OZ Minerals Limited
Annual Report 2022

Plain-text annual report

ASX Release Results for Announcement to the Market We have provided this results announcement to the market in accordance with Australian Securities Exchange (ASX) Listing Rule 4.2A and Appendix 4E for the Consolidated Entity (OZ Minerals) comprising OZ Minerals Limited (OZ Minerals Limited or the ‘Company’) and its controlled entities for the year ending 31 December 2022 (financial year) compared to the year ended 31 December 2021 (comparative period). Consolidated results, commentary on results and outlook 31 December 2022 $m 31 December 2021 $m Movement $m Movement % Revenue 1,920.8 2,095.8 (175.0) (8.4%) Profit after tax attributable to OZ Minerals Limited equity holders 207.3 530.7 (323.4) (60.9%) The commentary on the consolidated results and outlook, including changes in the state of affairs and likely developments of the Consolidated Entity, is set out on pages 10-14 and within the Financial Review section of the Directors’ Report on pages 26-29. Net tangible assets per share 31 December 2022 $ per share 31 December 2021 $ per share Net tangible assets per share(a) 9.47 8.98 (a) Right-of-Use assets are considered intangible assets and excluded from total assets for the net tangible assets calculation In accordance with Chapter 19 of the ASX Listing Rules, net tangible assets per share represents the total assets less intangible assets, less liabilities ranking ahead of, or equally with, ordinary share capital and divided by the number of ordinary shares on issue at the end of the year. Dividends On 22 December 2022, OZ Minerals entered into a SID with BHP, in relation to the proposed acquisition by BHP of all of the issued shares in OZ Minerals by scheme of arrangement. The SID permits, subject to certain conditions, OZ Minerals to declare and pay OZ Minerals shareholders a special dividend prior to implementation of the Scheme. Prior to the Scheme meeting (which is currently expected to be held in mid-April 2023), the Board intends to declare a fully franked special dividend of $1.75 per share, such dividend conditional on the Scheme becoming effective. If the Scheme does become effective the special dividend will be paid on the date the Scheme is implemented to OZ Minerals shareholders who hold OZ Minerals shares on the special dividend record date. The special dividend record date is currently expected to be three days before the Scheme record date, with both record dates currently expected to be in late-April 2023. Assuming the special dividend of $1.75 per share is paid, the consideration payable by BHP under the Scheme will be reduced by this amount. OZ Minerals shareholders who hold shares on both the special dividend record date and the Scheme record date will receive total consideration of $28.25 per share on the date the Scheme is implemented, with $1.75 being a fully franked special dividend paid by OZ Minerals and $26.50 being Scheme Consideration paid by BHP. As stated above, if the Scheme does not become effective the special dividend will not be paid. In that case, the Board will continue to consider the payment of dividends against its current policy of paying sustainable dividends from pre-growth cash flow, after taking into consideration the Company’s near term identified capital investment opportunities and maintaining a strong balance sheet. OZ Minerals Limited | ABN: 40 005 482 824 | 2 Hamra Drive, Adelaide Airport, South Australia 5950 T: +61 8 8229 6600 | F: +61 8 8229 6601 | info@ozminerals.com | www.ozminerals.com ASX Release Dividends announced or paid since 1 January 2021 Record date Date of payment Fully franked Total dividends Dividend reinvestment plan cents per share $m 1 September 2022 16 September 2022 8 26.8 No 25 February 2022 11 March 2022 18 60.2 Yes 24 August 2021 7 September 2021 16(a) 53.3 Yes 12 March 2021 26 March 2021 17 56.4 Yes (a) Included a special dividend of 8 cents per share. Independent auditor’s report The above announcement of the results to the market is based upon the Consolidated Financial Statements and we have included the Independent Auditor’s Report to OZ Minerals Limited members in the OZ Minerals’ 2022 Annual Report & Sustainbility Review. Page 2 of 2 OZ Minerals ASX Release | Going what’s possible to make lives better 2022 Annual Report and Sustainability Review Acknowledgement of country OZ Minerals acknowledges the traditional owners and custodians of country throughout Australia and their continuing connection to land, waters and community. We pay our respects to the people, the cultures and the elders past, present and emerging. OZ Minerals’ Adelaide Office is located on Kaurna land, our Prominent Hill mine is located on Antakirinja Matu‑Yankunytjatjara land, our Carrapateena mine is located on Kokatha land and our West Musgrave Project is located on Ngaanyatjarra land. Cautionary statement This report contains forward-looking statements that relate to our activities, plans and objectives. Actual results may significantly differ from these statements, depending on a variety of factors. The term ‘material topic’ is used for voluntary sustainability reporting to describe topics that could affect our sustainability performance. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and circumstances that will occur in the future and may be outside OZ Minerals’ control. Given these risks and uncertainties, undue reliance should not be placed on forward-looking statements. Contents 2022 Performance Snapshot 04 Message from the Chairman and CEO 06 Strategy 08 Operating Review 10 › Prominent Hill 10 › Carrapateena 11 › West Musgrave 12 › Kalkaroo 12 › Carajás 13 › Gurupi 13 › Exploration 14 Governance 15 Directors’ Report 22 Financial Review 26 Risk Management 30 Remuneration Overview and Report 36 Sustainability Review 58 Mineral Resources and Ore Reserves 69 Financial Report 73 Shareholder Information 114 Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 3 2022 Performance Snapshot 1. On 22 December 2022, OZ Minerals entered into a Scheme Implementation Deed with BHP Lonsdale Investments Pty Ltd (‘BHP’), a wholly owned subsidiary of BHP Group Limited, in relation to the proposed acquisition by BHP of all of the issued shares in OZ Minerals by way of scheme of arrangement under the Corporations Act 2001 (Cth) (‘Scheme’). The Scheme Implementation Deed permits, subject to certain conditions, OZ Minerals to declare and pay OZ Minerals shareholders a special dividend prior to implementation of the Scheme. Prior to the Scheme meeting (which is currently expected to be held in mid-April 2023), the Board intends to declare a fully franked special dividend of $1.75 per share, such dividend conditional on the Scheme becoming effective. If the Scheme does become effective the special dividend will be paid on the date the Scheme is implemented to OZ Minerals shareholders who hold OZ Minerals shares on the special dividend record date. The special dividend record date will be three days before the Scheme record date, with both record dates currently expected to be in late-April 2023. If the Scheme does not become effective, the special dividend will not be paid. An interim dividend of 8 cents per share, fully franked was paid to shareholders on 16 September 2022. Gold pricing Copper pricing 2022 $m 2021 $m Group revenue 1,920.8 2,095.8 EBITDA 692.7 1,162.4 Net depreciation (347.1) (366.7) EBIT 345.6 795.7 Net finance expense (35.4) (39.1) Income tax (expense) (102.9) (225.9) NPAT 207.3 530.7 Dividends per share (cents) 81 25 Full year financial results summary 0 2 4 6 8 $/lb Jan 18 Jan 19 Jan 20 Jan 21 Jan 22 Jan 23 Source: LME, Refinitiv US$/lb A$/lb Source: LBMA, Refinitiv US$/oz A$/oz 0 1,000 2,000 3,000 $/oz Jan 18 Jan 19 Jan 20 Jan 21 Jan 22 Jan 23 OF COPPER PRODUCED 124,065 TONNES OF GOLD PRODUCED 211,147 OUNCES ALL ASSETS Operating Mine Study Phase Exploration Mine in Construction Hub OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 4 Stakeholder Value Creation Details of perfomance can be found throughout this Report and on our website ozminerals.com Positive performance  Positive progress  Further focus required  Not yet assessed 1. Reflects additional Stakeholder Value Creation Metrics to be measured from 2023. SHAREHOLDER SHARE PRICE AND DIVIDENDS PAID Grow share price: measured relative to peer group Relative to peers over three year period Sustainable dividend: measured relative to OZL’s dividend track record Relative to prior year ordinary dividend BOTTOM HALF OF COST CURVE Measured relative to global copper producers Relative to industry cost curve RESERVE GROWTH Grow OZL's Reserves: measured relative to OZL’s reserve at the end of previous year Relative to prior year GOVERNANCE Compliance with ASX’s corporate governance principles and recommendations Relative to Stakeholder expectations and governance disclosures Metric 2022 Performance Criteria 2022 Rating GOVERNMENT EMPLOYMENT BY JURISDICTION Workforce – local / state / out of state / Land Connected and Indigenous Peoples (Total workforce, including employees and contractors) Relative to context and Stakeholder expectations TAXES AND ROYALTIES Income tax and Royalties (total and jurisdictions) Relative to NPAT and Revenue CAPITAL INVESTMENT Capital investment Relative to content spend and Stakeholder expectations EMISSIONS Scope 1 & 2 emissions intensity (tCO2-e per t Cu Eq) Relative to our Strategic Aspirations and TFCD Roadmap Absolute Scope 1 & 2 emissions ENERGY Renewable energy percentage Net energy intensity (per t Cu Eq) LOCAL CONTENT SPEND Value spent with local suppliers through supply chains Relative to content spend and Stakeholder expectations COMMUNITY WORKING WITH STAKEHOLDERS (COMMUNITY ENGAGEMENT/ PARTNERING) Number and average duration for resolution of concerns, complaints and grievances Relative to our Context and Stakeholder Expectations Partnering case studies SOCIAL CONTRIBUTION Social contribution (quantitative and qualitative) HUMAN RIGHTS Modern Slavery Act action plan and implementation and number of incidents Relative to our Strategic Aspirations and Modern Slavery Roadmap CULTURAL HERITAGE Unauthorised cultural heritage breaches Significant environmental and social incidents Relative to our Context and Stakeholder Expectations WATER Water consumed (per t Cu Eq) Relative to our Context, Strategic Aspirations and Stakeholder Expectations WASTE Non-mineral waste produced (per t Cu Eq) LAND AND BIODIVERSITY Areas (ha) disturbed in high biodiversity conservation areas WORKFORCE SAFETY PERFORMANCE Total Recordable Injury Frequency Rate (TRIFR) Zero Fatalities Relative to our year-on-year performance and annual performance relative to zero WORKFORCE ENGAGEMENT Employee Survey results above industry benchmark Relative to our Strategic Aspirations and Stakeholder Expectations INCLUSION Inclusion maturity upward trend Relative to Peers DIVERSITY Diversity of thought and demographic (Total workforce, including employees and contractors) Relative to Peers and our Strategic Aspirations CUSTOMER CUSTOMER QUALITY SPECIFICATION MET1 Introduced in 2022 and to be measured in 2023 N/A CONTRACTING1 Introduced in 2022 and to be measured in 2023 N/A SUPPLIER NET PROMOTER SCORE Net Promoter Score (NPS) Relative to our Context and Stakeholder Expectations ON TIME PAYMENT The proportion by number and value of invoices paid on time within payment terms Relative to Stakeholder Expectations and Compliance level SUPPLIER VALUE BY JURISDICTION OZ Minerals local, state, national, international and total spend Relative to our Context Statement expectation Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 5 The year was ultimately dominated by BHP’s proposal to acquire OZ Minerals for $28.25 per share by way of scheme of arrangement. BHP’s interest in our company is testament to our quality, long life assets in quality jurisdictions and, importantly, the agile culture of innovation, collaboration and inclusion we are creating. It is recognition that we produce minerals that are in strong demand for the electrification era. You will have seen from our announcements that the Board is recommending shareholders support the transaction when they vote at the Scheme meeting expected to be held in April, in the absence of a superior proposal and subject to the independent expert concluding and continuing to conclude that the transaction is in the best interests of shareholders. Given the proposed BHP acquisition is in progress, this Report and the accompanying Sustainability Review focuses primarily on the achievements of 2022. In line with the Corporations Act, should the Scheme be implemented in line with the current schedule, our current expectation is that an OZ Minerals Annual General Meeting (AGM) for the financial year ended 31 December 2022 will not be required. A growth strategy focussed on modern minerals Turning now to the past year. We evolved our Strategy from Copper to Modern Minerals. Our Strategic Aspirations have also evolved to ensure continued value creation for all stakeholders. You can read more about our Strategy and Strategic Aspirations in the Strategy section of this Report. While production and cost guidance were revised mid year, following a slower first half due to the impacts of COVID-19 absenteeism, supply chain disruption and inflationary pressure, we were able to draw on our cultural and organisational foundations to recalibrate our performance, delivering a strong final quarter and creating momentum into 2023. How we work together towards safe operational delivery Disappointingly, our total recordable injury frequency rate (TRIFR) increased to 6.99 compared to 4.40 in 2021. This is attributed to a number of factors including workforce turnover, challenging underground operating conditions and ramp up in both greenfield and brownfield execution activities. A one-day company-wide Safety Stop was implemented in August to address the unacceptable trend in safety which identified a range of activities to help our people refocus on their physical and mental wellbeing and to prioritise initiatives to work safely. We have been on the journey to embed a culture of inclusion at OZ Minerals since 2016 with our How We Work Together behaviours as the bedrock of our culture. As we continue to create and embed an inclusive environment, and one that says no to bullying, harassment and discrimination, an inaugural series of CEO Conversation Circles were held across our operations. These focussed on workforce experiences of gender equality, inclusion and inappropriate workplace behaviours. We are now also publishing deidentified reports of the results of investigations into such incidents on our intranet and sharing learnings from deidentified incidents in Safety Circles across our business. The profile of these and other activities has encouraged people to come forward, speak up and call out such behaviour. We still have a long way to go but feedback from our teams has been encouraging. Dear shareholders, 2022 was a defining year for OZ Minerals. We made considerable progress on our growth strategy with the West Musgrave copper nickel project approved and now in construction and the expansions at both Prominent Hill and Carrapateena well underway. We faced adverse weather conditions, supply chain challenges and the effects of over half a year of COVID related absenteeism which created a challenging operating environment. Message from the Chairman and Managing Director & CEO OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 6 Andrew Cole Managing Director & CEO Rebecca McGrath Chairman 2022 Financial and operational highlights Achieved $1.9B REVENUE Achieved $207.3M NET PROFIT AFTER TAX Achieved a 36% OPERATING MARGIN Achieved 62.0 cents EARNINGS PER SHARE During the year, we: › progressed construction of the Prominent Hill Wira Shaft Expansion › progressed the Carrapateena Sub-Level Cave ramp-up, with the cave breaking through in December 2022 › commenced construction on the West Musgrave Project following a positive Final Investment Decision, and demonstrated the potential technical and commercial opportunity of producing a high quality and high-grade Mixed Hydroxide Precipitate product for feed into the battery industry › secured an option to acquire the Kalkaroo project in South Australia, one of the largest undeveloped copper-gold deposits in Australia › delivered strong, operational performance at Pedra Branca, which ramped up ahead of schedule › undertook an accelerated program to develop the Santa Lúcia Pre‑Feasibility Study › improved performance on key Stakeholder Value Creation Metrics (page 5) › expanded our Educating the Next Generation social contribution program adding Shooting Stars, a program supporting Aboriginal girls to stay in school, to our existing support of the Clontarf Foundation, the Royal Flying Doctors Service and The Smith Family › increased overall female workforce (contracting partners and employees) participation by 14 per cent and female employee leadership by 19 per cent › ranked #1 in industry by the Workplace Gender Equality Agency for gender pay equity. It has been a privilege to be on the OZ Minerals journey with you over the years. The support of all our stakeholders has helped us create a modern mining company where culture is key to delivering operational performance and growth, while creating value for all our stakeholders. Thank you. Rebecca McGrath CHAIRMAN Adelaide February 2023 Andrew Cole MANAGING DIRECTOR & CEO Adelaide February 2023 Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 7 Strategy Our context We are a growth company. Our quality, long life, low-cost copper and nickel assets are located in safe and stable jurisdictions. Expansions are underway at our major operations, we have a new copper nickel mine in construction, several project studies underway and a strong exploration pipeline. The world is decarbonising. Copper and nickel are integral to this global energy transition. As the use of copper increases over the next 20 years, more than half will be used for clean energy. Copper is also the key ingredient for grid infrastructure that will power businesses and homes in the future. While we may see short term volatility and demand variations, the medium to long term fundamentals are strong. Strategy, Strategic Aspirations and The OZWay We review our Strategy frequently to ensure we are staying in front of mega trends. While we have been focussed on the world’s move towards electrification for some time now, as evidenced by our progression of West Musgrave, in 2022 we evolved our Strategy from a ‘copper focus’ to encompass ‘modern minerals’. This means our target suite now includes copper and nickel, and we are able to potentially consider other electrification era metals in future. In 2022, we also evolved our Strategic Aspirations. These revised Aspirations are centred around decarbonisation, digitisation, collaboration and a commitment to creating value for all our stakeholders. Our refreshed Strategic Aspirations sharpen our ‘future focus’ and help us conceptualise where we want to go and how we get there. Supporting this, is an ongoing effort to harness strategic alliances and partnerships, which speed up development, reduce costs, reduce risk, and effect transformative change much faster than average. Over the past eight years we have defined our own way of working, which we call The OZWay. The OZWay explains how all the parts of OZ Minerals fit together and every part is designed to help us make value accretive decisions and deliver on our Strategic Aspirations. It is more than a graphic, as it encapsulates a purpose-driven organisation that at our core, helps people be the best they can be and creates value for all our six stakeholder groups as we strive to achieve our purpose of ‘Going beyond what’s possible to make lives better’. THE OZWAY Our Choices › Strategy › Risk Appetite › Value Creation Policies Our Enablers › Organisational Model › How We Work Together › Process Standards › Performance Standards Our Work › Plans › Risks › Capability Our Performance › Learning › Reporting › Stakeholder Engagement Our Context › Macro Environment › Stakeholder Expectations › Laws and Regulations DEVOLVED GOING BEYOND WHAT'S POSSIBLE TO MAKE LIVES BETTER A MODERN MINING COMPANY WORKFORCE VALUE COMMUNITY VALUE GOVERNMENT VALUE SHAREHOLDER VALUE CUSTOMER VALUE SUPPLIER VALUE OUR CONTEXT OUR CHOICES OUR ENABLERS OUR WORK OUR PERFORMANCE A N D A G I L E VALUE CREATION D E V O L V E D R E S P O N S I B L Y L E A N A N D P A R T N E R I N G I N V E S T I N G I N N O V A T I V E H O W W E W O R K T O G E T H E R M O D E R N M I N E R A L S OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 8 PARTNERING › We use partnerships or alternative ownership structures that create mutual value across all aspects of our work. › We support Intellectual Property development by our partners and maintain a portfolio of spin-off ventures that create mutual value. › We attract and retain the best people who work collaboratively at pace and deliver great outcomes. MODERN MINERALS › We trade at a premium to the industry, recognised for the quality of our people, our culture of superior stakeholder value creation and the strength of our portfolio. › Our products are desired by every country and are traceable from mine to end user. LEAN AND INNOVATIVE › Our Traditional Owners and First Nations people are represented in all leadership levels across the company. › We have a socially diverse workforce and leadership which represents the demographics of the communities where we work. › We make all our material business decisions using predictive analytics, artificial or augmented intelligence and simulation with enough time to respond or take action. › We have stakeholder agreed, co-developed post closure land use plans with zero closure liabilities. › We are exceptional at agile value creation; with an opportunity‑oriented and feedback focused mindset that sees people experiment and scale or, fail fast to learn and develop. DEVOLVED AND AGILE › We are a paperless, flexible and virtual organisation where every person designs how, where and when they do their work. People are matched to work, not roles. › We have no people working directly in operational areas from exploration to product delivery, enabling the use of automation to ensure zero injuries, full production potential and complete flexibility. › We take new discoveries to first commercial product in less than 5 years. INVESTING RESPONSIBILITY › We continually achieve top quartile relative Total Shareholder Returns every year. › We exceed our stakeholders' expectations of value as measured by our Stakeholder Value Creation Metrics. Our stakeholders are our ambassadors. › We have eliminated waste and water from non-renewable sources in all our processes. STRATEGIC ASPIRATIONS Our Strategic Aspirations are just that, ‘aspirational’. They paint an ambitious and motivational picture of the future we strive to achieve for our people and other stakeholders. While they may not always be achieved and may be dependent on matters outside our control, we have found that aiming high helps us achieve beyond what most would think possible. VALUE CREATION D E V O L V E D R E S P O N S I B L Y L E A N A N D P A R T N E R I N G A N D A G I L E I N V E S T I N G I N N O V A T I V E H O W W E W O R K T O G E T H E R M O D E R N M I N E R A L S Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 9 Prominent Hill Province Copper  Gold  Silver Prominent Hill underground mine Antakirinja Country, Gawler Craton, South Australia Prominent Hill is an underground copper, gold and silver mine located 650km north-west of Adelaide in the Gawler Craton in South Australia which commenced production in 2009. The asset was first developed as an open pit mining operation, mining first ore in October 2007 and shipping its first concentrate in April 2009. 2022 Highlights Construction of the Wira Shaft is underway, and this brownfield expansion will extend Prominent Hill’s life of mine to 2038. As part of project optimisation works done in 2022, this electric hoisting shaft’s capacity was increased from 6Mtpa to 6.5Mtpa. The increased capacity will provide us with optionality to increase Prominent Hill’s annual production rates. The shaft headframe is planned for installation in the first half of 2023. The Wira Shaft will enable the electrification of the ore haulage system and is one of the ways Prominent Hill will achieve the decarbonisation commitments set out in OZ Minerals’ Decarbonisation Roadmap. Read more about our Decarbonisation Roadmap in the Sustainability Section of this Report. In 2022, 55,547 TONNES of copper and 124,843 OUNCES of gold were produced, at a C1 cost of 129.1 USc/lb and All-in Sustaining Cost of 204.0 USc/lb Mineral Resource: 180Mt at 0.9% copper and 0.8g/t gold1 Ore Reserve: 68Mt at 0.9% copper and 0.6g/t gold1 1. Please refer to the Mineral Resources and Ore Reserves section (page 69) for full disclosure. CASE STUDY UPPER SPENCER GULF COMPETITIVE CAPABILITY PROGRAM COVID-19 significantly impacted regional businesses and highlighted the criticality of online engagement in minimising disruption to their pipelines of work. Rather than providing short-term, financial crisis assistance, Global Maintenance Upper Spencer Gulf (GMUSG) and OZ Minerals partnered to deliver the Competitive Capability Program (CCP). The CCP is a cross-sector, region-wide, capacity-building program that delivered hands-on business development assistance to 50 businesses across the Upper Spencer Gulf, resulting in direct economic benefits for participating businesses. It created new capabilities and strengthened networks in regional communities and, given its success, was extended for an additional 12 months into 2022. Prominent Hill mine Operating Review OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 10 Carrapateena Province Copper  Gold  Silver Carrapateena underground mine Kokatha Country, Gawler Craton, South Australia 1. Please refer to the Mineral Resources and Ore Reserves section (page 69) for full disclosure. Carrapateena is an underground copper, gold and silver mine and is located approximately 250km south-east of Prominent Hill and 160km north of Port Augusta. Underground mining at Carrapateena is by sub-level caving with the operation producing first concentrate in December 2019. In 2022, 57,139 TONNES of copper and 77,630 OUNCES of gold were produced and a CI cost performance of 117.4 USc/lb and All-in Sustaining Cost of  158.1 USc/lb was achieved Mineral Resources: 900Mt at 0.56% copper and 0.24g/t gold1 Ore Reserves: 190Mt at 1.1% copper and 0.42g/t gold1 CASE STUDY Two fast charge electric vehicles have been developed in partnership with ZERO Automotive for use throughout 2022. Both vehicles are now in use on site and a third is expected to arrive in early 2023. In addition to this, an order for the first component of battery electric mining fleet, a Normet charge unit, has been placed. 2022 Highlights At the end of the year, the Carrapateena cave safely propagated to surface, an important de‑risking event for the mine. Progress was also made on Carrapateena’s transition from a Sub-Level Cave to a Block Cave. Converting the bottom half of the Sub-Level Cave to a Block Cave will unlock Carrapateena’s potential to be a multigenerational, low quartile cash cost producing province. The base case is for Carrapateena to reach a production rate of 12Mtpa from 2028. Block Cave 1 will almost double current average production to ~110‑120ktpa of copper and 110-120koz of gold. Underground Block Cave decline development has been advancing with the decline now over 1km vertically below the surface. The Tailings Storage Facility main embankment Stage 2 lift was completed ahead of schedule and under budget. All future stages of the Tailings Storage Facility will involve upstream lifts. Carrapateena mine Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 11 Musgrave Province Open cut mine in development  Copper  Nickel   West Musgrave Project Ngaanyatjarra Country, Musgrave, Western Australia The West Musgrave Project is a greenfield copper and nickel project located in the West Musgrave Ranges of Western Australia, approximately 1,300km northeast of Perth and 1,400km north‑west of Adelaide, near the intersection of the borders of Western Australia, South Australia and the Northern Territory. Construction commenced in the December 2022 quarter, and the Project is currently targeting first concentrate in the second half of 2025. Annual production is anticipated to be approximately 28ktpa of contained nickel and 35ktpa of contained copper over 24 years. 2022 Highlights Construction of our fourth mine, West Musgrave, is now underway following a positive Final Investment Decision on the $1.7 billion Project in September 2022. The Feasibility Study released at the same time, identified value uplift opportunities which have been embedded in the Project’s design, project delivery and operations. Life of Province opportunities at the West Musgrave Province are being explored, to understand optionality within the region, including the potential construction of a downstream nickel processing plant for Mixed Hydroxide Precipitate (MHP) and near mine expansion for the Succoth copper deposit and other exploration targets. The MHP study demonstrated the technical and commercial opportunity of producing a high quality and high grade MHP product for feed into the battery industry. Multiple fertile nickel-copper systems have also been identified within 20km of the West Musgrave mine infrastructure, stretching over a total extent of approximately 40km. In line with our aspiration to use partnerships or alternative ownership structures that create mutual value across all aspects of our work, we started exploring the potential for a minority selldown of the project through a strategic alliance. This generated significant interest but is on hold due to the proposed BHP transaction. Kalkaroo is a study stage copper project in South Australia, currently owned 100% by Havilah Resources Limited. Havilah Resources Limited published a Pre Feasibility Study for the project in 2019, featuring a Mineral Resource estimate of 245Mt @ 0.45% Cu and 0.41g/t Au and Ore Reserve of 100Mt @ 0.47% Cu and 0.44g/t Au. 2022 Highlights In 2022, we executed binding agreements with Havilah Resources that provides an option to acquire the Kalkaroo Project following a study period, and a strategic alliance over the Curnamona Province in South Australia focused on new exploration prospects. During the study period, we focussed on opportunities to identify additional value by assessing a range of Modern Mining opportunities, innovation, processing improvements and local infrastructure that reduce project costs and improve productivity. CASE STUDY The Think & Act Differently (TAD) team, powered by OZ Minerals is using innovative approaches to understand more about the Kalkaroo orebody. This includes the use of X-ray technology to digitalise drill core and leveraging the global crowd to build an algorithm. The Orexplore Technologies team, specialising in X-ray scanning for drill core, scanned some of the existing Kalkaroo core in order to digitalise it to accelerate and strengthen the development of our resource models. With this information, TAD will simulate different scenarios to mine and process critical mineral orebodies. Collaboration is key to our shared success, and we want to work with the best minds to design modern mines. Copper  Gold Kalkaroo Project Ngadjuri/Adnyhamathana Wilkayakali Country, Curnamona, South Australia Kalkaroo Province OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 12 1. Please refer to the Mineral Resources and Ore Reserves section (page 69) for full disclosure. The Carajás Province in Northern Brazil hosts a significant number of undeveloped copper-gold deposits. We are pursuing a staged, low risk and modest-capital hub approach in the Carajás, where each hub would process ore from several nearby satellite mines. We achieved a significant milestone with the commencement of underground mining at Pedra Branca in 2021, the first of the intended satellite mines. The asset comprises an underground copper and gold mine which ramped-up to full production during the June quarter 2022. 2022 Highlights CARAJÁS EAST Despite having experienced the highest rainfall in the region early in 2022, our Carajás East Hub advanced well during the year. Pedra Branca delivered strong operational performance with multiple stopes now consistently in production, as the capability of our underground operators grows and with ongoing plant optimisation work. An accelerated program was undertaken to progress the Pre-Feasibility Study for Santa Lúcia. Follow-up drilling during year at the Grota Rica and Tapuia exploration targets, after initial encouraging results in 2021, helped us understand further satellite opportunities. CARAJÁS WEST The Carajás West region has historically been underexplored. In 2022, we completed an additional drilling programme which, combined with earlier drilling, informed a comprehensive update of the estimated Mineral Resource for the Pantera deposit. In the Carajás East province in 2022, 11,378 tonnes of copper and 8,674 ounces of gold were produced at a C1 cost of 197.1 USc/lb and with an All-in Sustaining Cost of 279.5 USc/lb. Pedra Branca Mineral Resources: 18Mt at 1.6% copper and 0.41g/t gold1 Ore Reserves: 4.0Mt at 2.0% copper and 0.53g/t gold1 Santa Lucia Mineral Resources: 5.8Mt at 2.1% copper & 0.35g/t gold1 Pantera Mineral Resources: 20Mt at 1.2% copper and 0.2g/t gold1 Gurupi Province CentroGold Project Combined ‘Blanket’ & ‘Contact’ Mineral Resource; 28Mt at 1.9g/t gold1 The Gurupi Province is located in the state of Maranhão, Brazil and contains the CentroGold Project, a proposed open pit gold mining operation, comprising two deposits – Blanket and Contact. Additionally, once developed, CentroGold would be well placed to service nearby deposits such as Chega Tudo and Mandiocal, should they prove viable. We are intending to commence a Feasibility Study for the CentroGold Project once a historical court injunction, in existence when we acquired Avanco Resources Limited, is removed. 2022 Highlights We have since undergone an extensive negotiation and agreement process enabling final negotiations on a Land Use Agreement to be progressed and the project to be developed once the injunction is lifted (the timing of which cannot be guaranteed). In December 2022, the National Institute of Colonization and Agrarian Reform approved the land use concession agreement required for progressing the court injunction removal. Copper  Gold Maranhão, Brazil Carajás Province Copper  Gold Carajás East and West Hubs Para, Brazil Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 13 Exploration Our exploration portfolio consists of brownfield and greenfield exploration across locations in Australia, Brazil and Sweden. Our greenfield exploration activities are generally complemented by alliances (e.g. exploration earn-in agreements) and select direct investments in explorers. 2022 Highlights Significant mineralisation was intersected in Brazil in the Carajás East region, at Grota Rica, Valdomiro and Tapuia supporting the Carajás East hub. We moved to the earn-in stage at the Painirova and Lannavaara projects in northern Sweden based on results from diamond drillholes completed in the last winter drill season consistent with potential for mineralised copper-gold systems of size and grade of interest to OZ Minerals. Three further projects, Rockliden, Sadjem‑Dokkas and Skellefte are progressing through minimum commitment phases. Drilling commenced at the Woollogorang project in the Northern Territory and the Benmara Project, located in the Barkly Tablelands region of the Northern Territory, was added to our exploration portfolio with a joint venture targeting sediment-hosted base metal deposits with prospectivity for copper and cobalt. Finally, we withdrew from The Three Ways project with Red Metal Ltd in Queensland. We are also in the process of withdrawing from the Paraiso project in Peru. Kalkaroo West Musgrave Project Carajás Exploration night drilling in Sweden OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 14 Our governance framework, supported by a healthy corporate culture, helps us to deliver on our Strategy and enables us to effectively manage risks and assure compliance with legal and regulatory requirements. We are committed to doing business in accordance with high standards of corporate governance and creating and delivering value across our six stakeholder groups – workforce, community, shareholders, governments, suppliers and customers. The Board has adopted a system of internal controls, a risk management framework and corporate governance policies, standards and practices, which are designed to support and promote the responsible management and conduct of OZ Minerals. Strong ethical, environmental and social performance helps us comply with regulations and meet or exceed stakeholder expectations. Our governance practices are aligned with the recommendations of the ASX Corporate Governance Council’s Principles and Recommendations (4th edition) (ASX Principles and Recommendations) throughout the reporting period. Further information about OZ Minerals’ key governance practices and governance materials including our Board and Committee charters, policies and standards for the 2022 reporting period is set out in OZ Minerals’ Corporate Governance Statement. OZ Minerals’ governance materials and Corporate Governance Statement are available on the Corporate Governance section of our website ozminerals.com under the tab Who We Are/Corporate Governance. Attendance at Board and Committee meetings (1 January 2022 to 31 December 2022) Board meetings Board committee meetings Audit People and Remuneration Sustainability Nomination A B A B A B A B A B Director Rebecca McGrath 26 26 – – 7 7 – – 5 5 Andrew Cole 26 26 – – – – – – – – Tonianne Dwyer 26 26 6 6 7 7 – – – – Sarah Ryan 26 26 6 6 – – 3 3 5 5 Charles Sartain 26 26 6 6 – – 3 3 5 5 Richard Seville 25 26 – – 6 7 3 3 – – Peter Wasow 26 26 6 6 7 7 – – – – Note: The Managing Director and CEO and Non-executive Directors who were not Board Committee members also participated in various scheduled Board Committee meetings throughout the year. A The number of meetings attended during the time the Director held office. B The number of meetings held during the time the Director held office. Governance Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 15 Board of Directors Rebecca McGrath Independent Chairman BTP (Hons), MA (App.Sci), FAICD Appointed: Non-executive Director from 9 November 2010, Chairman from 24 May 2017 Board Committees: People and Remuneration, Nomination (Chairman) Rebecca is an experienced professional company director and chairman, with substantial international business experience. She spent 25 years with BP Plc, where she held various executive positions including Chief Financial Officer Australasia and served as a member of BP’s Executive Management Board for Australia and New Zealand. Rebecca has served as a Director of CSR Limited, Big Sky Credit Union and Incitec Pivot Ltd and as Chairman at Kilfinan Australia. She is a former member of the JP Morgan Advisory Council. She has attended executive management programs at Harvard Business School, Cambridge University and MIT in Boston. Listed Company Directorships (last three years) Macquarie Group Limited and Macquarie Bank Limited (January 2021 – present) Goodman Group (April 2012 – retiring 28 February 2023) Incitec Pivot Ltd (September 2011 – December 2020) Other current Directorships/appointments Chairman, Investa Wholesale Funds Management Ltd, Investa Commercial Property Fund Holdings and Investa Office Management Holdings Pty Ltd Chairman, Scania Australia Pty Ltd President, Victorian Council, Australian Institute of Company Directors Member, National Board, Australian Institute of Company Directors Member, ASIC Corporate Governance Consultative Panel Andrew Cole Managing Director & Chief Executive Officer BAppSc (Hons) in Geophysics, MAICD, FAusIMM Appointed: 3 December 2014 Board Committees: Nil Andrew has 30 years’ experience in exploration and operations in the resources industry. Following exploration geoscientist roles in Australia, Canada, United States of America (USA) and Mexico with Rio Tinto Exploration (CRA and Kennecott), Andrew spent 10 years in mine development and mine operations with Rio Tinto in Australia, China, Canada and the United Kingdom (UK). During his career at Rio Tinto, Andrew held various senior and leadership positions, including General Manager Operations of the Clermont Region Operations, Chief Executive Officer of Chinalco Rio Tinto Exploration and Chief Operating Officer of Rio Tinto Iron and Titanium. Listed Company Directorships (last three years) Nil Tonianne Dwyer Independent Non-executive Director BJuris (Hons), LLB (Hons), GAICD Appointed: 22 March 2017 Board Committees: People and Remuneration (Chairman), Audit Tonianne is an independent public company Non-executive Director. Tonianne spent over 20 years in investment banking and real estate fund management and was a Director of Investment Banking at Societe Generale/Hambros Bank advising on mergers and acquisitions, restructuring and refinancing. Tonianne was Head of Fund Management at the LSE listed property company, Quintain Estates and Development plc and was later appointed to the Board as an Executive Director. Tonianne is a graduate member of the Australian Institute of Company Directors. Listed Company Directorships (last three years) Incitec Pivot Ltd (May 2021 – present) ALS Ltd (July 2016 – present) Dexus Funds Management Limited (August 2011 – October 2022) Metcash Limited (June 2014 – June 2021) Other current Directorships/appointments Deputy Chancellor, Senate of the University of Queensland Director, Sir John Monash Foundation Governance continued OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 16 Peter Wasow Independent Non-executive Director B. Comm, GradDip (Management), Fellow (CPA Australia) Appointed: 1 November 2017 Board Committees: Audit (Chairman), People and Remuneration Peter has extensive experience in the resources sector as both a Senior Executive and Director. He formerly held the position of CEO & Managing Director of Alumina Limited, an ASX 100 Company, and before that Executive Vice President and Chief Financial Officer, Santos Limited. In a 20 year plus career at BHP, he held senior positions including Vice President, Finance and other senior roles in Petroleum, Services, Corporate, Steel and Minerals. Peter is currently a Non-executive Director of Australian Pipeline Limited, the responsible entity of the trusts which comprise the APA Group. Peter was previously the senior independent Director of the privately held GHD Group, Non-executive Director of Alcoa of Australia Limited, AWA Brazil Limitada, AWAC LLC and Non-executive Director of ASX-listed Alumina from 2011 to 2013 and Executive Director from 2014 to 2017. Peter has also been a member of the Business Council of Australia and Director of the International Aluminium Institute and the Australian Petroleum Production & Exploration Association (APPEA). Listed Company Directorships (last three years) Australian Pipeline Limited (March 2018 – present) Charles Sartain Independent Non-executive Director BEng (Mining)(Hons), Hon.DEngin Qld, FAusIMM, FTSE Appointed: 1 August 2018 Board Committees: Sustainability (Chairman), Audit, Nomination Charles has more than 35 years’ international mining industry experience. He was Chief Executive Officer of Xstrata’s global copper business for nine years from 2004. Prior to that, he held senior executive positions in Latin America and Australia including General Manager and President of Minera Alumbrera Ltd in Argentina, General Manager of Ernest Henry copper–gold mine and General Manager of Ravenswood Gold Mines in Queensland. Charles has also served as Chairman of the International Copper Association, a member of the Department of Foreign Affairs and Trade’s Council on Australian Latin American Relations, a member of the Senate of the University of Queensland and as a local Councillor of the Dalrymple Shire Council in Queensland. Listed Company Directorships (last three years) ALS Ltd (February 2015 – present) Newmont Corporation (April 2019 – April 2020) Other current Directorships/appointments Chairman, Advisory Board of the Sustainable Minerals Institute, University of Queensland Chairman of Board, Wesley Medical Research Limited Board of Directors continued Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 17 Board of Directors continued Sarah Ryan Independent Non-executive Director BSc (Geology), BSc (Hons I) (Geophysics), PhD (Petroleum Geology and Geophysics), FTSE Appointed: 17 May 2021 Board Committees: Audit, Sustainability, Nomination Sarah is an independent public company non-executive director. Sarah’s executive career includes 15 years with leading oilfield technology company, Schlumberger, in various positions internationally across research, engineering, manufacturing, operations, marketing and senior management. Sarah was Chief Operating Officer for a private equity backed company in the UK which successfully commercialised innovative oilfield technology, before transitioning into investment management, where she was responsible as an equity analyst and later, energy advisor for natural resources investments worldwide, based in the USA. Sarah has undertaken executive education at IMD, Switzerland. Listed Company Directorships (last three years) Aurizon Holdings Limited (December 2019 – present) Viva Energy Group Ltd (June 2018 – present) Woodside Energy Group Ltd (October 2012 – present) Akastor ASA (September 2014 – April 2021) Other current Directorships/appointments Director, Future Battery Industries CRC Fellow, Academy of Technology and Engineering Chair, Energy Forum, Australian Academy of Technology and Engineering Member, Chief Executive Women Member, ASIC Corporate Governance Consultative Panel Member, Federal Government Strategic Fleet Taskforce Richard Seville Independent Non-executive Director BSc (Hons) Mining Geology, MEngSc Rock Engineering, MAusIMM, Associate of the Royal School of Mines Appointed: 1 November 2019 Board Committees: Sustainability, People and Remuneration Richard has over 35 years’ experience in the resources sector including 25 years as either Managing Director or Executive Director of various ASX, TSX or AIM listed companies. Richard was the Managing Director and CEO of Allkem Limited (previously Orocobre Limited) for 12 years before stepping down in January 2019. He remains on the Board as a Non-executive Director. Richard is a mining geologist and geotechnical engineer, graduating from the Imperial College London and James Cook University in North Queensland. He holds a Bachelor of Science degree with Honours in Mining Geology and a Master of Engineering Science in Rock Engineering. Listed Company Directorships (last three years) Chairman, Agrimin Limited (August 2019 – present) Allkem Limited (previously Orocobre Limited) (April 2007 – present) Advantage Lithium Corp (February 2017 – April 2020) Other current Directorships/appointments Chairman, Advanced Energy Materials Ltd (1 January 2022 – present) Governance continued OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 18 Executive Leadership Team Andrew Cole Managing Director & Chief Executive Officer Biography available in Board of Directors, refer to page 16. Warrick Ranson Chief Financial Officer / Finance & Governance Executive Appointed: 4 December 2017 Priorities: Warrick leads the Corporate Finance function and has accountability for Forecasting, Planning & Risk; Portfolio Valuation & Economics; Assurance; Legal; Accounting & Financial Controls; Tax; and Treasury. Experience: Warrick has had an extensive career in the Mining industry, including over 18 years at Rio Tinto where he held various senior executive financial, commercial and transformation roles. Commencing his career in public practice, more recent roles included Finance Executive of Rio Tinto’s Copper product group based in London, Chief Commercial Officer within the Iron Ore product group and Head of Productivity Development for Rio Tinto globally. Prior to joining OZ Minerals, Warrick was with German-headquartered diversified industrial group, thyssenkrupp. Warrick is a Fellow of the Institute of Chartered Accountants in Australia, a graduate of the Australian Institute of Company Directors, and holds an MBA from the University of Oxford. Matt Reed Operations Executive Appointed: 1 September 2021 Priorities: Matt is accountable for operational performance across OZ Minerals including the Prominent Hill, Carrapateena and Carajás assets plus associated brownfields projects. Experience: Matt has over 25 years’ experience in the mining industry. He has held executive roles with Arrium and most recently SIMEC Mining where he had exploration to market responsibility for its iron ore and coking coal business. Prior to these positions he held a series of management and senior management roles with Arrium, led Matrikon’s Advanced Process Control business in Australia and South East Asia as well as fulfilled operational and technical roles within Newcrest Mining and WMC Resources. Debbie Morrow Projects Executive Appointed: 15 August 2022 Priorities: Debbie is responsible for overseeing the development of growth projects, ensuring they deliver value for all stakeholders. Experience: Debbie brings a breadth of experience from her 20 plus-year career at Woodside where she led large scale and major capital construction projects. She also held the role of Vice President Health, Safety, Wellbeing and Environment, where she helped the company achieve record safety performance and receive an industry award for environmental excellence. With several years in corporate leadership roles in the oil & gas industry, Debbie is also a Graduate of the Australian Institute of Company Directors and is embarking on her Board career. Bryan Quinn Strategy & Growth Executive Appointed: 11 April 2022 Priorities: Bryan was appointed the Executive responsible for the OZ Minerals strategy, early phase growth options in future facing commodities, Mergers, Acquisitions and Divestments, Exploration, and Sales and Marketing. Experience: Bryan has significant international executive experience across a range of commodities both mining and smelting. Bryan has deep operational and commercial expertise in leading businesses and global functions, acquisition and divestments, strategy and specialising in growing, building and transforming organisations to their full potential through stakeholder engagement and management. Bryan was formerly President of Joint Ventures for BHP from 2016 to 2021 where he was appointed Director and Chair of Samarco, post the Fundão dam failure in Brazil. Bryan was also appointed Chairman on the Boards of Cerrejón Coal in Colombia and Antamina Copper in Peru, and Non-Executive Director of Resolution in USA. Prior to this, Bryan held senior executive roles with BHP, including Global Head of technical functions, Lead for Acquisitions and Divestments, Asset President Manganese Australia and West Africa (2010-2014), and General Manager of Operations across BHP’s portfolio. Bryan is currently on the Board of Advisors for the Mining and Reservoir Engineering department for the UNSW, of which he is an Alumni. Bryan holds a BEng Mining (Honours), Master AppFin and completed the Harvard Business School AMP. Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 19 Notes: Tania Davey stepped off the Executive Leadership Team effective 1 March 2022 and continues in the role of Head of Digital, Robotics & Automation. Mark Irwin resigned as Projects Executive effective 15 May 2022. Jose Morea (Head of Projects) stepped into the role of Acting Projects Executive from 15 May 2022 to 15 September 2022. Executive Leadership Team continued Fiona Blakely People Executive Appointed: 11 February 2019 Priorities: Fiona is responsible for the corporate people and culture strategy. Experience: Fiona has over 25 years’ multinational experience in organisational development and culture change in international companies including Shell, Bausch & Lomb and Lion. Before joining OZ Minerals she ran a leadership development consultancy supporting leaders to drive culture change through a focus on their mindsets and behaviours. Fiona is a Fellow of the Australian HR Institute, an accredited coach with the International Coaching Federation and a member of the Australian Adaptive Leadership Institute. Michelle Ash Technology Executive Appointed: 1 March 2022 Priorities: Michelle is accountable for Information and Communications Technology (ICT) including digital, robotics and automation, Mining Technology and Transformation. Experience: Michelle has more than 20 years’ experience in the mining and manufacturing sectors with a focus on business improvement and change management. Most recently, she was CEO of Dassault Systems GEOVIA software division where she led a growth strategy across the company’s Natural Resources sector, delivering next-generation solutions through geologic modelling and mining engineering software applications. Prior to this, Michelle was Chief Innovation Officer at Barrick Gold. She is also a Board Member of Global Mining Group and technology start-ups Railveyor and Off World. Claire Parkinson Integration Executive Appointed: 18 October 2021 Priorities: Claire is accountable for guiding significant enterprise-wide change activity, connecting work streams and enhancing the level of integration across OZ Minerals. Experience: Working with OZ Minerals since 2016, Claire has acted in various roles including Head of Corporate Affairs, Innovation Strategy Lead and Change Execution Lead. Starting her career in the Criminal Justice Sector, Claire held roles as Prison Governor and Head of Operations for all London Prisons and Probation. Migrating from the UK to Australia in 2011, Claire then headed Justice Sector Reform for South Australia. Most recently, Claire ran her own strategic advisory company. Kerrina Chadwick Corporate Affairs Executive Appointed: 12 December 2016 Priorities: Kerrina is accountable for managing the company’s strategic approach to internal and external communications, brand, reputation, stakeholder engagement including investor relations, social performance, media, government, sustainability and reporting. Experience: Kerrina has more than 25 years’ experience in Corporate Public Affairs in prominent ASX listed companies including gold miner, Newcrest, and at retailer, Coles Group Limited. She began her career in the media followed by a period as a Ministerial advisor. Kerrina is a graduate of the AICD. Governance continued OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 20 Julie Athanasoff Group Manager Legal & Company Secretary Appointed: 12 July 2021 Experience: Julie holds a Bachelor of Laws from The University of Western Australia. Prior to joining OZ Minerals, Julie was a corporate advisory partner with Gilbert + Tobin and prior to that she was a partner with mining law firm, Blakiston & Crabb. Julie’s experience spans mergers and acquisitions, equity capital markets, and corporate governance matters, including continuous disclosure, director duties, and Corporations Act and ASX listing rules compliance. Robert Mancini Head of Legal & Company Secretary Appointed: 7 April 2021 Experience: Robert has been with the company since 2015. He brings a record of high-level legal and business experience to his role, including over 25 years of legal experience and leading in-house legal departments within the resources, oil and gas sector for over 15 years. He holds a Bachelor’s degree in both law and commerce. During his seven years at OZ Minerals, Robert has built a robust corporate compliance program and provided legal advice and analysis around ASX listing rules, contracts, transactions, acquisitions, disputes and employment matters. He also serves as the Lead of the Mineral Resources and Ore Reserves Corporate Team and the Continuous Disclosure Corporate Team. Robert works with senior management to advise on business and legal issues that shape the company. In 2016, the Doyles Guide, an independent guide to the legal profession in Australia, acknowledged Robert as a leading In-House Energy & Resources Lawyer in Australia. Company Secretaries Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 21 Directorsʼ Report OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 22 The Directors present their report for OZ Minerals Limited and its controlled entities (OZ Minerals or the 'Consolidated Entity') for the financial year ending 31 December 2022 (‘the year’) together with the Consolidated Financial Statements for the year. OZ Minerals Limited (OZ Minerals or the ‘Company’) is a Company limited by shares that is incorporated and domiciled in Australia. Directors The Directors of OZ Minerals Limited in office at any time during or since the end of the 2022 financial year and information on the Directors (including qualifications, experience and directorships of listed companies held by the Directors at any time in the last three years); and the number of Directors’ meetings held (including meetings of committees of the Board) and the number of meetings attended by each of the Directors of OZ Minerals during the financial year are set out under the governance statement on pages 15 to 18. Principal activities The principal activities of the Consolidated Entity during the year were the mining and processing of ore containing copper, gold and silver; sales of concentrate; undertaking exploration activities and the development of mining projects. For additional information on the activities of the Consolidated Entity, refer to the Financial Review section in the Directors’ Report (page 26). Significant changes in state of affairs 1. Proposed acquisition of all of the issued shares in OZ Minerals by way of scheme of arrangement under the Corporations Act 2001 (Cth) ('Scheme') by BHP Lonsdale Investments Pty Ltd ('BHP'), a wholly owned subsidiary of BHP Group Limited, with a Scheme Implementation Deed signed on 22 December 2022. The Scheme is subject to various conditions including approval by OZ Minerals shareholders at a Scheme meeting expected to be held in April 2023 2. Final investment approval to develop fourth operating asset, the West Musgrave copper-nickel project in Western Australia 3. Capacity of Prominent Hill hoisting shaft increased to 6.5Mtpa 4. Carrapateena cave safely propogated to surface 5. Agreed terms with Havilah Resources Limited for the option to acquire the Kalkaroo copper project in South Australia, with a study period of up to 18 months to evaluate the potential of the Kalkaroo project. The option period may be extended in certain circumstances, provided the option period does not exceed 30 months. Dividends The details relating to dividends announced or paid since 1 January 2021 are set out below: Table 1 – Dividends Record date Date of payment Fully franked Total dividends Dividend reinvestment plan (DRP) cents per share $m 1 September 2022 16 September 2022 8 26.8 No 25 February 2022 11 March 2022 18 60.2 Yes 24 August 2021 7 September 2021 16(a) 53.3 Yes 12 March 2021 26 March 2021 17 56.4 Yes (a) Included a special dividend of 8 cents per share. On 22 December 2022, OZ Minerals entered into a Scheme Implementation Deed with BHP Lonsdale Investments Pty Ltd ('BHP'), a wholly owned subsidiary of BHP Group Limited, in relation to the proposed acquisition by BHP of all of the issued shares in OZ Minerals by way of scheme of arrangement under the Corporations Act 2001 (Cth) ('Scheme'). The Scheme Implementation Deed permits, subject to certain conditions, OZ Minerals to declare and pay OZ Minerals shareholders a special dividend prior to implementation of the Scheme. Prior to the Scheme meeting (which is currently expected to be held in mid-April 2023), the Board intends to declare a fully franked special dividend of $1.75 per share, such dividend conditional on the Scheme becoming effective. If the Scheme does become effective the special dividend will be paid on the date the Scheme is implemented to OZ Minerals shareholders who hold OZ Minerals shares on the special dividend record date. The special dividend record date will be three days before the Scheme record date, with both record dates currently expected to be in late-April 2023. Assuming the special dividend of $1.75 per share is paid, the consideration payable by BHP under the Scheme will be reduced by this amount. OZ Minerals shareholders who hold shares on both the special dividend record date and the Scheme record date will receive total consideration of $28.25 per share on the date the Scheme is implemented, with $1.75 being a fully franked special dividend paid by OZ Minerals and $26.50 being Scheme Consideration paid by BHP. As stated above, if the Scheme does not become effective the special dividend will not be paid. In that case, the Board will continue to consider the payment of dividends against its current policy of paying sustainable dividends from pre-growth cash flow, after taking into consideration the Company’s near term identified capital investment opportunities and maintaining a strong balance sheet. Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 23 Directors' interest Table 2 – Directors’ interests in the ordinary shares of OZ Minerals Limited Director Shares number Rebecca McGrath 56,292 Andrew Cole 917,736 Tonianne Dwyer 19,900 Sarah Ryan 8,500 Charles Sartain 80,000 Richard Seville 16,750 Peter Wasow 20,000 Total 1,119,178 No rights or options over OZ Minerals Limited are held by any of our Non-executive Directors. Our Managing Director and CEO, Andrew Cole, holds rights over OZ Minerals Limited shares, granted under the OZ Minerals equity incentive offers. You can find more details about this in our Remuneration Report on pages 36 to 57. Officers The Executive Leadership Team and Company Secretaries of OZ Minerals Limited in office at any time during the 2022 financial year and their qualifications and experience are set out under the governance statement on pages 19 to 21. Environmental regulation OZ Minerals and its activities in Australia, Brazil and other international locations are subject to strict environmental regulations. OZ Minerals’ operations, development, exploration and concentrate shipping activities operate under various licences and permits under state, federal and territory laws in Australia, Brazil and other overseas jurisdictions. OZ Minerals regularly monitors its compliance with licenses and permits in various ways, including through its own environmental audits as well as those conducted by regulatory authorities and other third parties. OZ Minerals uses a documented process to classify and report any exceedance of a licence or permit condition as well as any incident reportable to the relevant authorities. All instances of reportable environmental non-compliance and significant incidents are reviewed by the Executive Leadership Team and the Sustainability Committee of the Board as a part of this process. A formal report is also prepared to identify the factors that contributed to the incident or non-compliance and the actions taken to prevent any reoccurrence. During the year, OZ Minerals submitted its energy and emissions report to the Clean Energy Regulator in accordance with the National Greenhouse and Energy Reporting Act 2007 (NGER Act). KPMG provided reasonable assurance over OZ Minerals’ energy and emissions report. KPMG has also provided limited assurance over selected metrics and disclosures made in this document and on the OZ Minerals website with reference to the Global Reporting Initiative Standard. KPMG’s assurance report is available on pages 67 to 68. The Company has not incurred any significant liabilities under any environmental legislation during the financial year. Insurance and indemnity During the financial year, OZ Minerals paid premiums with respect to a contract insuring Directors and Officers of the Company and its related bodies corporate against certain liabilities incurred while acting in that capacity. The insurance contract prohibits disclosure of the liability’s nature and the amount of the insurance premium. The Company’s Constitution also requires OZ Minerals to provide a full indemnity, to the extent permitted by law, to Officers of the Company or its related bodies corporate in relation to all losses, liabilities, costs, charges and expenses incurred by an Officer when acting in that capacity on behalf of the Company or a related body corporate. The Consolidated Entity has granted indemnities under deeds of indemnity with current and former Executive and Non-executive Directors, current and former Officers, the former General Counsel (Special Projects), the former Group Treasurers and each employee who was a Director or Officer of a controlled entity of the Consolidated Entity, or an associate of the Consolidated Entity, to conform with Rule 10.2 of the Constitution. Each deed of indemnity indemnifies the relevant Director, Officer or employee to the fullest extent permitted by law for liabilities incurred while acting as an Officer of OZ Minerals, its related bodies corporate and any associated entity, where such an office is or was held at the request of the Company. The Consolidated Entity has a policy that it will, as a general rule, support and hold harmless an employee who, while acting in good faith, incurs personal liability to others as a result of working for the Consolidated Entity. During the year and as at the date of this Directors’ report, no indemnity in favour of a current or former Director or Officer of the Group, or any auditor of the Consolidated Entity in their capacity as auditor of the Consolidated Entity, has been called on. Proceedings on behalf of OZ Minerals Limited At the date of this Report there are no leave applications or proceedings brought in respect of or on behalf of OZ Minerals Limited under section 237 of the Corporations Act 2001. Directorsʼ Report continued OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 24 Audit and non-audit services KPMG continues in office as OZ Minerals' external auditor in accordance with the Corporations Act 2001. A copy of the lead auditor’s independence declaration is set out on page 74 as required under section 307C of the Corporations Act 2001 and this forms part of the Directors’ Report. OZ Minerals, with the approval of the Audit Committee, may decide to employ the external auditor on assignments additional to their statutory audit duties where the auditor’s expertise and experience with the Consolidated Entity are important and where these services do not impair the external auditor’s independence. Table 3 – Amounts paid or payable to the external auditor (KPMG) and its network firms for audit and non-audit services Audit and review services $ Audit and review of financial statements - Group 606,200 Total fee for the audit and review services 606,200 Assurance services Sustainability and NGERS assurance 100,800 Other assurance services 15,000 Total fee for audit, review and assurance services 722,000 Other services Transaction advisory services 33,200 Total fee 755,200 Following the Audit Committee’s consideration of KPMG providing non-audit services and its subsequent recommendation to the Board, the Board is satisfied that provision of the non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the non-audit services provided by the auditor did not compromise the auditor independence requirements of the Corporations Act 2001 because: › all non-audit services were reviewed by the Audit Committee to ensure they did not impact the integrity and objectivity of the external auditor; and › none of the services undermined the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants. These include reviewing or auditing the auditor’s own work, acting in a management or a decision-making capacity for OZ Minerals or its controlled entities, acting as advocate for the Company or jointly sharing economic risk and rewards. Matters subsequent to the end of the financial year There have been no other events that have occurred subsequent to the reporting date that have significantly affected or may significantly affect the Consolidated Entity's operations, results of those operations or state of affairs in future years. Rounding of amounts The Company is of a kind referred to in ASIC Corporations Instrument 2016/191 (Rounding in Financial/ Directors’ Reports). Amounts in the Financial Statements and Directors’ Report have been rounded off in accordance with the Instrument to the nearest million dollars to one decimal place, or in certain cases, to the nearest dollar. All amounts are in Australian dollars, unless otherwise stated. Operating and financial review Our operations are reviewed on pages 10 to 14 and OZ Minerals Risk Management is on pages 30 to 35. These sections and the Financial Review (pages 26 to 29) form part of the Operating and Financial Review. Remuneration report The Remuneration Report which has been audited by KPMG is set out on pages 36 to 57 and forms part of the Directors’ Report. Business strategies and prospects for future financial years The Operating Review on pages 10 to 14 and the Financial Review on pages 26 to 29 of this document set out information on OZ Minerals’ business strategies. Information in the Operating Review and the Financial Review is provided to enable shareholders to make an informed assessment about the business strategies of OZ Minerals. Information that is likely to result in unreasonable prejudice to OZ Minerals, for example, information that is commercially sensitive, confidential or could give a third party a commercial advantage, has not been included. Other than the information set out in the Operating Review and the Financial Review, information about other likely developments in OZ Minerals’ operations and the expected results of these operations in future financial years has not been included. Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 25 Corporate governance The Board is committed to achieving and demonstrating the highest standards of corporate governance. The Board continues to refine and improve the OZWay Governance Framework and has practices in place to ensure they meet the interests of shareholders. The Corporate Governance Section (page 15 to 21), including details of directors and officers and Board meetings attended by Directors during the reporting period, forms part of this Directors' Report. Signed in accordance with a resolution of the Directors. Rebecca McGrath Chairman 22 February 2023 Andrew Cole Managing Director & CEO 22 February 2023 Financial Review OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 26 OZ Minerals is a modern mining company based in South Australia and is listed on the Australian Securities Exchange. Our strategy is to produce modern minerals from a portfolio of long life, low cost mines located in safe and stable countries. We are a growth company and we seek to create value for all our stakeholders: workforce, shareholders, communities, governments, customers and suppliers. We believe that only when we create value for all our stakeholders will we be successful and sustainable. Review of financial results FINANCIAL REVIEW OZ Minerals’ Net Profit After Tax (NPAT) for the year was $207.3 million compared to $530.7 million for 2021. Net Revenue was lower due to lower realised AUD copper prices, and lower production attributable to a number of one-off events in the first half of the year including adverse weather, materials handling system disruptions at Carrapateena, and COVID related absenteeism. With a large proportion of operating costs fixed in nature, the impacts to first half production together with inflationary pressures and supply chain disruptions resulted in unfavourable unit cost performance. The second half demonstrated a much improved production performance through programs implemented to address the disrupted first half, with progressively decreasing COVID absenteeism, a more continuous material flow and increased equipment availability leading to less constrained processing at Carrapateena, and Prominent Hill’s underground operations providing higher copper grades and elevating plant performance. Despite the impact to production and costs, the Company’s operating margin for earnings before interest, tax, depreciation, and amortisation (EBITDA) was 36 per cent, reflecting the maintenance of a strong operating performance despite the challenging operating environment in the first half. Whilst the US dollar copper price remained elevated for most of the year, market influences saw it decline late in the second quarter driven by concern over the risk of recession due to inflationary pressures. The gold price weakened during the first half with rising interest rates and a stronger USD, but high inflation and ongoing geopolitical risks increased prices in the fourth quarter. With commodity prices denominated in USD, the weaker AUD resulted in a marginally lower impact on net revenue. During the year, a significant number of construction and expansion activities were undertaken at all our operations as we implement our growth strategy, resulting in an increase to our Property, plant and equipment balances. The West Musgrave study progressed during the year with a positive final investment decision taken in September. Construction of Prominent Hill’s Wira Shaft expansion and Carrapateena’s Block Cave expansion continued to progress, with capital development and other related activities advancing throughout the year. The Company ended the year with a net debt position of $253.9 million (cash $136.7 million and debt of $390.6 million) after investment in growth projects and income tax payments. In May 2022, the corporate revolving credit facility was renewed for a further five-year period on favourable terms and was increased from $483.0 million to $700.0 million, providing an increased liquidity buffer and further funding flexibility to enable working capital liquidity management against revenue flows whilst we invest in our major brownfield expansion projects at Carrapateena and Prominent Hill. In October 2022 we entered into a new $1.2 billion, 18-month syndicated term loan facility with a number of our relationship banks to support the development of the West Musgrave Project. We made cash tax payments of $68.4 million and also paid dividends amounting to $78.6 million (net of the DRP) to shareholders. Variance analysis – Net Profit After Tax for the period ended 31 December 2022 $ million 530.7 530.7 (128.1) (128.1) (70.3) (70.3) 34.0 34.0 7.6 7.6 (176.4) (176.4) (87.0) (87.0) (29.9) (29.9) 126.7 126.7 207.3 207.3 NPAT for year ended 31 December 2021 Sales volume Sales price 2021 Gold Hedge TCRC and royalties Production costs Exploration and corporate development Other costs and income Tax and interest NPAT for year ended 31 December 2022 0 100 200 300 400 500 600 Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 27 REVENUE Gross revenue for the year (before treatment charges and refining costs) was $1,977.1 million, $198.4 million lower than the comparative period before gold hedging, mainly due to a reduced sales volume and weaker copper prices. Contained copper in concentrate sold was ~2 per cent (2,900 tonnes) lower while gold sold was lower by ~16 per cent (40,200 ounces). The lower gold sales were mainly the result of the depletion of high grade gold ore stockpiles at Prominent Hill in the prior year. The realised copper price in Australian dollars was ~7 per cent lower compared to the previous period, with gold ~7 per cent higher. A hedging loss on the high-grade gold stockpiles of $34.0 million was recognised within gross revenue in the prior period. REALISATION COSTS Treatment charges and refining costs (TCRCs) were $10.7 million higher due to lower copper concentrate grades combined with increased copper treatment and refining charges. Royalty expense decreased by $18.3 million, reflective of the reduced revenue. PRODUCTION COSTS Total production costs of concentrate sold were $176.4 million higher than the comparative period. The increase reflects the challenging operating environment with the one-off disruptions in the first half, inflationary pressures felt industry wide, and additional labour and equipment requirements for production optimisation. An extreme weather event during the first quarter and isolated conveyor belt failures at Carrapateena led to an increase in mining costs with repairs to the materials handling system (including the mobilisation of additional underground fleet to truck material to surface), and repairs to the Western Access Road. The impact of the downtime was partially offset by reduced power usage and running costs, together with opportune maintenance scheduling. Operating assets experienced COVID related disruptions and absenteeism requiring additional support from contractors, increased labour and equipment requirements for production optimisation, and industry wide inflationary pressures, including uplifts in hourly rates for both operator and maintenance crews as pressure amplified from the interstate market and turnover rates, and increases to diesel and utilities prices. A larger proportion of mining activity was attributed to production related activities at Carrapateena, resulting in a higher proportion of common costs expensed over capitalised development. The prior year result also included a $18.0 million benefit on restating ore stockpile values. At the Carajás East Hub, production costs were impacted by initial set-up costs for the Antas pit tailings deposition and improvements to the Pedra Branca logistics structure, together with general increases in insurance premiums and inflation. EXPLORATION AND CORPORATE DEVELOPMENT Exploration and corporate development expenditure of $143.3 million was incurred during the year net of $6.1 million received as part of the consideration for the Jericho/Eloise Joint Venture divestment. This was $87.0 million higher than the comparative period mainly due to payments relating to the Carajás Hub, the ramping up of activity following an easing of COVID related access restrictions to some tenements, and Kalkaroo spend of $6.9 million following the Havilah Resources transaction. Items of expenditure relating to the Carajás Hub included: › Production based contingent payment for the Pedra Branca mine $14.5 million › Acquisition costs for the Pantera project $20.3 million › Tenement holdings review $16.4 million › General exploration and development expenditure $25.6 million. TAX, INTEREST AND OTHER Income tax expense of $102.9 million was $123.0 million lower than the comparative period mainly due to a reduced profit position. The net financing expense of $35.4 million marginally decreased by $3.7 million with the capitalisation of $9.8 million of borrowing costs related to growth projects with increased utilisation of the corporate revolving credit facility over the period. Other expenses and income increased by $29.9 million over the comparative period due to lower foreign exchange gains than the prior year of $12.2 million, an increase in corporate general and administration costs of $16.7 million mainly due to the general market increase in insurance premiums and costs related to the proposed BHP acquisition, and lower other income of $1.0 million. Financial Review continued OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 28 Cash flow analysis Cash balance and cash flow for the period ended 31 December 2022 $ million 215.4 215.4 647.6 647.6 224.5 224.5 (951.0) (951.0) 0.2 0.2 136.7 136.7 Opening 1 January 2022 cash balance Operating activities Financing activities Investing activities Effect of exchange rate changes Closing 31 December 2022 cash balance 0 300 600 900 1,200 OPERATING CASH FLOWS Operating cash flows of $647.6 million for the year were $323.4 million lower than in the comparative period. Customer receipts during the year were lower by $135.9 million in line with lower revenues and timing of receivables. Payments to suppliers and employees were higher, reflective of a full period of ramped up operations at Carrapateena and the Carajás, the impact of inflationary pressures, one-off production events in the first half of the year and the focus on production optimisation. Higher freight costs also contributed to the increase in payments. Payments for exploration and corporate development increased by $46.6 million, reflecting payments made in relation to the Carajás Hub and increased exploration activity during the year. Progressive tax payments were lower than the comparative period with lower tax expense for the current year, and the application of a deduction under the temporary full expensing provisions announced in the 2021 Federal Budget, in so far as it applies to certain assets. Financing costs included in operating cashflow decreased marginally during the year by $3.3 million, mainly due to capitalisation of $9.8 million of borrowing costs related to growth projects with increased utilisation of the corporate revolving credit facility over the period, and a reduction in lease finance charges on powerline infrastructure, offset by new service contracts accounted for as right of use assets. INVESTING CASH FLOWS Net investing cash flows of $951.0 million were attributable to investments in our brownfield expansion projects at Carrapateena and Prominent Hill, mine development and sustaining capital expenditure at all our operations, and investment at West Musgrave. Payments incurred included: › Carrapateena Plant and Equipment, and mine development costs $358.3 million › Prominent Hill development $235.5 million › West Musgrave costs $165.8 million › Sustaining capital expenditure $114.7 million › Carajás East capital expenditure $29.8 million FINANCING ACTIVITIES Net cash inflows relating to financing activities were $224.5 million, comprising $375.0 million utilisation of the company’s corporate revolving credit facility and $15.6 million utilisation of the West Musgrave syndicated term loan facility; partly offset by $78.6 million dividend (net of the DRP) paid to shareholders; and $87.5 million in lease principal repayments. Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 29 Balance sheet The total equity of the Group increased by $182.9 million to $3,912.6 million. The increase was mainly the result of the net profit performance for the year of $207.3 million, an increase in foreign currency translation reserve due to the weaker AUD of $30.7 million, share based payments of $25.8 million; partially offset by dividend payments of $78.6 million (net of DRP). The Company ended the year with a net debt position of $253.9 million (cash of $136.7 million and borrowings of $390.6 million) after investment in brownfield and greenfield growth projects, net of $375.0 million drawdown on its corporate revolving credit facility, and $15.6 million drawdown on its West Musgrave syndicated term loan facility. The Group revolving credit facility was extended in May 2022 for a further five years, increasing by $217.0 million to $700.0 million, and in October 2022 the Group entered into a new $1.2 billion, 18-month syndicated term loan facility to support the development of the West Musgrave Project. During the year, net operating cashflows were invested in ongoing growth projects at Carrapateena, Prominent Hill and West Musgrave; investment in Property, Plant and Equipment (PP&E); tax payments; and dividend payments to shareholders. The West Musgrave asset was reclassified from an exploration asset to a development asset triggered by a final investment decision in September. The Group had a $56.6 million tax receivable balance following finalisation of its December 2021 income tax liability and an assessment of its eligibility for a deduction under the temporary full expensing provisions announced in the 2021 Federal Budget, in so far as it applies to certain assets. Inventories at 31 December 2022 were $359.1 million, a reduction from the comparative period as stockpiled open pit material continues to supplement Prominent Hill's underground production. Trade Receivables increased because of timing of shipments. PP&E and Exploration assets increased during the year due to capital expenditure at Carrapateena, continuing capitalisation of underground development at Prominent Hill, capitalised West Musgrave costs, and general sustaining capital expenditure. Additional right-of-use (ROU) lease assets and liabilities were recognised during the year associated with the recognition of a lease in relation to aviation services for a five year period, ending in 2027. The movement in the net assets of the Company for the year ended 31 December 2022 is provided below. Balance sheet movement for the year ended 31 December 2022 $ million 3,729.7 3,729.7 (78.7) (78.7) (49.6) (49.6) 59.5 59.5 759.3 759.3 15.8 15.8 (94.8) (94.8) (390.6) (390.6) (38.0) (38.0) 3,912.6 3,912.6 Net Assets 31 December 2021 Cash Inventory Trade Receivables PP&E and Exploration assets Net lease and other assets Trade payables Borrowings Tax and other liabilities Net Assets 31 December 2022 2,500 3,000 3,500 4,000 4,500 5,000 The Company recognises that timely identification and management of opportunities and threats are fundamental to sound management and superior outcomes for our stakeholder groups. OZ Minerals’ operating performance, financial results, and Strategy delivery are subject to a wide range of risks. These risks comprise political, environmental, social, market, economic, strategic, and operational factors which create both threats and opportunities for the Company. Proactively minimising threats and maximising opportunities allows us to manage both sides of risk. The Company manages existing, new and emerging risks as an integrated part of our operating environment to minimise adverse impacts and optmise beneficial outcomes. Through our Risk Management Framework, emphasis is placed on risk-aware decision- making to deliver our Strategy, and contribute to the achievement of value creation for our six stakeholder groups and our Purpose of Going beyond what’s possible to make lives better. Risk management accountability and oversight is a central part of our OZWay Governance Framework. The Board, its Committees and the Executive Leadership Team oversee risk management. Collectively, they are responsible for ensuring the Company maintains an effective risk management and internal control environment, with risks assessed according to the potential impact on each stakeholder. Risk management oversight and governance The Board sets the Company’s risk appetite and oversees the management framework and effectiveness of the systems of internal control and risk management. The Board reviews the Risk Framework and appetite to ensure it remains adequate to identify and manage threats and opportunities. It also reviews and monitors the Material Risks of the Company. Reporting of Material Risks to the Board includes an overview of Company risks, a summary of key changes to the risk profile, critical control updates, and the actions implemented to reduce the level of uncertainty and improve the manageability of risks. The Board requires the CEO and Executive Leadership to implement a system of controls for identifying, assessing, managing, and reporting risks in line with the Risk Management Framework. BOARD MANAGEMENT The Executive Leadership Team (ELT) is responsible for the effective implementation of the Risk Management Framework and system of control for identifying, assessing, managing, and reporting risk across the Company. The ELT reviews, and the CEO approves, the risk profile for the organisation and ensures Assets and Corporate Functions embed risk management process, practice, and culture into everyday business systems and activities. CORPORATE RISK FUNCTION The Corporate Risk Function supports and champions the implementation of the Risk Management Framework, ensures risk management is embedded into core business processes, and builds risk management capability and a risk-aware culture across the business. The Corporate Risk Function oversees OZ Minerals’ Risk Management Framework and develops, governs, supports and reports on the effective implementation of risk management to the ELT, the Board and its Committees. BOARD COMMITTEES Committees review risk management reports covering risks, controls and actions to manage risks to the business within their respective remits AUDIT COMMITTEE › Financial reporting › Audit › Disclosure processes › Cyber & digital risk › Internal financial controls › Funding SUSTAINABILITY COMMITTEE › HSEC – Health, Safety, Environment & Community › Social performance › Climate change › Cultural heritage › Human rights › Compliance & Regulation PEOPLE & REMUNERATION › Performance management › Company culture › Succession planning › Rewards & remuneration › Diversity & inclusion NOMINATION COMMITEE › Board composition › Director & CEO succession & development › Board performance Risk Management OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 30 Risk and control owners apply Process and Performance Standards to identify risks, implement controls and verify control effectiveness Statutory and Regulatory Audits conducted by third parties Internal Audits conducted in accordance with an approved Internal Audit Plan Asset and Corporate Function Leads validate first line activities to assure risks are managed effectively IDENTIFY AND IMPLEMENT ENABLE AND MONITOR INDEPENDENT THIRD LINE ASSURANCE EXTERNAL AUDITS 04 03 02 01 RISK MANAGEMENT AUDIT AND ASSURANCE Our risk approach and culture The Company uses risk management to plan and prioritise our work and support key decision making in line with our Risk Management Framework at all levels. The Framework enables us to focus on informed risk-based work activities that create value for all stakeholders, eliminate non-value adding tasks and allow fast and calculated decisions to be made at the right level in line with our risk appetite. In 2022, we initiated a Risk Evolution Project to drive further risk maturity across the business. The Project takes a ‘whole-of-system’ approach to protect and enhance value to support growth and performance. The Project is focused on improving risk maturity across the board with further development of risk artefacts, processes and outcomes. Management is continuing to mature the Company’s approach to risk, focussed on developing and owning a top-down (Context) and bottom-up (Performance) risk system. Under this system, all Performance risks are assessed as risks to the base case reflected in our annual Business Plan. A review of Context Risks and draft controls formed a core component of the Board Strategy sessions in 2022. Material risks Management undertakes a regular review of the Company’s risks and refer outcomes to the Board. Material risks are subsequently managed in the context of supporting the successful delivery of OZ Minerals' Strategy and Business Plan. Discussion of material risks ADVANCED TECHNOLOGY AND ITS APPLICATION The rate at which technology is advancing means it is no longer a barrier for organisations. This is due to shorter lifecycles, lower deployment costs and reduction in Intellectual Property constraints, and has resulted in a shift in how technology can be applied by organisations to enhance not only what they do, but how they do it. For OZ Minerals, taking advantage of the pace of technological change has the potential to enable us to: › operate and adapt faster › create greater value faster for our stakeholders › build a culture and workforce that is adaptive, innovative and able to continually use emerging technology to improve what we do and how we work. Technology provides us with an advantage in the short-term, if improvements are easily replicated, and a longer-term advantage if we are able to disrupt the industry via technological application. Technology has also enabled a proactive response to the accelerated focus on Environmental, Social and Governance (ESG) themes and is recognised as a critical enabler to accelerate our Strategic Aspirations of being a data-driven Modern Mining Company that ethically and responsibly mines copper and other minerals that contribute to a low carbon future. Our technology focus and innovative approach include health and safety, decarbonisation and electrification, process and decision intelligence, automation and ways of working. Our unique innovation approach is aimed at attracting the best expertise inside and outside the industry sector to find new and efficient ways to solve complex challenges while maximising value creation. However, there can be no assurance that OZ Minerals will be able to continue to attract or retain capable staff to drive innovation. OZ Minerals operates a four-level line of defense in risk management governance model Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 31 CYBER SECURITY The impact of cyber security incidents on privacy in Australia has been widely publicised through incidents involving large corporate organisations. The exposure of personal data leads to malicious activities such as extortion, targeted phishing and identity theft. The increasing rate of technology advancement and dependency on it, as well as greater accessibility, has resulted in a greater actual and potential negative impacts on organisations and individuals. The growing volume and sophistication of cyber threats, both locally and globally, is increasing the likelihood of compromised data. The regulatory landscape continues to evolve, placing further obligations on organisations. More control is also being given to individuals and increasing the penalty regime for organisations who experience security breaches. We recognise that our increasing use of data and digital technology is an immediate threat that can result in potential safety, reputation and financial harm when things go wrong, either due to malicious intent or by accident. We continually monitor for cyber threats and have various data loss prevention controls to safeguard data. We have also taken significant steps in investment to elevate our control strategies for the prevention, detection, response and recovery of our digital assets. STAKEHOLDER AND SOCIETAL EXPECTATIONS There are increasing expectations around the quality and method of production for both final products and the components along their full value chain. Furthermore, society now expects companies to deliver financial returns and to have net positive impacts on the environment and society more broadly. OZ Minerals and our contracting parties’ performance may directly, indirectly or cumulatively adversely impact the social, economic and cultural values of stakeholders and communities. This can affect access to land and resources, delay approvals and ultimately impact the delivery of our Strategy. Our success depends on how we partner with stakeholders to co‑develop specific and fit-for-purpose processes based on transparent, fair and informed consent that drives value creation for the businesses and the community. At OZ Minerals, we have begun embedding a higher purpose and our unique value creation approach in our governance framework, resulting in an opportunity to create greater value and perform above expectations of stakeholders. CLIMATE CHANGE The physical and non-physical impacts of climate change may affect OZ Minerals’ Assets, our productivity, the markets in which we sell our products, and the communities in which we operate. Risks related to the physical impacts of climate change include acute risks resulting from increased severity of extreme weather events and chronic risks resulting from longer-term changes in climate patterns. Non-physical risks arise from a variety of policy, regulatory, legal, technology, financial and market responses to the challenges posed by climate change and the transition to a lower-carbon economy. Any changes to government regulation or policy relating to climate change, including changes relating to greenhouse gas emissions or energy intensive assets, may directly or indirectly impact costs and operational efficiency. Climate change and emissions reductions have continued to increase in materiality across the sector, creating a range of opportunities and threats. The impacts of climate change and emissions reductions have been integrated into our Strategic Aspirations, one of which is to produce products that are high purity, support a decarbonising world, have a zero carbon footprint and are traceable from mine to end user. We continue to work closely with key stakeholders on issues relating to climate change and emissions reductions. OZ Minerals is exposed to some climate related risks within our assets, such as a risk to delivery of plans, including against OZ Minerals’ stakeholder value creation metrics. The physical impacts of climate change continue to manifest rapidly in the form of extreme weather events such as increasing temperatures, increasing rainfall and flooding. The occurrence of such events could have an adverse effect on the operations of the OZ Minerals business. Decarbonisation represents a strategic opportunity for OZ Minerals. We produce copper and nickel, minerals critical for a decarbonising world. The opportunity is to responsibly produce these commodities. We are actively working on reducing our carbon footprint and published our Decarbonisation Roadmap in February 2022 which sets out a pathway to a 50 per cent reduction in emissions by 2027 and to achieve net zero1 Scope 1 and Scope 2 emissions by 2030. WORKFORCE SUPPLY Macroeconomic conditions caused by COVID-19 have forced a new and accelerated approach to workforce management. There are more open roles in major developed economies than there are people looking for work, providing leverage for the workforce for the first time in many decades. This leverage is enabling the workforce to exercise choices in a number of areas. Workers are reporting a strong desire to retain control over their personal life that flexible hours and remote working during the pandemic has given them. They are also more driven towards looking for purposeful work in a company that cares with a culture they can thrive in. Labour supply tensions have resulted in significant workforce movement in lower paying roles, where there has traditionally been stagnant real wage growth. 1. Our approach requires all technically and economically feasible emissions reduction options to be exhausted prior to the application of certificates, in the form of offsets and/or renewable energy certificates. Risk Management continued OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 32 In addition, some of the employees at OZ Minerals’ Assets are represented by labour unions under various collective labour agreements. OZ Minerals (or its relevant joint venture partners) may not be able to satisfactorily renegotiate collective labour agreements when they expire and may face higher wages and changes in benefits. In addition, existing labour agreements may not prevent strikes or work stoppages in the future, and any strike or other work stoppage could have an adverse effect on the operations and financial results of OZ Minerals. A lack of cross-border workers has been exacerbated by higher turnover and a net loss of industry knowledge requiring the industry to pivot to distributed responsibility and leadership across almost all roles while positioning it as an attractive sector for the next generation of workers. Societal risks and mental health are similar factors. Attracting top talent for the future will require further focus on a diverse, inclusive and continuous improvement culture. In response, we have adapted our operating model to manage activities in a more agile way, increasing flexibility and evolving application of our Fly-In-Fly-Out labour pool. OZ Minerals has many of the foundational elements in place to be a powerful talent attractor due to an existing focus on creating value for stakeholders, including our workforce. Responding to the needs of the workforce also provides an opportunity for us to challenge existing ways of working for the better. COMMODITY MARKET CYCLE Commodity markets are influenced by a broad range of macroeconomic conditions that can influence trade flows, supply, demand and price. Commodity market cycles can have significant negative impacts on organisations but can also provide material opportunities during peaks, troughs and mid-curve with the cycle. An increase in demand for zero emissions energy is expected to increase the demand for copper and nickel. The long-term commodity price outlooks under the Paris-Agreement goals continue to reflect copper and nickel benefiting from the rapid pace of electrification, which has been accelerated under the current government policy. However, threat exposure may increase due to a rise in inflation, shortage of critical labour skills and global supply chain costs due to the operating environment and geopolitical tensions. OZ Minerals ensures a resilient, adaptive and high performing business to provide an opportunity to make use of commodity cycles with the potential to diversify into other strong performing minerals while optimising the risk/return trade-off. INFLATION, PRODUCTIVITY AND SUPPLY CHAIN Long term structural trends combined with an increasing rate of change has resulted in increased costs globally. As a result of global events, short term inflationary cycles are being felt across industries with ties to COVID-19 and the Ukraine/Russia war. In the short term, OZ Minerals has been impacted by labour shortages and increased absenteeism as a result of COVID-19. Input costs have been impacted by a range of supply chain factors over the year. In the long term, this will be offset by our ability to outperform peers via relatively higher productivity achieved through the successful application of new technology and leveraging The OZWay. GEOPOLITICAL INSTABILITY A combination of global and regional geopolitical tensions combined with COVID-19 related supply constraints have the potential to impact the industry. Threats of trade wars between global leaders, the rise of global movements protesting matters from racial injustice to climate change to COVID-19 restrictions means the current global political environment remains dynamic and fraught with contentious issues. Emerging impacts across the mining sector include cost inflation and availability of critical labour skills and equipment. OZ Mineral’s operations could be adversely affected by government actions, political instability or trade restrictions involving countries in which it has operational exposures (such as Brazil), investment or exploration interests, or into which it makes sales (in particular, countries in Asia). These circumstances include, but are not limited to, the introduction of, amendment to or changes in the interpretation of legislation, guidelines and regulations in relation to mining and resources exploration and production, industrial materials processing, taxation, the environment, carbon emissions, competition policy, export duties, and import duties, tariffs, quotas, bans or restrictions, as well as an inability to ensure the security of our assets and people. Such actions could impact land access, the granting of licences and permits, the approval of project developments and ancillary infrastructure requirements, the sale of products, the supply of materials, and the cost of compliance. Any such government action may require increased capital commitments in order to ensure compliance or could delay or even prevent certain operation/activities of OZ Minerals. Such actions could therefore have a material adverse effect on OZ Minerals’ financial standing. We continually review availability with our supply partners and collectively identify controls to manage our exposure through initiatives such as forward ordering and alternative supply options. OPERATIONAL RISK The ability of OZ Minerals to meet operating (including production targets) and capital expenditure estimates has uncertainty. These uncertainties are more pronounced over a longer period. OZ Minerals’ assets and mining operations are subject to uncertainty with respect to, among other things, ore tonnes, grade, metallurgical recovery and impurities, ground conditions, operational environment, funding for development, availability of power supply, regulatory changes, accidents, contractual risks and other unforeseen circumstances such as unplanned mechanical failure of plant or equipment, cyclones, storms, floods, bushfires or other natural disasters, or outbreaks, continuations or escalations of disease (including pandemics). Costs of production may be affected by a variety of factors, including changing waste-to-ore ratios, geotechnical issues, unforeseen difficulties associated with power supply, water supply and infrastructure, ore grade, metallurgy, labour costs, changes to applicable laws and regulations, general inflationary pressures and currency exchange rates. OZ Minerals’ revenue could also be adversely impacted by increased prices for diesel, reagents and other supply chain factors, commodities, increased cost of labour, and other input costs. These circumstances could result in OZ Minerals not realising its operational or development plans, or in such plans costing more than expected, or taking longer to realise than expected. Any of these outcomes could have an adverse effect on OZ Minerals’ financial and operational performance. Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 33 HEALTH AND SAFETY There are numerous occupational health and safety risks associated with mining processes such as travel to and from remote operations, the operation of heavy and complex machinery in challenging geographic locations and exposure to hazardous substances. These hazards may cause personal injury and/or loss of life to OZ Minerals employees, contractors, suppliers, customers or other third parties, damage to property and contamination of the environment, which may result in the suspension of operations and the imposition of civil or criminal penalties, including fines, expenses for remediation and claims brought by governmental entities or third parties, as well as reputational damage. BALANCE SHEET, LIQUIDITY AND FUNDING OZ Minerals’ continued ability to operate our business and effectively implement our Business Plan over time will depend in part on our ability to raise additional funds for future operations and to repay or refinance debts as they fall due. At present, no assurance can be given that any such additional financing will be available or that, if available, it will be available on terms acceptable to OZ Minerals or OZ Minerals’ Shareholders. If additional funds are raised through the issue of equity securities, the capital raising may be dilutive to OZ Minerals Shareholders (if OZ Minerals determines that a pro-rata entitlement offer is not the most appropriate method of equity fundraising or shareholders elect not to participate in such entitlement offers) and such securities may, subject to any requisite shareholder approval, have rights, preferences or privileges senior to those currently holding OZ Minerals’ shares. While OZ Minerals will be subject to the constraints of the Listing Rules regarding the percentage of capital that it is able to issue within a 12 month period without shareholder approval (other than where exceptions apply), OZ Minerals’ Shareholders at the time may be diluted as a result of such issues of OZ Minerals shares. OZ Minerals has existing debt facilities. In the future, OZ Minerals may need to renegotiate or refinance the terms of these debt facilities or may seek further facilities or replacement facilities with alternative financiers to satisfy our capital requirements. The terms on which debt financiers are willing to offer finance may vary from time to time depending on macro-economic conditions, the performance of OZ Minerals and an assessment of the risks and intended use of funds. Debt finance, if available on terms acceptable to OZ Minerals, may involve restrictions on financing and operating activities. If sufficient funds are not available from either debt or equity markets to satisfy the OZ Minerals’ short, medium or long-term capital requirements, when required, this may adversely impact OZ Minerals’ operations, financial performance and financial position. CORPORATE AND REGULATORY COMPLIANCE Companies engaged in the development and operation of mines and related facilities are subject to increased costs, and delays in production and other schedules as a result of the need to comply with applicable environment and planning laws, regulations and permitting requirements. There can be no assurance that approvals and permits required to commence construction, development or operation of OZ Minerals’ exploration and development projects will be obtained. Additional permits, studies and approvals will need to be obtained or completed prior to operation of OZ Minerals’ exploration and development projects. These may include the requirement for environmental impact studies to be conducted before permits can be obtained. There can be no assurance that OZ Minerals will be able to obtain or maintain all necessary licences, approvals and permits that may be required to commence construction, development or operation of our projects promptly to avoid delays in production and other schedules or on terms which enable operations to be conducted at economically justifiable costs. Company risk categories and material risks The allocation of our Material Risks against the Company’s primary risk categories is shown in the following table. In identifying our Material Risks, we have considered the likelihood and potential impact of the related events. Key changes to our inherent Material Risks during the financial year, primarily due to the external environment and ongoing global instability are presented within the following table. Changes are determined based on the inherent risk before the application of controls and response plans to reflect these uncertainties. The Company applies strategic controls and actions to prevent, reduce or mitigate downside risk events and increase the likelihood of opportunities being realised. Risk Management continued OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 34 Changes to our Material Risks in 2022 GROWTH PROJECTS PEOPLE CORPORATE AFFAIRS SOCIAL PERFORMANCE SUSTAINABILITY & ENVIRONMENT TECHNOLOGY FINANCIAL MANAGEMENT & GOVERNANCE SUB-CATEGORIES PRIMARY CATEGORY Financial Planning & Forecasting (inc. Cost Control) Balance Sheet, Liquidity Funding & Insurance (incl. credit risk) Business Performance Monitoring & (internal / external) Reporting Capital Allocation & Planning Geopolitical Stability / Macroeconomics Tax Management LEGAL Corporate & Regulatory Compliance Bribery & Corruption Contracts & Agreements (inc. counterparty risk) Litigation OPERATIONS Plan Execution & Optimisation Asset Expansion & Augmentation (inc. Ops Readiness) Asset & Critical Infrastructure Integrity & Performance Ops Logistics, Supply Chain & Procurement Production Planning & Forecasting Orebody Knowledge (geology, geotech., hydrology) Concentrate Quality Health, Safety & Wellbeing (inc. Fatality Risks) Employee Relations Strategy Formation, Planning & Acceleration (inc. Competitor & Market Intelligence) Customer Expectations, Sales & Marketing Joint Ventures & Strategic Partnerships Brownfields & Provincial Exploration Mergers, Acquisitions, Divestments & (Dis)Integration Greenfield Exploration Commodity Market Cycles & Portfolio Returns Early Studies Strategy & Development Project Execution (inc. Contractor & Partner Strategy) Advanced Studies Strategy & Development Project Optimisation Strategic Sourcing Organisational Culture Government Engagement Brand & Communications (Internal & External) Shareholder & Market Expectations & Engagement Land Access & Tenure (inc. Mining Leases) Cultural Heritage Human Rights / Modern Slavery Community & Societal Expectations Decarbonisation & Climate Change Adaptation Closure & Rehabilitation Emissions. Water & Waste Management Land & Eco- System Impacts Digital Security, Data & Privacy Management Digital Innovation & Transformation Digital Integration / Automation & Robotics Digital Systems Availability & Reliability Data Integrity (Relevancy & Accuracy) Mining Value Chain Technologies (Mineral Extraction, Processing & Energy) Decreased threat Increased threat No material movement Increased opportunity Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 35 Remuneration Overview and Report OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 36 Letter from the Chair of the People and Remuneration Committee DEAR SHAREHOLDERS, On behalf of the Board of Directors, I am pleased to provide you with the 2022 Remuneration Report for OZ Minerals. 2022 was a challenging year from an operational perspective with adverse weather conditions, supply chain challenges and the effects of over a half a year of COVID related absenteeism necessitating a revision to production and cost guidance. However, the adaptability of our culture and workforce enabled us to recalibrate performance and deliver against revised guidance including record group quarterly copper production in Q4 with Prominent Hill exceeding its original copper guidance for an eighth consecutive year. Considerable progress was also made on our growth strategy with the West Musgrave copper nickel project approved and now in construction, expansions at both Prominent Hill and Carrapateena well underway and Pedra Branca mine ramped up to full production ahead of schedule. Our quality long life assets, our demonstrated ability to deliver a growth portfolio and our agile culture of innovation and collaboration ultimately resulted in the proposal by BHP to acquire OZ Minerals for $28.25 per share, marking considerable value creation for shareholders. 2022 Stakeholder Value Creation Outcomes Our focus on value creation for multiple stakeholder groups is a key differentiator for OZ Minerals and has been at the core of our Strategy since 2015. In 2022 we reviewed the Company’s Strategy, evolving our focus from Copper to Modern Minerals, adding a sixth stakeholder group of ‘Customers’ and broadening our ‘Employee’ stakeholder group to 'Workforce' to reflect the importance of all people who contribute directly to OZ Minerals' success. Our stakeholder value creation metrics were first published in our 2020 Annual & Sustainability Report and inform targets in our Executive remuneration framework. They are an important performance assessment tool that focusses our work and behaviour and support the achievement of our Purpose, Going beyond what’s possible to make lives better. We have shown how our performance against these metrics has created value for our stakeholder groups (page 5). 2022 shareholder value creation highlights: › Net Profit After Tax of $207.3m. › Interim dividend of 8 cents per share paid in September 2022. The Board has not declared a final dividend for 2022 but intends to declare a special dividend in connection with the Scheme before the Scheme meeting, conditional on the Scheme becoming effective. Full details are set out in the Scheme Booklet to be sent to shareholders in early March. › Total shareholder returns of 167% over the 3 year period of 1 January 2020 to 31 December 2022, finishing the period at the 85th percentile of our peer group. › Advancing our organic growth projects to unlock province potential with progression of the Carrapateena Block Cave and Prominent Hill Wira Shaft expansions. › The acquisition in August of an option to acquire the Kalkaroo project, one of the largest undeveloped copper-gold deposits in Australia. › Commencing construction on the West Musgrave Project following a positive Final Investment Decision in September. › Ramp up of Pedra Branca ahead of schedule and an accelerated study program for the Santa Lucia project. › Publication of our Decarbonisation Roadmap and the completion of the Scope 3 Reduction Plan which focuses on a data centric, multi year phased approach to identifying and mitigating Scope 3 emissions. › An increase in our MSCI ESG rating from 7.9 to 8.5, maintaining our classification as AA. Of course, from a shareholder perspective, the most significant event to occur in 2022 was the proposal by BHP to acquire OZ Minerals. The Board rejected an initial approach in August at $25 per share but following a period of engagement the Board reached agreement with BHP to recommend a proposal at $28.25 per share representing a premium of 49.3% to the closing share price on 5 August 2022, subject to the independent expert concluding and continuing to conclude that the transaction is in the best interests of shareholders, and there being no superior proposal. Full details of BHP's proposal will be sent to shareholders in a Scheme Booklet in early March ahead of a Shareholder meeting to pass a resolution approving the Scheme which is anticipated to be held in April 2023. Remuneration outcomes in 2022 In assessing remuneration outcomes during 2022, the Board believes the following outcomes are a strong reflection of the Company’s performance and are aligned with the experience of shareholders: › Executive salaries were increased as communicated in last year’s report, in line with our remuneration philosophy and supported by market data. › Notwithstanding our notable achievements outlined above, we were disappointed that our total recordable injury frequency rate (TRIFR) increased from 4.40 in 2021 to 6.99 in 2022. Whilst there were several contributing factors (workforce turnover, challenging underground operating conditions and a ramp up in both greenfield and brownfield execution activities), a deterioration in TRIFR is an unacceptable trend and this along with the need to revise production and cost guidance is reflected in the score of zero for the EBITDA, production and safety components of the Company scorecard resulting in a Corporate Performance score of 2.18 out of 5. The details can be found in section 3.2. The impact of these adjustments is reflected in the Short Term Incentive (STI) payments which are also detailed in section 3.2, demonstrating clear links between business performance and remuneration outcomes. › Reflecting Company performance and his leadership of OZ Minerals through a milestone year, an STI award of 49 per cent of his maximum STI opportunity ($771,750), was made to the Managing Director & Chief Executive Officer, Andrew Cole. › Corporate and individual performances resulted in the award to the CFO / Finance & Governance Executive Lead, Warrick Ranson, of 63 per cent ($422,100), to the Operations Executive Lead, Matthew Reed of 60 per cent ($371,875), to the Strategy & Growth Executive Lead Bryan Quinn(1) of 70 per cent ($320,178) and to the Projects Executive Lead Debbie Morrow(2) of 67 per cent ($157,013) of their maximum STI opportunity. No STI award was made to the former Projects Executive Lead Mark Irwin who left the business in May 2022. Thirty per cent of the 2022 STI awards have been paid in performance rights vesting in normal (1) Mr Quinn was appointed as KMP upon commencement with OZ Minerals on 11 April 2022. (2) Ms Morrow was appointed as KMP upon commencement with OZ Minerals on 15 August 2022. Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 37 circumstances after two years. Treatment of these performance rights in the event of a change of control is addressed below. › The 2020 LTI performance rights vested at 100 per cent in December 2022 following top quartile relative Total Shareholder Returns (rTSR) (85.71 percentile) and strong All-in Sustaining Costs (AISC) performance (132.4 USc/lb) over the three-year performance period. This resulted in the vesting of 128,287 performance rights for Andrew Cole, 49,519 for Warrick Ranson and 37,775 for Mark Irwin(1) . Details can be found in section 3.3. The one-off grant of 19,296 Performance Rights made in 2021 to Mark Irwin lapsed following his departure. Remuneration changes for 2023 In accordance with our usual practice, during the second half of the year, we conducted a review of employee and Executive salaries with the Board resolving to approve a Company-wide remuneration review of four per cent with effect from 1 January 2023 and for that to apply also at Executive level. Accordingly, the Board resolved to increase the fixed remuneration of: › Managing Director & CEO, Andrew Cole, from $1,050,000 to $1,092,000. Mr Cole's fixed remuneration remains low by comparison with peers. › CFO / Finance and Governance Executive Lead, Warrick Ranson, from $670,000 to $700,000 noting that Mr Ranson received a 4.5% increase to ensure his remuneration remained in line with market peers. › Operations Executive Lead, Matthew Reed, from $625,000 to $650,000. › Strategy and Growth Executive Lead, Bryan Quinn, from $630,000 to $655,000; and › Projects Executive Lead, Debbie Morrow, from $620,000 to $645,000. Further, in accordance with our remuneration framework and our usual practice, Key Management Personnel (KMP) will be issued performance rights under 2023–25 LTI offers with vesting measures unchanged from 2022 namely, 60 per cent by rTSR and 20 per cent by each of AISC and Environment, Social and Governance (ESG) performance. Similarly, there will be no changes to the comparator group. In October 2022, the Board reviewed Non-executive Directors' fees and determined to increase, with effect from 1 January 2023, the Board Chair’s fee to $425,000 per annum and the Board base fee received by other Non-executive Directors to $160,000 per annum, noting that the last increase in these fees was 1 January 2021. These fee increases will increase overall Board remuneration by approximately $100,000 per annum representing an overall increase of seven per cent. Remuneration implications of the approval of the Scheme Treatment of all outstanding performance rights in the event of a change of control will be addressed in the Scheme Booklet in relation to the BHP proposal to be issued to shareholders in early March 2023. In summary, should the Scheme be approved, it has been agreed with BHP that all outstanding performance rights (including those issued in relation to outstanding LTI, STI and Performance Rights plans) will vest in full but excluding performance rights granted under the 2023 LTI offer to Executive KMP. In accordance with Accounting Standards, a provision has been made in the accounts for 2022 for the remuneration consequences of the Scheme resulting in an incremented charge of $1.7 million in relation to Executive KMP. Further details are provided in section 5. In the case of the 2023 STI awards, if the Scheme is approved and completes during the 2023 financial year, pro-rata STI awards will be assessed and paid on the basis of Company and individual performance for the period from 1 January 2023 to the effective date of the Scheme. It has been a privilege to Chair the People & Remuneration Committee and see the delivery of continuous value creation for shareholders and all stakeholders that OZ Minerals has become recognised for. We thank you for your support of OZ Minerals. Tonianne Dwyer Chair People & Remuneration Committee 22 February 2023 (1) LTI award pro-rated for period to cessation of employment on 13 May 2022. Remuneration Overview OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 38 Remuneration to Executive Key Management Personnel (KMP) in 2022 Full details of the audited cost to the Company of Executive KMP remuneration, calculated in accordance with the accounting standards and the Corporations Act 2001, are available in section 5 of the Remuneration Report. The table below (unaudited) which includes details of remuneration actually delivered to Executive KMP in 2022, has been prepared to be transparent with our shareholders regarding remuneration outcomes. The KMP remuneration received in 2022 reflects the Company performance across the year and the more than doubling of the share price over the three-year period of the Long Term Incentive Scheme. Shareholders who invested in the Company over the period will have benefited in this share price growth alongside Management through the strong alignment of remuneration outcomes with Company performance. Actual 2022 remuneration paid to Executive Key Management Personnel Cash Salary Paid Short Term Incentives(a) Vesting Deferred Short Term Incentives(b) Vesting Long Term Incentives(c) Contributed super- annuation(d) Termination Benefits Total remuneration $ $ $ $ $ $ $ Andrew Cole Managing Director & CEO 2022 1,025,570 771,750 512,438 3,581,773 24,430 - 5,915,961 2021 958,138 628,425 709,185 3,762,327 22,631 - 6,080,706 Warrick Ranson CFO / Finance & Governance Executive Lead 2022 645,570 295,470 219,026 1,382,570 24,430 - 2,567,067 2021 587,369 343,735 363,178 1,500,495 22,631 - 2,817,408 Matthew Reed Operations Executive Lead 2022 596,992 260,313 - - 24,430 - 881,735 2021 189,108 112,237 - - 5,892 - 307,237 Bryan Quinn Strategy and Growth Executive(e) 2022 438,962 224,125 - - 18,538 - 681,625 - - - - - - - Debbie Morrow Projects Executive Lead(f) 2022 223,224 109,909 - - 12,646 - 345,779 - - - - - Mark Irwin Projects Executive Lead(g) 2022 221,639 - 217,179 1,054,678 20,215 580,847 2,094,558 2021 577,369 331,800 324,916 1,447,382 22,631 - 2,704,098 (a) This amount represents 70 per cent of total STI which was paid in cash for 2022. In addition, 30 per cent of total STI will be granted in performance rights to Mr Ranson (4,535), Mr Reed (3,996), Mr Quinn (3,440) and Ms Morrow (1,687), which vest after 2 years provided certain conditions are satisfied (refer section 3.2). If the Scheme of Arrangement pursuant to which BHP will acquire all of the shares in OZ Minerals ('Scheme') becomes effective then these perfomance rights will automatically vest and be exercised, and the resulting shares will be transferred to BHP under the Scheme in exchange for $28.25 per share. For the Managing Director & CEO, Andrew Cole, the value of his deferred 2022 STI rights issue has been assessed at $231,525. If the Scheme becomes effective this amount will be paid to Mr Cole in cash. If the Scheme does not become effective, subject to shareholder approval being obtained at a general meeting of the Company, this amount will be satisfied via an issue of performance rights in accordance with the OZ Minerals Omnibus Incentive Plan Rules ('Plan Rules'). Mark Irwin ceased employment on 13 May 2022 and did not participate in the 2022 STI Plan. (b) On 31 December 2022, the 2020 STI vested resulting in the award of 18,029 shares to Mr Cole (see section 3.2) and 7,706 shares to Mr Ranson, and 7,641 shares to Mr Irwin. The value of the deferred short term incentives which vested is calculated by multiplying the number of performance rights vested by the volume weighted average price (VWAP) of $27.58 over the 20 day trading period 1 December to 30 December 2022 and adding the related equivalent dividends paid. (c) On 31 December 2022, the 2020 LTI performance rights vested resulting in the award of 128,287 shares to Mr Cole (see section 3.3) and 49,519 shares to Mr Ranson and 37,775 shares to Mr Irwin. The value of the long term incentives which vested is calculated by multiplying the number of performance rights vested by the volume weighted average price (VWAP) of $27.58 over the 20 day trading period 1 December to 30 December 2022. The performance rights were awarded on the basis of a VWAP (20 trading days from 1 to 30 January 2020) share price of $10.52. (d) Represents direct contributions to superannuation funds based on quarterly contribution limits under Super Guarantee Charge regulations. Amounts greater than the maximum superannuation level have been included in cash salary. (e) Mr Quinn joined OZ Minerals and became KMP on 11 April 2022. (f) Ms Morrow joined OZ Minerals and became KMP on 15 August 2022. (g) Mr. Irwin ceased employment with OZ Minerals and as KMP on 13 May 2022. Termination benefits paid in accordance with cessation of employment arrangements. Remuneration Report Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 39 The Directors of OZ Minerals Limited present the Remuneration Report for the Company and the Consolidated Entity for the year ended 31 December 2022. This Remuneration Report forms part of the Directors’ Report and has been audited in accordance with the Corporations Act 2001. 1 Key Management Personnel The Consolidated Entity’s KMP during 2022 are listed in Table 1 and consist of the Non-executive Directors (NED) and Executive KMP who are accountable for planning, directing and controlling the affairs of the Company and its controlled entities. Table 1 – KMP during 2022 Position Period as KMP during the year Executive KMP Andrew Cole Managing Director & CEO All of 2022 Warrick Ranson CFO / Finance & Governance Executive All of 2022 Matthew Reed Operations Executive All of 2022 Bryan Quinn Strategy & Growth Executive From 11 April 2022 Debbie Morrow Projects Executive From 15 August 2022 Mark Irwin Projects Executive Until 13 May 2022 Non-executive Directors Rebecca McGrath Independent Chairman All of 2022 Tonianne Dwyer Independent NED All of 2022 Peter Wasow Independent NED All of 2022 Charles Sartain Independent NED All of 2022 Richard Seville Independent NED All of 2022 Sarah Ryan Independent NED All of 2022 2 Remuneration Strategy 2.1 Remuneration Philosophy OZ Minerals seeks to attract and retain high performing Executives. Our approach to remuneration is to provide Executives with market competitive fixed remuneration and to reward outperformance through performance-linked, ‘at risk’ remuneration which is aligned to the shareholder experience. Accordingly, we seek to position the fixed remuneration of our Executives at a market competitive level that is informed by relevant benchmarks, with the opportunity to earn upper quartile total remuneration for delivering outperformance. Remuneration Report continued OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 40 2.2 Remuneration Principles Our remuneration principles that are set out below (Table 2), demonstrate the linkage between remuneration and the delivery of our business strategies and objectives. The overriding business objective is to build value for all our stakeholders with ‘Creating Shared Value’ at the heart of the OZ Minerals Strategy. Table 2 – Remuneration Principles Business needs and market alignment OZ Minerals’ remuneration framework is focused on achieving our corporate objectives and structured so that outcomes are aligned with stakeholder value creation. The framework is informed by market practice. Simplicity and equity OZ Minerals’ remuneration philosophy, principles and framework are simple to understand, communicate and implement, and are equitable across the Company and its diverse workforce. Performance and reward linkages A well-designed remuneration framework supports and drives Company and team performance and encourages the demonstration of desired behaviours. Performance measures and targets are few in number, outcome- focused and customised at an individual level to maximise performance, accountability and reward linkages. Market positioning and remuneration mix Fixed remuneration is set at a competitive level and positioned to take into account the challenges of attracting and retaining high performers in business critical roles, particularly in the mining industry. The ‘at-risk’ components of remuneration are based on challenging goals designed to incentivise Executives to achieve business critical objectives and create stakeholder value including shareholder returns. A substantial portion of remuneration is paid in equity and ‘locked in’ to encourage focus on longer term outcomes. Talent management The remuneration framework is closely aligned with our performance and talent management frameworks to ensure that we appropriately reward employees who deliver upon their role accountabilities and our corporate objectives and to engage future leaders. Governance, transparency and communication with shareholders OZ Minerals is committed to developing and maintaining remuneration practices that promote the creation of shared value for stakeholders. We openly communicate these practices to shareholders and other relevant stakeholders, and will always be within legal, regulatory and industry requirements. The Board has absolute discretion to develop, implement and review all aspects of remuneration. 2.3 Remuneration framework The OZ Minerals Remuneration Framework seeks to attract high performing people to deliver the OZ Minerals Strategy, offering fixed and variable (at-risk) pay that incentivises both short term and longer term performance in alignment with business objective to build value for all our stakeholders. Element Structure Performance Measures Link to delivery of corporate Strategy Total Fixed Remuneration (TFR) Base cash salary, statutory superannuation contributions and salary sacrificed benefits (provided that no extra cost is incurred by the Company for these benefits). TFR is determined based on factors including external market benchmarking, relativity to peers and individual performance. Fixed remuneration is set at a competitive level to take into account the challenges of attracting and retaining high performers in business critical roles. Short Term Incentive (STI) Mix of 70 per cent cash and 30 per cent performance rights, with a subsequent two-year service period. STI is determined based on performance against challenging, clearly defined and measurable corporate and individual targets. The short term ‘at-risk’ component of remuneration is focused on incentivising Executives to achieve business critical objectives and demonstrate OZ Minerals’ desired ways of working. Long Term Incentive (LTI) Performance rights with a three-year vesting period subject to an additional two-year holding lock period. LTI is assessed against three(a) performance hurdles: › Relative Total Shareholder Return (rTSR):60 per cent › All-in Sustaining Costs (AISC): 20 per cent › Environment, Social and Governance (ESG) measure: 20 per cent The long term ‘at-risk’ component of remuneration rewards the delivery of shareholder returns and a sustainable business whilst encouraging decision making aligned to long term shareholder value creation. Minimum Shareholding Requirements (MSR) All Executives are expected to accumulate and hold a minimum level of vested shares in OZ Minerals over a reasonable period. There are different shareholding requirements for each level of Management, which are expressed as a percentage of their TFR. This requirement increases the sense of ownership of the Company amongst our Executives and enhances the degree to which our reward arrangements align the interests of our Executives with the shareholder experience. (a) Applicable to LTI awards from the 2022 LTI onwards. Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 41 2.4 Review of Executive KMP remuneration Executive KMP remuneration levels are reviewed annually by the Board with support from the People & Remuneration Committee and external remuneration consultants, as required. The review ensures that Executive KMP remuneration remains consistent with the Company’s remuneration framework and guiding principles, and considers: › the Company’s remuneration philosophy › relevant market benchmarks using remuneration survey data from the Australian and global industrial and resources sectors › the skills and experience required of each role in order to grade positions accurately and attract high calibre people › individual performance against role expectations, set objectives, leadership behaviours and development plans › Company Strategy, business plans and budgets. 2.5 Executive KMP remuneration components 2.5.1 Remuneration mix The mix of fixed and at-risk remuneration varies depending on the role and grading of Executives as well as the performance of the Company and individual Executives. More senior positions have a greater proportion of at-risk remuneration. If ‘at target’ and ‘at maximum’ at-risk remuneration is earned, the ratios of fixed to at-risk remuneration for KMP would be as follows. Remuneration mix at Target 28% 28% 38% 38% 30% 30% 27% 27% 42% 42% 35% 35% Fixed STI LTI Managing Director & CEO Other Executive KMP Remuneration mix at Maximum 24% 24% 34% 34% 38% 38% 34% 34% 38% 38% 32% 32% Fixed STI LTI Managing Director & CEO Other Executive KMP 2.5.2 Total fixed remuneration (TFR) What is included in TFR? An Executive KMP’s TFR comprises salary, certain other benefits (including statutory superannuation contributions) and salary sacrificed benefits (provided that no extra cost is incurred by the Company for these benefits). When and how is TFR reviewed? TFR is reviewed annually. Any adjustments to the TFR for the Managing Director & CEO and other Executive KMP must be approved by the Board after recommendations from the People & Remuneration Committee. Market benchmarking of Executive remuneration was conducted in 2022, mindful of the need to continue to retain our key employees in a competitive market and operating environment, whilst staying alert to the impact of commodity cycle pricing. Are there any changes to how TFR is determined? No changes to our approach to determine TFR were implemented in 2022. We will continue to review our Executive remuneration levels annually to ensure pay levels remain competitive to attract, motivate and retain the best talent for OZ Minerals. 2.5.3 Short term incentive (STI) Why does the Board consider that a STI is an appropriate element of remuneration? The purpose of the STI is to ensure that the award of a significant proportion of the total reward package is subject to meeting various targets linked to OZ Minerals’ business objectives. The STI is considered to be an appropriate component of the total reward package as it: › rewards Executives who contribute to OZ Minerals' success during the performance year › ensures that a significant portion of the total remuneration package is linked to the achievement of various targets linked to OZ Minerals' corporate performance, business objectives and value creation for all stakeholders › avoids the necessity of much higher levels of TFR and is designed to focus and motivate employees to achieve outcomes which deliver the Company Strategy › through its STI funding approach, provides OZ Minerals with the flexibility to manage the overall cost of the STI and remuneration in line with the achievement of corporate performance outcomes. Remuneration Report continued OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 42 In addition, a reward structure that provides variable performance-based remuneration is also a necessary component of a competitive remuneration package in the Australian and broader global marketplace for Executives. OZ Minerals reviews the STI annually to ensure it remains aligned to market practice and continues to incentivise participants in alignment with Company strategy and business objectives. How is Performance assessed? In 2022 performance was assessed across objectives and targets in the following categories: (a) Company Goals, (b) Individual Goals and (c) our How We Work Together (HWWT) principles. The Company Goals in 2022 determined 80 per cent of the STI award for the Managing Director & CEO with Individual Goals determining the balance of 20 per cent. The Company Goals determined 50 per cent of the STI award for the other Executive KMP with the balance determined by attainment of Individual Goals (25 per cent) and the demonstration of behaviours exemplifying the Company’s HWWT principles (25 per cent). This is consistent with prior years. Company Goals are set through a robust process that cascades our Stakeholder Value Creation Metrics and overall annual business plan into a series of Company priorities with detailed goals and measurable objectives defining threshold, on-target and maximum rating achievement. Once Company Goals are approved by the Board each January they are cascaded into Board approved Individual Goals for each Executive KMP, ensuring alignment of focus throughout the organisation. The table below shows a summary of the goals and objectives set for the Company and individual KMP and demonstrates how they align to our Stakeholder Value Creation Metrics. Table 3.1 – Goals in 2022 that applied to current KMP % of Target STI Managing Director & CEO CFO/ Finance and Governance Executive Operations Executive Strategy & Growth Executive Projects Executive Company Goals Common to all KMP - See Table 5 80 50 50 50 50 Individual Goals Shareholder Value Strategy refresh Portfolio rationalisation Organic and inorganic growth Financial performance and value maximisation Business Plan Business improvement programs Execution of Prominent Hill, Carrapateena and West Musgrave projects Organic and inorganic growth West Musgrave FID and commencement of construction Projects portfolio execution Government Value Decarbonisation and clean concentrate Value creation metrics Decarbonisation and clean concentrate Autonomous operations roadmaps Net Zero pathway Stakeholder value creation investment framework West Musgrave ESG roadmaps Community Value Supplier Value Employee Value Safety Culture, capability and capacity Zero tolerance Safety Team culture, capability and capacity Safety Zero tolerance Systematisation of devolved operating model Safety Team culture, capability and capacity Safety Inclusion & Diversity Cultural awareness capability Individual Goals 20 25 25 25 25 HWWT The How We Work Together principles are the same for all Executive KMP and they are based on the following elements: Thinking and acting differently Building a culture of respect that enables our people to succeed Focusing on partnerships and collaboration, not hierarchy Delivering superior results through effective planning and agile deployment Doing what we say we will do and taking action Acting with integrity and engaging with our stakeholders HWWT Part of Individual Goals 25 25 25 25 Total 100 100 100 100 100 Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 43 Is there an overriding financial performance condition or other condition? Yes. The availability and funding of the STI pool is at the discretion of the Board, which takes into account the interests of the Company and shareholders. In its discretion, the Board can choose not to pay or reduce the amount of the STI awards otherwise payable. How is the STI structured to reward exceptional performance? › The STI is designed to reward Executive KMP for the achievement of identified objectives any point in between threshold and maximum performance levels. › Threshold performance represents the minimum level of performance required for an STI award to be paid. › Target performance represents the achievement of planned or budgeted performance, set at a challenging level. › Maximum performance represents outstanding performance, set at a stretch level. What is the value of the STI opportunity? Table 3.2 – The Target and Maximum STI reward opportunity for Executive KMP in 2022 Executive KMP STI at Target(a) as % of TFR Maximum STI as % of TFR Andrew Cole 105 150 Warrick Ranson 70 100 Matthew Reed 70 100 Bryan Quinn(b) 70 100 Debbie Morrow(c) 70 100 (a) Annualised STI target. (b) Mr Quinn became KMP on 11 April 2022. (c) Ms Morrow became KMP on 15 August 2022. How is STI assessed? Company Goals: Comprehensive data against each separate measure within the Company Goals is collated and reviewed by the People & Remuneration Committee and the Board to assess the performance of the Company against the Company Goals and determine a rating for the Company Goal element of the STI. Individual Goals: The People & Remuneration Committee and Board assess the performance of the Managing Director & CEO for achievement against his agreed individual performance targets and objectives and determine a rating for the Individual Goal element of his STI. The Managing Director & CEO assesses the performance of each Executive KMP throughout the year for achievement against their individual performance targets and objectives and arrives at a summary year end assessment for discussion with the People & Remuneration Committee and the Board. The Board also reviews the performance assessment of all other Executives who report directly to the Managing Director & CEO, with a view to understanding, endorsing and/or discussing individual circumstances, performance, leadership behaviours and future development. What happens to STI awards when an Executive ceases employment? If the cessation of employment is due to resignation, performance reasons, or as a result of gross misconduct, the Executive will not be eligible to receive any STI award in the year of cessation of employment. If an Executive KMP ceases employment with OZ Minerals as a result of retrenchment, retirement, permanent incapacity or death and subject to the Executive’s contract and Board approval, the STI may be granted on a pro rata basis in relation to the period of service completed. If an Executive leaves as a Good Leaver, performance rights unvested remain on foot to vest in the normal course. How is the STI settled? 70 per cent of STI is paid in cash and 30 per cent of STI is awarded in performance rights which vest, subject to fulfillment of a further service condition of an additional two years with the Company. Have the arrangements changed from last year? No. 2.5.4 Long term incentive (LTI) Why does the Board consider that a LTI is an appropriate element of remuneration? It is the view of the Board that an appropriately structured LTI: › focuses and motivates Executives to achieve superior longer term performance outcomes › ensures that business decisions and strategic planning take into account the Company’s long term performance › is consistent with contemporary remuneration governance standards and guidelines › is consistent and competitive with current practices across comparable companies › creates an ownership mindset among the Executives, aligning them with shareholders by linking a substantial portion of their potential total reward to OZ Minerals’ shareholder returns. How is the award delivered? Awards under the LTI are granted using performance rights (detailed in Table 3.3). The performance rights have a three-year performance period. Post vesting, they are subject to a two-year holding lock period. Remuneration Report continued OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 44 Was a grant made in 2022? Yes. As detailed in Table 3.3, a grant was made to all Executive KMP (including the Managing Director & CEO). Grants were made applying a face value approach, the number of performance rights granted to each Executive was calculated as their LTI dollar opportunity divided by the adjusted twenty-day VWAP of OZ Minerals as at the start of the performance period of $27.01. The performance period for the 2022 LTI grant is 1 January 2022 to 31 December 2024. What was the value of the 2022 grant for Executive KMP? Table 3.3 – The LTI granted to Executive KMP in 2022 Executive KMP 2022 LTI Grant (as % of TFR) 2022 LTI Grant Value ($) 2022 LTI Grant Rights Andrew Cole 150% 1,575,000 58,312 Warrick Ranson 90% 603,000 22,325 Matthew Reed 90% 562,500 20,826 Bryan Quinn(a) 90% 519,356 19,229 Debbie Morrow(b) 90% 210,970 7,811 Mark Irwin(c) 90% 567,000 20,992 (a) Mr Quinn became KMP on 11 April 2022. (b) Ms Morrow became KMP on 15 August 2022. (c) Mr Irwin ceased employment 13 May 2022. 18,406 of his 2022 LTI grant listed in the table lapsed on termination. What are the performance and service conditions? In order for any vesting of the 2022 LTI grant to occur, the following conditions must be satisfied: (a) OZ Minerals meeting the LTI performance conditions/hurdles; and (b) the Executive KMP meeting the service condition. Were there any changes to the 2022 LTI from the previous year? As foreshadowed in the 2021 Annual & Sustainability Report, the LTI performance conditions for the 2022 offers have been expanded to include a third performance hurdle category in the form of an Environment, Social and Governance (ESG) measure. This ESG measure applies the MSCI ESG Ratings Metals and Mining – Non-Precious Metals as a performance hurdle. The respective weightings of the performance hurdles are set out below: Performance Hurdles 2022 LTI Weighting 2021 LTI Weighting Relative Total Shareholder Return 60% 70% All-in Sustaining Costs 20% 30% Environment, Social and Governance 20% N/A Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 45 The performance hurdles for the 2022 offers are set out in further detail below: 1. Relative Total Shareholder Return (rTSR) Relative TSR is the primary LTI performance hurdle measured against a comparator group. The Board considers rTSR to be an appropriate performance measure because it ensures that a proportion of each participant’s remuneration is linked to value creation for shareholders and that participants only receive a benefit where there is a corresponding direct benefit to our shareholders as reflected in the relative economic return to shareholders. TSR reflects benefits received by shareholders through share price growth and dividend yield and it is the most widely used long term incentive measure in Australia. The Company employs an independent organisation to calculate the TSR ranking to ensure an objective assessment of the relative TSR comparison. Performance rights in respect to this hurdle vest in accordance with the following table. Table 3.4 – Performance rights vesting according to relative Total Shareholder Return TSR of OZ Minerals relative to TSRs of constituents of the nominated peer group Proportion of performance rights that vest Below 50th percentile Nil 50th percentile 50% Between 50th percentile and 75th percentile Straight line vesting between 50% and 100% 75th percentile or above 100% The rTSR performance hurdle accounts for 60 per cent of the LTI award. 2. All-in Sustaining Costs (AISC) AISC is an industry accepted measure of the total operating cost of producing a unit of metal. Comparative data is sourced from CRU’s global copper mine database. The annual AISC performance is recalculated across the full three-year period (total three-year absolute costs divided by total three-year copper metal production). The comparison is to the average published AISC benchmark across that same period. Performance in relation to this hurdle is measured over the three-year performance period and vests in accordance with the following table. Table 3.5 – Performance rights vesting according to All-in Sustaining Costs OZ Minerals AISC over the performance period Proportion of performance rights that vest Above 50th percentile Nil 50th percentile 50% Between 50th percentile and 25th percentile (lowest cost) Straight line vesting between 50% and 100% 25th percentile or below 100% The AISC hurdle accounts for 20 per cent of the LTI award. 3. Environment, Social and Governance (ESG) The Rights subject to the ESG measure have the MSCI ESG Ratings Metals and Mining – Non-Precious Metals as a performance hurdle. MSCI ESG Ratings measures a company’s resilience to long term ESG risks based on publicly available information, is independent and transparent. Performance rights in respect of this hurdle will vest in accordance with the following table: Table 3.6 – Performance rights vesting according to ESG MSCI ESG Ratings Metals & Mining: Non-Precious Metals (FIAS score out of 10) MSCI Band Level of vesting Below 7.143 A Nil 7.143 AA 50% Between 7.143 and 8.23 AA Straight line vesting between 50% and 100% 8.23 or above AA 100% The ESG hurdle accounts for 20 per cent of the LTI award. Service condition In general, if Executives cease employment as a ‘Good Leaver’ prior to vesting of their rights at the end of the performance period, a pro rata portion of their rights, having regard to the portion of the performance period that has elapsed, will continue on foot and be subject to their original terms as though they had not ceased employment. Any remaining rights will lapse immediately. Their shares still subject to a holding lock, will continue on foot and be subject to their original terms as though they had not ceased employment. Why were these measures chosen? It is standard market practice to link individual Executive performance (including mandatory service periods) and Company performance to the vesting of performance rights. The conditions link Executives’ retention and performance directly to rewards, but only where shareholder returns are realised (TSR), the operating cost of producing a unit of metal is kept competitive (AISC) and ESG risks are managed appropriately. The Remuneration Report continued OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 46 focus on employee-held equity is also part of a deliberate policy to strengthen engagement and direct personal interest to achieve returns for shareholders. What is the Comparator Group? The comparator companies selected for the LTI are considered to be alternative investment vehicles for local and global investors seeking exposure to copper and nickel. They are impacted by commodity prices and cyclical factors in a similar way to OZ Minerals. The Comparator Group is reviewed annually for market changes, as reflected in the table below. Table 3.7 – Long Term Incentive Comparator Groups 2020 Vested 2021 in Flight 2022 in Flight 2023 Antofagasta Antofagasta Antofagasta Antofagasta Boliden AB Boliden AB Boliden AB Boliden AB Central Asia Metals Plc Ero Copper Corp Capstone Mining Corp Capstone Mining Corp Ero Copper Corp First Quantum Minerals Ero Copper Corp Ero Copper Corp First Quantum Minerals Freeport McMoran First Quantum Minerals First Quantum Minerals Freeport McMoran Hudbay Minerals Inc Freeport McMoran Freeport McMoran Hudbay Minerals Inc IGO Limited(a) Hudbay Minerals Inc Hudbay Minerals Inc Independence Group Jiangxi Copper Company IGO Limited IGO Limited Jiangxi Copper Company KGHM Polska Jiangxi Copper Company Jiangxi Copper Company Kaz Minerals Plc(b) Lundin Mining Corporation KGHM Polska KGHM Polska KGHM Polska Nickel Mines Lundin Mining Corporation Lundin Mining Corporation Lundin Mining Corporation Sandfire Resources Nickel Mines Nickel Industries(c) Sandfire Resources Zijin Mining Group Sandfire Resources Sandfire Resources Taseko Mines South32 South32 Zijin Mining Group 29Metals 29Metals (a) Formerly Independence Group. (b) Removed due to delisting following takeover by Nova Resources in 2021. (c) Formerly Nickel Mines. Are any changes to the LTI proposed for 2023? Noting the addition of the ESG performance hurdle in 2022, no changes are proposed for 2023. What happens to performance rights granted under the LTI when an Executive ceases employment? If the Executive’s employment is terminated for cause, all unvested performance rights will lapse unless the Board determines otherwise. In all other circumstances, unless the Board determines otherwise, a pro rata portion of the Executive’s performance rights, calculated by reference to the portion of the performance period that has elapsed, will remain on foot. If and when these performance rights vest, shares will be allocated (or a cash equivalent amount will be paid) in accordance with OZ Minerals Limited Omnibus Incentive Plan Rules and any other conditions of grant. What happens in the event of a change of control? In the event of a takeover or change of control at OZ Minerals, the Board has the discretion to determine that the vesting of all or some of the performance rights should be accelerated. The treatment of performance rights in connection with the Scheme will be set out in the Scheme Booklet to be sent to shareholders in early March. Is there any ability for the Company to ‘clawback’ LTI awards? In the event of fraud, dishonesty, gross misconduct or material misstatement of the financial statements, the Board may make a determination that could include the lapsing of unvested performance rights, the forfeiture of shares allocated on vesting of performance rights, and/or repayment of any cash payment or dividends to ensure that no unfair benefit was obtained. The Board can also adjust awards granted under the STI or LTI offers in the event that there is a catastrophic safety, environmental, or other event, in which an adjustment is warranted. Does the Company have a policy in relation to margin loans and hedging at risk remuneration? Under the Company’s Securities Trading requirements, all Executives, Directors and Officers are prohibited from entering into financing arrangements where the monies owed to the lender are secured against a mortgage over OZ Minerals’ shares. The Company’s Securities Trading Policy also prohibits Executives and employees from entering into any hedging arrangement over unvested securities issued pursuant to any share scheme, performance rights plan or option plan. Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 47 2.6 Remuneration consultants The Board of Directors and the People & Remuneration Committee seek and consider advice from independent remuneration consultants to ensure that they have all of the relevant information at their disposal to determine Executive KMP remuneration. Remuneration consultant engagement is governed by internal protocols that set the parameters around the interaction between Management and consultants to minimise the risk of any undue influence and ensure compliance with the Corporations Act 2001. Protocols Under the protocols adopted by the Board and the People & Remuneration Committee: › remuneration consultants are engaged by and report directly to the Board or the People & Remuneration Committee › the Committee must, in deciding whether to approve the engagement, have regard to any potential conflicts of interest including factors that may influence independence such as previous and future work performed by the Committee and any relationships that exist between any Executive KMP and the consultant › communication between the remuneration consultants and Executive KMP is restricted to minimise the risk of undue influence on the remuneration consultant › where the consultant is also engaged to perform work that does not involve the provision of a remuneration recommendation, prior approval of the Board or People & Remuneration Committee must be obtained in certain circumstances where the consultant continues to be engaged to provide remuneration recommendations. The Board and the People & Remuneration Committee use remuneration consultants’ advice and recommendations from time to time. The Board makes its decisions after it considers the issues and the advice from the People & Remuneration Committee and consultants. During 2022, SW Corporate was engaged to undertake market benchmarking for the Managing Director & CEO’s remuneration, Executive KMP remuneration and for the Non-executive Directors' fees. In addition, SW Corporate provided insight on market practice for the information of the People & Remuneration Committee. The analysis and insight from SW Corporate was considered by the Board and People & Remuneration Committee in forming their views on remuneration matters. The work completed did not constitute a remuneration recommendation in accordance with the Corporations Act 2001. 3 Company performance and remuneration outcomes Our remuneration framework is designed to reward Executives for the creation of value for our stakeholders. We recognise the importance of clearly demonstrating the link between business performance and value creation over time and Executive remuneration outcomes. 3.1 Company performance over time Over time Executive performance rewarded via both Short Term and Long Term Incentives has reflected the year on year creation of value across a range of measures. Table 4 – Company performance(a) Measure(b) 2018 2019 2020 2021 2022 EBITDA – $ million 534.5 462.4 606.3 1,162 692.7 Net profit after income tax – $ million 222.4 163.9 212.6 530.7 207.3 Net cash inflow from operating activities – $ million 449.6 510.6 550.4 971 647.6 Basic earnings per share – cents 71.5 50.7 65.2 159.6 62 Share price at end of year – $ 8.8 10.6 18.9 28.2 27.9 Dividend per share declared - cents 23 23 23 34 8(c) Total Shareholder Return – %(d) 5.1 26.2 78.9 48.2 -0.1 Market Capitalisation - $ billion 2.84 3.11 6.25 9.4 9.3 Relative Total Shareholder Return – Percentile Ranking - %(e) 66.7 75.0 92.3 76.9 85.7 All-in Sustaining Cost – ‘USc/lb’(f) 117.7 111 56.9 134.3 189.7 All-in Sustaining Cost – Quartile(g) Q1 Q1 Q1 Q1 Q1 (a) Refer to the Financial Review section page 26 in the Directors’ Report for a commentary on the consolidated results, including performance of the Consolidated Entity. (b) Refer to the Financial Review section page 26 in the Directors’ Report for a commentary on the consolidated results, including performance of the Consolidated Entity. (c) Interim dividend of 8 cents per share paid in September 2022. The Board has not declared a final dividend for 2022 but intends to declare a special dividend of $1.75 per share in connection with the Scheme before the Scheme meeting, conditional on the Scheme becoming effective. Full details are set out in the Scheme Booklet to be sent to shareholders in early March 2023. (d) Absolute TSR in the year. (e) Relative TSR percentile ranking in the relevant comparator group for the three-year performance period ending in that year. (f) Absolute AISC in the year. (g) Quartile position AISC in the year as determined by data sourced from CRU. Remuneration Report continued OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 48 3.2 Company performance and STI outcomes for 2022 In keeping with prior years, the 2022 Company Goals (which represent 80 per cent per cent of the STI for the Managing Director & CEO and 50% for other Executive KMP) were set based on key company priorities that, in line with our value creation Strategy, are intended to drive value creation for all of our stakeholder groups. A series of measures encompassing Shareholder Value, Government Value, Community Value, Supplier Value and Employee Value were set to ensure that Company performance is holistically assessed. The rating criteria for each measure is threshold (2), on-target (3) and maximum (5). Performance was tracked throughout the year and assessed at year end with a detailed review by the Board on delivery against set targets. Shareholder Value › In a challenging operating environment we achieved an EBITDA of $692.7 million against Flexed Plan of EBITDA of $1,167 million. › 2022 CuEq production was 168kt against a Flexed production plan of 188kt, reflecting an underperformance of 20kt, or 11 per cent, just below the threshold hurdle. › Significant progress on our growth strategy with the West Musgrave Copper Nickel project approved and now in construction. › Material advances in our expansions at both Prominent Hill and Carrapateena. › The acquisition of an option to acquire the Kalkaroo project in South Australia. › Strong, operational performance at Pedra Branca, which ramped up ahead of schedule. Government Value › Endorsement and publication of the Carbon Roadmap. › Development of the Carbon Offsets Plan which considers stakeholder value from a holistic perspective. › In-situ recovery trials in Kapunda, established partnering with EnviroLeach. › Scope 3 implementation plan complete, with an anticipated 45 per cent reduction in emissions from our charter flights. › Emission reduction activities for Prominent Hill, Carrapateena, West Musgrave and Carajas incorporated into the 2023-27 Base Plan. Community Value › Development and implementation of an 'Educating the Next Generation' program (graduates, partnerships, community) with identified baseline metrics for year on year improvement. › Ranked in the top quartile in five of the six indices on which we focus: MSCI = top 7% (AA), DJSI = top 14% (86th percentile), Sustainalytics = 11% (14/132), ISS = 20% (second decile), ACSI = second quintile (Detailed), FTSE 69%. Supplier Value › A 32% increase in on-time payments from the prior year moving from 57% to 75%. › A fully autonomous roadmap supported by an end-to-end value chain model completed. › Productivity uplifts resulting from automation case studies such as Smart Vision, IOT and EDGE Automation and Drill & Blast Automation. Employee Value › Rolling 12 month TRIFR of 6.99 against plan of 3.39. › 14% improvement in total female workforce. › 19% improvement in employee female leadership. › Achievement of industry leadership in WGEA gender pay gap analysis. Board’s assessment of Corporate Performance Score Although 2022 saw significant achievements, it was an operationally challenging year with adverse weather conditions, supply chain challenges and the ongoing impacts of COVID related absenteeism in the first half necessitating, in June, a downward revision to production and cost guidance for the first time in seven years. However, the adaptability of our culture and workforce enabled us to recalibrate performance and deliver against revised guidance including our highest group quarterly copper production on record in Q4 and delivery against Prominent Hill’s original copper guidance for an eighth consecutive year. Nevertheless, as a result of the challenges earlier in the year, our 2022 performance against the key financial metrics of EBITDA and Net Profit After Tax was below target. Further, our total recordable injury frequency rate (TRIFR) increased from 4.40 in 2021 to 6.99 in 2022 which is a disappointing outcome given our focus on safety and employee well being. Whilst there were a number of contributing factors including workforce turnover, challenging underground operating conditions and a ramp up in both greenfield and brownfield execution activities, a deterioration in TRIFR is not an acceptable trend. These outcomes are reflected in the Board attributing a score of zero for the EBITDA, production and safety components of the Company scorecard, and an overall rating of 2.18 out of 5 which is a reduction of approximately 36% on the prior year and in alignment with our philosophy on ‘at risk’ pay. The Board’s assessment of achievements against the targets set for the year for each component of the Company Score is set out below. Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 49 Table 5 – Company performance indicators and outcomes 2022 Outcome Not Achieved Partially Achieved Achieved Exceeded Threshold Stakeholder Group Performance not achieved Threshold Performance 50% Target Performance 70% Maximum Performance 100% Weighting Target 0 2 3 4 5 Shareholder Value 25% › Flexed EBITDA › Production (CuEq) Shareholder Value 15% › Study execution and acceleration Government Value 15% › Emissions reduction strategy Community Value 15% › Partnering with our Communities › Zero land disturbances Supplier Value 15% › On-time payments › Data enable the Supply Chain (inc Autonomous Roadmap) Employee Value 7.5% › Safety – TRIF & Zero Fatalities Employee Value 7.5% › OZWay Capability › Inclusion & Diversity 100% Company KPI Performance Total Outcome: 2.18 Remuneration Report continued OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 50 STI awards for KMP The assessment of Company scores and individual outcomes resulted in the following % awards of STI to KMP. Table 6 – STI award percentage for Executive KMP Name Company KPI Performance as per cent of maximum performance Individual KPI Performance as per cent of maximum performance(a) Overall Performance Outcome as per cent of maximum performance(b) % % % Andrew Cole 41.3 77.5 49.0 Warrick Ranson 41.3 76.0 63.0 Matthew Reed 41.3 71.5 59.5 Bryan Quinn 41.3 82.0 70.0 Debbie Morrow 41.3 80.5 66.5 Mark Irwin(c) 0 0 0 (a) Individual KPI considers the assessment of Individual Goals and HWWT principles. (b) Mr Cole’s STI composition is 80 per cent Company and 20 per cent Individual. Remaining Executive KMP are 50 per cent Company, 25 per cent Individual, and 25 per cent HWWT. (c) Mr Irwin ceased employment on 13 May 2022 and as per Plan Rules was not eligible for a 2022 STI award. Details of STI payments made to Executive KMP in February 2022 are included in the table below: Table 7 – STI payments to Executive KMP in 2022 Name Total Payment Maximum potential value of payment(a) Percentage of maximum grant awarded Percentage of maximum grant forfeited Cash Payment (70%) Performance Rights Payment (30%) $ $ % % $ $ Andrew Cole(b) 771,750 1,575,000 49.0 51.0 771,750 0 (b) Warrick Ranson 422,100 670,000 63.0 37.0 295,470 126,630 Matthew Reed 371,875 625,000 59.5 40.5 260,313 111,563 Bryan Quinn(c) 320,178 459,288 70.0 30.0 224,125 96,053 Debbie Morrow(d) 157,013 234,411 66.5 33.5 109,909 47,104 Mark Irwin(e) 0 0 0 0 0 0 (a) The maximum potential value of payment represents the achievement of stretch target. The minimum potential value of the payments was nil. (b) For the Managing Director & CEO Andrew Cole, the value of his deferred 2022 STI performance rights issue has been assessed at $231,525 which represents 30% of his total STI payment. If the Scheme becomes effective, this amount will be paid to Mr Cole in cash. If the Scheme does not become effective, subject to shareholder approval being obtained at a general meeting of the Company, this amount will be satisfied via an issue of performance rights in accordance with the Plan Rules. (c) Mr. Quinn became KMP on 11 April 2022. (d) Ms. Morrow became KMP on 15 August 2022. (e) Mr Irwin ceased employment 13 May 2022, and as per Plan Rules was not eligible for a 2022 STI award. Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 51 Table 8 – Deferred STI awards on foot (30% of total STI award) Year Total Value Rights(a) Service Period Expiry Date Vesting outcomes Andrew Cole(b) 2022 $231,525 0 01/01/2023 - 31/12/2024 15/02/2025 Subject to Scheme(c) 2021 $269,325 9,971 01/01/2022 - 31/12/2023 15/02/2024 Subject to Scheme 2020 $357,615 18,029 01/01/2021 - 31/12/2022 15/02/2023 100% Vested Warrick Ranson 2022 $126,630 4,535 01/01/2023 - 31/12/2024 15/02/2025 Subject to Scheme 2021 $147,315 5,454 01/01/2022 - 31/12/2023 15/02/2024 Subject to Scheme 2020 $152,856 7,706 01/01/2021 - 31/12/2022 15/02/2023 100% Vested Mark Irwin(d) 2022 - - - - - 2021 $142,200 5,265 01/01/2022 - 31/12/2023 15/02/2024 Subject to Scheme 2020 $151,553 7,641 01/01/2021 - 31/12/2022 15/02/2023 100% Vested Matthew Reed 2022 $111,563 3,996 01/01/2023 - 31/12/2024 15/02/2025 Subject to Scheme 2021 $48,101 1,781 01/01/2022 - 31/12/2023 15/02/2024 Subject to Scheme Bryan Quinn 2022 $96,053 3,440 01/01/2023 - 31/12/2024 15/02/2025 Subject to Scheme Debbie Morrow 2022 $47,104 1,687 01/01/2023 - 31/12/2024 15/02/2025 Subject to Scheme (a) The number of performance rights for 2022 were calculated by dividing 30 per cent of STI by $27.92 being the VWAP over the period 3 January to 31 January 2023. (b) For the Managing Director & CEO, Andrew Cole, the value of his deferred 2022 STI performance rights has been assessed at $231,525. If the Scheme becomes effective, this amount will be paid to Mr Cole in cash. If the Scheme does not become effective, subject to shareholder approval being obtained at a general meeting of the Company, this amount will be satisfied via an issue of perfomance rights in acccordance with the Plan Rules. (c) The Board has exercised its discretion for all of these outstanding Performance Rights to vest, subject to the Scheme becoming effective. If the Scheme does not become effective, the Performance Rights will remain on issue and will vest according to the existing vesting conditions, as determined by the Board. (d) Mr Irwin ceased employment on 13 May 2022 and as per Plan Rules was not eligible for a 2022 STI award. 3.3 LTI performance and outcomes Performance rights granted under the OZ Minerals LTI offers are granted for no consideration. Performance rights granted under the LTI offers carry no dividend or voting rights. One ordinary share in the Company will be allocated on vesting of a performance right. For grants from 2020 to 2021 the performance hurdles are relative TSR and AISC performance weighted at 70 per cent and 30 per cent respectively. From 2022 onwards the performance hurdles are: Performance Hurdles LTI Weighting Relative TSR 60% AISC 20% Environment, Social and Governance 20% In regard to the 2020 LTI offers, over the performance period of 1 January 2020 to 31 December 2022, the Company achieved top quartile performance against the 2020 Comparator Group with a relative TSR ranking (assessed independently by Orient Capital) of 85.71 percentile. As a result, the rTSR component of the LTI vested at 100 per cent in accordance with the vesting schedule. The OZL average AISC across the 2020-2022 vesting period was 132.4 USc/lb, which is below the 25th percentile of the Average CRU AISC over the same period (133.9 USc/lb), confirming OZ Minerals continues to be a leading low cost producer. As a result, the AISC component of the LTI vested at 100 per cent vesting as per the conditions outlined in Table 9. Remuneration Report continued OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 52 Table 9 – 2020–2022 CY Average CRU All-in Sustaining Costs(a) US$/t US$/t USc/lb USc/lb USc/lb Measure 25th Percentile 50th Percentile 25th Percentile 50th Percentile OZL 2020 AISC 2,700 3,701 >>> Convert to lb @2204.62 122.5 167.9 56.9 2021 AISC 2,923 3,892 132.6 176.5 134.3 2022 AISC 3,230 4,441 146.5 201.4 189.7 Average AISC 2,951 4,011 133.9 182 132.4 (a) Source: CRU Global Copper Mine Database (at 17 January 2023). The LTI awards history are detailed below: Table 10 – LTI awards on foot Grant Date Rights Maximum value of grant $(a) Weighted average fair value $(b) Performance Period Expiry Date(c) Vesting outcomes Andrew Cole 8 April 2022 58,312 1,734,782 17.93 01/01/2022 - 31/12/2024 15/02/2025 Subject to Scheme(d) 1 April 2021 75,622 2,165,058 17.93 01/01/2021 - 31/12/2023 15/02/2024 Subject to Scheme 17 April 2020 128,287 2,532,385 6.73 01/01/2020 - 31/12/2022 15/02/2023 100% Vested Warrick Ranson 28 February 2022 22,325 664,169 17.99 01/01/2022 - 31/12/2024 15/02/2025 Subject to Scheme 26 February 2021 27,678 792,421 16.26 01/01/2021 - 31/12/2023 15/02/2024 Subject to Scheme 24 February 2020 49,519 977,505 6.71 01/01/2020 - 31/12/2022 15/02/2023 100% Vested Matthew Reed 28 February 2022 20,826 619,574 17.99 01/01/2022 - 31/12/2024 15/02/2025 Subject to Scheme 26 February 2021 14,752 422,350 16.26 01/10/2021 - 31/12/2023 15/02/2024 Subject to Scheme Bryan Quinn 22 April 2022 19,229 572,063 17.74 01/01/2022 - 31/12/2024 15/02/2025 Subject to Scheme Debbie Morrow 11 November 2022 7,811 232,377 20.54 01/01/2022 - 31/12/2024 15/02/2025 Subject to Scheme Mark Irwin(e) 28 February 2022 2,586 76,934 17.99 01/01/2022 - 31/12/2024 15/02/2025 Subject to Scheme 26 February 2021 12,431 355,900 16.26 01/01/2021 - 31/12/2023 15/02/2024 Subject to Scheme 24 February 2020 37,775 745,678 6.71 01/01/2020 - 31/12/2022 15/02/2023 100% Vested (a) The minimum value of each grant is nil. The maximum value of grant is calculated by applying the highest price of OZ Minerals’ shares during the year in which the rights were issued (2022 at $29.75). (b) The weighted average fair values were calculated proportional to the fair value of each hurdle. In accordance with the requirements of applicable Accounting Standards, remuneration includes a proportion of the notional value of performance rights as compensation granted or outstanding during the year. The notional value of performance rights granted as compensation is determined as at the grant date and progressively allocated over the vesting period. The amount included as remuneration is not related to or indicative of the benefit (if any) that individual Executives may in fact receive. The values were calculated by an external third party based on a Monte-Carlo simulation model. (c) Expiry date does not consider holding lock periods. (d) The Board has exercised its discretion for all of these outstanding Performance Rights to vest, subject to the Scheme becoming effective. If the Scheme does not become effective, the Performance Rights will remain on issue and will vest according to the existing vesting conditions, as determined by the Board. (e) Mr Irwin's 2020, 2021 and 2022 LTI awards were adjusted in accordance with his cessation agreement. There have been no fair value changes for the awards. Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 53 3.4 Minimum shareholding requirement All Executives and certain senior management are expected to accumulate and hold a minimum level of vested shares in OZ Minerals over a reasonable period. Table 11 shows the extent of compliance. Name Shareholding requirement (% TFR) Shareholding (% TFR)(a) Executive KMP Andrew Cole 100 2,437 Warrick Ranson 50 700 Matthew Reed 50 25 Bryan Quinn 50 15 Debbie Morrow 50 8 (a) Includes shares owned and exercisable and performance rights awarded where vesting is only contingent on a service condition being satisfied. Information at 31 December 2022 based on share price at that date. With expected levels of vesting of the deferred equity element of the STI and LTI, it is anticipated that all executive KMP should meet their minimum shareholding requirement within the required timeframe. 4 Executive KMP employment arrangements Remuneration arrangements for Executive KMP are formalised in Executive Service Agreements. Each agreement provides for the payment of fixed remuneration, performance-related cash and equity bonuses under the STI, other benefits, and participation in the Company’s LTI. Table 12 – Current executive KMP key provisions Name Term of contract 2022 TFR $ Notice period Termination benefit Current Andrew Cole Permanent – ongoing until notice has been given by either party. 1,050,000 › Twelve months’ notice by the Company. › Six months’ notice by Andrew Cole. › Company may elect to make payment in lieu of notice. › No notice period required for termination by Company for cause. Twelve months fixed remuneration in the case of termination by the Company. Warrick Ranson Permanent – ongoing until notice has been given by either party. 670,000 › Three months’ notice by either party. › Company may elect to make payment in lieu of notice. › No notice required for termination by Company for cause. Nine months fixed remuneration in the case of termination by the Company. Matthew Reed Permanent – ongoing until notice has been given by either party. 625,000 › Three months’ notice by either party. › Company may elect to make payment in lieu of notice. › No notice required for termination by Company for cause. Nine months fixed remuneration in the case of termination by the Company. Bryan Quinn Permanent – ongoing until notice has been given by either party. 630,000 › Three months’ notice by either party. › Company may elect to make payment in lieu of notice. › No notice required for termination by Company for cause. Nine months fixed remuneration in the case of termination by the Company. Debbie Morrow Permanent – ongoing until notice has been given by either party. 620,000 › Three months’ notice by either party. › Company may elect to make payment in lieu of notice. › No notice required for termination by Company for cause. Nine months fixed remuneration in the case of termination by the Company. Remuneration Report continued OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 54 5 Executive KMP Remuneration Table 13 – Total rewards to Executive KMP as per Accounting Standards Short Term Benefits Long Term Benefits Salary, Fees & Allow- ances Accrued annual leave(a) Super- annuation(b) Term- ination Benefits (c) Short Term Incentive (d) Other Long Term Benefits(e) Value of perfor- mance rights(f) Value of perfor- mance rights (STI deferred) (g) Accounting Impact of Scheme(h) Total remun- eration Perform- ance Related $ $ $ $ $ $ $ $ $ $ % Andrew Cole Managing Director & CEO 2022 1,025,570 53,400 24,430 - 555,421 36,417 1,087,807 286,155 842,264 3,911,464 70.9% 2021 958,138 (10,754) 22,631 - 648,680 40,759 1,057,927 297,792 - 3,015,173 66.5% Warrick Ranson CFO / Finance & Governance Executive 2022 645,570 24,871 24,430 - 303,176 31,328 394,429 142,267 334,399 1,900,470 61.8% 2021 587,369 19,985 22,631 - 354,108 20,837 387,560 145,539 - 1,538,029 57.7% Matthew Reed Operations Executive 2022 596,992 21,975 24,430 - 260,313 7,307 204,951 53,222 256,257 1,425,447 54.4% 2021 189,108 11,047 5,892 - 112,237 2,082 27,900 16,034 - 364,300 42.9% Bryan Quinn Strategy and Growth Executive(i) 2022 438,962 16,624 18,538 - 224,125 1,689 90,843 23,286 186,045 1,000,112 52.4% - - - - - - - - - - - Debbie Morrow Projects Executive(j) 2022 223,224 4,082 12,646 - 109,909 272 25,662 8,121 81,516 465,432 48.4% - - - - - - - - - - - Mark Irwin Projects Executive(k) 2022 221,639 (29,359) 20,215 580,847 7,641 (44,204) 116,558 145,318 - 1,018,655 26.5% 2021(l) 577,369 9,255 22,631 - 341,080 24,791 400,480 138,608 - 1,514,214 58.1% Total 2022 3,151,957 91,593 124,689 580,847 1,460,585 32,809 1,920,251 658,369 1,700,481 9,721,580 41.3% Total 2021 2,311,984 29,533 73,785 - 1,456,105 88,469 1,873,867 597,973 - 6,431,716 61.1% (a) Annual leave has been separately categorised and is measured on an accrual basis and reflects the movement in the accrual over the twelve month period. Any reduction in accrued annual leave reflects more leave taken/cashed out than that which accrued in the period. (b) Represents direct contributions to superannuation funds. Amounts greater than the maximum superannuation level have been paid and included in cash salary. (c) Termination benefits paid to Mr Irwin in accordance with cessation of employment arrangements. No other Benefits or Allowances paid to Executive KMP. (d) For 2022 it includes the cash proportion of 2022 STI and the equivalent dividends paid for 2020 STI deferred. (e) Represents the net accrual movement for Long Service Leave (LSL) over the twelve-month period which will only be paid if Executive KMP meets the required service conditions. (f) The fair values were calculated as at the grant dates. In accordance with the requirements of applicable Accounting Standards, remuneration includes a proportion of the notional value of equity rights compensation granted or outstanding during the year. The notional value of equity rights granted as compensation which do not vest during the reporting period is determined as at the grant date and progressively allocated over the vesting period. The amount included as remuneration is not related to or indicative of the benefit (if any) that individual Executives may in fact receive. The values were calculated by an external third party based on a Monte Carlo simulation model. (g) Reflects actual value of deferred STI, which is provided in the form of performance rights. The total value of the deferred STI is recognised proportionally over the period the Executive is required to provide service. For the Managing Director & CEO, Andrew Cole, the value of his deferred 2022 STI performance rights has been assessed at $231,525. If the Scheme becomes effective, this amount will be paid to Mr Cole in cash. If the Scheme does not become effective, subject to shareholder approval being obtained at a general meeting of the Company, this amount will be satisfied via an issue of perfomance rights in accordance with the Plan Rules. (h) On 22 December 2022, OZ Minerals entered into a Scheme Implementation Deed with BHP Lonsdale Investments Pty Ltd ('BHP'), a wholly owned subsidiary of BHP Group Limited, in relation to the proposed acquisition by BHP of all of the issued shares in OZ Minerals by way of scheme of arrangement under the Corporations Act 2001 (Cth) ('Scheme'). Subject to the Scheme becoming effective, all unvested performance rights (other than performance rights granted under the 2023 LTI offer to Executive KMP) will automatically vest and be exercised, with one OZ Minerals Share issued per performance right. If the Scheme does not become effective, the unvested performance rights continue on foot on their current terms. OZ Minerals Management must assess the likelihood of the Scheme becoming effective and the performance rights therefore automatically vesting and being exercised, and has determined that it is more likely than not that the Scheme will become effective. As such, share based payments have been calculated on the basis that the Scheme becomes effective and all of the performance rights (other than performance rights granted under the 2023 LTI offer to Executive KMP) vest and are exercised on Scheme effective date, with the cumulative impact of the revision to original estimates recognised in the income statement with a corresponding adjustment to equity. (i) Mr Quinn became KMP on 11 April 2022. (j) Ms Morrow became KMP on15 August 2022. (k) Mr Irwin ceased employment on 13 May 2022. Mr Irwin's 2020, 2021 and 2022 LTI awards were adjusted in accordance with his cessation agreement. There have been no fair value changes for the awards. Termination benefits paid in accordance with cessation of employment arrangements. (l) Retention Award cash component included under 'Other Long Term Benefits' and performance rights component under 'Value of Performance Rights' for Mr. Irwin. Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 55 6 Non-executive Director remuneration 6.1 Non-executive Director remuneration policy Non-executive Director remuneration is reviewed annually by the Board. Non-executive Directors receive a fixed remuneration consisting of a base fee and additional fees for Committee roles. Consistent with best practice, Non-executive Directors do not receive any form of equity incentive entitlement, bonuses, options, other incentive payments or retirement benefits. As approved at the OZ Minerals General Meeting on 18 July 2008, the maximum fees payable per annum are $2.7 million in total. All Directors (including the Chairman) are entitled to superannuation contributions (or cash in lieu thereof) in line with Australian Superannuation Rules calculated on base Board and Committee fees and are entitled to be reimbursed for travel and other expenses properly incurred by them in attending any meeting or otherwise in connection with the business or affairs of the Company, in accordance with the Company’s constitution. The Chairman of the Board does not receive additional fees for being a member of any Board Committee. Table 14 – Details of Board Fees in 2022 Fees per Annum (including super) Chair $ Member $ Board 394,376 145,912 Audit 47,362 23,681 Sustainability 40,000 20,000 People & Remuneration 40,000 20,000 Nomination 12,500 6.2 Total fees paid to Non-executive Directors In 2022, Non-executive Directors received $1.43 million (2021: $1.3 million) in total fees, compared to the maximum approved fees payable of $2.7 million. Table 15 – Total remuneration paid to NEDs Board fees and cash benefits Committee fees Non- monetary benefits Superannuation(a) Total fixed remuneration $ $ $ $ $ Rebecca McGrath Chairman 2022 369,946 - - 24,430 394,376 2021 380,800 - - 11,784 392,584 Tonianne Dwyer Non-executive Director 2022 132,347 57,761 - 19,485 209,593 2021 132,345 49,671 - 17,745 199,761 Peter Wasow Non-executive Director(b) 2022 145,912 67,362 - - 213,274 2021 141,947 61,193 - 4,724 207,864 Charlie Sartain Non-executive Director 2022 132,347 69,099 - 20,647 222,093 2021 132,345 49,671 - 17,745 199,761 Richard Seville Non-executive Director 2022 132,347 36,282 - 17,283 185,912 2021 132,345 30,952 - 15,914 179,211 Sarah Ryan Non-executive Director(c) 2022 145,912 56,181 - - 202,093 2021 91,068 24,479 - 115,547 Total 2022 1,058,811 286,685 - 81,845 1,427,341 2021 1,010,850 215,966 - 67,912 1,294,728 (a) Represents direct contributions to superannuation funds. Any amounts greater than the superannuation maximum contribution base have been paid and included in board fees and cash benefits. (b) Mr Wasow has established a Superannuation Guarantee Employer Shortfall Exemption Certificate to reduce his superannuation contribution with OZ Minerals. (c) Ms Ryan has established a Superannuation Guarantee Employer Shortfall Exemption Certificate to reduce her superannuation contribution with OZ Minerals. Ms Ryan became an Independent NED on 17 May 2021. Remuneration Report continued OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 56 6.3 Minimum shareholding requirements Non-executive Directors Non-executive Directors are required to accumulate and maintain a holding in OZ Minerals’ shares that is equivalent to at least 100 per cent of the Non-executive Directors base fee (calculated on the purchase price of shares) within five years from the date of appointment as a Director or as a Chair. Table 16 – NED Minimum Shareholding Requirements in 2022(a) Name Shareholding (% of annual base fee)(b) Deadline NED Rebecca McGrath 121 24/05/2022 Tonianne Dwyer 112 22/03/2022 Peter Wasow 130 01/11/2022 Charlie Sartain 478 01/08/2023 Richard Seville 157 01/11/2024 Sarah Ryan 139 17/05/2026 (a) Information at 31 December 2022. (b) Calculated as the total amounts paid per Share divided by the directors' annual base fees. 7 Equity instrument disclosure relating to KMP The movement in the number of shares held by each KMP during the year is set out below: Table 17 – NED and Executive KMP shareholdings Balance at 1 January 2022 or date becoming KMP Shares acquired on exercise of rights Net other movements Balance at 31 December 2022 or date ceasing to be KMP Non-executive Directors Rebecca McGrath 52,292 - 4,000 56,292 Tonianne Dwyer 19,900 - - 19,900 Peter Wasow 20,000 - - 20,000 Charlie Sartain 80,000 - - 80,000 Richard Seville 11,665 - 5,085 16,750 Sarah Ryan 8,500 - - 8,500 Executive KMP Andrew Cole 607,831 163,589 - 771,420 Warrick Ranson 62,745 68,111 - 28,000 102,856 Matthew Reed - - - - Bryan Quinn - - - - Debbie Morrow - - - - Total 862,933 231,700 - 18,915 1,075,718 Information Only Mark Irwin 63,700 64,793 - 99,150 29,343 Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 57 Table 18 – Executive KMP performance rights holdings Balance at 1/01/2022 Granted as remuneration (a) Value of rights granted(b) Vested Exercised Value of rights vested(c) Lapsed(d) Balance at 31/12/2022 Vested & Exercisable(e) $ $ Andrew Cole 385,527 68,283 1,314,859 146,316 163,589 4,034,912 - 290,221 146,316 Warrick Ranson 153,014 27,779 548,942 57,225 68,111 1,578,077 - 112,682 57,225 Matthew Reed 14,752 22,607 422,761 - - - - 37,359 - Bryan Quinn - 19,229 341,122 - - - - 19,229 - Debbie Morrow - 7,811 160,438 - - - - 7,811 - Mark Irwin(f) 166,762 26,257 519,846 45,416 64,793 1,252,423 (62,528) 65,698 45,416 Total 720,055 171,966 3,307,969 248,957 296,493 6,865,413 (62,528) 533,000 248,957 (a) Does not include performance rights from the 2022 STI that will be granted. Table 8 contains details of rights granted subsequent to year end. (b) The value of performance rights granted represents the sum of LTI: performance rights issued during the year multiplied by the fair value per instrument at grant date as set out in table 10, performance rights issued under the Retention Plan during the year multiplied by the fair value of each instrument at grant date as set out in table 10, and the total value of STI awards for the 2021 STI for which performance rights were issued in February 2022. (c) Value of rights vested calculated as number of rights vested times VWAP over the period 1 December to 30 December 2022 ($27.58). (d) Forfeiture of Mr Irwin's performance rights on cessation of employment. (e) Rights vested and exercisable are considered in the Balance at 31 December 2022. They represent rights which vested on 31 December 2022 for which shares are issued in early 2023. (f) Mr Irwin ceased to be KMP on 13 May 2022. 8 Other transactions with Executive KMP or NEDs There were no loans made to Executive KMP, NEDs or their related parties during the year. There were no other transactions between the Company and any Executive KMP, NEDs or their related parties other than those within the normal employee, customer or supplier relationship on terms no more favourable than arm’s length. Sustainability Review 1. 2022 sustainability reporting & disclosures For 2022, we have adopted a new format for our Sustainability reporting, reflecting contextual changes including stakeholder expectations and our macroenvironment. Our Sustainability Review focuses on our 2022 performance and activities, such as our Stakeholder Value Creation Metrics, Strategic Aspirations, and material sustainability topics, including risks (opportunities and threats) at OZ Minerals. The Review is accompanied by broader disclosures regarding our approach to managing material sustainability topics and supporting performance data available in the Sustainability section of our website. The new format builds on our history of reporting our sustainability performance, which we commenced in 2008 as a separate report. In 2016, we combined our disclosures into a single Annual & Sustainability Report to demonstrate the interconnectivity and interdependency of sustainability with Company performance. Stakeholder value creation is the centre of our Company Strategy and the lens through which we view sustainability. Our 2022 Sustainability Review covers the performance of our Australian assets Prominent Hill, Carrapateena, and West Musgrave (WMP) 1, and our Brazilian assets in the Carajás Province. 1.1 Structure of our 2022 Sustainability reporting & disclosures 2022 sustainability performance and activities › Sustainability the OZWay – approach, materiality assessment, external recognition › Social – safety, workforce, culture, host communities › Environment – decarbonisation and emissions, waste, tailings, water, land & biodiversity Management approaches and detailed disclosures › Governance › Social performance management › Environmental management Sustainability data 2022 performance data and basis of preparation SUSTAINABILITY REVIEW SUSTAINABILITY SECTION OF OUR WEBSITE 2. Sustainability the OZWay Value creation for our six stakeholder groups is at the centre of our Strategy (see page 8). The OZWay embeds the concept of value creation across our Company via our governance systems and processes, how we conduct our business activities, and manage risk while delivering performance across our devolved operating model to exceed stakeholder expectations (see page 8 of Annual Report for further overview of The OZWay). Our Strategic Aspirations (see page 9) paint an ambitious and motivational picture of the future we strive to achieve for our people and other stakeholders. They help focus our work on a few high- impact activities under each element of our Strategy in pursuit of our Purpose: Going beyond what’s possible to make lives better. Sustainability is embedded across The OZWay through our Strategic Aspirations, organisational model, and our governance systems and processes, including our Board Sustainability Committee, Stakeholder Value Creation Policies, Global Process and Performance Standards, and Stakeholder Value Creation Metrics (see page 5). This ensures sustainability is part of OZ Minerals as a Modern Mining Company focused on Modern Minerals. Our 2022 Sustainability Review discusses how the elements of sustainability align across our Stakeholders. 2.1 Strategic Aspirations and Stakeholder Value Creation Metrics Our Strategic Aspirations are just that, ‘aspirational’. They paint an ambitious and motivational picture of the future we strive to achieve for our people and other stakeholders. While they may not always be achieved and may be dependent on matters outside our control, we have found that aiming high helps us achieve beyond what most would think possible. Our Strategic Aspirations help focus our work on a few high-impact activities under each element of our Strategy (see page 8). Our Stakeholder Value Creation Metrics (SVCMs) provide our six Stakeholder Groups transparency on how we are creating value (see page 5). The SVCMs also support our approach, performance, and our focus across material sustainability topics including: safety, health and wellbeing, governance, socio-economic contribution, emissions and energy, stakeholder engagement, human rights, cultural heritage, water and waste, land and biodiversity, diversity, equity and inclusion (DEI), and culture. 2.2 Materiality Assessment Our annual Materiality Assessment identifies the topics most important to our Stakeholders and our Performance. Outcomes of the Materiality Assessment allow us to better understand our context and inform the choices that drive delivery of our Strategy, our Work and Performance. Our 2022 Assessment demonstrated that environmental and social topics are most material, alongside health, safety and wellbeing (figure below). Business ethics and economic performance decreased in materiality in 2022 compared with previous years. 2.2.1 2022 Materiality matrix Somewhat material Most material Least material Business ethics, anti-corruption and transparency Influence on stakeholder decisions Impact on ESG performance Somewhat material Modern slavery, human rights and responsible value chain High Low High Decarbonisation, water, waste and tailings management Local communities, Free, Prior and Informed Consent (FPIC) and social inclusion Diversity, equity and inclusion Economic performance, resilience and agility Workforce risk Health, safety and wellbeing First Nations and land connected peoples Biodiversity, ecology and rehabilitation 1. WMP is not yet operational, and data and reporting are therefore limited. OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 58 3. External recognition, commitments and benchmarking Our overall ESG risk rating was decreased to 26.7 (Medium) in 2022, well ahead of the global diversified metals industry average of 44.3. This was alongside an increase of 4.7 in our risk management score to 64.4 (High). We retained our ‘C’ score, sitting in the second decile. Our score decreased by 0.3, placing us in the 69th percentile in the Basic Materials, General Mining subsector. Number 1 in Mining Industry for Gender Pay Equity (WGEA Compliance Report 2021 - 2022) Work 180 Employer of Choice for Women Maintained our ‘AA’ rating, sitting within the top seven per cent of Metals and Mining – Non-precious metals companies. Our overall score was 53 in 2022, an increase of six from 2021. We now sit in the 86th percentile within the Metals and Mining Industry in the S&P Global Corporate Sustainability Assessment (CSA). We remained in the second‑to-top quintile (Detailed) in 2022. 4. Social Workforce Value Community Value Material topics: Free, Prior and Informed Consent, First Nations heritage, diversity and inclusion, health and safety Strategic Aspirations: Partnering SVCMs: Safety, workforce engagement, inclusion, diversity, partnering, social contribution, grievances, heritage incursions, human rights incidents 4.1 Performance Standards We aim to be welcome in the communities and regions that host our operations, and we endeavour to engage in genuine partnerships with local communities, suppliers, and all levels of government where we share opportunities and work collaboratively on threats and opportunities to achieve our common goals. First Nations Peoples and local land-connected peoples, as well as our host communities, rely on OZ Minerals to act with transparency and build sustainable partnerships based on trust and collaboration that helps us understand the impact of our activities. These partnerships deliver long-term benefits, maximising opportunities and minimising negative effects. Our Global Social Performance Standards set out the minimum requirements for our Workforce and Suppliers to manage threats associated with specific activities or tasks, and to identify opportunities that have the potential to drive value creation for both OZ Minerals and the communities in which we operate, and wish to be welcome. These Standards are guided by the OECD Guidelines for Multinational Enterprises and align with the United Nations frameworks for human rights including: › the UN Universal Declaration of Human Rights › the UN Guiding Principles on Business and Human Rights; and › the UN Declaration on the Rights of Indigenous Peoples All statutory and legal requirements must be met, however, our Social Performance Standards impose additional requirements for stakeholder engagement and assessing and managing threats and opportunities arising from our operations. This includes how we manage heritage, land access, acquisition and resettlement as well as other human rights issues. For more information on our Social Performance Standards see (ozminerals.com/en/how-we-work/performance-standards). As part of our Strategy (ozminerals.com/en/who-we-are/our-strategy), we prioritise Partnering relationships with our Communities that enhance education opportunities and build resilience and capability in ways that support the following UN SDGs: › Goal 4: Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all › Goal 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all › Goal 9: Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation › Goal 16: Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels For more information on how we partner, see ozminerals.com/en/how-we-work/partnering-with-communities/how-we-engage. Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 59 4.2 Safety & Wellbeing At OZ Minerals safety is everyone’s responsibility. We strive to create a culture where everyone is empowered to act. Our Global Safety, and Health and Wellbeing Performance Standards guide our approach to managing physical and psychosocial risks associated with mining activities and support us in protecting the safety of all parties undertaking work at our Assets, Corporate Functions and remote locations. We are committed to preventing workplace injuries and illnesses through continuous monitoring of key indicators. We investigate all safety incidents and implement corrective actions upon thorough investigation. The Learning Through Incidents and Risk Management Process Standards set out the process for identifying, evaluating and reporting incidents, including those pertaining to physical and psychosocial safety. Incidents and near misses are rated internally against potential or actual consequence and likelihood. Every incident is also assessed for its impact on our six stakeholder groups. All significant safety incidents (actual or potential) are investigated thoroughly using the Incident–Cause–Analysis Method (ICAM). The Board oversees our approach to managing safety risks through the Sustainability Committee. Our Global Safety Performance Standards are designed to be in line with the statutory requirements of the jurisdictions in which we operate at a minimum and guide our approach to risk evaluation. 4.3 Workforce SVCMs Our employees, contracting partners and contingent workforce are essential to the development and operations of OZ Minerals. They allow us to put our Purpose into action and drive value creation for all our Stakeholders. Stakeholder Value Creation Metrics SAFETY PERFORMANCE WORKFORCE ENGAGEMENT DIVERSITY INCLUSION We want to have an inclusive and diverse workplace that recognises everyone’s value and creates opportunities for everyone to fully contribute and thrive. Our approach is designed to drive cultural change through building inclusive systems, symbols, mindsets and behaviours, underpinned by How We Work Together Principles. This is embedded through People Process Standards and inclusive talent practices to counteract the risk of unconscious biases, Health and Wellbeing Performance Standards, OZWay Capability and Leadership programs. We also track lag and lead indicators of diversity and inclusion, and focus on continuing to mainstream flexible working practices through Work Life Plans. We have an annual calendar of Inclusion and Diversity events such as International Women’s Day and NAIDOC week. We regularly track progress around the experiences of our workforce through our independent workforce Pulse survey conducted every quarter. CASE STUDY GENDER PAY EQUITY As part of our 2022 Salary Review we undertook a compa-ratio review of Gender Pay Equity at Pay Level, (not just ‘like for like’ roles) reducing our Gender Pay Gap from 2.3% to 0.9% for all OZ Minerals Australian Employees. We also updated our controls to systematise gender pay equity across the employee life cycle (hiring, promotions, annual review etc). Our 2021-22 WGEA Annual Compliance Report indicated OZ Minerals is number 1 in our Industry for Gender Pay Equity. CASE STUDY STOP FOR SAFETY 2022 In August a company-wide Safety Stop was held across OZ Minerals following an increase in safety related incidents within a short period. The day consisted of a series of interactive sessions held both in-person and virtually on how to achieve better safety outcomes. These included reviews of workplace hazards, area inspections and clean up activities, update of Work Life Plans, leader storytelling and team commitments to safety and wellbeing supported by incident trend and Pulse data (anonymous workforce feedback tool). We also held safety circles to share de-identified incidents of harassment and build ‘upstander’ capability. › TRIFR of 6.99 per million hours worked, an increase of 2.59 from year prior › Company‑wide Stop for Safety Day, see case study › Zero fatalities 2022 SNAPSHOT Sustainability Review continued OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 60 4.4 Culture Our commitment to prioritising the safety, health and wellbeing of our Workforce includes ensuring our work environment is physically and psychologically safe and everyone feels respected and included. At the heart is our How We Work Together principles and behaviours of caring for each other, looking after our own health and wellbeing and supporting others to do the same, and questioning behaviours that are not aligned with How We Work Together. The recent attention on challenges of sexual harassment and bullying in our industry are a powerful reminder that we must continue to focus on building a culture of care and respect. We are identifying and assessing both physical and psychosocial risks and hazards and putting in place plans to address these. We measure our success using a series of Stakeholder Value Creation Metrics (SVCMs). We have zero tolerance for harassment, bullying and discrimination in all its forms. In 2022 we took a number of actions to strengthen our controls and systematise zero tolerance into our operations. This includes: › CEO conversation circles to listen directly to workforce experiences of respect and inclusion (what is working well and where we can improve). › Increase in females in leadership from 18.6% to 22.1%. › Incidents involving behaviour which may result in prolonged physical or psychological harm to member(s) of the workforce are treated as significant incidents. › Sharing de-identified incidents through CEO broadcasts and safety circles on site to reinforce behavioural expectations and learning. › Building capability in how to be an ‘upstander’ vs a bystander and proactively intervene early if people see or experience something that makes them or others feel uncomfortable. › Strengthening our Code of Conduct, Speak up and Incidents Process Standards and Global Health and Wellbeing Performance standards. › Strengthening lag and lead indicators in our Pulse survey to measure effectiveness of our controls. › Independent audit of our two Australian site facilities, processes and policies to identify opportunities to strengthen controls aligned to our commitment to safe, respectful work environments. › We are in the process of training and establishing a Safe Space Network as an additional channel to support people who have seen or experienced inappropriate workplace behaviours (partnering with Blue Knot National Centre of Excellence for support for people impacted by trauma). This work supports OZ Minerals’ pursuit of UN Sustainable Development Goal number 5, Achieve gender equality and empower all women and girls. 4.5 Community SVCMs At OZ Minerals, we measure the value we create for our Communities through our approach to Social Performance with a set of metrics, our SVCMs, that help us understand and learn from our activities and their impacts (see page 5). Community SVCMs In 2022 we undertook a review of Community SVCMs to ensure that the Company is aiming high to achieve its targets and to collect rich data on emerging patterns and areas for learning and growth to support our Strategic Aspirations. 4.5.1 How we engaged in 2022 We work to protect and respect country and culture by supporting the principles of Voice, Treaty and Truth and support the effort being made to achieve National Reconciliation. In 2019, we engaged in extensive consultation with our Traditional Owners with respect to the need for a collective company Reconciliation Action Plan (RAP). It was their view that our Partnering Agreements superseded a RAP. These agreements enshrine our commitment to work in the spirit of shared value and mutual obligation and inform the management of our production Assets’ specific Native Title Mining Agreements. OZ Minerals recognises the collective rights of First Nations Peoples to self-determine and decision-make in regard to their lands and waters. This is the principle that underpins our work to ensure Free, Prior and Informed Consent. For more information on how we engage with Communities, develop Agreements and ensure that Free, Prior and Informed Consent is granted, see ozminerals.com/en/ how-we-work/partnering-with-communities/how-we-engage. Examples of successful partnerships undertaken in 2022 can be found at ozminerals.com/en/where-we-work. › WGEA Report 2021 - 2022 identified OZ Minerals as #1 in the mining industry for gender pay equity › Increased overall leadership gender balance from 20.7% to 23.7% › Increase in females in leadership from 18.6% to 22.1% › Achieved 40:40:20 gender target for Board and Executive › Executive LTI goals now carry 20% weighting on performance against ESG indices (Section 3, ESG benchmarking) 2022 SNAPSHOT PARTNERING CASE STUDIES COMPLAINTS AND GRIEVANCES AREA DISTURBED CULTURAL HERITAGE INCIDENTS WATER CONSUMED HUMAN RIGHTS INCIDENTS NON-MINERAL WASTE SOCIAL CONTRIBUTION SPEND Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 61 In 2022 OZ Minerals supported initiatives to the value of $145,000. In addition, OZ Minerals is a member of associations including the South Australian Chamber of Mines and Energy (SACOME), Association of Mining Exploration Companies (AMEC), United Nations Global Compact (UNGC), Committee for Economic Development of Australia (CEDA), Australia-Latin America Business Council (ALABC), Work180, Diversity Council of Australia, Pride in Diversity, Parents at Work and International Copper Association Australia (ICAA). In 2022 OZ Minerals undertook a review and due diligence of industry association and memberships for alignment with our Stakeholder Value Creation Metrics. No material misalignments were identified. OZ Minerals has developed Membership Principles, linking them to our existing Anti Bribery and Corruption Global Process Standards which sets out our zero tolerance for donations to political parties, organisations or any political official on behalf of OZ Minerals. 4.6 Human Rights At OZ Minerals, we aim to advance and promote human rights throughout our value chain. We have zero tolerance of human rights abuse and modern slavery and expect this of our Workforce, Suppliers and partners. Our Human Rights Global Performance Standard (ozminerals.com/en/how-we-work/performance-standards) is guided by national and international guidelines, including: › UN Guiding Principles on Business and Human Rights › Universal Declaration on Human Rights › Voluntary Principles on Security and Human Rights (VP) › International Labour Organisations (ILO) Conventions on child labour and freedom of association › International Council on Mining and Metals (ICMM) Principles › Australian Modern Slavery Act 2018 (Cth). In addition to our Human Rights Performance standard we also manage human rights issues through dedicated actions for our workforce culture, safety, heritage management and land disturbance standards. Where issues arise with our Community partners, we have robust processes to ensure these incidents are recorded, heard and responded to in a timely manner. These include processes for assessing and responding to human rights incidents, heritage incidents and community grievances. For more information on these processes see ozminerals.com/en/how-we-work/partnering-with-communities/how- we-engage. In 2022 there were zero significant/material human rights incidents and zero significant/material cultural heritage breaches. One grievance was recorded at Carrapateena relating to a concern about an increased risk of Foot and Mouth Disease impacting local pastoral operations due to the disease’s spread in Asia. The grievance was responded to by being recorded in the Critical Risk Management portal, a risk assessment was undertaken and stakeholder communications were immediately initiated. This included the development of an infectious diseases protocol which was communicated to the workforce. 4.5.2 How we invested in 2022 Our social investment decisions expand our community efforts beyond our immediate sphere of influence and allow us to develop sustainable legacies. This year, we contributed a total of $1.58 million in community support. We work to ensure that our decisions are defined, driven, informed by the needs of the community and provide long-term benefits. To learn more about how we invest in our communities visit ozminerals.com/en/how-we-work/partnering-with- communities/social-investment. Our Educating the Next Generation Program was redeveloped in 2022. The Program reflects what is front and centre of our Strategy – creating value for stakeholders – and through it, we have developed a number of partnerships to support our Communities. The Program now integrates OZ Minerals’ support through funding, internships, STEM innovation projects and volunteer and mentoring opportunities for our Workforce. The funding arm of this Program is being delivered through partnerships with The Clontarf Foundation, Shooting Stars and The Smith Family totalling $900,000 over the next three years as well as an ongoing contribution to the Royal Flying Doctor Service of $150,000 per year. In 2022 we continued our COVID-19 Stakeholder Support Fund established at the onset of the pandemic. This year, the Fund contributed $150,000 to Foodbank SA for support of food security and supply issues arising from the pandemic. Additionally, ad hoc sponsorship initiatives are undertaken by the Corporate centre and at each Asset. In developing social contribution initiatives, we seek to avoid creating dependency. Instead, we strive to support organisations or projects in achieving self-sustaining outcomes so communities close to our operations benefit from our presence. For more information on sponsorship guidelines, including priority areas for support (ozminerals.com/en/news/sponsorship). › Carrapateena human rights gap analysis completed › Review of modern slavery internal and external capability for enhancement › Australian supplier-wide communication from CEO on our human rights position › Brazil human rights capability campaign 2022 SNAPSHOT Sustainability Review continued OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 62 In 2022 we continued progressing our Modern Slavery Plan, which included continuing high risk supplier due diligence and program enhancements via capability review of existing training modules. In 2022 we did not identify any direct instances of modern slavery in our global Assets. OZ Minerals and multiple cross industry users in Australia were indirectly exposed to modern slavery in the rubber gloves supply chain in 2022. This exposure was a national issue and triggered further due diligence in collaboration with impacted suppliers (as distributors). This incident is currently being actively monitored as part of our ongoing modern slavery program. For further information on OZ Minerals’ approach to modern slavery, see the company’s 2021 Modern Slavery Statement (ozminerals.com/ en/working-with-us/modern-slavery-statement). The 2022 Modern Slavery Statement will be published later in 2023. In 2022 the key human rights focus areas included an externally facilitated audit of the threat of ‘Occurance of Human Rights Breach’. This informed ongoing developments to the Carrapateena Human Rights Management Plan. Brazil commenced human rights capability enhancements including harassment, discrimination and First Nations heritage. At the West Musgrave Project (WMP), whilst still in greenfield state, the focus remained on cultural heritage approvals, community and First Nations engagement ozminerals.com/en/where- we-work/west-musgrave. 5. Environmental performance Government Value Community Value › Material topics: Decarbonisation, water, waste and tailings management, biodiversity, ecology and rehabilitation › Strategic Aspirations: Decarbonisation and traceability, closure, waste and water › SVCMs: Emissions, energy, water, waste, land and biodiversity Together with our Stakeholders, we depend on the natural environment. As a Modern Mining Company, we recognise our global operations inherently impact the environment and our Stakeholders. We remain committed to exceeding the expectations of our Stakeholders through how we manage our interactions with the environment, our practices and Standards, compliance with statutory and regulatory requirements, reduction of our impact, and regeneration and rehabilitation of the land and ecosystems which support our business and our Stakeholders. For a detailed overview of our approach to environmental management, see the Environmental Performance section of our website. No regulatory non-compliances were identified for the reporting period at any of our operations, however a reportable spill occurred at Carrapateena, a seepage of saline water which impacted vegetation. This was reported to the South Australian regulator consistent with statutory requirements. 5.1 Climate change, decarbonisation and air emissions This section provides an overview of our 2022 performance and activities. More detailed disclosures aligned to the Recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) can be found on our website (ozminerals.com/en/how-we-work/ performance-standards/climate-statement). 5.1.1 Climate change & decarbonisation Our Assets continued to execute detailed Decarbonisation Plans in 2022 to implement and deliver against our Decarbonisation Roadmap (ozminerals.com/en/how-we-work/performance-standards/climate- statement). At Carrapateena and Prominent Hill, progress has been made on construction of the electric materials handling systems and to execute trials of electrified concentrate haulage, loaders and light vehicles (LVs) throughout 2023. Our Brazil team developed a greenhouse gas inventory across Scope 1, 2 and 3 emissions2, from which they developed a Decarbonisation Plan for their operating context. In 2022 we announced FID to proceed with our West Musgrave Project which will be one of the lowest emissions intensity nickel mines globally. Reflecting these developments, our Company Strategy was updated to focus on Modern Minerals, uniquely placing us to capitalise on the growing demand for the modern minerals that are integral to the multi-decade electrification and decarbonisation transition (page 8). In 2022, we revised our approach to climate risk management to identify major enterprise risks for the Company, known as Context Risks (page 30). Climate change, encompassing both physical and transition risk (opportunities and threats), is identified as a Context Risk, owned by the Corporate Affairs Executive. Transition risks are managed by key Corporate roles including Sustainability and Strategy, as well as dedicated Asset roles overseeing the implementation of decarbonisation initiatives consistent with our Decarbonisation Roadmap. Specific physical climate-related risks have been identified as potential threats to our operational performance and are captured by our Assets as Performance Risks. 2. Brazil greenhouse gas inventory was prepared in alignment with Programa Brasileiro GHG Protocol and Greenhouse Gas Protocol requirements. › First year of Decarbonisation Roadmap delivery › Final Investment Decision to proceed with our WMP which will be one of the lowest emissions intensity nickel mines globally › FY22 emissions: Scope 1 95,387 tCO2-e, 0.7% increase Scope 2 230,651 tCO2-e, 7.7% decrease Scope 3 557,847 tCO2-e 2022 SNAPSHOT Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 63 We also undertook a climate risk assessment of the Basis of Design for our Carrapateena Expansion. This builds on the physical risk assessments of our Assets in previous years (see 2021 Annual and Sustainability Report). The results of this assessment showed the current design to be resilient to physical risks (threats) under extreme climate change scenarios, with no Material threats identified 3. To support delivery of our net zero commitments and potential exposure to changing government policy settings, we have developed an Offsets Plan. The Plan is centred on value creation for our Stakeholders through the use of offsets and informs how we meet our abatement requirements and ensure integrity. Key elements of the Plan include working with Stakeholders to develop opportunities for new offsets projects and building our offsets portfolio based on our operating locations as well as other jurisdictions. We have developed a Reduction Plan for Scope 3 emissions which focuses on engaging our Suppliers and value chain partners, including our Customers, to identify opportunities to collaborate to reduce Scope 3 emissions. In 2022, our total Scope 1 emissions were 95,387 tCO2-e, increasing 0.7 per cent from FY21, consistent with the expected trajectory of our Decarbonisation Roadmap. Our Scope 2 emissions decreased over the same period by 7.7 per cent to 230,651 tCO2-e, despite an increase in energy consumption. This was largely due to a significant decrease in the emissions intensity of the South Australian electricity grid 4, attributable to increased renewable penetration of approximately 67.5 per cent 5 in 2022. GHG Emissions - Scope 1 & 2 (tCO2-e) 400,000 tCO2-e 300,000 200,000 100,000 2018 2019 2020 2021 2022 Scope 1 Scope 2 0 We re-baselined our Scope 3 emissions in 2022 (Figure below), which totalled 557,847 tCO2-e. This increase was due primarily to a greater amount of smelting associated with our product. We also analysed our purchased goods and services in more detail which led to higher emissions for this category. At the same time, we are on track to achieve several reductions in Scope 3 emissions. Through moving to smaller aircraft for commuting to our mines and scheduling enhancements, we are anticipating a 45 per cent reduction 6 in emissions from our charter flights. We have also made changes to our inbound logistics movements at Carrapateena which we estimate has reduced Scope 3 emissions by 10 per cent. OZ Minerals' Scope 3 Emissions Profile (tCO2-e) FY22 500,000 400,000 300,000 200,000 100,000 0 Purchased goods and services Shipping Waste Employee commuting (charter flights) Rail Smelting Business travel Upstream logistics 5.1.2 Air emissions In 2022, Prominent Hill successfully completed trials applying dust suppression additives to the site access road and underground mining environment. In addition, speed restrictions were implemented along sections of the access road stocked with livestock. Together, the trials have reduced the impacts of dust on air quality on both the surface and underground and on local livestock neighbouring the operation. Our Australian Assets, Prominent Hill and Carrapateena, anually report emissions of air pollutants via the National Pollutant Inventory (NPI). In FY22, emissions of carbon monoxide and oxides of nitrogen increased at Carrapateena, consistent with the increase in diesel consumption, while the inverse occurred at Prominent Hill. No emissions to surface water were identified at either Asset, while all emissions to land (including groundwater) decreased at Carrapateena and increased at Prominent Hill, reflecting the change in water volume in tailings slurry at each Asset respectively. 3. Refer to 2022 TCFD disclosures for details of the risk assessment. 4. Compilation No. 14 (July 2022), National Greenhouse and Energy Reporting (Measurement) Determination 2008. 5. OpenNEM. 6. Estimated reduction over full financial year. Aircraft and scheduling change commenced in June 2022. Sustainability Review continued OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 64 5.2 Non-mineral & mineral waste We have an Aspiration to eliminate waste from non-renewable sources at our operations. Our Assets maintain Waste Management Plans to manage non-mineral waste that are guided by the waste management hierarchy of avoid, reduce, reuse, recycle, recover, treat and dispose in accordance with our Non‑Mineral Waste and Wastewater Performance Standard. In 2022, Prominent Hill undertook an initiative to remove disused infrastructure and equipment from site for recycling. This resulted in an additional 327 tonnes of metal being recycled. Carrapateena implemented timber and poly-pipe recycling initiatives whereby timber is reprocessed into wood chips for landscaping, and poly-pipe is granulated and supplied to manufacturers to be remoulded into new products. We produced 2,497 tonnes of landfill waste across OZ Minerals Assets in 2022, slightly less than in 2021. We recycled nearly 2,700 tonnes of solid material, slightly less than in 2021. Non-mineral waste 2018 2019 2020 2021 2022 Solid recyled (t) Liquid recyled (l) Landfill (t) Incineration (t) On-site storage (t) Hazardous transported (t) 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 5.3 Tailings We recognise the importance of ensuring safe, long-term impoundment of mine tailings and residues to prevent any detrimental impact on the environment, downstream communities and Workforce facilities. OZ Minerals is committed to aligning with the Global Industry Standard on Tailings Management (GISTM). We recognise that achieving alignment with the GISTM is a multi-year journey and our Assets are developing their own plans reflective of local requirements, regulations and our internal governance system. We currently own and operate four active tailings facilities (Table below) at Prominent Hill and Carrapateena in South Australia and at the site of the Antas mine in the Carajás East Hub in Brazil. In the Carajás Hub, tailings are now deposited in the depleted Antas open pit. We currently do not have any closed tailings facilities. Detailed information of our governance and management approaches to tailings and detailed disclosures regarding our tailings facilities can be found in the Tailings section of on our website ozminerals.com/en/how-we-work/performance-standards/tailings. OZ Minerals’ Tailings Storage Facilities Tailings facility Description Initial operation date Raising method Current volume Planned volume Carrapateena Cross-valley embankment March 2020 Stage 2 downstream, stages 3-6 upstream 7.9 million m3 (July 2022) 26.6 million m3 (2028, estimated) Prominent Hill Large circular dam February 2009 Downstream 51.6 million m3 (July 2022) 65.1 million m3 (2028) Antas dam Cross-valley embankment March 2016 Downstream 2.4 million m3 (October 2022) 30,000m3 (2023, estimated) 8 Antas pit Depleted Antas pit 7 April 2022 Not applicable 0.3 million m3 5.8 million m3, estimated 7. The exhausted Antas pit is not considered a dam under Brazilian regulations. 8. The relatively low planned volume in the Antas dam is due to transfer of tailings to the exhausted Antas pit. › New Strategic Aspiration to eliminate waste and water from non-renewable sources in all our processes › Enhancements in data capture via SVCMs 2022 SNAPSHOT › Four active tailings facilities owned and operated by OZ Minerals › All Assets completed assurance reviews against OZ Minerals’ Standards and gap analyses against the GISTM › Commitment to implementing the GISTM 2022 SNAPSHOT Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 65 All Assets with active tailings facilities completed reviews against the GISTM in 2022 to identify any gaps and pathways to alignment. During the reporting period, Carrapateena completed stage two of the TSF, consisting of a 14m downstream raise using approximately 1.6 million m3 of compacted mine rockfill. Stage two is expected to provide adequate tailings storage capacity until 2028. At Prominent Hill, the Tailings Operational Management Plan was reviewed and updated and the stage six uplift design completed ahead of activity planned for 2024/25. Geotechnical and geochemical investigations at both Carrapateena and Prominent Hill confirmed tailings to be Non‑Acid Forming (NAF). In Brazil, activities focussed on decommissioning the Antas facility through transferring existing tailings to the exhausted mine pit. As a result, no continuous operational activities were undertaken. 5.4 Water › New Strategic Aspiration to eliminate waste and water from non-renewable sources in all our processes 2022 SNAPSHOT While water is essential to sustain our operations, we have an Aspiration to eliminate water from non-renewable sources. Our Assets design, construct and operate water consuming activities and infrastructure with consideration to minimising water usage, including the adoption of new technologies. Our Australian operations are located in arid zones and rely on hyper‑saline groundwater drawn from nearby wellfields. These Assets do not draw from the Great Artesian Basin. Our operations in Brazil are in high rainfall zones and use a combination of surface and groundwater. None of our Assets are located in areas of extreme water stress 9. Water withdrawal 1,000 2,000 3,000 4,000 5,000 6,000 7,000 9,000 8,000 2018 2019 2020 2021 2022 0 Surface water (ML) Groundwater (mine dewatering, ML) Groundwater (wellfield, ML) Rainwater (ML) Municipal water supply (ML) Total recycled (ML) 5.5 Land, biodiversity, rehabilitation & closure Recognising the need to further integrate nature into decision making, in 2022 we determined to implement the Task Force on Nature-Related Disclosures (TNFD) framework over a multi-year period, once the framework is finalised. Our South Australian Assets have established Significant Environmental Benefit (SEB) offset areas on nearby land parcels. As an example the SEB area at Prominent Hill consists of a portion of the Mt Eba Pastoral Lease and undisturbed areas within the Mining Lease totalling approximately 12,415 ha (less project-related disturbances). The SEB areas contain several threatened flora and fauna species listed under State and Commonwealth legislation. During the reporting period, regulatory approvals were granted to disturb 5.23 ha of land at Prominent Hill, while 8.06 ha were rehabilitated onsite following the demolition of several work areas. In total, 10.2 ha was reseeded at Carrapateena with native plant species. 6. Appendix 6.1 Organisational scope and boundary Our sustainability data is disclosed in accordance with the Global Reporting Initiative (GRI) and Sustainability Accounting Standards Board (SASB) Metals and Mining Standard. We are also aware of emerging sustainability standards and frameworks, some elements of which are reflected in our Review. Our 2022 Sustainability Review covers the performance of our Australian Assets Prominent Hill, Carrapateena and West Musgrave 10, and our Brazilian Assets in the Carajás Province. These are facilities over which OZ Minerals had or gained operational control 11 during the 2022 calendar year. Joint ventures which we do not operate are excluded. 6.2 Sustainability data Data supporting the Sustainability Review is available from ozminerals.com/ArticleDocuments/358/230221_OZ%20Minerals% 202022%20Sustainability%20Review_databook.xlsx.aspx. 6.3 Assurance OZ Minerals engaged KPMG to undertake Reasonable Assurance over the energy and emissions data for our Australian Assets and Limited Assurance over other selected information in this Review. The full details of the process, scope of assurance and outcome are detailed in KPMG’s Assurance Statement on page 67. 9. According to the World Resources Institute Aqueduct Water Risk Atlas. 10. WMP is not yet operational and data and reporting is therefore limited. 11. As defined by the National Greenhouse and Energy Reporting Act 2007. › Determined to implement TNFD › Some rehabilitation works 2022 SNAPSHOT Sustainability Review continued OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 66 Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 67 Independent Limited Assurance Report to the Directors of Oz Minerals Ltd Conclusion Based on the evidence we obtained from the procedures performed, we are not aware of any material misstatements in the Selected Sustainability Information which has been prepared by OZ Minerals Limited (the Company) in accordance with Global Reporting Initiative (GRI) Standards, the recommendations of the Taskforce on Climate- related Financial Disclosures (TCFD) and the Company specific definitions outlined in the Sustainability Review section of the Company’s 2022 Annual Report and Sustainability Review on pages 58-66 and the 2022 Sustainability Review Databook for the year ended 31 December 2022. INFORMATION SUBJECT TO ASSURANCE The Selected Sustainability Information, as presented in the Sustainability Review section of the Company’s 2022 Annual Report and Sustainability Review on pages 58-66 and the 2022 Sustainability Review Databook for the year ended 31 December 2022 and available on the Company website, comprises the following: Selected Sustainability Information Value assured Location of disclosure Greenhouse gas emissions Scope 1 1 July 2021 to 30 June 2022 Australian operations 87,400t CO2-e 2022 Sustainability Review Databook tab “Environment 2022 Data” Greenhouse gas emissions Scope 2 1 July 2021 to 30 June 2022 Australian operations 227,546t CO2-e Greenhouse gas emissions Scope 3 1 July 2021 to 30 June 2022 557,847t CO2-e 2022 Sustainability Review Databook tab “Scope 3 Emissions 2022” Climate change, decarbonisation, and air emissions disclosure N/A OZ Minerals 2022 Annual Report and Sustainability Review pages 63-64 Fatalities 0 2022 Sustainability Review Databook tab “Social 2022 data” Total Recordable Injury Frequency Rate (TRIFR) 6.99 Lost Time Injury Frequency Rate (LTIFR) 1.06 Significant safety incidents 58 Representation at leadership level (Employees, CY22): › Board › Senior Leaders › Total Employees › 50% female › 16.1% female › 23.7% female CRITERIA USED AS THE BASIS OF REPORTING The criteria used in relation to the Selected Sustainability Information are the GRI Standards published by the GRI, Recommendations of the TCFD and Company specific definitions outlined in the Sustainability Review section of the Company’s 2022 Annual Report and Sustainability Review on pages 58-66 and the 2022 Sustainability Review Databook for the year ended 31 December 2022. 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. OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 68 BASIS FOR CONCLUSION We conducted our work in accordance with Australian Standard on Assurance Engagements ASAE 3000 Assurance Engagements Other Than Audits or Reviews of Historical Financial Information and ASAE 3410 Assurance Engagements on Greenhouse Gas Statements (Standards). In accordance with the Standards we have: › used our professional judgement to plan and perform the engagement to obtain limited assurance that we are not aware of any material misstatements in the Selected Sustainability Information, whether due to fraud or error; › considered relevant internal controls when designing our assurance procedures, however we do not express a conclusion on their effectiveness; and › ensured that the engagement team possess the appropriate knowledge, skills, and professional competencies. SUMMARY OF PROCEDURES PERFORMED Our limited assurance conclusion is based on the evidence obtained from performing the following procedures: › enquiries with relevant Company personnel to understand the internal controls, governance structure and reporting process relevant to the Selected Sustainability Information; › reviews of relevant documentation; › analytical procedures over the Selected Sustainability Information; › walkthroughs of the Selected Sustainability Information to source documentation; › a site visit to Prominent Hill and remote discussions with Corporate Head Office (Adelaide), Carrapateena, and Brazil Assets; › agreeing the Selected Sustainability Information to relevant underlying sources on a sample basis; › evaluating the appropriateness of the criteria with respect to the Selected Sustainability Information; and › reviewed the OZ Minerals Sustainability Review & Sustainability Review Databook in its entirety to ensure it is consistent with our overall knowledge of assurance engagement. HOW THE STANDARD DEFINES LIMITED ASSURANCE AND MATERIAL MISSTATEMENT 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. Misstatements, including omissions, are considered material if, individually or in the aggregate, they could reasonably be expected to influence relevant decisions of the Directors of OZ Minerals Limited. USE OF THIS ASSURANCE REPORT This report has been prepared for the Directors of OZ Minerals Limited for the purpose of providing an assurance conclusion on the Selected Sustainability Information and 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 OZ Minerals Limited or for any other purpose than that for which it was prepared. MANAGEMENT’S RESPONSIBILITY Management are responsible for: › determining that the criteria is appropriate to meet their needs and the needs of the Company stakeholders; › preparing and presenting the Selected Sustainability Information in accordance with the criteria; and › establishing internal controls that enable the preparation and presentation of the Selected Sustainability Information that is free from material misstatement, whether due to fraud or error; and › maintaining the integrity of the website. OUR RESPONSIBILITY Our responsibility is to perform a limited assurance engagement in relation to the Selected Sustainability Information for the year ended 31 December 2022, and to issue an assurance report that includes our conclusion. Our Independence and Quality Control We have complied with our independence and other relevant ethical requirements of the Code of Ethics for Professional Accountants (including Independence Standards) issued by the Australian Professional and Ethical Standards Board and complied with the applicable requirements of Australian Standard on Quality Management 1 to design, implement and operate a system of quality management. KPMG Julia Bilyanska Partner 22 February 2023 Mineral Resources and Ore Reserves As at 30 June each year OZ Minerals reports its Mineral Resources and Ore Reserves in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, December 2012 (the JORC Code) as required by the Australian Securities Exchange (ASX). Overall, compared to the prior year the 2022 estimated Ore Reserves were stable at approximately 560 Mt. Total estimated Mineral Resources were also stable at approximately 1,800 Mt. The Mineral Resource and Ore Reserve information in the table below is drawn from the following ASX releases: Deposit Release date Prominent Hill Mineral Resource and Ore Reserve Statement as at 30 June 2022 21-Dec-22 Carrapateena 2022 Mineral Resources and Ore Reserves Statements and Explanatory Notes as at 30 June 2022 21-Dec-22 Fremantle Doctor 2022 Mineral Resources Statement and Explanatory Notes as at 30 June 2022 21-Dec-22 Maiden Succoth Resource Estimate (asx.com.au/asxpdf/20151207/pdf/433lsh4dgb91rs.pdf) 7-Dec-15 Maiden Jericho Resource and Cloncurry exploration update (asx.com.au/asxpdf/20200716/pdf/44kkzdc6ljty34.pdf) 16-Nov-21 West Musgrave Project Nebo-Babel Deposits 2022 Mineral Resource and Ore Reserve Statement and Explanatory Notes as at 23 September 2022 23-Sep-22 Antas North Mineral Resource included in “Summary of updated Mineral Resource & Ore Reserve Statements” 21-Dec-22 Pedra Branca Mineral Resource and Ore Reserve Statement and Explanatory Notes as at 30 June 2022 21-Dec-22 CentroGold Mineral Resource Estimate and Ore Reserve Statement as at 6 May 2019 and 24 June 2019 11-Jul-19 CentroGold Resources Increase 45% and Exceeds 1.8 Million Ounces 1 (asx.com.au/asxpdf/20171113/pdf/43p5by2k5xpcsl.pdf) 13-Nov-17 Santa Lúcia Mineral Resource Statement and Explanatory Notes as at 1 July 2021 24-Sep-21 Pantera Mineral Resource Statement and Explanatory Notes as at 1 October 2022 21-Dec-22 Note: All Mineral Resources and Ore Reserves are estimates. The OZ Minerals Mineral Resources and Ore Reserves statements and their accompanying explanatory notes can be viewed in full at: ozminerals.com/en/investing-in-us/resources-reserves 1. Announcement relates to Chega Tudo only Summary of significant changes since 2021 PROMINENT HILL The Prominent Hill Ore Reserves increased as a result of the upgrading of the Mineral Resource confidence due to the positive drilling results and the favourable long term copper price assumptions. The increase has resulted in an extension of the mine life. Prominent Hill underground Mineral Resources increased due to a combination of favourable drilling results and a lower effective copper cut-off grade for the Mineral Resource. The Mineral Resource cut-off grade change was mostly the result of a more favourable long term copper price assumption. CARRAPATEENA PROVINCE The Carrapateena Mineral Resource and Ore Reserve decreased due to the inclusion of data from a drilling campaign of ~40 kms between July 2020 and June 2022 as well as mapping and sampling information collected from underground development resulting in refined interpretation and estimation. Fremantle Doctor Mineral Resource decreased due to changes in the interpretation, estimation technique and application of the reasonable prospects to be aligned with selectivity of the block caving mining method. WEST MUSGRAVE PROVINCE The 2022 Ore Reserve estimate increased by 17 million tonnes, 20 thousand tonnes of nickel metal and 30 thousand tonnes of copper metal. The update is driven by favourable changes in the processing cost based on increased processing plant throughput and updated power cost assumptions, updated Mineral Resource, metal payability, mining modifying factors and offset by economic assumptions and logistics costs. There has been 304 infill drillholes incorporated into the Nebo-Babel Mineral Resource estimate since the previous Mineral Resource update published in December 2020 as part of the West Musgrave Project (WMP) Pre Feasibility Study Update (PFSU). Overall, Mineral Resource tonnes, grade and metal have remained stable. A decrease in the size of the optimised reporting pit shell, as a result of site limitations, has been offset by favourable changes in the net smelter return (NSR) cut-off value and changes in interpretation as a result of drilling. CARAJÁS PROVINCE The Antas North Mineral Resource was reduced due to processing depletion of stockpiles. The Pedra Branca Ore Reserve and Mineral Resource were reduced due to mining depletion. A new Mineral Resource was released for Pantera. OTHERS There have been no changes to the Mineral Resource estimates of Santa Lúcia, Succoth, CentroGold or Chega Tudo throughout 2022. Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 69 2022 Mineral Resources Measured Indicated Inferred Total Tonnes Cu Au Ag Tonnes Cu Au Ag Tonnes Cu Au Ag Tonnes Cu Au Ag Cu Au Ag Mt % g/t g/t Mt % g/t g/t Mt % g/t g/t Mt % g/t g/t kt koz Moz Copper Prominent Hill underground 49 1.2 0.6 3.0 51 0.9 0.9 2.5 66 0.8 0.9 2.3 170 0.9 0.8 2.5 1,600 4,300 14 Prominent Hill surface stocks 0.35 0.7 0.5 2.0 – – – – – – – – 0.35 0.7 0.5 2.0 2.3 5.4 0.02 Carrapateena 140 1.1 0.43 4.1 470 0.61 0.26 2.7 300 0.26 0.13 1.8 900 0.56 0.24 2.6 5,100 7,000 76 Fremantle Doctor – – – – – – – – 100 0.51 0.33 1.2 100 0.51 0.33 1.2 520 1,100 4.0 Succoth – – – – – – – – 156 0.60 – – 156 0.60 – – 943 – – Antas North – – – – 0.4 0.8 0.2 – 1.0 0.4 0.1 – 1.3 0.5 0.1 – 6.2 6.0 – Pedra Branca 1.9 1.6 0.48 – 8.7 1.7 0.44 – 7.3 1.4 0.36 – 18 1.6 0.41 – 280 240 – Santa Lúcia – – – – 0.91 6.1 0.97 9.2 4.9 1.3 0.24 3.9 5.8 2.1 0.35 4.8 120 66 0.89 Pantera – – – – 13 1.3 0.2 – 7.1 1.1 0.2 – 20 1.2 0.2 – 250 110 – Total 190 1.1 0.5 3.7 540 0.7 0.3 2.6 650 0.5 0.2 1.3 1,400 0.6 0.3 2.1 8,800 13,000 94 Gold Prominent Hill surface stocks – – – – 8.8 0.1 0.5 0.4 – – – – 8.8 0.1 0.5 0.4 11 150 0.12 CentroGold – – – – 21 – 1.9 – 7.3 – 1.8 – 28 – 1.9 – – 1,700 – Chega Tudo – – – – 8.2 – 1.6 – 3.1 – 1.5 – 11.3 – 1.6 – – 577 – Total – – – – 38 0.03 1.5 0.1 10 – 1.7 – 48 0.02 1.6 0.1 11 2,400 0.12 Tonnes Ni Cu Au Tonnes Ni Cu Au Tonnes Ni Cu Au Tonnes Ni Cu Au Ni Cu Au Mt % % g/t Mt % % g/t Mt % % g/t Mt % % g/t kt kt Moz Nickel Babel 91 0.31 0.36 0.06 190 0.28 0.31 0.05 58 0.32 0.35 0.06 340 0.30 0.33 0.06 1,000 1,100 0.6 Nebo – – – – 49 0.34 0.32 0.04 1.1 0.35 0.38 0.05 50 0.34 0.32 0.04 170 160 0.1 Total 91 0.31 0.36 0.06 240 0.29 0.31 0.05 59 0.32 0.35 0.06 390 0.30 0.33 0.06 1,200 1,300 0.7 Ore Reserves Proved Probable Total Tonnes Cu Au Ag Tonnes Cu Au Ag Tonnes Cu Au Ag Cu Au Ag Mt % g/t g/t Mt % g/t g/t Mt % g/t g/t kt koz Moz Copper Prominent Hill underground 29 1.2 0.6 2.9 30 0.9 0.7 2.4 59 1.0 0.7 2.6 590 1,230 5.0 Prominent Hill surface stocks 0.35 0.7 0.5 2.0 – – – – 0.35 0.7 0.5 2.0 2.3 5.4 0.02 Carrapateena – – – – 190 1.1 0.42 4.3 190 1.1 0.42 4.3 2,000 2,600 27 Pedra Branca 0.94 1.8 0.51 – 3.1 2.1 0.53 – 4.0 2.0 0.53 – 80 69 – Total 30 1.2 0.6 2.8 230 1.0 0.5 4.0 260 1.1 0.5 3.8 2,700 3,900 32 Gold Prominent Hill surface stocks – – – – 8.8 0.1 0.5 0.4 8.8 0.1 0.5 0.4 11 150 0.12 CentroGold – – – – 20 – 1.7 – 20 – 1.7 – – 1,100 – Total – – – – 28 0.04 1.3 0.2 31 0.04 1.3 0.1 11 1,200 0.12 Tonnes Ni Cu Au Tonnes Ni Cu Au Tonnes Ni Cu Au Ni Cu Au Mt % % g/t Mt % % g/t Mt % % g/t kt kt Moz Nickel Babel – – – – 236 0.30 0.34 0.06 236 0.30 0.34 0.06 705 791 0.5 Nebo – – – – 36 0.37 0.35 0.04 36 0.37 0.35 0.04 132 125 0.05 Total – – – – 270 0.31 0.34 0.06 270 0.31 0.34 0.06 840 920 0.5 Numbers in table subject to rounding. The Santa Lúcia project is 100% owned by Vale and the Brazil National Economic Development Bank (BNDES) holds a right to participate in up to 50% of the economic results of the project. OZ Minerals has an option to purchase Vale’s share of the project and is in discussions with BNDES regarding the possible acquisition of its option to acquire the other 50% interest in the project. Data reported is on a 100% basis. Mineral Resources are inclusive of Ore Reserves. Mineral Resources and Ore Reserves continued OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 70 2021 Mineral Resources Measured Indicated Inferred Total Tonnes Cu Au Ag Tonnes Cu Au Ag Tonnes Cu Au Ag Tonnes Cu Au Ag Cu Au Ag Mt % g/t g/t Mt % g/t g/t Mt % g/t g/t Mt % g/t g/t kt koz Moz Copper Prominent Hill underground 42 1.3 0.6 3.2 44 0.9 0.9 2.7 51 0.8 0.9 2.3 140 1.0 0.8 2.7 1,400 3,600 12 Prominent Hill surface stocks 2.4 0.6 0.4 1.7 – – – – – – – – 2.4 0.6 0.4 1.7 14 28 0.1 Carrapateena 130 0.96 0.42 3.6 490 0.62 0.26 2.9 330 0.32 0.16 2.0 950 0.56 0.25 2.7 5,400 7,500 82 Fremantle Doctor – – – – – – – – 104 0.7 0.5 3 104 0.7 0.5 3 800 2,000 10 Succoth – – – – – – – – 156 0.60 – – 156 0.60 – – 943 – – Jericho – – – – – – – – 9.1 1.4 0.3 1.6 9.1 1.4 0.3 1.6 130 88 0.5 Antas North 0.1 0.7 0.3 – 0.4 0.8 0.2 – 1.1 0.3 0.1 – 1.5 0.5 0.1 – 7.1 6.6 – Pedra Branca 2.3 1.6 0.5 – 11 1.6 0.4 – 4.8 1.5 0.4 – 19 1.6 0.4 – 300 270 – Santa Lúcia – – – – 0.91 6.1 0.97 9.2 4.9 1.3 0.24 3.9 5.8 2.1 0.35 4.8 120 66 0.89 Total 170 1.0 0.5 3.4 550 0.7 0.3 2.8 660 0.5 0.2 1.7 1,400 0.6 0.3 2.3 9,000 13,000 100 Gold Prominent Hill surface stocks – – – – 12 0.1 0.6 0.4 – – – – 12 0.1 0.6 0.4 15 220 0.2 CentroGold – – – – 21 – 1.9 – 7.3 – 1.8 – 28 – 1.9 – – 1,700 – Chega Tudo – – – – 8.2 – 1.6 – 3.1 – 1.5 – 11.3 – 1.6 – – 577 – Total – – – – 41 0.04 1.5 0.1 10 – 1.7 – 51 0.03 1.5 0.1 15 2,500 0.2 Tonnes Ni Cu Au Tonnes Ni Cu Au Tonnes Ni Cu Au Tonnes Ni Cu Au Ni Cu Au Mt % % g/t Mt % % g/t Mt % % g/t Mt % % g/t kt kt Moz Nickel Babel – – – – 260 0.30 0.34 0.06 79 0.32 0.37 0.06 340 0.31 0.35 0.06 1,000 1,200 0.7 Nebo – – – – 52 0.36 0.32 0.04 2.3 0.32 0.33 0.04 54 0.36 0.32 0.04 190 170 0.1 Total – – – – 310 0.31 0.34 0.06 82 0.32 0.37 0.06 390 0.31 0.34 0.06 1,200 1,300 0.7 Ore Reserves Proved Probable Total Tonnes Cu Au Ag Tonnes Cu Au Ag Tonnes Cu Au Ag Cu Au Ag Mt % g/t g/t Mt % g/t g/t Mt % g/t g/t kt koz Moz Copper Prominent Hill underground 25 1.3 0.6 3.2 24 1.0 0.7 2.8 48 1.2 0.7 3.0 560 1,100 4.7 Prominent Hill surface stocks 2.4 0.6 0.4 1.7 – – – – 2.4 0.6 0.4 1.7 14 28 0.1 Carrapateena – – – – 210 1.1 0.44 4.3 210 1.1 0.44 4.3 2,300 3,000 30 Antas North – – – – – – – – – – – – – – – Pedra Branca 1.1 1.9 0.6 – 3.9 2.1 0.5 – 5 2.1 0.5 – 104 89 – Total 28 1.3 0.6 3.0 240 1.1 0.5 4.1 270 1.1 0.5 4 3,000 4,200 35 Gold Prominent Hill surface stocks – – – – 12 0.1 0.6 0.4 12 0.1 0.6 0.4 14 210 0.2 CentroGold – – – – 20 – 1.7 – 20 – 1.7 – – 1,100 – Total – – – – 31 0.04 1.2 0.2 31 0.04 1.2 0.2 14 1,200 0.2 Tonnes Ni Cu Au Tonnes Ni Cu Au Tonnes Ni Cu Au Ni Cu Au Mt % % g/t Mt % % g/t Mt % % g/t kt kt Moz Nickel Babel – – – – 220 0.31 0.35 0.06 220 0.31 0.35 0.06 680 770 0.4 Nebo – – – – 33 0.41 0.36 0.04 33 0.41 0.36 0.04 140 120 0.05 Total – – – – 253 0.32 0.35 0.06 253 0.32 0.35 0.06 820 890 0.5 Numbers in table subject to rounding. Mineral Resources are inclusive of Ore Reserves. In 2021 OZ Minerals had an 80 per cent ownership stake in the Jericho Joint Venture, however, the Mineral Resource was reported on a 100 per cent basis. Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 71 Material changes in the Mineral Resources and Ore Reserves estimates OZ Minerals is not aware of anything that materially affects the information contained in any of the above-listed estimates since they were last reported, except for depletion due to mining. Depletion of the Ore Reserves between 30 June 2022 and 31 December 2022 is outlined below. Asset Tonnes (Mt) Cu (%) Au (g/t) Ag (g/t) Prominent Hill 4.3 0.8 0.6 2 Carrapateena 2.3 1.4 0.6 8 Pedra Branca 0.4 1.8 0.5 – Competent Persons’ statements The information in this report that relates to the Mineral Resources and Ore Reserves listed in the table below is based on, and fairly represents, information and supporting documentation prepared by the relevant Competent Person whose name appears in the same row. Each has sufficient experience which is relevant to the style of mineralisation and types of deposits under consideration and to the activity which they have undertaken to qualify as a Competent Person as defined in the JORC Code (2012). As a whole, the Mineral Resources and Ore Reserves Statement in this report has been approved by each person named in the table below. Each person is a member of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists or other Recognised Professional Organisations, and consents to the inclusion in this report of the matters based on their information in the form and context in which it appears. Competent Persons may be shareholders in OZ Minerals Limited. OZ Minerals’ employees are entitled to participate in the OZ Minerals Performance Rights Plan. Asset Estimate Name Employer Professional Organisation Membership Number Prominent Hill Mineral Resource Bruce Whittaker OZ Minerals full time employee AusIMM 222853 Prominent Hill Ore Reserve Anne-Marie Ebbels OZ Minerals full time employee AusIMM 111006 Carrapateena Mineral Resource Shaun Light OZ Minerals full time employee AusIMM 316591 Carrapateena Ore Reserve Matthew Fargher OZ Minerals full time employee AusIMM 305811 Fremantle Doctor Mineral Resource Shaun Light OZ Minerals full time employee AusIMM 316591 Antas North Mineral Resource Colin Lollo OZ Minerals full time employee AusIMM 225331 Pedra Branca Mineral Resource Colin Lollo OZ Minerals full time employee AusIMM 225331 Pedra Branca Ore Reserve Luiz Eduardo Pignatari Dompieri Tecnologia em Mineração Consultant Comisión Minera CH 20.235 No 288 Santa Lúcia Mineral Resource Colin Lollo OZ Minerals full time employee AusIMM 225331 Pantera Mineral Resource Colin Lollo OZ Minerals full time employee AusIMM 225331 CentroGold Mineral Resource Aaron Green CSA Global Pty Ltd full time employee AIG 1719 CentroGold Ore Reserve Adriano Carneiro Mining Plus full time employee AusIMM 319595 Chega Tudo Mineral Resource Aaron Green CSA Global Pty Ltd full time employee AIG 1719 Succoth Mineral Resource Aaron Green CSA Global Pty Ltd full time employee AIG 1719 Nebo-Babel Mineral Resource Phillippa Ormond OZ Minerals full time employee AusIMM 226746 Nebo-Babel Ore Reserve Yohanes Sitorus OZ Minerals full time employee AusIMM 317702 Governance arrangements OZ Minerals has established Mineral Resources and Ore Reserves estimation processes, which set Company-wide consistency, rigour and discipline in the preparation and reporting of Mineral Resources and Ore Reserves in accordance with industry best practice. Updates to Mineral Resources and Ore Reserves estimates compiled during 2022 were completed in accordance with the OZ Minerals guiding principles, suitably modified to meet current Company structures, delegated authorities and estimate requirements. These included: › reporting in accordance with the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code 2012 Edition) › suitably qualified and experienced Competent Persons › all Mineral Resources and Ore Reserves estimates being subject to independent review by suitably qualified practitioners, inclusive of the Competent Persons › review by the Mineral Resources and Ore Reserves Corporate Team › Board approval of the Mineral Resources and Ore Reserves estimates prior to release to the market. Mineral Resources and Ore Reserves continued OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 72 Financial Report Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 73 OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 74 Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 To the Directors of OZ Minerals Limited: I declare that, to the best of my knowledge and belief, in relation to the audit of OZ Minerals Limited for the financial year ended 31 December 2022 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 2. no contraventions of any applicable code of professional conduct in relation to the audit. KPMG Chris Sargent Partner 22 Feburary 2023 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. Consolidated statement of comprehensive income Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 75 For the year ended 31 December Notes 2022 $m 2021 $m Revenue 1 1,920.8 2,095.8 Other income – 1.0 Mining (657.1) (516.3) Processing (306.1) (281.0) Freight (100.8) (80.4) Site administration (149.2) (115.9) Royalties (75.4) (93.6) Inventory movement (66.8) (110.0) Corporate administration (78.4) (61.7) Exploration and corporate development (143.3) (56.3) Foreign exchange gain 1.9 14.1 Profit before interest and income tax 345.6 795.7 Financing income 1.7 0.5 Financing expense (37.1) (39.6) Profit before income tax 310.2 756.6 Income tax 3 (102.9) (225.9) Profit for the year attributable to equity holders of OZ Minerals Limited 207.3 530.7 Other comprehensive gain/(loss) Items that will not be reclassified subsequently to future Income Statements Change in fair value of investments in equity securities, net of tax (2.3) 7.4 Items that may be reclassified subsequently to future to Income Statements Cash flow hedges change in fair value – 1.6 Cash flow hedges reclassified to profit and loss – 23.8 Foreign operations - foreign currency translation differences 30.7 22.2 Other comprehensive gain/(loss) for the year, net of tax 28.4 55.0 Total comprehensive income for the year attributable to equity holders of OZ Minerals Limited 235.7 585.7 cents cents Basic earnings per share 2 62.0 159.6 Diluted earnings per share 2 61.7 158.5 The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying Notes. Consolidated statement of change in equity OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 76 For the year ended 31 December 2022 Notes Issued Capital Retained earnings Cash flow hedge reserve Foreign currency translation reserve Total equity $m $m $m $m $m Balance as at 1 January 2022 2,400.3 1,315.5 – 13.9 3,729.7 Total comprehensive income for the year Profit for the year – 207.3 – – 207.3 Other comprehensive income – (2.3) – 30.7 28.4 Total comprehensive income for the year – 205.0 – 30.7 235.7 Transactions with owners, recorded directly in equity Dividends 4 8.4 (87.0) – – (78.6) Share-based payments 13 – 25.8 – – 25.8 Total transactions with owners 8.4 (61.2) – – (52.8) Balance as at 31 December 2022 2,408.7 1,459.3 – 44.6 3,912.6 For the year ended 31 December 2021 Notes Issued Capital Retained earnings Cash flow hedge reserve Foreign currency translation reserve Total equity $m $m $m $m $m Balance as at 1 January 2021 2,371.4 873.7 (25.4) (8.3) 3,211.4 Total comprehensive income for the year Profit for the year – 530.7 – – 530.7 Other comprehensive income – 7.4 25.4 22.2 55.0 Total comprehensive income for the year – 538.1 25.4 22.2 585.7 Transactions with owners, recorded directly in equity Dividends 4 28.9 (109.7) – – (80.8) Share-based payments 13 – 13.4 – – 13.4 Total transactions with owners 28.9 (96.3) – – (67.4) Balance as at 31 December 2021 2,400.3 1,315.5 – 13.9 3,729.7 The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying Notes. Consolidated balance sheet Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 77 At 31 December Notes 2022 $m 2021 $m Current assets Cash and cash equivalents 136.7 215.4 Trade receivables 296.0 236.5 Other receivables 27.8 20.7 Tax receivables 56.6 – Inventories 5 289.2 279.3 Prepayments 31.2 19.1 Total current assets 837.5 771.0 Non-current assets Deferred tax assets 3 7.4 7.4 Inventories 5 69.9 129.4 Exploration assets 8 58.9 288.6 Property, plant and equipment 7 4,339.2 3,350.2 Right-of-Use Assets 9 739.8 733.6 Other assets 17.8 16.7 Total non-current assets 5,233.0 4,525.9 Total assets 6,070.5 5,296.9 Current liabilities Trade payables and accruals 326.9 232.1 Other payables 17.2 9.9 Current tax provision – 55.0 Employee benefits 29.2 26.0 Borrowings 14 375.0 – Lease liabilities 14 97.2 80.5 Total current liabilities 845.5 403.5 Non-current liabilities Deferred tax liabilities 3 504.2 356.4 Employee benefits 5.0 4.4 Provisions 10 130.2 139.5 Borrowings 14 15.6 – Lease liabilities 14 657.4 663.4 Total non-current liabilities 1,312.4 1,163.7 Total liabilities 2,157.9 1,567.2 Net assets 3,912.6 3,729.7 Equity Issued capital 12 2,408.7 2,400.3 Retained earnings 1,459.3 1,315.5 Foreign Currency Translation Reserve 44.6 13.9 Total equity attributable to equity holders of OZ Minerals Limited 3,912.6 3,729.7 The above Consolidated Balance Sheet should be read in conjunction with the accompanying Notes. Consolidated statement of cash flows OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 78 For the year ended 31 December Notes 2022 $m 2021 $m Cash flows from operating activities Receipts from customers 1,906.9 2,042.8 Payments to suppliers and employees (1,052.8) (830.0) Payments for exploration and evaluation (102.9) (56.3) Income tax paid (68.2) (145.6) Financing costs (37.1) (40.4) Interest received 1.7 0.5 Net cash inflows from operating activities 6 647.6 971.0 Cash flows from investing activities Payments for property, plant and equipment (849.8) (571.8) Payments for exploration assets(a) (92.2) (72.4) Proceeds from/(payment for) equity investments (9.0) 14.0 Net cash outflows from investing activities (951.0) (630.2) Cash flows from financing activities Dividends paid to shareholders 4 (78.6) (80.8) Proceeds from loans and borrowings 14 840.6 200.0 Payment for loans and borrowings 14 (450.0) (300.0) Lease payments 9 (87.5) (76.0) Net cash outflows from financing activities 224.5 (256.8) Net (decrease)/increase in cash held (78.9) 84.0 Cash and cash equivalents as at 1 January 215.4 131.7 Effects of exchange rate changes on foreign currency denominated cash balances 0.2 (0.3) Cash and cash equivalents at the end of the year 136.7 215.4 (a) Payments for West Musgrave study costs spent prior to the final investment decision in September 2022. The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying Notes. Notes to the Consolidated Financial Statements Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 79 INTRODUCTION The principal business activities of OZ Minerals Limited (‘OZ Minerals’ or ‘the Company’) and its controlled entities (collectively the ‘Consolidated Entity’ or the ‘Group’) were the mining and processing of ore containing copper, gold and silver; undertaking exploration activities; and the development of mining projects. The Company is incorporated and domiciled in Australia and limited by shares which are traded on the Australian Securities Exchange. OZ Minerals’ registered office is located at 2 Hamra Drive, Adelaide Airport, South Australia 5950, Australia. The Consolidated Financial Statements of OZ Minerals Limited and its controlled entities for the year ended 31 December 2022: › are general purpose financial statements prepared in accordance with Australian Accounting Standards (AASBs) and the Corporations Act 2001, and comply with International Financial Reporting Standards (IFRS) › are presented in Australian dollars which is also the functional currency of its major operations. The controlled entities of the Company have the functional currency of Australian dollars and US dollars. The financial statements of the Company include consolidation of its subsidiaries referred to in Note 17 › have amounts rounded off to within the nearest million dollars to one decimal place unless otherwise stated, in accordance with Instrument 2016/191, issued by the Australian Securities and Investments Commission. The Consolidated Financial Statements have been prepared on a going concern basis. The Group's current liabilities exceed its current assets by $8.0 million. The Group's working capital, investing and financing requirements are being actively managed through operating cash flows and utilisation of committed facilities. The Consolidated Financial Statements have been prepared under the historical cost convention, except for the following items which are measured at fair value, or otherwise, in accordance with the provisions of applicable accounting standards: › financial instruments, including trade receivables › items of property, plant and equipment which have been written down in accordance with applicable accounting standards. Globally economies are experiencing high inflationary pressures as they emerge out of the COVID-19 pandemic; and commodity prices and foreign exchange rates have been volatile. OZ Minerals' operations and project execution have been impacted by inflationary pressures, COVID related absenteeism and supply chain disruptions. On 22 December 2022, OZ Minerals entered into a Scheme Implementation Deed with BHP Lonsdale Investments Pty Ltd ('BHP'), a wholly owned subsidiary of BHP Group Limited, in relation to the proposed acquisition by BHP of all of the issued shares in OZ Minerals by way of scheme of arrangement under the Corporations Act 2001 (Cth) ('Scheme'). The Scheme Implementation Deed permits, subject to certain conditions, OZ Minerals to declare and pay OZ Minerals shareholders a special dividend prior to implementation of the Scheme. Prior to the Scheme meeting (which is currently expected to be held in mid-April 2023), the Board intends to declare a fully franked special dividend of $1.75 per share, such dividend conditional on the Scheme becoming effective. If the Scheme does become effective the special dividend will be paid on the date the Scheme is implemented to OZ Minerals shareholders who hold OZ Minerals shares on the special dividend record date. The special dividend record date will be three days before the Scheme record date, with both record dates currently expected to be in late-April 2023. As stated above, if the Scheme does not become effective the special dividend will not be paid. In that case, the Board will continue to consider the payment of dividends against its current policy of paying sustainable dividends from pre-growth cash flow, after taking into consideration the Company’s near term identified capital investment opportunities and maintaining a strong balance sheet. There have been no other events that have occurred subsequent to the reporting date that have significantly affected or may significantly affect the Consolidated Entity's operations, results of those operations or state of affairs in future years. Notes to the Consolidated Financial Statements continued OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 80 Group performance 1 Operating segments Segment Principal activities Prominent Hill Mining and processing underground ore containing copper, gold and silver along with residual lower grade open pit ore from stockpiles. Development of an expansion project which includes the installation of a hoisting shaft enabling an increase in production rates and extension of mine life. The Prominent Hill mine is located in the Gawler Craton of South Australia. The Prominent Hill mine generates revenue from the sale of concentrate containing copper, gold and silver to customers in Asia, Europe and Australia. Carrapateena Mining and processing underground ore containing copper, gold and silver. Development of an expansion project which includes the transition to a block cave to materially increase production and extend mine life. The Carrapateena mine generates revenue from the sale of concentrate containing copper, gold and silver to customers in Asia, Europe and Australia. Carajás Mining ore containing copper and gold from the Pedra Branca underground mine and processing it at the processing facilities located at the Antas mine which support the Carajás East Hub in Brazil. The Carajás East Hub generates revenue from the sale of concentrate containing copper and gold to customers in Europe and Asia. West Musgrave Development associated with the West Musgrave Project, a significant greenfield copper and nickel mining and processing project located in the West Musgrave Mineral Province of central Western Australia. OZ Minerals announced a final investment approval to develop the West Musgrave Project in September 2022. Exploration & development Exploration and evaluation activities associated with other projects, including exploration arrangements with AIC Mines Limited (formerly Demetallica Ltd and prior to that Minotaur Exploration Ltd), Red Metal Ltd, Mineral Prospektering i Sverige, Inversiones Mineras La Chalina S.A.C., Resolution Minerals Ltd, Black Tiger Resources Ltd and corporate development activities. The Company undertakes its own evaluation and exploration on tenements around existing operating and development Assets, including at Mt Woods and the Stuart Shelf in South Australia, the West Musgrave Project in Western Australia, the Carajás province, and the CentroGold project in the Gurupi province in Brazil. A conditional binding Terms Sheet with Havilah Resources Limited was signed in 2022 setting out a new strategic relationship in the Curnamona Province in South Australia including the option to acquire the Kalkaroo project. Corporate (corporate activities) Other corporate activities include the Consolidated Entity’s group office (which includes all corporate expenses that cannot be directly attributed to the operation of the Consolidated Entity’s operating segments), and treasury activities. RECOGNITION AND MEASUREMENT OF REVENUE The Consolidated Entity generates sales revenue primarily from the transfer of concentrate to buyers (Primary Obligation) and in some cases, based on the commercial terms of the contract, delivering it to customers (Secondary Obligation). The performance obligation to transfer concentrate and delivery arises as and when a shipment is agreed with customers against ongoing short and long term supply contracts. Revenue is allocated between the performance obligations and recognised as each performance obligation is met, which for the primary obligation occurs when the concentrate is delivered to a vessel or location and for the secondary obligation, if applicable, when the concentrate is delivered to the customer’s location. Revenue arising from the secondary obligation is immaterial to the Group and aggregated with the primary obligation for disclosure purposes. The Group’s sale of concentrate incurs customary treatment and refining charges and other commercial costs consistent with industry practice. These items are a deduction from the value of metal contained within the concentrate and accordingly are recognised as a deduction from revenue. As is industry practice, the Consolidated Entity typically makes sales whereby the final sales price for the primary performance obligation is determined based on the market price prevailing at a date in the future, typically three months. Revenue for the primary performance obligation is measured based on the fair value of the consideration specified in a contract with the customer at the time of settling the performance obligation and is determined by reference to forward market prices. Provisional pricing adjustments, which occur between the fair value at the time of settling the primary performance obligation and the final price, are also recorded within revenue. Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 81 Revenue information presented is based on the location of the customers’ operations. Three major customers (2021: three customers) who individually accounted for more than 10 per cent of total revenue contributed approximately 92 per cent of total revenue (2021: 93 per cent). Net revenue by metal Prominent Hill Carrapateena Carajás Total $m $m $m $m 2022 Copper 512.5 721.7 135.3 1,369.5 Gold 278.6 215.2 22.0 515.8 Silver 8.0 27.5 - 35.5 Total 799.1 964.4 157.3 1,920.8 2021 Copper 823.0 617.7 76.6 1,517.3 Gold 331.6 195.8 12.4 539.8 Silver 13.5 24.7 0.5 38.7 Total 1,168.1 838.2 89.5 2,095.8 Notes to the Consolidated Financial Statements continued OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 82 Segmental financial information Prominent Hill Carrapateena Carajás West Musgrave Exploration & Development Corporate Consolidated $m $m $m $m $m $m $m 31 December 2022 Revenue(a) 799.1 964.4 157.3 – – – 1,920.8 Cost of goods sold(b) (484.4) (410.5) (105.2) – – – (1,000.1) EBITDA(c) 307.0 539.2 34.1(d) – (125.9) (61.7) 692.7 Net depreciation and amortisation (141.7) (126.0) (61.8) – – (17.6) (347.1) Capital expenditure(e) 304.5 392.1 66.3 82.4(f) – 12.4 857.7 Property, plant & equipment 1,121.9 2,145.2 288.5 395.6 359.0 29.0 4,339.2 31 December 2021 Revenue(g) 1,168.1 838.2 89.5 – – – 2,095.8 Cost of goods sold(h) (516.6) (275.7) (57.3) – – – (849.6) EBITDA(c) 661.5 555.7 30.9 – (52.6) (33.1) 1,162.4 Net depreciation and amortisation (216.1) (101.8) (31.2) – – (17.6) (366.7) Capital expenditure 209.8 309.0 89.5 – – 9.8 618.1 Property, plant & equipment 868.1 1,840.1 279.0 – 335.9 27.1 3,350.2 (a) Revenue includes a $50.8 million loss relating to the remeasurement of provisionally priced sales contracts for changes in commodity prices between the date of sale and the end of the quotational period. (b) Cost of goods sold does not include net depreciation and amortisation and central cost allocations (Prominent Hill $11.2 million, Carrapateena $14.1 million and Brazil $4.7 million). (c) OZ Minerals financial results are reported under IFRS. This Report includes certain non-IFRS measures including earnings before interest, tax, depreciation and amortisation (EBITDA). These measures are presented to enable an understanding of the performance of the Consolidated Entity and are consistent with the information the Consolidated Entity’s chief operating decision maker uses to assess the performance of the business and make resource allocations. (d) Includes previously recognised exploration assets of $16.2 million transferred to exploration expense during the year. (e) Capital expenditure excluding capitalised borrowing costs of $9.8 million. (f) West Musgrave capital expenditure excludes study costs of $92.2 million spent prior to the final investment decision made by the Board. (g) Revenue includes a $65.0 million gain relating to the remeasurement of provisionally priced sales contracts for changes in commodity prices between the date of sale and the end of the quotational period. (h) Cost of goods sold does not include net depreciation and amortisation, a net realisable value (NRV) adjustment of $18.0 million increasing Prominent Hill inventory value; and corporate cost allocations (Prominent Hill $10.6 million, Carrapateena $10.3 million and Brazil $4.0 million). RECONCILIATION OF CONSOLIDATED EBITDA TO PROFIT AFTER TAX 31 December 2022 2021 $m $m EBITDA(a) 692.7 1,162.4 Depreciation (306.6) (291.5) Other assets amortisation (6.6) (6.6) Capitalised depreciation unwind (33.9) (68.6) Earnings before finance expense and tax 345.6 795.7 Net finance expense (35.4) (39.1) Profit before tax 310.2 756.6 Tax expense (102.9) (225.9) Profit for the year attributable to equity holders of OZ Minerals Limited 207.3 530.7 (a) EBITDA includes corporate and exploration expense of $228.8 million (2021: $116.5 million), other income Nil (2021: $1.0 million) and foreign exchange gain of $1.9 million (2021: $14.1 million) which resulted from the movement in AUD:USD and BRL:USD currency exchange rates on translation of foreign currency transactions and foreign currency denominated financial assets and liabilities. 2021 EBITDA also included an adjustment to increase the value of inventory by $18.0 million with respect to low grade gold ore following an assessment of the NRV. Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 83 Net depreciation and amortisation expense for the year 31 December 2022 2021 $m $m Mining 178.8 156.2 Processing 85.6 91.1 Site and corporate administration 48.8 50.8 Capitalised depreciation unwind 33.9 68.6 Total depreciation and amortisation 347.1 366.7 2 Earnings per share 2022 2021 Earnings per share-cents Basic 62.0 159.6 Diluted 61.7 158.5 Inputs used in calculating basic and diluted earnings per share Profit after tax - $ millions 207.3 530.7 Weighted average number of ordinary shares on issue used in the calculation of basic earnings per share 334,253,895 332,520,485 Weighted average number of ordinary shares on issue used in the calculation of diluted earnings per share 336,188,318 334,762,664 Basic earnings per share is calculated by dividing the profit attributable to equity holders of OZ Minerals Limited by the weighted average number of ordinary shares outstanding during the financial year. The weighted average is determined by the total number of shares on issue less treasury shares held by the Company throughout the period. Diluted earnings per share adjusts the amounts used in the determination of basic earnings per share to take into account dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares. 3 Income tax Income tax expense comprises current and deferred tax of the Consolidated Entity. Current and deferred tax expenses are recognised in other comprehensive income or directly in equity as is appropriate. Recoverability of Deferred Tax Assets The Consolidated Entity is subject to income taxes in Australia and of the jurisdictions where it has foreign operations. Significant judgement is required in the application of income tax legislation to determine the provision for income taxes. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain and for which provisions are based on estimated amounts probable of being accepted by the relevant tax authorities. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred tax provision in the period in which the determination is made. Assumptions about the generation of future taxable profits influence the ability of the Consolidated Entity to recognise (or continue to recognise) deferred tax assets. Taxable profit estimates are based on estimated future production and sales volumes, commodity prices, foreign exchange rates, operating costs, restoration costs and capital expenditure. A change in these assumptions may impact the amount of deferred tax assets recognised in the balance sheet in future periods. GROUP TAXATION The Consolidated Entity’s principal operations are located in Australia and Brazil. Income tax expense, current tax and deferred tax balances have been determined based on the tax laws and tax rates applicable in the relevant jurisdiction. OZ Minerals Limited and its wholly owned Australian-controlled entities are part of a tax consolidated group. OZ Minerals Limited is the head company of the Australian tax consolidated group. No foreign operating affiliates are consolidated for tax purposes. Notes to the Consolidated Financial Statements continued OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 84 Income tax expense in the income statement 2022 2021 $m $m Current income tax benefit/(expense) 43.4 (180.0) Deferred income tax expense (146.3) (45.9) Income tax expense (102.9) (225.9) Reconciliation of income tax expense to pre-tax profit 2022 2021 $m $m Profit before income tax 310.2 756.6 Income tax expense at the Australian tax rate of 30 per cent (93.1) (227.0) Adjustments: Variation in overseas tax 5.9 5.3 Non-deductible expenditure (30.8) (6.4) Revision for prior periods 0.2 (0.2) Recognition of Australian losses 16.5 4.0 R&D tax benefit 0.5 0.5 Other – 0.3 Derecognition of overseas losses (2.1) (2.4) Income tax expense (102.9) (225.9) The increase in non-deductible expenditure for the year ended 31 December 2022 compared to the prior year is predominantly due to the increased exploration expenditure in overseas jurisdictions for the year. UNRECOGNISED TAX LOSSES A review of unrecognised tax losses was undertaken during the year and additional restricted tax losses of $16.5 million tax effected (2021: $4.0 million) were recognised on the balance sheet. This is due to the increased taxable income forecast for future years, predominantly due to the inclusion of forecast revenue of the West Musgrave open-pit mine, which began construction during 2022. Restricted tax losses are subject to an available fraction, which limits the amount of loss utilisation each year. Australian restricted tax losses of $126.5 million tax effected (2021: $143.0 million) remain unrecognised at 31 December 2022. Capital losses of $648.2 million tax effected (2021: $648.2 million tax effected) remain unrecognised at 31 December 2022. DEFERRED TAX ASSETS AND LIABILITIES The movement in the Consolidated Entity’s recognised deferred tax balances are as follows: 31 December 2020 Recognised in income statement Recognised in equity 31 December 2021 Recognised in income statement Recognised in equity 31 December 2022 $m $m $m $m $m $m $m Deferred tax assets Unrestricted tax losses 0.4 (0.4) – – 8.8 – 8.8 Restricted tax losses 51.0 (14.7) – 36.3 21.6 – 57.9 Lease liability 226.7 (3.6) – 223.1 3.2 – 226.3 Provisions and accruals 28.9 (0.1) 0.1 28.9 0.7 0.3 29.9 Derivative financial instruments 10.8 – (10.8) – – – – Other 4.4 (2.5) – 1.9 9.1 – 11.0 Total deferred tax assets 322.2 (21.3) (10.7) 290.2 43.4 0.3 333.9 Less offset against deferred tax liabilities (315.2) 21.5 10.9 (282.8) (43.7) – (326.5) Net deferred tax assets 7.0 0.2 0.2 7.4 (0.3) 0.3 7.4 Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 85 31 December 2020 Recognised in income statement Recognised in equity 31 December 2021 Recognised in income statement Recognised in equity 31 December 2022 $m $m $m $m $m $m $m Deferred tax liabilities Inventories (5.0) (0.2) – (5.2) (0.8) – (6.0) Exploration assets (17.2) (24.0) (1.7) (42.9) 35.8 (0.2) (7.3) Property plant and equipment (352.7) (5.4) (9.2) (367.3) (222.7) (1.4) (591.4) Right of use assets (225.0) 4.9 – (220.1) (1.8) – (221.9) Provisions and accruals (3.8) 0.1 – (3.7) (0.2) (0.2) (4.1) Total deferred tax liabilities (603.7) (24.6) (10.9) (639.2) (189.7) (1.8) (830.7) Less offset against deferred tax assets 315.2 (21.5) (10.9) 282.8 43.7 – 326.5 Net deferred tax liabilities (288.5) (46.1) (21.8) (356.4) (146.0) (1.8) (504.2) RECOGNITION AND MEASUREMENT OF INCOME TAXES Current tax The tax payable is based on taxable profit for the year, using rates enacted or substantively enacted at the reporting date, and any adjustments to tax payable in respect of previous years. Deferred tax Deferred tax assets and liabilities are not recognised for temporary differences arising from investments in subsidiaries where the Consolidated Entity is able to control the reversal of the temporary differences, and it is probable that they will not reverse in the foreseeable future. Deferred tax assets are recognised to the extent that it is probable that future taxable income will be available to utilise them. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and adjusted based on estimates of future taxable income and/or capital gains against which the deferred tax asset could be utilised. Deferred tax assets and liabilities are measured at the tax rates applicable to each jurisdiction which are expected to apply in the period when the assets are realised, or liabilities discharged. They are offset where they relate to the same tax authority and there is a legally enforceable right to offset. 4 Dividends On 22 December 2022, OZ Minerals entered into a Scheme Implementation Deed with BHP Lonsdale Investments Pty Ltd ('BHP'), a wholly owned subsidiary of BHP Group Limited, in relation to the proposed acquisition by BHP of all of the issued shares in OZ Minerals by way of scheme of arrangement under the Corporations Act 2001 (Cth) ('Scheme'). The Scheme Implementation Deed permits, subject to certain conditions, OZ Minerals to declare and pay OZ Minerals shareholders a special dividend prior to implementation of the Scheme. Prior to the Scheme meeting (which is currently expected to be held in mid-April 2023), the Board intends to declare a fully franked special dividend of $1.75 per share, such dividend conditional on the Scheme becoming effective. If the Scheme does become effective the special dividend will be paid on the date the Scheme is implemented to OZ Minerals shareholders who hold OZ Minerals shares on the special dividend record date. The special dividend record date will be three days before the Scheme record date, with both record dates currently expected to be in late-April 2023. Assuming the special dividend of $1.75 per share is paid, the consideration payable by BHP under the Scheme will be reduced by this amount. OZ Minerals shareholders who hold shares on both the special dividend record date and the Scheme record date will receive total consideration of $28.25 per share on the date the Scheme is implemented, with $1.75 being a fully franked special dividend paid by OZ Minerals and $26.50 being scheme consideration paid by BHP. As stated above, if the Scheme does not become effective the special dividend will not be paid. In that case, the Board will continue to consider the payment of dividends against its current policy of paying sustainable dividends from pre-growth cash flow, after taking into consideration the Company’s near term identified capital investment opportunities and maintaining a strong balance sheet. The details in relation to dividends announced or paid since 1 January 2021 are set out below: Record date Date of payment Fully franked Total dividends Dividend reinvestment plan (DRP) cents per share $m 1 September 2022 16 September 2022 8 26.8 No 25 February 2022 11 March 2022 18 60.2 Yes 24 August 2021 7 September 2021 16(a) 53.3 Yes 12 March 2021 26 March 2021 17 56.4 Yes (a) Included a special dividend of 8 cents per share. Notes to the Consolidated Financial Statements continued OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 86 Capital employed 5 Inventories 143.8 143.8 86.3 86.3 69.9 69.9 59.1 59.1 101.7 101.7 135.7 135.7 129.4 129.4 41.9 41.9 31 December 2022 31 December 2021 Concentrates Ore stockpile (current) Ore stockpile (non-current) Stores and consumables 0 50 100 150 31 December 2022 31 December 2021 $m $m Concentrates 143.8 101.7 Ore stockpile 86.3 135.7 Stores and consumables 59.1 41.9 Inventories – current 289.2 279.3 Ore stockpile – non-current 69.9 129.4 Inventories – non-current 69.9 129.4 Total Inventories 359.1 408.7 There were no realisable value adjustments made during the year (2021: $18.0 million increase to Inventories). All inventories at 31 December 2022 were held at cost (2021: at cost). Net Realisable Value of Inventories Inventories are recognised at the lower of cost and net realisable value (NRV). NRV of ore is based on the estimated amount expected to be received when the ore is processed and sold, less incremental costs to convert the ore to concentrate and selling costs. The calculation of NRV for stockpiles involves significant judgements and estimates in relation to future ore blend rates, timing of processing, processing costs, commodity prices, foreign exchange rates, discount rates and the ultimate timing of sale of concentrates produced. A change in any of these critical assumptions will alter the estimated NRV and may therefore impact the carrying value of inventories. Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 87 RECOGNITION AND MEASUREMENT OF INVENTORIES Costs are assigned to individual items of inventory on the basis of weighted average costs. Costs comprise direct materials, labour and a proportion of overhead expenditure directly related to the production of inventories. Expenditure directly related to the production of inventories includes processing costs; transportation costs to the point of sale; and depreciation of plant, equipment, mining property; and development assets, the latter of which includes deferred stripping assets and mine rehabilitation costs incurred in the mining process. Inventories expected to be processed or sold within 12 months after the balance date are classified as current assets and all other inventories are classified as non-current. 6 Operating cash flows The Consolidated Entity’s operating cash flow reconciled to profit after tax is as follows: 2022 2021 $m $m Profit after tax for the year 207.3 530.7 Adjustments for: Depreciation and amortisation 221.1 217.5 Lease amortisation 92.0 80.6 Foreign exchange (loss)/gain on cash balances (0.2) 0.3 Share based payments 22.9 13.4 Other items 0.1 (2.7) Change in assets and liabilities: Trade and other receivables (66.6) (83.4) Prepayments and other assets (25.3) (10.0) Inventories 49.6 110.0 Trade and other payables 103.9 44.4 Provision for employee benefits 3.9 5.5 Other provisions 2.7 (1.8) Derivative Financial Instruments – (36.3) Net current and deferred taxes 36.2 102.8 Net cash inflow from operating activities 647.6 971.0 RECOGNITION AND MEASUREMENT OF CASH AND CASH EQUIVALENTS Cash comprises cash on hand and demand deposits. Cash equivalents comprise short term and highly liquid cash deposits that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value. For the purposes of the Consolidated Statement of Cash Flows, cash includes cash on hand, at call deposits and cash equivalents. Notes to the Consolidated Financial Statements continued OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 88 7 Property, plant and equipment Plant and equipment Mine property and development Freehold land and buildings Mineral rights Capital work in progress Total $m $m $m $m $m $m 31 December 2022 At cost 2,486.8 3,352.0 261.4 359.8 1,021.4 7,481.4 Accumulated depreciation and impairment losses (1,236.2) (1,727.5) (178.5) – – (3,142.2) Closing carrying amount 1,250.6 1,624.5 82.9 359.8 1,021.4 4,339.2 Reconciliation of carrying amounts Opening carrying amount at 1 January 2022 1,218.4 1,355.8 91.5 336.2 348.3 3,350.2 Reclassification of exploration assets(a) – – – – 308.7 308.7 Additions and transfers 140.6 363.0 0.6 – 353.5 857.7 Borrowing costs capitalised – – – – 9.8 9.8 Disposals – at cost (0.8) – – – – (0.8) Accumulated depreciation on disposals 0.6 – – – – 0.6 Depreciation (109.6) (95.5) (9.5) – – (214.6) Foreign currency exchange differences 1.4 1.2 0.3 23.6 1.1 27.6 Closing carrying amount at 31 December 2022 1,250.6 1,624.5 82.9 359.8 1,021.4 4,339.2 31 December 2021 At cost 2,345.6 2,987.8 260.5 336.2 348.3 6,278.4 Accumulated depreciation and impairment losses (1,127.2) (1,632.0) (169.0) – – (2,928.2) Closing carrying amount 1,218.4 1,355.8 91.5 336.2 348.3 3,350.2 Reconciliation of carrying amounts Opening carrying amount at 1 January 2021 1,083.7 1,241.5 88.8 317.2 182.3 2,913.5 Additions and transfers 228.1 211.1 12.9 – 166.0 618.1 Depreciation (97.7) (103.0) (10.2) – – (210.9) Foreign currency exchange differences 4.3 6.2 – 19.0 – 29.5 Closing carrying amount at 31 December 2021 1,218.4 1,355.8 91.5 336.2 348.3 3,350.2 (a) During the year the Board approved the construction of the West Musgrave open pit mine, therefore West Musgrave exploration assets balance of $308.7 million was reclassified to the property plant and equipment (refer to Note 8). This balance includes study cost of $92.2 million spent during 2022 prior to the final investment decision. Borrowing costs relating to general and specific borrowing included in the carrying values of the assets is $9.8 million (2021:Nil). Under the original terms of OZ Minerals’ acquisition of Carrapateena, in the event of production of rare earths, iron or any other commodity except copper, gold and silver, a further US$25 million is payable to the vendor. No such production has occurred. West Musgrave Project aquisition terms stated contingent payments up to an aggregated cap of $20 million are payable in two scenarios: 1. $10 million (or pro-rata) if OZ Minerals sells 30 per cent or more of the West Musgrave Project where the implied sale value for 30 per cent of the Project exceeds $76 million and $10 million (or pro-rata) calculated at 20 per cent of the value exceeding the implied value. 2. $10 million if OZ Minerals sells 30 per cent or more of the nickel stream to a mining company which produces, sells or markets base metals. Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 89 West Musgrave Project aquisition terms also stated deferred payments for: 1. a production milestone payment of $10 million, payable 12 months after commencement of production from the West Musgrave Project. 2. a two per cent net smelter royalty payable from future production from the tenements within the West Musgrave and Yarawindah Project. Above contingent payment and deferred payments are not recognised as liabilities as their payment remains wholly within the control of the Group. RECOGNITION AND MEASUREMENT OF PROPERTY, PLANT AND EQUIPMENT Items of property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the items and costs incurred in bringing assets into use. Carrying values include borrowing costs incurred in relation to the acquisition of the item until the asset become available for intended use. Expenditure associated with mining that relates to developing access to new sections of an ore body is capitalised as a mine development asset and depreciated on a units of production basis as ore is extracted. When ore extraction and mine development occur concurrently, expenditure is allocated between the cost of ore extraction (inventory) and mine development on the basis of the proportion of underlying activity; typically metres advanced or material moved. Mineral rights comprise identifiable mineral resources and ore reserves which are acquired as part of a business combination and are recognised at fair value at date of acquisition. Mineral rights are subsequently reclassified as mine property and development once mine development commences. Mine property and development assets include costs transferred from exploration and evaluation assets and mineral rights once technical feasibility and commercial viability of an area of interest are demonstrated. After transfer, all subsequent expenditures to develop the mine to the production phase and which are considered to benefit mining operations in future periods are capitalised. The present value of the expected cost of decommissioning, rehabilitation, restoration and dismantling of assets after use is included in the cost of the respective asset if the recognition criteria for a provision is met including revision to the expected cost. Property, plant and equipment is tested for impairment when there is an indication of impairment. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows. An impairment loss is recognised for the amount by which the asset or cash generating unit (CGU) carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value, less the cost to dispose and its value in use. Assets that have been impaired are reviewed for possible reversal of impairment at each reporting date. Value in use is the net amount expected to be recovered through cash flows arising from the continued use and subsequent disposal of an asset (or group of assets). In assessing value in use, estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and risks specific to the asset. The asset’s fair value less costs to dispose is the amount obtainable from the sale of an asset or cash-generating unit in an arm’s length transaction between knowledgeable and willing parties, less the estimated costs of disposal. A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use, or by selling it to another market participant who would use the asset in its highest and best use. Mineral Resource and Ore Reserve Estimates The estimated quantities of Mineral Resource and Ore Reserve estimates are based upon interpretations of geological and geophysical models and require assumptions to be made regarding exchange rates, commodity prices, future capital requirements and future operating performance. Changes in reported mineral resource and ore reserve estimates can impact the carrying value of property, plant and equipment, including deferred mining expenditure; capitalised exploration; provisions for mine rehabilitation; restoration and dismantling obligations; and recognition of deferred tax assets as well as the amount of depreciation charged to the income statement. Changes in the carrying value of the assets may arise principally through changes in the income that can be economically generated from each project. Changes in depreciation expense may arise through a change in the units of ore available for extraction over which property, plant and equipment is depreciated. Notes to the Consolidated Financial Statements continued OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 90 Recoverability of Assets Cash generating units are tested for impairment when there is an indication that the CGU may be impaired. Examples of impairment indicators include the Group’s net assets exceeding its market capitalisation, unfavourable fluctuations in commodity prices and foreign exchange rates, or a decline in the CGU’s operating performance. The Consolidated Entity undertook a review of the Prominent Hill, Carrapateena, Carajás and Gurupi CGUs to determine whether there was any indication that these CGUs had suffered an impairment loss. The Consolidated Entity concluded that there were no such indicators that the CGUs were impaired at the reporting date. When the Group reviewed impairment indicators, consideration was also given to the potential impacts of climate change in the significant judgements and assumptions that may impact the CGU’s valuation in future periods, including: › expected future cash flows based on a range of factors including Board-approved internal budgets and forecasts which reflect expectations of resources and reserves; present mine plans and expectations regarding regulatory approvals; short and long term commodity prices and foreign exchange rates; and forecast operating and capital costs. › implications of climate change risks and opportunities on the CGU’s carrying value, including the transition to a low carbon economy which may result in higher demand for the Group’s commodities due to regulatory, legal, technological, market or societal responses to climate change. Long term changes in climate patterns could also cause adverse impacts on the Group’s operations with associated cost and operational implications due to the increased severity of extreme weather events. The Group continues to monitor for new factors and impacts as regulatory, technological and market responses to climate change evolve. › potential implications of carbon pricing and other climate related regulatory costs in scenario analysis. › the value of mineral resources not modelled in Board-approved budgets, based on the use of an appropriate resource valuation multiple to the contained copper equivalent within the resources applicable to the CGU. › the discount rate applied to the cash flows which reflects current market conditions. In addition, the Consolidated Entity monitors impairment indicators by considering the impact of the above judgements and assumptions on the valuation of CGUs through periodic updates to its business valuation models. Such assumptions are subject to variation as a result of changes in future economic and operational conditions. Consequently, the carrying value of the Consolidated Entity’s CGUs may differ in future years if assumptions made do not eventuate and actual outcomes are less favourable than present assumptions. In considering the recoverable amount for the Gurupi CGU, the Group considers the likelihood that the historical injunction over development of the CentroGold project will be removed in future periods. Having considered the applicable legislation, the status of negotiations with local regulators and judicial precedents together with its external advisors, the Group considers that it is likely that the injunction will be removed in future periods. Accordingly, the recoverable amount of the Gurupi CGU is based on an estimate of future cash flows discounted to their present value, with the estimated future cash flows reflecting the prefeasibility study updated for current inputs such as commodity prices, exchange rates and inflation. The status of the injunction and its potential impact on the Gurupi CGU valuation is assessed each reporting period, and in the event the injunction is not removed in line with the Group’s expectations, absent any other factors a downward adjustment to the carrying value may be required in future periods. Depreciation methods adopted by the Consolidated Entity Category Depreciation method Freehold land Not depreciated Buildings and other infrastructure Straight line over life of mine Short term plant and equipment Straight line over life of asset Processing plant Units of ore milled over mining inventory Mine property and development Units of ore extracted over mining inventory applicable to the development Depreciation of assets commences when the assets are ready for their intended use. The depreciation of mine property and development commences when the mine is commissioned or deemed ready for use. The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each reporting date and adjusted prospectively, if appropriate. Where depreciation rates are changed, the net written down value of the asset is depreciated from the date of the change in accordance with the new depreciation rate, with the change accounted for as a change in accounting estimate. Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 91 8 Exploration assets Carrying Value of Capitalised Exploration Expenditure The accounting policy for exploration and evaluation expenditure requires judgement to determine whether future economic benefits are likely from either future exploitation or sale, or whether activities have not reached a stage that permits a reasonable assessment of the existence of reserves. In the event future economic benefits are unlikely or a reasonable assessment of the existence or otherwise of economic reserves is not possible, an impairment test may be required which may result in an adjustment to the carrying value of capitalised exploration expenditure. The ultimate recoupment of costs capitalised for exploration and evaluation phases is dependent on successful development and commercial exploitation or sale of the respective area of interest. Exploration assets 2022 2021 $m $m Opening balance at 1 January 288.6 215.8 Additions during the period 92.2 72.4 West Musgrave balance transferred to property, plant and equipment (refer Note 7) (308.7) – Transferred to exploration expense (16.2) (3.9) Foreign currency exchange difference 3.0 4.3 Closing balance at 31 December 58.9 288.6 RECOGNITION AND MEASUREMENT OF EXPLORATION EXPENDITURE Exploration and evaluation expenditure is recognised in the Income Statement as incurred, unless it is expected to be recouped through successful development and exploitation of the area of interest; or alternatively by its sale, in which case it is recognised as an asset on an area of interest basis; or the exploration asset is acquired via an asset purchase or a business combination. Exploration and evaluation assets are classified as tangible according to the nature of the assets. Exploration and evaluation assets are not depreciated and are assessed for impairment when facts and circumstances suggest that the carrying amount exceeds the recoverable amount. For the purposes of impairment testing, exploration and evaluation assets are allocated to cash-generating units to which the exploration activity relates. A CGU is not larger than the area of interest. Once the technical feasibility and commercial viability of the extraction of mineral reserves in an area of interest are demonstrated, exploration and evaluation assets attributable to that area of interest are first tested for impairment and then reclassified to mine property and development assets within property, plant and equipment. From time to time the Consolidated Entity enters into arrangements which enable it to secure the opportunity to explore and potentially earn the right to mineralisation if discovered on underlying exploration tenements held by other entities (earn-in arrangements). Under these agreements, OZ Minerals does not assume any liabilities or hold any rights to other assets that the holder of the tenement may possess. Expenditure is accounted for under OZ Minerals’ accounting policy for exploration and evaluation expenditure. Notes to the Consolidated Financial Statements continued OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 92 9 Right-of-use assets Powerline infrastructure Property Plant & equipment Total $m $m $m $m 2022 Opening balance at 1 January 561.8 5.2 166.6 733.6 Additions to right-of-use assets 34.3 0.3 63.6 98.2 Depreciation charge for the period (40.1) (0.8) (51.1) (92.0) Closing carrying amount at 31 December 556.0 4.7 179.1 739.8 2021 Opening balance at 1 January 586.0 5.7 158.4 750.1 Additions to right-of-use assets 14.9 0.3 113.7 128.9 Derecognition of right-of-use assets – – (64.8) (64.8) Depreciation charge for the period (39.1) (0.8) (40.7) (80.6) Closing carrying amount at 31 December 561.8 5.2 166.6 733.6 The right-of-use (ROU) assets include office space, mining equipment leases contained in mining service contracts, aviation equipment included in air charter services contracts and powerline infrastructure. Corresponding lease liabilities are recognised within ‘Lease liabilities’ in the consolidated balance sheet (refer to Note14). RECOGNITION AND MEASUREMENT OF ROU ASSETS An assessment is made, at inception or when contract terms are changed, to determine whether the contract is or contains a lease. A contract is, or contains, a lease if the contract conveys a right to control the use of an identified asset for a period of time in exchange for consideration. The Consolidated Entity determines the consideration attributable to the lease or a lease component within a contract on the basis of the standalone price of the assets for which a right of use is conveyed. However, for the leases of Powerline Infrastructure the Consolidated Entity has elected not to separate non-lease components and account for the lease and non-lease components as a single lease component. As a lessee, the Consolidated Entity recognises a ROU asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. Short term and low value leases are expensed in the consolidated statement of comprehensive income on a straight-line basis over the life of the lease. The Group recognises a ROU asset and a lease liability at the lease commencement date. The ROU asset is initially measured at cost (present value of the lease liability, deemed cost of acquiring the asset and restoration or make good cost), and subsequently at cost less any accumulated depreciation, impairment losses and adjustments for remeasurement of the lease liability. The ROU assets are depreciated over the life of the lease. The lease liability is initially measured at the present value of the lease payments expected to be paid over the lease term, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the entity’s incremental borrowing rate. The lease liability is subsequently increased by the interest cost on the lease liability and decreased by lease payments made. The lease liability is further remeasured if the estimated future lease payments change as a result of index or rate changes, residual value guarantees or the likelihood of exercising purchase, extension or termination options. Extension and Renewal of Lease The Consolidated Entity has applied judgement to determine the lease term for lease contracts that include renewal options. The assessment of whether the Group is reasonably certain to exercise such options impacts the lease term, which affects the measurement of lease liabilities and ROU assets recognised. Where practicable, the Group seeks to include extension options in new leases to provide operational flexibility. The extension options held are exercisable only by the Group and not by the lessors. The Group assesses at lease commencement date whether it is reasonably certain to exercise the extension options. The Group also reassesses whether it is reasonably certain to exercise the options if there is a significant event or significant changes in circumstances within its control. The Group has estimated that the potential future lease payments, should it exercise the available extension options, would result in an increase in the lease liability amount of $105.4 million (2021:$69.0 million). Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 93 Amounts recognised in the Consolidated financial statements for the year ended 31 December 2022 2022 2021 $m $m Amount recognised in profit and loss Depreciation and amortisation 92.0 80.6 Lease interest (included in finance expense) 26.2 25.9 Expense relating to short term leases 5.6 4.3 Expense relating to lease of low-value assets, excluding short term 0.3 0.2 Amount recognised in the statement of cash flows Lease liability payments (included in cash flows from net financing activities) 87.5 76.0 Lease interest paid (included in cash flows from operating activities) 26.2 25.9 Balance sheet Right-of-use assets at carrying value 739.8 733.6 Lease liabilities Current (97.2) (80.5) Non-current (657.4) (663.4) Short term lease commitments At 31 December 2022, the Group has short term lease commitments of $1.6 million (2021: $1.6 million). 10 Provisions Mine Rehabilitation, Restoration and Dismantling Obligations The provision for mine rehabilitation includes future cost estimates associated with reclamation, plant closures, waste site closures, monitoring, demobilisation of equipment, decontamination, water purification and permanent storage of historical residues. Uncertainty exists as to the amount of rehabilitation obligations which will be incurred due to the impact of environmental legislation changes and many other factors, including future changes in technology, adverse impacts relating to climate change which could impact both the cost, extent and timing of rehabilitation, price increases and changes in interest rates. The calculation of these provision estimates requires assumptions to be made as to the application of environmental legislation, the potential physical impacts of climate change, plant closure dates, available technologies, engineering cost estimates and discount rates. A change in any of the assumptions used may have a material impact on the carrying value of mine rehabilitation, restoration and dismantling provisions. RECOGNITION AND MEASUREMENT OF PROVISIONS Provisions are measured at the present value of the best estimate of the expenditure required to settle the present obligation at balance sheet date. The discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the liability. The increase in provisions due to the passage of time is recognised in the income statement as a financing expense. Provisions are made for the estimated cost of rehabilitation, decommissioning and restoration of areas disturbed during mining and exploration operations up to the reporting date for areas not yet rehabilitated. Provisions for mine rehabilitation are based on the current estimated cost to rehabilitate such areas, discounted to their present value based on expected future cash flows. The estimated costs include the current cost of rehabilitation necessary to meet legislative requirements. Changes in estimates are dealt with on a prospective basis as they arise. The provision is recognised as a liability, separated into current (estimated costs arising within 12 months) and non-current components based on the expected timing of these cash flows. Notes to the Consolidated Financial Statements continued OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 94 2022 2021 $m $m Provisions Other provisions 20.6 8.7 Mine rehabilitation 109.6 130.8 Total provisions 130.2 139.5 Reconciliation of mine rehabilitation provisions Opening carrying amount 130.8 111.2 Unwind of discount 3.7 1.3 Provisions (decrease) /increase (24.9) 18.3 Closing carrying amount 109.6 130.8 The decrease in mine rehabilitation provision reflects the net impact of discount rate changes during the year, inflation expectations and a change in the expected timing of rehabilitation activities resulting principally from the extension to the Prominent Hill mine life. 11 Commitments The Consolidated Entity has entered into various contracts with suppliers for the ongoing sustaining and growth development activities at existing mines as well mine development at West Musgrave. The total capital expenditure commitment in relation to these contracts as at 31 December 2022 was $325.5 million (2021: $283.6 million). Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 95 Contributed equity 12 Issued capital 31 December 2022 2021 $m $m 334,890,502 shares (2021: 333,654,973 shares) 2,408.7 2,400.3 Share capital movement Number of shares Share capital $m 31 December 2022 Opening balance at 1 January 2022 333,654,973 2,400.3 Shares issued under employee share plans 896,000 –(a) Shares issued under DRP 339,529 8.4 Closing balance at 31 December 2022 334,890,502 2,408.7 31 December 2021 Opening balance at 1 January 2021 331,293,359 2,371.4 Shares issued under employee share plan 1,051,995 –(a) Shares issued under DRP 1,309,619 28.9 Closing balance at 31 December 2021 333,654,973 2,400.3 (a) Shares issued under the employee share plan are at no cash cost. Shares granted are valued on the grant date and the related expense of the employee earning the shares is recognised as an expense progressively over the vesting period within share-based payment expenses. Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in proportion to the number of shares held. On a show of hands, every holder of ordinary shares present at a meeting in person or by proxy is entitled to one vote, and upon a poll each holder is entitled to one vote per share. RECOGNITION AND MEASUREMENT OF ISSUED CAPITAL Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown within equity as a deduction. Shares were issued but no shares were bought for the Employee Share Plan Trust to meet the Consolidated Entity’s obligation to provide shares to employees in accordance with the terms of their employment contracts and employee share plans as and when they may vest, and are classified as ordinary shares and are presented as an addition to the total equity. The Company may also issue securities as consideration for asset acquisitions in lieu of cash. The fair value of assets acquired is measured with reference to market observable prices adjusted for any matters specific to the arrangement. The value recognised as an increase in issued capital reflects the fair value of assets acquired. The increase in equity associated with shares issued under the DRP is measured as the amount equal to the cash payment the security holder was otherwise entitled to, had the holder not participated in the DRP. Notes to the Consolidated Financial Statements continued OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 96 13 Share-based payments Element Performance rights granted under PRP(a) Performance rights granted under LTIP Performance period 2022: 1 January 2022 to 31 December 2023 2021: 1 January 2021 to 31 December 2022 2020: 1 January 2020 to 31 December 2020 2022: 1 January 2022 to 31 December 2024 2021: 1 January 2021 to 31 December 2023 2020: 1 January 2020 to 31 December 2022 Service period 2022: 1 July 2022 to 1 July 2024 2021: 1 July 2021 to 1 July 2023 2020: 1 July 2020 to 1 July 2021 2022: 1 January 2022 to 31 December 2024 2021: 1 January 2021 to 31 December 2023 2020: 1 January 2020 to 31 December 2022 Vesting conditions Percentage vesting based on individual performance against Key Performance Indicators 1. Total shareholder return (TSR) TSR performance measured Comparator Group Percentage of vesting Less than 50th percentile Nil 50th percentile 50% Between the 50th and 75th percentile Straight-line vesting between 50% and 100% 75th percentile or greater 100% 2. All-In Sustaining Costs (AISC)(b) OZ Minerals AISC over the performance period Percentage of vesting Above 50th percentile Nil 50th percentile 50% Between 50th percentile and 25th percentile (Lowest cost) Straight-line vesting between 50% and 100% 25th percentile or below 100% 3. Environmental, Social and Governance (ESG)(b) MSCI(c) ESG Ratings Metals & Mining: Non-Precious Metals (FIAS(d) score out of 10) MSCI(c) Band Percentage of vesting Below 7.143 A Nil 7.143 AA 50% Between 7.143 and 8.23 AA Straight-line vesting between 50% and 100% 8.23 or above AA 100% Exercise price Nil Nil (a) The PRP Plan performance and service periods are set to two years starting from 2021. (b) From the year 2022 the LTI Plan was set on TSR, AISC and ESG, weighted at 60 per cent, 20 per cent and 20 per cent respectively (2021: TSR and AISC, weighted at 70 per cent and 30 per cent respectively). (c) Morgan Stanley Capital International index (d) Final Industry-Adjusted Score The total employee benefits expense for 2022 was $164.4 million of which $25.8 million comprised share-based payments (2021: $133.5 million, share-based payment $13.4 million). Performance rights granted under the employee incentive schemes do not include dividends or voting rights. All performance rights under current performance rights offers are automatically exercised upon vesting which is dependent upon meeting both the service condition and the performance conditions. When issued, the shares on vesting of performance rights rank equally in all respects with previously issued, fully paid ordinary shares. On 22 December 2022, OZ Minerals entered into a Scheme Implementation Deed with BHP Lonsdale Investments Pty Ltd ('BHP'), a wholly owned subsidiary of BHP Group Limited, in relation to the proposed acquisition by BHP of all of the issued shares in OZ Minerals by way of scheme of arrangement under the Corporations Act 2001 (Cth) ('Scheme'). Subject to the Scheme becoming effective, all unvested performance rights (other than performance rights granted under the 2023 LTI offer to Executive KMP) will automatically vest and be exercised, with one OZ Minerals share issued per performance right. If the Scheme does not become effective, the unvested performance rights continue on foot on their current terms. OZ Minerals must assess the likelihood of the Scheme becoming effective and the performance rights therefore automatically vesting and being exercised, and has determined that it is more likely than not that the Scheme will become effective. As such, share based payments have been calculated on the basis that the Scheme becomes effective and all of the performance rights (other than the performance Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 97 rights granted under the 2023 LTI offer to Executive KMP) vest and are exercised on Scheme effective date, with the cumulative impact of the revision to original estimates recognised in the income statement with a corresponding adjustment to equity. The fair value of services received in return for share-based payments granted during the year is based on the fair value of the performance rights granted, measured using a binomial approximation option valuation model and Monte-Carlo simulation valuation model for performance rights plans and LTIPs respectively. The models use the following inputs: Grant date Fair value at grant date Share price at grant date Expected volatility Expected dividends Risk-free interest rate $ $ % % % Performance rights granted under the LTIP 1 January 2022 Managing Director and CEO Tranche One (60%) 13.3 25.8 35.0 1.4 2.4 Managing Director and CEO Tranche Two (20%) 24.9 25.8 35.0 1.4 2.4 Managing Director and CEO Tranche Three (20%) 24.9 25.8 35.0 1.4 2.4 Other KMP Tranche One (60%) 14.1 25.3 35.1 1.4 1.9 Other KMP Tranche Two (20%) 24.4 25.3 35.1 1.4 1.9 Other KMP Tranche Three (20%) 24.4 25.3 35.1 1.4 1.9 1 January 2021 Managing Director and CEO Tranche One (70%) 16.1 23.2 33.0 1.7 0.1 Managing Director and CEO Tranche Two (30%) 22.1 23.2 33.0 1.7 0.1 Other KMP Tranche One (70%) 14.1 22.4 33.0 1.8 0.1 Other KMP Tranche Two (30%) 21.3 22.4 33.0 1.8 0.1 1 January 2020 Managing Director and CEO Tranche One (70%) 6.0 9.0 31.0 2.7 0.3 Managing Director and CEO Tranche Two (30%) 8.4 9.0 31.0 2.7 0.3 Other KMP Tranche One (70%) 5.7 9.6 29.0 2.9 0.3 Other KMP Tranche Two (30%) 9.0 9.6 29.0 2.9 0.3 Performance rights granted under the PRP 1 July 2022 16.8 17.3 37.0 1.3 2.6 1 July 2021 21.4 22.1 37.0 1.8 0.1 1 July 2020 11.1 11.3 33.0 2.0 0.3 Performance rights granted under the retention award 1 November 2021 23.3 24.6 35.0 1.7 1.0 PERFORMANCE RIGHTS The movement in the number of performance rights during the year 2022 2021 Number Number Opening balance 2,242,179 2,553,714 Rights granted 815,737 934,954 Rights vested (808,741) (1,069,990) Rights forfeited (194,387) (176,499) Closing balance 2,054,788 2,242,179 RECOGNITION AND MEASUREMENT OF SHARE-BASED PAYMENTS The fair value of share-based payment transactions measured at grant date are recognised as an employee benefit expense with a corresponding increase in equity over the period during which employees become unconditionally entitled to the instruments. Notes to the Consolidated Financial Statements continued OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 98 If the employee does not meet a non-market condition, such as a service condition or internal KPI, any cumulative previously recognised expense is reversed. The fair value of the share-based payment transactions granted is adjusted to reflect market vesting conditions at the time of grant and are not subsequently adjusted. Non-market vesting conditions are included in assumptions about the number of instruments that are expected to become exercisable and are updated at each balance sheet date. The impact of the revision to original estimates for non-market conditions, if any, is recognised in the income statement with a corresponding adjustment to equity. Changes as a result of market conditions are not adjusted after the initial grant date. Risk management 14 Financial risk management OZ Minerals’ Group Treasury Function (Group Treasury) evaluates and manages financial risks for the Group. The Board approves principles for overall risk management as well as policies covering specific risk areas such as commodity markets, financial markets, counterparty credit risk and liquidity risk. This note presents information about the Consolidated Entity’s financial assets and liabilities, its exposure to financial risks, and its objectives, policies and processes for measuring and managing risks. The Consolidated Entity’s activities expose it primarily to the following financial risks: › commodity prices › foreign currency exchange rates › counterparty › credit › liquidity › interest rate. The Consolidated Entity holds the following financial instruments Carried at fair value using level one valuation technique (based on share prices quoted on the relevant stock exchanges) Carried at fair value using level two valuation technique (quoted market prices of copper, gold and silver adjusted for specific settlement terms) Carried at amortised cost › Investments in equity securities › Trade receivables › Cash and cash equivalents(a) › Other receivables(a) › Trade payables(a) › Other payables(a) (a) The carrying value of each of these items approximates fair value. Recognition and measurement Financial assets and liabilities are recognised when the Consolidated Entity becomes party to the contractual provisions of an instrument. NON-DERIVATIVE FINANCIAL ASSETS The Consolidated Entity classifies its financial assets as: › financial assets at fair value through other comprehensive income › financial assets at fair value through profit and loss › loans and receivables at amortised cost. Financial assets measured at amortised cost are recognised initially at fair value plus any directly attributable transaction costs. Trade receivables, including those containing an embedded derivative, are carried at fair value. Concentrate sales receivables are recognised in accordance with the recognition and measurement criteria disclosed in Note 1. Provisional payments in relation to trade receivables are usually due within 30 days from the date of invoice issue, with final settlement usually due within 90 days. Other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. The Consolidated Entity de-recognises a financial asset or a part of it when, and only when, the contractual rights to the cash flows from the financial asset or part of it expires or, the financial asset is transferred to another party without retaining control or substantially all risks and rewards of the asset. On de-recognition of a financial asset, the difference between the carrying amount (measured at the date of de-recognition) and the consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in the income statement. A financial asset measured at amortised cost is assessed at each reporting date as to whether there is any objective evidence of impairment as a result of one or more events having an impact on the estimated future cash flows of the asset. An impairment loss is recognised for any expected credit loss for the lifetime of the financial asset, accounted for at amortised cost or fair value through other comprehensive income. Credit losses are measured on the present value of all cash shortfalls between the cash flows due to the entity in accordance with the contract and the expected cash flows. In the event that an impairment loss is reversed, the asset’s carrying amount cannot exceed what the carrying amount would have been had the impairment not been recognised. The amount of reversal is recognised in the income statement. Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 99 NON-DERIVATIVE FINANCIAL LIABILITIES All financial liabilities are recognised initially at fair value and net of directly attributable transaction costs. Trade and other payables represent liabilities for goods and services provided to the Consolidated Entity prior to the end of the financial year which are unpaid. The amounts are non-interest-bearing, unsecured and are usually paid within 30 days of recognition. Lease liabilities are recognised at net present value and reduced by the actual payment made (refer Note 9). The Consolidated Entity de-recognises financial liabilities when its obligations are discharged, cancelled or expire. The difference between the carrying amount of the liability de-recognised and the consideration paid and payable is recognised in the income statement. COMMODITY PRICE RISK MANAGEMENT AND SENSITIVITY ANALYSIS The Consolidated Entity is exposed to commodity price volatility on the sale of metal in concentrates such as copper, gold and silver which are priced on, or benchmarked to, open market exchanges. OZ Minerals aims to realise average copper prices which are materially consistent with the prevailing average market prices for the same period. The Consolidated Entity manages uneven exposure to price by managing shipment schedules. Commodity price sensitivity analysis The analysis below reflects the impact of movements in copper and gold prices. Variations in silver prices have been deemed immaterial for the purpose of this analysis. In accordance with Australian Accounting Standards, the sensitivity analysis is on all financial assets and liabilities deemed material to the Consolidated Entity. +10% movement in copper prices -10% movement in copper prices +10% movement in gold prices -10% movement in gold prices Impact on income statement net of tax Impact on income statement net of tax Impact on income statement net of tax Impact on income statement net of tax $m $m $m $m 2022 Trade receivables 14.9 (14.9) 5.4 (5.4) Total 14.9 (14.9) 5.4 (5.4) 2021 Trade receivables 12.0 (12.0) 4.3 (4.3) Total 12.0 (12.0) 4.3 (4.3) Provisionally priced sales are those for which price finalisation, referenced to the relevant index, is outstanding at balance date. The Provisional pricing mechanisms within the Consolidated Entity’s sales arrangements have the character of a commodity derivative. Trade receivables under these contracts are carried at fair value through the profit and loss using a Level 2 valuation based on quoted market prices for copper, gold and silver adjusted for specific settlement terms. The Consolidated Entity’s exposure at 31 December 2022 to the impact of movements in commodity prices on provisionally invoiced sales was on both copper and gold. The Consolidated Entity had 38,000 tonnes of copper exposure and 28,000 ounces of gold exposure as at 31 December 2022 (2021: 37,000 tonnes and 30,000 ounces respectively) that was provisionally priced. The final price of these sales volumes will be determined during the first half of 2023. A 10 per cent movement in copper and gold prices which is based on reasonably possible changes over a financial year and reflects the variability management applies in forecasting sensitivity. In accordance with accounting standards, the impact has been calculated on the outstanding balance that is subject to commodity price risk and does not include the impact of the movement in commodity prices on the total revenue for the year. FOREIGN CURRENCY EXCHANGE RISK MANAGEMENT AND SENSITIVITY ANALYSIS The Consolidated Entity is exposed to foreign currency risk arising from assets and liabilities that are held in currencies other than the Australian dollar (primarily United States Dollar and Brazilian Real). The Group’s principal operations have a functional currency of Australian dollars. An entity’s functional currency is the currency of the primary economic environment in which the entity operates. Determination of an entity’s functional currency requires management’s judgement and considers a number of factors, including the currency that mainly influences revenue, costs of production, and competitive forces and regulations which impact on revenue. In addition, consideration must be given to the currency in which financing and operating activities are undertaken. All exchange differences that arise on translating results and the financial position of all entities within the Consolidated Entity that have a functional currency different from the presentation currency are recognised as a separate component of equity in the Foreign Currency Translation Reserve. When a foreign operation is sold a proportionate share of such exchange differences is recognised in the Income Statement as part of the gain or loss on sale where applicable. Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the date of the transaction. Foreign exchange gains and losses resulting from the settlement of such transactions, and from the translation at year-end exchange rates of financial assets and liabilities denominated in foreign currencies, are recognised in the Income Statement. The carrying amount of the Consolidated Entity’s financial assets and financial liabilities by their currency risk exposure at the reporting date are disclosed below. Notes to the Consolidated Financial Statements continued OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 100 Denominated in US$ Other currencies Total presented in A$m presented in A$m A$m 2022 Cash and cash equivalents 92.6 9.2 101.8 Trade receivables 294.3 – 294.3 Trade payables (4.7) (17.0) (21.7) Total 382.2 (7.8) 374.4 2021 Cash and cash equivalents 100.3 3.9 104.2 Trade receivables 233.6 – 233.6 Trade payables (4.3) (24.7) (29.0) Total 329.6 (20.8) 308.8 Exchange rates during the year Average rate 31 December spot rate 2022 2021 2022 2021 AUD:USD 0.6951 0.7516 0.6813 0.7256 AUD:BRL 3.5863 4.0584 3.6040 4.0400 At reporting date, if the foreign currency exchange rates weakened or strengthened against the functional currency by 5 per cent and all other variables were held constant, the Consolidated Entity’s after tax profit would have increased by $14.1 million (2021: $12.1 million) or decreased by $12.7 million (2021: $11.0 million) respectively. There would have been no impact to the other comprehensive income. The sensitivity analysis includes only outstanding foreign currency denominated monetary items at the reporting date and adjusts their translation for a 5 per cent change in the foreign currency rate. INTEREST RATE RISK MANAGEMENT AND SENSITIVITY ANALYSIS During the year, the Consolidated Entity drew down $825.0 million of the available revolving credit facility and repaid $450.0 million with an outstanding balance of $375.0 million at 31 December 2022, and drew down $15.6 million of the West Musgrave syndicated term loan facility. The Consolidated Entity is exposed to changes in the Australian bank bill interest rate as at 31 December 2022. +1% movement in interest rates -1% movement in interest rates Impact on income statement net of tax Impact on income statement net of tax $m $m 2022 Cash and cash equivalent 1.0 (1.0) Borrowings (5.3) 5.3 Total (4.3) 4.3 2021 Cash and cash equivalent 1.5 (1.5) Borrowings 0.0 0.0 Total 1.5 (1.5) CREDIT RISK MANAGEMENT Credit risk refers to the risk that any counterparty will default on its contractual obligations resulting in financial loss to the Consolidated Entity. Counterparty credit risk arises through sales of metal in concentrate on normal terms of trade and investment of cash. The credit risk on cash and cash equivalents is managed by restricting financial transactions to relationship banks which have Board-approved exposure limits and a minimum credit rating assigned by an internationally recognised credit rating agency. Credit risk in trade receivables is managed by restricting trade credit to Board-approved exposure limits with customers that have a minimum credit rating or trade credit that is secured by a letter of credit from a bank with an acceptable credit rating. Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 101 As there are a relatively small number of transactions, they are closely monitored to ensure risk of default is kept to an acceptable level. Sales contracts generally require a provisional payment of at least 90 per cent of the estimated value of each sale either promptly after vessel loading or upon the vessel arriving at the discharge port. MAXIMUM EXPOSURE TO CREDIT RISK FOR TRADE RECEIVABLES AT THE REPORTING DATE BY CUSTOMER GEOGRAPHIC REGION 2022 2021 $m $m Asia 248.1 197.0 Australia 47.9 39.5 Total 296.0 236.5 Three major customers (2021: three customers) who individually accounted for more than 10 per cent of total revenue contributed approximately 92 per cent of total revenue (2021: 93 per cent). These customers also represent 99.3 per cent of the trade receivables balance as at 31 December 2022 (2021: 99.5 per cent). There were no instances of customer default during 2022 and there are no significant receivables which are past due at the reporting date. LIQUIDITY RISK MANAGEMENT Liquidity risk is the risk of encountering difficulty in meeting obligations associated with financial liabilities. OZ Minerals manages liquidity risk by conducting regular reviews of the timing of cash outflows, the maturity profiles of term deposits and maintaining committed available bank credit to ensure sufficient funds are available to meet its obligations. The following table reflects all contractual repayments from recognised financial assets and liabilities at the reporting date. Contractual cashflows Carrying amount <1 year 1-2 years 2-5 years >5 years Total $m $m $m $m $m $m 2022 Non-derivative financial instruments Cash and cash equivalents 136.7 136.7 – – – 136.7 Trade receivables 296.0 296.0 – – – 296.0 Other receivables 27.8 27.8 – – – 27.8 Trade payables (326.9) (326.9) – – – (326.9) Borrowings (390.6) (375.0) (15.6) – – (390.6) Lease liabilities (754.5) (120.8) (111.2) (231.7) (462.2) (925.9) Total (1,011.5) (362.2) (126.8) (231.7) (462.2) (1,182.9) 2021 Non-derivative financial instruments Cash and cash equivalents 215.4 215.4 – – – 215.4 Trade receivables 236.5 236.5 – – – 236.5 Other receivables 20.7 20.7 – – – 20.7 Trade payables (232.1) (232.1) – – – (232.1) Lease liabilities (743.9) (104.5) (98.7) (234.9) (489.5) (927.6) Total (503.4) 136.0 (98.7) (234.9) (489.5) (687.1) LOANS AND BORROWINGS The Consolidated Entity recognised the draw-down of its revolving credit facility and the specific term loan within the borrowings for the year. Lease liabilities are recognised for any new ROU lease contracts as they are entered. When lease contracts are terminated or altered, the unpaid lease liability and net carrying value of ROU assets are derecognised. Notes to the Consolidated Financial Statements continued OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 102 2022 2021 Borrowings Lease liabilities Total Borrowings Lease liabilities Total $m $m $m $m $m $m Opening balance 1 January – 743.9 743.9 100.0 755.8 855.8 Debt facility drawdown 840.6 – 840.6 200.0 – 200.0 Lease recognised during the year – 98.2 98.2 – 128.9 128.9 Accretion of interest – 26.2 26.2 – 25.9 25.9 Lease terminations during the year – – – – (64.8) (64.8) Repayment during the year (450.0) (113.7) (563.7) (300.0) (101.9) (401.9) Closing balance at 31 December 390.6 754.6 1,145.2 – 743.9 743.9 In May 2022, the Company increased its existing revolving credit facility of $483.0 million to $700.0 million with an extended expiry date of 25 May 2027 (31 December 2021: $483.0 million) subject to maintaining certain financial covenants. During the year the Company secured $1.2 billion 18-month syndicated term loan facility to fund the mine development of West Musgrave project. Borrowings represent the drawn down balance of the revolving credit facility and the specific term loan for the West Musgrave Project as at the reporting date. The Company was not in breach of its financial covenants as at 31 December 2022. The Lease liabilities recognised during the period include arrangements identified within certain mining services supply contracts of $63.6 million, the powerline infrastructure agreement of $34.3 million, and other agreements of $0.3 million. The addition to lease liabilities corresponds to the increase in ROU assets (refer Note 9). Borrowing costs relating to major assets under development are capitalised as a component of the cost of development. Where funds are borrowed specifically for qualifying assets, the actual borrowing costs incurred are capitalised. Where the projects are funded through general borrowings, the borrowing costs are capitalised based on the weighted average cost of borrowing. Borrowing costs incurred after commencement of commercial operations are expensed to the income statement. 31 December 2022 31 December 2021 Borrowings Lease liabilities Total Borrowings Lease liabilities Total $m $m $m $m $m $m Current 375.0 97.2 472.2 – 80.5 80.5 Non-current 15.6 657.4 673.0 – 663.4 663.4 Total 390.6 754.6 1,145.2 – 743.9 743.9 During the year the company decreased its bilateral bank guarantee facilities from $525.0 million to $505.0 million. At 31 December 2022 bank guarantees totalling $437.1 million had been issued to support the Consolidated Entity’s obligations which primarily relate to power infrastructure lease agreements and mine rehabilitation obligations. Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 103 15 Contingencies Contingencies By their nature, contingencies will only be resolved when one or more uncertain future events occur. Determination of contingent liabilities disclosed in the financial statements required the exercise of significant judgement regarding the outcome of future events and the financial results of OZ Minerals in future periods may be impacted unfavourably in the event of an unfavourable outcome of a number of matters outlined in this note. BANK GUARANTEES OZ Minerals Group Treasury Pty Ltd has provided certain financial bank guarantees to third parties, associated with the terms of mining leases, power infrastructure contracts, exploration licences and office leases, in respect of which the relevant entity is obliged to indemnify the bank if the guarantee is called upon. At the end of the financial year, no claims have been made under any of these guarantees. The amount of some of these guarantees may vary from time to time depending upon the requirements of the recipient. These guarantees amounted to $437.1 million as at 31 December 2022 (2021: $436.2 million) and are issued under bilateral bank facilities that are rolled forward every twelve months. DEEDS OF INDEMNITY The Consolidated Entity has granted indemnities under deeds of indemnity with current and former executive and Non-executive Directors, current and former officers, the former General Counsel–Special Projects, former Group Treasurers and each employee who was a director or officer of a controlled entity of the Consolidated Entity, or an associate of the Consolidated Entity, in conformity with Rule 10.2 of the OZ Minerals Limited Constitution. Each deed of indemnity indemnifies the relevant director, officer or employee to the fullest extent permitted by law for liabilities incurred while acting as an officer of OZ Minerals, its related bodies corporate and any associated entities, where such an office is or was held at the request of the Company. Under these indemnities, the Company meets the legal costs incurred by company officers in responding to investigations by regulators and may advance funds to meet defence costs in litigation, to the extent permitted by the Corporations Act 2001 (Cth). WARRANTIES AND INDEMNITIES The Consolidated Entity has given certain warranties and indemnities to the purchasers of assets and businesses that have been sold. Warranties have been given in relation to various matters including the sale of assets, certain taxes and information. Indemnities have also been given by the Consolidated Entity in relation to matters including compliance with laws, environmental claims, a failure to transfer or deliver all assets, and payment of taxes. FORMER CAMBODIAN OPERATIONS In 2011, OZ Minerals self-reported to the Australian Federal Police (AFP) that employees of Oxiana (Cambodia) Limited, a former foreign subsidiary of Oxiana Limited that later became part of the OZ Minerals Group, may have provided benefits to foreign officials to obtain mining rights in Cambodia contrary to applicable law. As OZ Minerals has previously disclosed, the matter has been subject to an AFP investigation. The Commonwealth Director of Public Prosecutions has informed OZ Minerals that it determined not to commence a prosecution against OZ Minerals in relation to the matter. Proceeds of crime associated with the matter remain under consideration by the AFP and minor legal provision remains in place. OTHER OZ Minerals Limited and its controlled entities are defendants from time to time in other legal proceedings or disputes, arising from the conduct of their business. OZ Minerals does not consider that the outcome of any of these proceedings or disputes is likely to have a material effect on the Consolidated Entity’s financial position. Notes to the Consolidated Financial Statements continued OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 104 Group structure and other information 16 Parent entity disclosures As at, and throughout the financial year ended 31 December 2022, the parent entity of the Consolidated Entity was OZ Minerals Limited. Income Statement of the parent entity 2022 2021 $m $m Net provision reversal/(increase) for non-recovery of loans to subsidiary 10.7 (12.4) Dividend income 800.0 – Net other expense (28.4) (28.7) Net profit/(loss) for the year 782.3 (41.1) Other comprehensive (loss)/income (0.4) 7.4 Total comprehensive income/(loss) 781.9 (33.7) Financial position of the parent entity Assets Current assets 131.5 16.1 Non-current assets 2,974.4 2,395.4 Total assets 3,105.9 2,411.5 Liabilities Current liabilities 18.2 47.2 Non-current liabilities 6.6 6.4 Total liabilities 24.8 53.6 Net assets 3,081.1 2,357.9 Equity Issued capital 2,408.7 2,400.3 Retained earnings 869.7 174.8 Accumulated losses (197.3) (217.2) Total equity 3,081.1 2,357.9 Refer to Note 15 for Contingencies and Note 18 for Deed of Cross Guarantee disclosures. The parent entity’s capital expenditure commitment as at 31 December 2022 was nil (2021: nil). Franking account details 2022 2021 $m $m Franking account balance at the beginning of the year 291.1 194.5 Franking credits from income tax paid during the year 62.5 143.6 Franking debits from franked dividend paid during the year (37.3) (47.0) Franking account balance at the end of the year 316.3 291.1 Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 105 17 Basis of consolidation INVESTMENTS IN SUBSIDIARIES Subsidiaries are those entities over which the Consolidated Entity is capable of exerting control. The Consolidated Entity controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Where the Consolidated Entity holds less than a majority of the voting rights, other relevant factors are considered in assessing whether power over the entity exists. Factors considered include any contractual arrangements with other vote holders, rights arising from other contractual arrangements, as well as the Consolidated Entity’s voting and potential voting rights. The Consolidated Entity reassesses whether it controls an entity if circumstances indicate that there has been a change in one of the factors which indicate control. Subsidiaries are consolidated from the date on which control is assessed to exist until the date that control ceases. The purchase method of accounting is used to account for the acquisition of subsidiaries by the Consolidated Entity. Intercompany transactions, balances and unrealised gains and losses on transactions between companies controlled by the Consolidated Entity are eliminated on consolidation. SUBSIDIARIES The wholly-owned controlled entities of OZ Minerals Limited are listed below: Entity Country of incorporation Entity Country of incorporation OZ Minerals Brazil (Holdings) Pty Ltd Australia Avanco Lux I S.C.S Luxembourg Avanco Resources Pty Ltd Australia Carrapateena Pty Ltd Australia Avanco Holdings Pty Ltd Australia CTP Assets Pty Ltd Australia Estrela Metals Pty Ltd Australia CTP Operations Pty Ltd Australia AVB Copper Pty Ltd Australia Minotaur Resources Holdings Pty Ltd Australia AVB Brazil Pty Ltd Australia OZ Exploration Pty Ltd Australia AVB Carajás Holdings Pty Ltd Australia OZ Minerals Equity Pty Ltd Australia AVB Minerals Pty Ltd Australia OZ Minerals Group Treasury Pty Ltd Australia Mineração Águas Boas Ltda Brazil OZ Minerals Holdings Pty Ltd Australia AVB Mineração Ltda Brazil OZ Minerals Insurance Pte Ltd Singapore Avanco Resources Mineração Ltda Brazil OZ Minerals International (Holdings) Pty Ltd Australia SLM – Santa Lúcia Mineração Eireli Brazil OZ Minerals Investments Pty Ltd Australia MCT Mineração Ltda Brazil OZ Minerals Jamaica Limited Jamaica ACG Mineração Ltda Brazil OZ Minerals Prominent Hill Operations Pty Ltd Australia ARL South America Exploration Ltd Bermuda OZ Minerals Prominent Hill Pty Ltd Australia ARL Holdings Ltd Bermuda OZ Minerals Services Pty Ltd Australia Avanco Lux S.a.r.l. Luxembourg OZ Minerals Zinifex Holdings Pty Ltd Australia OZ Minerals Carrapateena Pty Ltd Australia Crossbow Resources Pty Ltd Australia OZM Carrapateena Pty Ltd Australia Wirraway Metals & Mining Pty Ltd Australia OZ Minerals Musgrave Holdings Pty Ltd Australia OZ Minerals Peru S.A.C Peru OZ Minerals Musgrave Operations Pty Ltd Australia OZ Exploration (USA) LLC USA Cassini Resources Pty Ltd Australia ZRUS Holdings Pty Ltd Australia Notes to the Consolidated Financial Statements continued OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 106 18 Deed of cross guarantee The Company and all its Australian domiciled subsidiaries listed in Note 17 to the Consolidated Financial Statements, except for OZ Minerals International (Holdings) Pty Ltd and ZRUS Holdings Pty Ltd, are party to a Deed of Cross Guarantee (‘Deed’). The effect of the Deed is that the Company guarantees to each creditor payment in full of any debt in the event of the winding up of any of the subsidiaries under certain provisions of the Corporations Act 2001. If a winding up occurs under other provisions of the Act, the Company will only be liable in the event that after six months any creditor has not been paid in full. The subsidiaries have also given similar guarantees in the event that the Company is wound up. Consolidated Statement of Comprehensive Income of the entities within the Deed 2022 $m 2021 $m Revenue 1,763.5 2,006.3 Other income – 0.7 Mining (573.0) (484.4) Processing (267.7) (247.7) Freight (88.3) (74.6) Site administration (131.1) (109.5) Royalties (63.1) (84.7) Inventory movement (65.8) (114.3) Corporate administration (73.6) (57.2) Exploration and corporate development (124.4) (50.6) Foreign exchange gain 0.3 10.4 Profit before interest and income tax 376.8 794.4 Financing income 1.2 – Financing expense (37.2) (38.9) Profit before income tax 340.8 755.5 Income tax (112.8) (230.3) Profit for the year 228.0 525.2 Other comprehensive gain/(loss) Items that will not be reclassified subsequently to future Income Statements Change in fair value of investments in equity securities, net of tax (2.3) 7.4 Items that may be reclassified subsequently to future Income Statements Cash flow hedges reserve change in fair value – 1.6 Cash flow hedges reclassified to profit and loss – 23.8 Other comprehensive gain/(loss) for the year, net of tax (2.3) 32.8 Total comprehensive income for the year 225.7 558.0 Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 107 Consolidated balance sheet of the entities within the Deed 2022 $m 2021 $m Current assets Cash and cash equivalents 81.4 196.5 Trade receivables 293.8 236.0 Tax receivable 58.2 – Inventories 266.3 259.3 Prepayments 27.7 13.7 Other receivables 285.1 247.3 Total current assets 1,012.5 952.8 Non-current assets Inventories 69.9 129.4 Exploration assets – 216.5 Property, plant and equipment 3,691.8 2,735.3 Right-of-Use assets 739.8 733.6 Investment in subsidiaries which are not part of the Deed 346.0 346.0 Other assets 15.7 15.5 Total non-current assets 4,863.2 4,176.3 Total assets 5,875.7 5,129.1 Current liabilities Trade payables and accruals 294.2 213.6 Other payables 7.2 6.1 Current tax provision – 51.2 Employee benefits 27.7 25.0 Borrowings 375.0 – Lease liabilities 97.2 80.5 Total current liabilities 801.3 376.4 Non-current liabilities Deferred tax liabilities 349.9 190.1 Employee benefits 5.0 4.4 Provisions 97.2 118.5 Borrowings 15.6 – Lease liabilities 657.4 663.4 Total non-current liabilities 1,125.1 976.4 Total liabilities 1,926.4 1,352.8 Net assets 3,949.3 3,776.3 Equity Issued capital 2,408.7 2,400.3 Retained earnings 1,540.6 1,376.0 Total equity 3,949.3 3,776.3 Notes to the Consolidated Financial Statements continued OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 108 19 Key management personnel KEY MANAGEMENT PERSONNEL (KMP) REMUNERATION KMP are accountable for planning, directing and controlling the affairs of the Company and its controlled entities. KMP REMUNERATION FOR THE CONSOLIDATED ENTITY 2022 2021 $ $ Short-term employee benefits 6,049,631 5,024,438 Other long term benefits 32,809 88,469 Post-employment benefits 206,534 141,697 Termination benefits 580,847 – Share-based payments 4,279,100 2,471,840 Total 11,148,921 7,726,444 Share based payments for 2022 have been calculated on the basis that the likelihood of the Scheme with BHP becoming effective is more likely than not and all of the performance rights (other than performance rights granted under the 2023 LTI offer to Executive KMP) vest and are exercised on Scheme effective date, with the cumulative impact of the revision to original estimates recognised in the income statement with a corresponding adjustment to equity, as disclosed in Note 13. RECOGNITION AND MEASUREMENT OF WAGES AND SALARIES AND SHORT-TERM EMPLOYEE BENEFITS Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within 12 months of the reporting date are recognised in the provision for employee benefits in respect of employees’ services up to the reporting date and are measured at the amounts expected to be paid, inclusive of on-costs, when the liabilities are settled. RECOGNITION AND MEASUREMENT OF OTHER LONG-TERM EMPLOYEE BENEFITS Long-term employee benefits include annual leave liabilities which are expected to be settled in the period greater than 12 months from balance date and long service leave liabilities. Other long-term benefits are recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to the expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on high availability corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows. 20 Related party transactions A number of KMP, or their related parties, may hold positions in other entities that may result in them having control or significant influence over the financial or operating policies of those entities. Where the Consolidated Entity transacts with the KMP and their related parties, the terms and conditions of these transactions are no more favourable than those available, or which might reasonably be expected to be available, on similar transactions to non-KMP related entities on an arm’s length basis. During the year the Group did not enter into any related party transactions (2021: None). 21 Remuneration of auditors 2022 2021 $ $ Audit and review services Audit and review of financial statements - Group 606,200 557,000 Total fee for the audit and review services 606,200 557,000 Assurance services Sustainability and NGERS assurance 100,800 87,700 Other assurance services 15,000 – Total fee for audit, review and assurance services 722,000 644,700 Other services Transaction advisory services 33,200 – Taxation advice and tax compliance services – 76,000 Other services – 5,000 Total fee for other services 33,200 81,000 Total fee 755,200 725,700 Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 109 22 New accounting standards CHANGES IN ACCOUNTING POLICIES AND MANDATORY STANDARDS ADOPTED DURING THE YEAR The accounting policies applied by the Consolidated Entity in these Consolidated Financial Statements are consistent with those applied by the Consolidated Entity in its Annual & Sustainability Report for the year ended 31 December 2021. A number of new standards were effective from 1 January 2022 and they did not have a material effect on the Group’s financial statements for the year. ISSUED STANDARDS AND PRONOUNCEMENTS NOT EARLY ADOPTED A number of new standards and amendments to standards are effective for annual periods beginning after 1 January 2023 and earlier application is permitted; however, the Group has not early adopted any of the forthcoming new or amended standards in preparing these Consolidated Financial Statements for the year. Directors’ declaration OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 110 1. In the opinion of the Directors of OZ Minerals Limited (the Company): a. the Consolidated Financial Statements and Notes set out on pages 75 to 109 and the remuneration disclosures that are contained in the Remuneration Report on pages 36 to 57, are in accordance with the Corporations Act 2001, and: i. give a true and fair view of the financial position of the Consolidated Entity as at 31 December 2022 and of its performance for the year ended on that date; and ii. comply with Australian Accounting Standards and the Corporations Regulations 2001; b. there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due and payable. 2. The Directors draw attention to page 79 of the Consolidated Financial Statements, which includes a statement of compliance with international financial reporting standards. 3. At the date of this declaration, there are reasonable grounds to believe that the Company, and the consolidated entities identified in Note17, will be able to meet any liabilities to which they are, or may become subject to because of the Deed of Cross Guarantee between the Company and those consolidated entities pursuant to ASIC Instrument 2016/785. 4. The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Chief Executive Officer and Chief Financial Officer for the financial year ended 31 December 2022. Signed in accordance with a resolution of the Directors. Rebecca McGrath Chairman 22 February 2023 Andrew Cole Managing Director & CEO 22 February 2023 Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 111 Independent Auditor’s Report To the shareholders of OZ Minerals Limited Report on the audit of the Financial Report OPINION We have audited the Financial Report of OZ Minerals Limited (the Company). In our opinion, the accompanying Financial Report of the Company is in accordance with the Corporations Act 2001, including: › giving a true and fair view of the Group's financial position as at 31 December 2022 and of its financial performance for the year ended on that date; and › complying with Australian Accounting Standards and the Corporations Regulations 2001. The Financial Report comprises: › Consolidated balance sheet as at 31 December 2022; › Consolidated statement of comprehensive income, Consolidated statement of changes in equity, and Consolidated statement of cashflows for the year then ended; › Notes including a summary of significant accounting policies; and › Directors' Declaration. The Group consists of OZ Minerals Limited (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. 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 Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in accordance with these requirements. KEY AUDIT MATTERS The Key Audit Matters we identified are: › Recognition and measurement of revenue › Recoverability of non-current assets. 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. 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. OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 112 RECOGNITION AND MEASUREMENT OF REVENUE Refer to Note 1 to the Financial Report. The key audit matter How the matter was addressed in our audit As disclosed in Notes 1 and 14 to the Financial Report, the Group’s agreements for the sale of concentrate may provide for provisional invoicing based on commodity prices at the date of shipment and an initial metallurgical assay, with a subsequent adjustment at the end of the quotational period to reflect the final commodity price and final metallurgical assay. This was a key audit matter as the provisional pricing adjustments may represent a significant component of revenue within the consolidated income statement. Also, for sales where the final settlement price is yet to be determined, the value of the provisionally recognised revenue (and the associated outstanding receivable) is adjusted based on the appropriate forward price. Our procedures included: › We tested controls relating to the authorisation of new contracts and the approval of amendments to existing contracts. › On a sample basis, we inspected the Group’s sales contracts and assessed key terms of sale, including the basis for issuing provisional invoices and the duration of any quotational period. › On a sample basis, we compared the provisional and final invoices raised during the year to supporting documentation, including the results of metallurgical assays, prevailing commodity prices and shipping terms. › We assessed the methodologies, inputs and assumptions used by the Group in determining the fair value of trade receivables subject to quotational pricing. › We recalculated the fair value measurement of trade receivables still subject to quotational pricing adjustments as at 31 December 2022 using market forward prices. › We evaluated the adequacy of the disclosures within the Financial Report with reference to the requirements of accounting standards. RECOVERABILITY OF NON-CURRENT ASSETS, INCLUDING PROPERTY, PLANT AND EQUIPMENT ($4,339M) Refer to Note 7 to the Financial Report. The key audit matter How the matter was addressed in our audit A key audit matter was the recoverability of non-current assets, including property plant and equipment, given the size of the balances and, particularly with respect to the impact of the historical injunction restricting development activity in the Gurupi cash generating unit (CGU), the level of judgement applied by us when evaluating the evidence available. We focused on the significant forward looking assumptions made by the Group, including future commodity prices, operational and development expenditure, reserve and resource estimates, discount rates and matters relevant to permitting of mining activity. We involved valuation specialists to supplement our senior audit team members in assessing this key audit matter. Our procedures included: › Using our understanding of the nature of the Group’s business, we assessed the Group’s evaluation as to whether there were any impairment indicators relevant to the Group’s CGUs. › Specifically with respect to the Gurupi CGU: – We assessed the impact of the historical injunction restricting development activity on the Group’s assessment of recoverable amount. We read correspondence with the Group’s external advisors and relevant regulatory bodies and used this knowledge to assess inputs into the Group’s recoverable amount assessment. – We assessed the integrity of the model used to assess the recoverable amount, including the accuracy of the underlying calculation formulas. – We assessed the Group’s discounted cash flow models and key assumptions by comparing to business plans, prefeasibility studies and resource and reserve statements. Working with our valuation specialists, we independently developed ranges for key inputs such as commodity prices, foreign exchange rates and discount rates and compared these to the rates used by the Group. – We evaluated the Group’s sensitivity analysis in respect of key assumptions in the models, including relating to the injunction, to identify those assumptions at higher risk of bias or inconsistency in application and to focus our further procedures. – We assessed the scope, competence and objectivity of the Group’s external experts engaged to assist with the assessment of regulatory matters and with the assessment of the recoverable amount of the Gurupi CGU. › We evaluated the adequacy of the disclosures within the Financial Report using our understanding of the matter obtained from our testing and against the requirements of accounting standards. Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 113 OTHER INFORMATION Other Information is financial and non-financial information in OZ Minerals Limited’s annual reporting 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 and defined sustainability information within the Sustainability Review and our related assurance opinions. 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. RESPONSIBILITIES OF THE DIRECTORS FOR THE FINANCIAL REPORT The Directors are responsible for: › preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 › implementing necessary internal control to enable the preparation of a Financial Report that gives a true and fair view and is free from material misstatement, whether due to fraud or error › 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 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/admin/file/ content102/c3/ar1_2020.pdf. This description forms part of our Auditor’s Report. REPORT ON THE REMUNERATION REPORT Opinion In our opinion, the Remuneration Report of OZ Minerals Limited for the year ended 31 December 2022 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 39 to 57 of the Directors’ report for the year ended 31 December 2022. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. KPMG Chris Sargent Partner 22 February 2023 Shareholder Information Capital Share capital comprised 335,515,966 fully paid ordinary shares on 17 February 2023. Shareholder details At 17 February 2023, OZ Minerals had 43,063 shareholders. There were 394 shareholdings with less than a marketable parcel of $500 worth of ordinary shares. Top 20 investors at 17 February 2023 Name Number of shares Issued Capital % HSBC Custody Nominees (Australia) Limited 104,537,484 31.16 Citicorp Nominees Pty Limited 70,587,851 21.04 J P Morgan Nominees Australia Pty Limited 62,408,459 18.60 National Nominees Limited 13,431,404 4.00 BNP Paribas Nominees Pty Ltd (AGENCY LENDING DRP A/C) 10,853,242 3.23 BNP Paribas Nominees Pty Ltd (DRP) 9,309,757 2.77 Warbont Nominees Pty Ltd (UNPAID ENTREPOT A/C) 2,708,195 0.81 Romsup Pty Ltd (ROMADAK SUPER FUND A/C) 2,467,057 0.74 Neweconomy Com Au Nominees Pty Limited (900 ACCOUNT) 1,424,246 0.42 Pacific Custodians Pty Limited (OZL PLANS CTRL) 1,358,954 0.41 OZ Minerals Equity Pty Ltd (DESP A/C) 1,186,032 0.35 Citicorp Nominees Pty Limited (COLONIAL FIRST STATE INV A/C) 1,047,930 0.31 OZL Directors' Holdings (Balances & Assoc A/cs) 741,488 0.22 BNP Paribas Nominees Pty Ltd (HUB24 CUSTODIAL SERV LTD DRP) 708,535 0.21 BNP Paribas Nominees Pty Ltd Acf Clearstream 612,818 0.18 A & R Cole Investments Pty Ltd (COLE FAMILY A/C) 597,831 0.18 Netwealth Investments Limited (WRAP SERVICES A/C) 577,358 0.17 BNP Paribas Nominees (NZ) Ltd (DRP) 499,418 0.15 Mirrabooka Investments Limited 367,000 0.11 UBS Nominees Pty Limited 341,497 0.10 Total 285,766,556 85.17 Substantial shareholders of OZ Minerals limited at 17 February 2023 BlackRock Group advised as at 27 January 2023, it and its associates had an interest in 17,003,397 shares, which represented 5.07 per cent of OZ Minerals capital at that time. Mitsubishi UFJ Financial Group Inc advised that as at 23 January 2023, it and its associates had an interest in 18,938,885 shares, which represented 5.66 per cent of OZ Minerals capital at that time. State Street Corporation advised that as at 23 January 2023, it and its associates had an interest in 22,052,927 shares, which represented 6.59 per cent of OZ Minerals capital at that time. Investor categories at 17 February 2023 Ranges Number of investors Number of shares Issued capital % 1 – 1,000 32,833 11,283,259 3.36 1,001 – 5,000 8,708 18,646,406 5.56 5,001 – 10,000 955 6,883,955 2.05 10,001 – 100,000 527 12,085,465 3.59 100,001 and over 40 286,643,881 85.43 Total 43,063 335,515,966 100.00 OZ Minerals 2022 Annual Report Contents 2022 Performance Snapshot Message from Chairman and CEO Strategy Operating Review 114 Voting rights On a show of hands, every member present in person or by attorney or by proxy or by representative shall have one vote. Upon a poll, every member present in person or by attorney or by proxy or by representative shall have one vote for every share held by the member. Where more than one proxy, representative or attorney is appointed, none may vote on a show of hands. Other securities on issue The Company has performance rights on issue in addition to ordinary shares. The details of the securities held as at 20 February 2023 are as follows: Class of security Number of holders Number of securities Performance rights 752 2,204,154 No voting rights attach to the above securities, however, any ordinary shares that are allotted to the holders of the securities upon vesting or conversion of the above-mentioned securities will have the same voting rights as all other ordinary OZ Minerals shares. Dividends On 22 December 2022, OZ Minerals entered into a Scheme Implementation Deed with BHP Lonsdale Investments Pty Ltd (‘BHP’), a wholly owned subsidiary of BHP Group Limited, in relation to the proposed acquisition by BHP of all of the issued shares in OZ Minerals by way of scheme of arrangement under the Corporations Act 2001 (Cth) (‘Scheme’). The Scheme Implementation Deed permits, subject to certain conditions, OZ Minerals to declare and pay OZ Minerals shareholders a special dividend prior to implementation of the Scheme. Prior to the Scheme meeting (which is currently expected to be held in mid-April 2023), the Board intends to declare a fully franked special dividend of $1.75 per share, such dividend conditional on the Scheme becoming effective. If the Scheme does become effective the special dividend will be paid on the date the Scheme is implemented to OZ Minerals shareholders who hold OZ Minerals shares on the special dividend record date. The special dividend record date will be three days before the Scheme record date, with both record dates currently expected to be in late-April 2023. An interim dividend of 8 cents per share, fully franked was paid to shareholders on 16 September 2022. Dividend payments Dividend payments are credited directly into any nominated bank, building society or credit union account in Australia. Annual & Sustainability Report A full copy of the Annual & Sustainability Review is available online at ozminerals.com. If you no longer wish to receive hard copies of the Annual & Sustainability Report, log into your shareholding or contact our share registry to update your shareholder communication instructions. Share registry information The OZ Minerals share registry is maintained by Link Market Services Limited. Visit Link Market Services’ website linkmarketservices.com.au and access a wide variety of holding information, change your personal details and download forms. You can: › check your current and previous holding balances › elect to receive financial reports electronically › update your address details › update your bank details › confirm whether you have lodged your Tax File Number (TFN), Australian Business Number (ABN) or exemption › check transaction and dividend history › enter your email address › check the share prices and graphs › download a variety of instruction forms. You can access this information via a security login using your Security Holder Reference Number (SRN) or Holder Identification Number (HIN) as well as your surname (or company name) and postcode (must be the postcode recorded on your holding record). Contact information Shareholder enquiries about shareholding should be addressed to Link Market Services. You can contact the Company’s share registry by calling (+61) 1300 306 089, local call cost within Australia. Share registry contact information can be found on the back cover of this report. Governance Directorsʼ Report Risk Management Remuneration Overview and Report Sustainability Review MROR Financial Report 115 OZ MINERALS LIMITED › ABN 40 005 482 824 CORPORATE OFFICE › 2 Hamra Drive, Adelaide Airport South Australia 5950 › Telephone: (+61 8) 8229 6600 › Facsimile: (+61 8) 8229 6601 › info@ozminerals.com SHARE REGISTRY › Link Market Services Limited › Tower 4, 727 Collins Street, Docklands Victoria 3008 Australia › Telephone: (+61) 1300 306 089 › Facsimile: (+61 2) 9287 0303 › linkmarketservices.com.au INVESTOR ENQUIRIES › Travis Beinke Group Manager Investor Relations › Telephone: (+61 8) 8229 6622 › travis.beinke@ozminerals.com

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