS AND INSURERS

TOPICS RAISED

RESPONSE

TOPICS RAISED

  • Merger and acquisition opportunities (bankers)
  • Funding (bankers)
  • Insurance cover and costs (with particular focus
    on cybersecurity, SASRIA and tailings storage facility cover) (insurers).

RESPONSE

  • Responsible management of our fiinancial position to enable ARM to pursue value-enhancing growth opportunities
  • Comprehensive risk financing and transfer programme.

•

Community needs, including socio-economic

•

Engaging with communities at specialised

development, infrastructure development,

discussions/meetings to understand their specifiic

employment, support and opportunities for local

concerns

businesses

•

Community open days support information sharing

INTEGRATED

•

Status of social projects, operational changes and

and relationship building

expansions

•

The ARM BBEE Trust invests in uplifting rural

•

Environmental issues affecting communities

communities across South Africa by partnering with

•

Employment of local community members

traditional and other community leaders

ANNUAL

•

Service delivery challenges

•

Changes or expansions to our current operations

•

Transformation.

require engaging with interested and affected parties

REPORT

through stakeholder consultation as prescribed

by NEMA and other relevant legislation.

ESGRefer to page 46 of ESG report for detailed disclosure on stakeholder engagement and management.

10

2023

11

Stakeholders - hot topics in F2023 continued

OVERVIEW

ABOUT

CUSTOMERS

ARM

GOVERNMENT

TOPICS RAISED

RESPONSE

•

Social investment

•

Implementation and monitoring local economic

•

Health and safety

development (LED) projects

•

Environmental management

•

Compliance with relevant safety, health and

•

Transformation

environmental legislation

•

Compliance with governing regulations

•

Engaging with national government on policy matters

TOPICS RAISED

  • Product quality
  • Sustainability issues.

RESPONSE

  • Processes to ensure consistent product quality
  • ARM follows global good practice in managing sustainability matters and is committed to transparent and comprehensive reporting to stakeholders.

PERFORMANCE REVIEW

• Regular progress reports and updates.

as required

•

Regular reports submitted by operations on social

and labour plan (SLP) projects

•

Annual mining charter scorecard reports submitted

to DMRE by each mine.

INDUSTRY ASSOCIATIONS*

SUPPLIERS AND LOCAL BUSINESSES

TOPICS RAISED

RESPONSE

•

Local economic development

•

Support for local enterprise development through

•

Industry issues

CSR initiatives

•

Fair payment terms

•

Payment terms align with industry standards

•

Fair treatment

•

ARM operates ethically and does not tolerate unfair

•

Valid BEE certification

discrimination

•

Ethics

•

ARM requires valid BBBEE certifiicates to support

TOPICS RAISED

  • Sustainable development
  • Labour issues
  • Implementation of best practice
  • Industry-specificissues
  • Changes in legislation
  • Coordinated response to industry-related matters.

RESPONSE

  • Representation in various executive and other roles in industry associations to engage and give input on industry issues and communicate with industry and government stakeholders
  • Coordinated industry-level and direct support for employees, communities and government.

• Sustainability issues.

transformation in its supply chain.

MEDIA

TOPICS RAISED

RESPONSE

*  Includes the Minerals Council South Africa, International Council on Mining and Metals, World Economic Forum, Ferro Alloy Producers Association, Association of Mine Managers of South Africa, Association of Resident Engineers, Business Unity South Africa, Water User Associations and the Energy Intensive Users Group, among others.

12

•

Operational, financial and ESG performance raised

• ARM's investor relations department communicates

during results presentations

with the investment community and media, facilitating

•

Plans for Bokoni Mine

access to information and management where

•

Impact of Transnet operational challenges on ARM.

possible.

INTEGRATED ANNUAL REPORT 2023

13

Strategy

Deliver competitive returns and sustainable value

Our longer-term strategy is unchanged but we continually review short-term issues - to prioritise our strategic objectives and integrate emerging issues, particularly decarbonisation - into our short, medium and longer-term view.

ENABLED BY

STRATEGY

Owner-operator

DELIVER COMPETITIVE

RETURNS AND CREATE

Entrepreneurial

SUSTAINABLE VALUE FOR

management

ALL STAKEHOLDERS

Delivering on our strategy

RESPONSIBLE

HOW

  • Drive operational efficiencies and ensure competitive position on global cost curve
  • Contain unit cost increases
  • Implement appropriate innovation and technology
  • Ensure a safe and healthy work environment
  • Invest in our people's personal and professional wellbeing
  • Enhance relationships with key stakeholders by driving positive and sustainable impact in communities neighbouring our operations
  • Remain responsible stewards of the environment.

WHY

Protect value by responsibly and efficiently

operating our assets and managing people

MEASURED BY

  • Position on the global cost curve for each operation
  • Unit cost increases relative to mining inflation
  • Efficiencies as measured by volumes and unit cost performance
  • Safety and health indicators including: fatalities, lost-time injury frequency rate and eliminating occupational illnesses
  • Human capital investment to attract, develop and retain talent; promote diversity, equity and inclusion; and minimise turnover
  • Total investment in host communities (including impact of social and labour plans, local economic development and corporate social investment)
  • Reducing greenhouse gas (GHG) emissions in support of a sustainable transition to achieve net-zero GHG emissions from mining by 2050
  • Water withdrawn and water reused
  • Conformance of our tailings storage facilities to global standards
  • Adequate provision for environmental rehabilitation.

OVERVIEW ABOUT ARM PERFORMANCE REVIEW

Operate our

Focus on

Investing in

portfolio of assets

value-enhancing

our employees

safely, responsibly

and integrated

and efficiently

growth

Partnering with

Allocate capital to

communities and other

stakeholders

value-creating

investments

Application of

innovative technology

RESILIENT

HOW

  • Ensure effective allocation of financial capital
  • Manage a robust financial position that enables us to be opportunistic and resilient
  • Integrate ESG criteria in investment decisions to ensure positive and sustainable impact.

WHY

Create and sustain value through prudent

management of financial capital

MEASURED BY

  • Returns on capital investment including net present value (NPV), internal rate of return (IRR) and payback period
  • Benchmarking returns from investment opportunities to returns from share buybacks
  • Dividends
  • Total shareholder returns
  • Net cash/debt position
  • Debt funding capacity
  • Investing in value-accretive growth opportunities that meet ARM's strategic imperatives.

RESPONSIBLE

Strategic objective

Operate our portfolio of assets safely,

responsibly and efficiently

RESILIENT

Strategic objective

Allocate capital to

value-creating investments

Underpinned by our values

READY

Strategic objective

Focus on value-enhancing

and integrated growth

READY

HOW

•

Drive innovation and capitalise on value-accretive

opportunities for growth

•

Support inclusive business opportunities in communities

neighbouring our mines

•

Focus on local and preferential procurement from

women/youth-owned businesses

•

Drive shift to net-zero GHG emissions from mining

by 2050

WHY

Create and unlock additional value by investing

in growth and innovation supporting sustainable

responses to the changing operating environment

MEASURED BY

•

Returns including IRRs, NPV, payback periods

•

Successful commercialisation of more efficient

smelting technology

•

Optimised energy consumption in smelting process

•

Local and preferential procurement spend and number

of SMMEs supported

•

Impact and sustainability of community investment

•

Decarbonisation pathways and year-on-year reduction

INTEGRATED ANNUAL

Aim for operational excellence | Provide a safe and healthy work environment | Maintain a non-discriminatory workplace | Improve the lives of those living in communities neighbouring our operations | Work responsibly to achieve balance between the economic, social and environmental aspects of our business | Maintain the highest standards of corporate governance

14

•

Invest in skills of the future

•

Continually assess portfolio for disposal opportunities

or points of exit.

in GHG emissions

• Investment in skills training.

REPORT 2023

15

Strategy continued

Completed and future growth projects

Completed growth projects

BLACK ROCK AND GLORIA PROJECTS

The Black Rock Project was completed in September 2022 and within the approved budget of R7.4 billion,

with 1.4 million fatality-free shifts and a LTIFR of 0.22.

Key benefits: improved tramming cycle times, lower cost of production and enhanced control

of ore quality.

TWO RIVERS PLANT EXPANSION

Fully commissioned, now ramping up to mill the additional 40 000 tonnes per month capacity, and minimise

impact of grade reduction in ore tonnes milled.

16

Future growth projects

TWO RIVERS MERENSKY PROJECT

The Two Rivers Merensky project is on target for completion in Q2 F2025, with first PGM concentrate

production in Q4 F2024.

Additional 182 000 6E PGM ounces, 1 600 tonnes nickel and 1 300 tonnes copper per annum.

BOKONI PLATINUM MINE

Good progress in advancing the definitive feasibility study (DFS) based on a phased

development approach.

The DFS will now advance to bankable feasibility and then be presented to the board

for approval.

OVERVIEW ABOUT ARM PERFORMANCE REVIEW

INTEGRATED ANNUAL REPORT 2023

17

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ARM - African Rainbow Minerals Ltd. published this content on 26 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 October 2023 15:49:22 UTC.