ANNUAL
REPORT
2024
Corporate
Governance
Statement
Modern Slavery
Statement
Sustainable
Development
Report
Tax Transparency
and Payments
to Governments
Report
SUSTAINABLE
DEVELOPMENT
REPORT
2024
Sustainability
Databook
Standards and
Frameworks
Reporting Index
SUSTAINABILITY
DATABOOK
2024
STANDARDS
AND FRAMEWORKS
REPORTING INDEX
2024
CORPORATE
GOVERNANCE
STATEMENT
2024
MODERN
SLAVERY
STATEMENT
2024
TAX TRANSPARENCY
AND PAYMENTS
TO GOVERNMENTS REPORT
2024
Annual Report FY24
This Annual Report is a summary of South32’s operations, activities
and performance for the year ended 30 June 2024 and its financial
position as at 30 June 2024. South32 Limited (ABN 84 093 732 597) is
the ultimate holding company of the South32 group of companies.
In this report, unless otherwise noted:
a) references to South32, the South32 Group, the Group, we, us, our
and similar expressions refer to South32 Limited, its subsidiaries
and operated joint ventures;
b) references to ‘our operations’, or commodities ‘we produce’ or in
‘our portfolio’ includes commodities such as bauxite, alumina,
aluminium and copper that may form part of, or be produced by
our non-operated joint ventures;
c)
financial information outside of the Financial Report(1) is
presented based on the Group’s equity share in its subsidiaries(2),
operated joint ventures(3) and non-operated joint ventures(4); and
d) metrics describing health, safety, environment, people and
community related performance in this report are presented for
the Group’s subsidiaries and operated joint ventures(5) on a
100 per cent basis, as outlined in the “Reporting Boundaries”
section of our Sustainable Development Report 2024 available at
www.south32.net.
Monetary amounts in this report are expressed in US dollars unless
otherwise stated.
Non-IFRS
This report includes non-IFRS financial measures, including
underlying measures of earnings, effective tax rate, returns on
invested capital, cash flow and net cash/(debt).
Non-IFRS measures should not be considered as alternatives to an
IFRS measure of profitability, financial performance or liquidity. For
an explanation of how South32 uses non-IFRS measures, see page
39. The definitions of individual non-IFRS measures used in this
report are set out in the glossary on page 191.
(1) For Financial Report basis of preparation, refer to Note 2 to the financial statements (Basis of preparation) on page 151 of this report.
(2) Cerro Matoso SA financial information is presented on a 100 per cent basis.
(3) Note that Chita Valley financial information is presented on a 100 per cent basis.
(4) Note that financial information for Mineração Rio do Norte S.A (MRN) and Port Kembla Coal Terminal (PKCT) is excluded.
(5) Metrics in relation to Chita Valley are not included.
Forward-looking statements
While the forward-looking statements in this report reflect South32’s
expectations at the date of this report (including with respect to its
strategies and plans regarding climate change), they may be
affected by a range of variables which could cause actual outcomes
and developments to differ materially from those expressed in such
statements. These variables include but are not limited to: financial
and economic conditions in various countries; fluctuations in
demand, price, or currency; operating results; development
progress including approvals; risks, including physical, technology
and carbon emissions reductions risks; industry competition; loss of
market for South32’s products; legislative, fiscal, and regulatory
developments; the conduct of joint venture participants and
contractual counterparties, and estimates relating to cost,
engineering, reserves and resources. For further information
regarding South32’s approach to risk, see page 28.
South32 makes no representation, assurance or guarantee as to the
accuracy, completeness or likelihood of fulfilment of any forward-
looking statement, any outcomes expressed or implied in any
forward-looking statement or any assumptions on which a forward-
looking statement is based. Except as required by applicable laws or
regulations, South32 does not undertake to publicly update or
review any forward-looking statements. Past performance cannot
be relied on as a guide to future performance. South32 cautions
against undue reliance on any forward- looking statements or
guidance.
Annual Report 2024
This report is a summary of our operations, activities, performance and financial position as at 30 June 2024.
Our 2024 Annual Reporting Suite
Cover: A geochemist specialist at the Hermosa project in the United States.
Right: Anindilyakwa People on Groote Eylandt in Australia.
+
You can view all the documents in our Annual Reporting Suite at www.south32.net.
About this report
2
SOUTH32 ANNUAL REPORT 2024
OPERATING AND FINANCIAL REVIEW
About this report
IFC
From the Chair
2
Our purpose-led approach
4
Our business explained
6
About us
6
Performance highlights
7
Where we operate
8
Our business model
10
Our stakeholders and impact
12
Our commodities
14
From the CEO
16
Our strategy
18
Our strategy in action
20
Key performance indicators
26
Risk management
28
Financial and operational performance summary
39
GOVERNANCE
Governance at a glance
68
Board of Directors
70
Directors’ report
75
Lead Team
80
Remuneration report
82
Acknowledgement
We acknowledge and pay our respects to the
Indigenous, Traditional and Tribal Peoples of the
lands, waters and territories on which South32
is located and where we conduct our business
around the world.
We respect and acknowledge the unique cultural
and spiritual relationships that Indigenous,
Traditional and Tribal Peoples have to the lands,
waters and territories, and their rich contribution
to society.
In the spirit of respect and reconciliation, we will
continue to support initiatives that strengthen
culture and ways of life so that their legacy
continues and extends to future generations.
FINANCIAL REPORT
Consolidated income statement
110
Consolidated statement
of comprehensive income
111
Consolidated balance sheet
112
Consolidated cash flow statement
113
Consolidated statement of changes in equity
114
Notes to the financial statements
115
Directors' declaration
170
Lead auditor’s independence declaration
171
Independent auditor’s report
172
RESOURCES AND RESERVES
Information
178
Competent persons
179
Accompanying tables
180
INFORMATION
Shareholder information
188
Glossary of terms and abbreviations
191
Corporate directory
199
Contents
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
1
SOUTH32 ANNUAL REPORT 2024
As our portfolio evolves, the common
commitment that unites us is that
everyone at South32 goes home safe and
well. As a result, we view our performance
for the year through the lens of safety.
In every part of our business, our people
have worked hard to deliver the Safety
Improvement Program and I am pleased
to report we are seeing positive trends in
our leading indicators, which are designed
to detect and provide advance warning of
latent safety hazards.
We continue to place emphasis on
developing safety leaders through our
LEAD Safely Every Day program and we
are extending the program to frontline
employees to involve and empower them
to drive safety improvements on the
ground. Consistent with the program’s aim
to form a common understanding of what
it means to be a safety leader at South32,
the Board has also completed this training.
Our approach to safety is supported by
a culture that promotes inclusion and
allows for collaboration, innovation and
performance. Delivering the cultural
transformation required for sustained
safety improvement demands focus
at all levels, from the Board to frontline
employees.
To see how our culture is experienced on
the ground, the Board visits a number
of our operations and offices each year.
In FY24 we visited Worsley Alumina,
Cannington, Australia Manganese, Mozal
Aluminium, our Singapore Marketing
office and our office in Johannesburg.
These visits also provided an opportunity
for Directors to hear from operational
employees on how they experience our
Safety Improvement Program in the field.
As part of the ongoing development of our
workplace culture, the Board participated
in Active Bystander training in FY24, a
new program that builds upon our Living
our Code training on acceptable and
unacceptable workplace behaviours.
It focuses on the important role of
bystanders in helping to reduce unsafe
and disrespectful behaviours, in an effort
to create a workplace where everyone
feels safe and can speak up.
We have continued our work overseeing
the development and implementation of
our strategy, with a key aspect being the
identification and pursuit of opportunities
to sustainably reshape our business for
the future.
Developing the Taylor zinc-lead-silver
deposit in the United States and divesting
Illawarra Metallurgical Coal are significant
portfolio decisions that align with our
purpose, positioning us to continue to
supply the commodities needed for the
global energy transition.
The development of the Taylor deposit
will increase the supply of zinc, a federally
designated critical mineral in the United
States and, as the largest private
investment in southern Arizona's history,
it is poised to make a major contribution
to the local economy and communities for
generations to come.
Longer term, we are excited by the
potential for Hermosa to produce
commodities including battery-grade
manganese and copper, in addition to zinc,
across multiple deposits, underpinned by
Taylor as the first development stage.
The sale of Illawarra Metallurgical Coal will
see the operation continue its contribution
to the local steel industry and the Illawarra
and Macarthur regions. For South32, it will
streamline our portfolio and unlock capital
to invest in our high-quality development
projects in base metals. Following
completion of the transaction, which is
expected on 29 August 2024, our exposure
to the aluminium value chain and base
metals will be approximately 90 per cent of
Underlying revenue, up from 50 per cent
when South32 was formed in 2015.
Despite weather and other operational
impacts on our business, we achieved
two annual production records in FY24
and delivered Underlying earnings of
US$380 million.
We reported a statutory loss after tax of
US$205 million, with impairment expenses
for Worsley Alumina and Cerro Matoso
partially offset by an impairment reversal
for Illawarra Metallurgical Coal.
PIVOTING
OUR PORTFOLIO
This year has been one of the most significant in South32’s history
as we accelerated the transformation of our portfolio to produce
commodities critical for a low-carbon future.
“
The portfolio changes we have announced align with
our purpose and position South32 to continue
supporting the global energy transition.”
From the Chair
2
SOUTH32 ANNUAL REPORT 2024
We returned US$198 million to
shareholders during FY24, with
US$163 million in fully-franked ordinary
dividends and US$35 million via our
on-market share buy-back. In February
2024, we took the decision to cancel our
on-market share buy-back to manage
our financial position and retain the
right balance of flexibility, efficiency
and prudence. Reflecting the Group's
strengthened financial position and
our disciplined approach to capital
management, the Board has resolved to
allocate US$200 million to our ongoing
capital management program, to be
returned to shareholders via an on-
market share buy-back, commencing
from completion of the sale of Illawarra
Metallurgical Coal.
Our Board represents a broad cultural,
ethnic, background and geographic mix,
and in FY24 we achieved gender balance
among our Directors. In November 2023
we welcomed Sharon Warburton as an
independent Non-Executive Director,
further enhancing the Board’s broad range
of skills and experience.
In October we will farewell Keith Rumble
who is stepping down from the Board at
our 2024 Annual General Meeting. Keith
has been a Non-Executive Director since
2015 and was the inaugural Chair of our
Sustainability Committee, a role he held
until recently. During his tenure Keith
has made a very valuable contribution to
our Board and to the company, bringing
his deep operational skills and ensuring
sustainability considerations were
incorporated into our strategy during a
period of heightened stakeholder focus
on environmental and social performance.
I would like to take this opportunity to
thank Keith for his contribution to South32.
Our approach to sustainability has
continued to focus on five areas that
are material to our stakeholders, our
business and to our long-term future,
and are closely aligned to our purpose
and integrated with our strategy. The
most material of these is responding
to the imperative to address climate
change. We support the goals of the
Paris Agreement and have set a target
to halve our operational greenhouse gas
(GHG) emissions (Scope 1 and 2) by 2035
from our FY21 baseline. We also have a
long-term goal to achieve net zero GHG
emissions, inclusive of Scope 1, 2 and 3
emissions, by 2050.
We continue to make progress against
our first Climate Change Action Plan which
was published in 2022. The Plan focuses
on reshaping our portfolio, decarbonising
our operations, working with others on
shared challenges, and responding to
the potential physical impacts of climate
change, the latter being brought into
sharper focus in FY24 as severe weather
events impacted two of our operations.
As we consider our approach to climate
change going forward, we engage
extensively with shareholders and other
stakeholders and take their feedback into
account. We intend to publish our second
Climate Change Action Plan in 2025.
Together with climate change,
environment is a material strategic and
governance issue for South32. As stewards
of the lands and waters where we operate,
it is our responsibility to minimise our
impacts on the natural environment.
Our Board oversees our environmental
approach and performance, supported
by the Sustainability Committee. We are
developing our approach to addressing
nature-related risks and opportunities,
which we plan to publish in 2025.
Global markets will continue to be
impacted by geopolitical issues that
have resulted in disruptions and volatility
in trade flows and commodity supply
chains. Heightened tensions between
world superpowers have further
exacerbated policy uncertainties, with
trade barriers and strategic realignments
shaping the global economic landscape.
Elections in many countries have also
added unpredictability to the market
environment.
As a result, we are likely to see continued
volatility in the prices of our commodities.
We are focused on what we can control,
which is to remain disciplined in how we
allocate capital to protect our balance
sheet, while maintaining safe and reliable
operations and continuing to transform
our portfolio for long-term value creation.
As we look ahead to our 10th year and
beyond, we have much to be proud of
and much to look forward to as a global,
diversified producer of commodities
critical for a low-carbon future.
On behalf of the Board, I would like to
thank our people for their hard work
and dedication throughout the year,
as well as the communities where we
work, our shareholders and all our other
stakeholders for their ongoing support.
Karen Wood
Chair
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
3
SOUTH32 ANNUAL REPORT 2024
Our strategy
Our purpose is underpinned by a simple strategy which is focused on optimising the performance of our
operations, unlocking their potential and identifying new opportunities to create value for our stakeholders.
Our purpose-led approach
MAKING
A DIFFERENCE...
Our purpose
Our purpose is to make a difference by developing natural resources, improving people’s lives now and for
generations to come. We are trusted by our owners and partners to realise the potential of their resources.
Our values
While our strategy outlines what we do to achieve our purpose, our values guide how we do it.
Every day, our values shape the way we behave and the standards we set for ourselves and others.
Our performance
Our key performance indicators provide a balanced approach to measuring our performance against the
delivery of our strategy, in support of our purpose and aligned with our values.
Sustainability is at the heart of our purpose and underpins the delivery of our strategy.
OPTIMISE
UNLOCK
IDENTIFY
+
Learn more about our values at www.south32.net.
+
Learn more in Our strategy
in action on pages 20 to 21.
+
Learn more in Our strategy in
action on pages 22 to 23.
+
Learn more in Our strategy in
action on pages 24 to 25.
+
Learn more about our key performance indicators on pages 26 to 27.
Care
We care about people,
the communities we’re
a part of and the world
we depend on.
Trust
We deliver on our
commitments and rely
on each other to do
the right thing.
Togetherness
We value difference and
we openly listen and share,
knowing that together
we are better.
Excellence
We are courageous
and challenge ourselves
to be the best in
what matters.
+
Learn more about our approach to sustainability in our Sustainable Development Report 2024 at www.south32.net.
4
SOUTH32 ANNUAL REPORT 2024
...AND IMPROVING
PEOPLE’S LIVES
Our stakeholders
We are committed to creating value
for our stakeholders. We believe
that, when done sustainably, the
development of natural resources
can change people’s lives for the
better. In delivering our strategy, we
seek to create enduring social,
environmental and economic value,
in a way that aligns with our purpose
and values.
+
Learn more about how we are
creating brighter futures,
together on pages 12 to 13.
+
Learn more about our stakeholders
in our Sustainable Development
Report 2024 at www.south32.net.
Our people
Nothing is more important than the health, safety and wellbeing of our people. We are committed to working together
safely, creating a values-based culture and an inclusive and diverse workforce.
+
Learn more about how we are protecting and respecting our people in our Sustainable Development Report 2024
at www.south32.net.
Our people are fundamental to our success. We seek to attract, develop and retain talented people who have a shared
belief in our purpose and values. Our reward framework aims to reward business and individual performance, as well
as drive ownership behaviours
+
Learn more about executive reward in our Remuneration report on pages 82 to 108.
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
5
SOUTH32 ANNUAL REPORT 2024
SOUTH32 IS A GLOBALLY
DIVERSIFIED MINING
AND METALS COMPANY
We produce commodities including bauxite,
alumina, aluminium, copper, zinc, lead, silver, nickel,
manganese and metallurgical coal from our
operations in Australia, Southern Africa and South
America. We also have a portfolio of high-quality
development projects and options, and exploration
prospects, consistent with our strategy to reshape
our portfolio towards commodities critical for a
low-carbon future(1).
Our business explained > About Us
Purpose-driven, dynamic and agile, we
empower our people to work safely and
collaboratively to make a positive impact
every day. By working with our partners
and communities, we build meaningful
relationships to create brighter futures,
together. From exploration to development,
operation to closure, we work to minimise
our impact on the environment and aspire
to leave a positive legacy.
Together we’re making a difference.
Now, and for future generations.
(1) In this report we use particular terminology in relation to climate change. Definitions of the terms 'goal', 'target' and 'low-carbon' when used in the context of climate change
are set out in the Glossary of terms and abbreviations on pages 191 to 198 of this report.
6
SOUTH32 ANNUAL REPORT 2024
OUR PERFORMANCE
AT A GLANCE
Our business explained > Performance highlights
〉
No fatalities at our operations and
improved our total recordable
injury frequency.
〉
Improved operating performance,
disciplined cost management and
higher prices for our key
commodities lifted our financial
results to finish the year.
〉
Set consecutive annual
production records at Hillside
Aluminium and South Africa
Manganese, and lifted production
at Cannington by 10 per cent
year-on-year despite adverse
weather impacts.
〉
Announced final investment
approval to develop the Taylor
zinc-lead-silver deposit at our
Hermosa project(5).
〉
Announced the sale of Illawarra
Metallurgical Coal, which is
expected to complete on
29 August 2024(6).
〉
Operational greenhouse gas
(GHG) emissions (Scope 1 and 2)
decreased by six per cent and
value chain GHG emissions (Scope
3) decreased by 17 per cent
year-on-year.
(1) Copper equivalent production was calculated using FY23 realised prices.
(2) Fully-franked ordinary dividends paid in respect of H2 FY23 (US$145M), fully-franked ordinary dividends paid in respect of H1 FY24 (US$18M) and on-market share buy-back
(US$35M).
(3) Frequency rates are per million hours worked. Incidents are included where South32 controls the work location or controls the work activity.
(4) Includes Scope 1 and Scope 2 greenhouse gas emissions.
(5) For further information see page 23 of this report.
(6) For further information see page 25 of this report.
+
Learn more about our key performance indicators, including historical data,
on pages 26 to 27.
198
Shareholder returns
(US$ million)(2)
(FY23 1,225)
1,802
Underlying EBITDA
(US$ million)
(FY23 2,534)
20.3
Operational greenhouse gas emissions
(Million tonnes CO2-e)(4)
(FY23 21.7)
23.6
Social Investment
(US$ million)
(FY23 27.7)
1,118
Copper equivalent production
(kilotonnes)(1)
(FY23 1,206)
1.9
Lost time injury frequency
(per million hours worked)(3)
(FY23 1.6)
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
7
SOUTH32 ANNUAL REPORT 2024
CERRO MATOSO
Nickel
AMBLER METALS
Copper, Lead, Gold, Silver and Zinc
HERMOSA
Zinc, Lead, Silver and Manganese
VANCOUVER
BRAZIL ALUMINA
Alumina
BRAZIL ALUMINIUM
Aluminium
BRAZIL ALUMINA
Bauxite
Development option
Development project
Non-operated operation
Greenfield exploration
South32-operated operation
Office
Aluminium value chain
Copper
Metallurgical coal
Nickel
Zinc, lead, silver
Manganese
By Commodity(1)
Australia
Southern Africa
Americas
By Geography(1)
SIERRA GORDA
Copper, Molybdenum and Gold
26%
15%
26%
15%
5%
13%
68%
16%
16%
A DIVERSIFIED
PORTFOLIO WITH A BIAS
TO BASE METALS
(1) Excludes manganese alloys, the Hermosa project, and Group and unallocated items/eliminations. Metallurgical coal comprises IMC, including energy coal by-product volumes
and excluding third party product.
FY24 Underlying EBITDA
US$1,802M
+
Read more on Segment Reporting in Note 4 to the financial statements on page 118.
Our business explained > Where we operate
8
SOUTH32 ANNUAL REPORT 2024
CANNINGTON
Silver, Lead and Zinc
WORSLEY ALUMINA
Alumina
AUSTRALIA MANGANESE
Manganese ore
JOHANNESBURG
SINGAPORE
PERTH HEAD OFFICE
SOUTH AFRICA
MANGANESE
Manganese ore
LONDON
MOZAL
ALUMINIUM
Aluminium
HILLSIDE ALUMINIUM
Aluminium
ILLAWARRA METALLURGICAL COAL
Metallurgical coal
(2) For further information see page 25 of this report.
Our commodities
Aluminium value chain
Our aluminium value chain consists of integrated bauxite mines
and alumina refineries in Australia and Brazil, which supply our own
aluminium smelters in Southern Africa and export markets.
Copper
We have an interest in a conventional open-cut copper mine in the
prolific Antofagasta region in Chile, producing a commodity critical
to a low-carbon future.
Zinc, lead, silver
The Hermosa Taylor development project has the potential to be
one of the world's largest zinc producers. Cannington also produces
zinc and is one of the world’s largest producers of lead and silver.
Nickel
We are one of the world’s largest ferronickel producers with the
potential to produce intermediary nickel products for electric
vehicle markets.
Manganese
We are one of the world’s largest producers of manganese. We also
have the potential to produce battery-grade manganese at the
Hermosa Clark development option.
Metallurgical coal
We produce premium-quality, hard coking coal for domestic
and export steel markets. In February 2024 we entered into an
agreement to sell Illawarra Metallurgical Coal, which is expected to
complete on 29 August 2024(2).
+
Learn more about our commodities and their uses
on pages 14 to 15.
OPERATING AND FINANCIAL REVIEW
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FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
9
SOUTH32 ANNUAL REPORT 2024
Mine/Process
Refine/Smelt
Explore
Develop
Market
Rehabilitate
and Close
Our business explained > Our business model
CREATING
LONG-TERM VALUE
As a global mining and metals company, we create value by producing commodities that are used
in many aspects of modern life and will play a critical role in a low-carbon future. Our operations,
development projects and options, and exploration prospects are diversified by commodity and
geography. We work to minimise the impact of our activities and aim to create enduring value
for our stakeholders, at each stage of the mining lifecycle.
The resources
we rely on
People and expertise
Our global workforce is made up of both
employees and contractors and is our
most important resource, providing
the skills, experience and technical
expertise required to run our business.
Natural resources
The resources and reserves we access
are the primary inputs for our business.
Other natural resources such as water
and energy are also important for
the operation of our facilities, and we
require access to land to conduct our
business activities.
Physical assets
We have a suite of operations including
open-cut and underground mines,
refineries, smelters and associated
infrastructure. We procure equipment
and services from suppliers globally to
support our operations, development
projects and options, and exploration
programs.
Finance
Our shareholders and lenders provide
access to financial capital, which we
put to work by operating our existing
facilities and funding our pipeline of
development projects and options, and
exploration programs.
Relationships
Trust and transparency are essential
to the way we operate. We seek to
build trust in the communities where
we have a presence to help realise the
potential of their resources, and we
work with our suppliers and customers
to apply responsible business practices
throughout our value chain.
What we do
10
SOUTH32 ANNUAL REPORT 2024
We are committed to creating value for
our stakeholders, including our people,
communities, suppliers, customers,
governments and investors.
+
Learn more about our stakeholders
and impact on pages 12 to 13.
The outcomes
we create
Explore
We have a portfolio of more than 25 greenfield exploration partnerships and
prospects across the world to discover deposits to underpin our next generation
of mines, with a focus on commodities critical to a low-carbon future. We work to
minimise the footprint of our exploration activities through the use of technology
and well-designed programs.
Develop
Our development projects in base metals and pipeline of growth options in
various study phases have the potential to produce commodities to support the
transition to a low-carbon world. As we advance our projects and options we are
looking to reshape the way we mine to support better safety, productivity and
emissions outcomes, including as we develop the Taylor zinc-lead-silver deposit
at our Hermosa project.
Mine/Process
We mine and process bauxite, copper, zinc, lead, silver, nickel, manganese
and metallurgical coal. Our most important commitment at all of our sites is
the health, safety and wellbeing of our employees, contractors, visitors and
communities. We listen to our stakeholders and work together with the aim of
creating enduring value.
Refine/Smelt
We refine bauxite to produce alumina, we smelt alumina to produce aluminium,
and we smelt nickel ore to produce ferronickel. We are also executing
operational decarbonisation initiatives, focusing on our highest emitting
facilities.
Market
We generate revenue from the sale of our commodities to a global customer
base and purchase raw materials from global markets. We also analyse
commodities and their markets to inform our strategic business planning and
investment decisions. We are working to build meaningful partnerships with key
customers and suppliers to support and co-design greenhouse gas emissions
reduction programs in the value chain.
Rehabilitate and Close
From exploration through to closure and beyond, we seek to minimise our
adverse impacts on the surrounding communities and environments. We
undertake progressive rehabilitation where possible and our closure plans are
informed by the aspirations and expectations of our host communities and
countries.
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
11
SOUTH32 ANNUAL REPORT 2024
9,906
employees globally(1)
US$913M in employee wages and benefits
446 graduates, apprentices, trainees and learners in our talent pipeline
We invest in our people through training and development to help them realise their
career aspirations
Inclusion and diversity is a core element of our culture and we are committed to building
and maintaining an inclusive and diverse workforce that reflects the communities in
which we operate
Our annual Your Voice employee survey allows us to understand and continuously
improve the employee experience
+
Learn more about our people and culture in our Sustainable Development Report
2024 at www.south32.net.
US$23.6M
in social investment
Our direct social investment spend was across our four key focus areas - education
and leadership (22 per cent), good health and social wellbeing (20 per cent), economic
participation (45 per cent), and natural resource resilience (13 per cent)
Over 30,000 students across more than 500 schools and learning institutions
participated in education and leadership programs funded by South32
We work collaboratively with Indigenous, Traditional and Tribal Peoples to preserve
cultural heritage and advance opportunities for economic participation and social
inclusion
+
Learn more about how we deliver value to society in our Sustainable Development
Report 2024 at www.south32.net.
Our business explained > Our stakeholders and impact
CREATING
BRIGHTER
FUTURES,
TOGETHER
We believe that, when done sustainably, the development
of natural resources can change people’s lives for the better.
Here are some of the ways we are doing this.
People
Communities
(1) Includes direct employees at our non-operated joint ventures.
12
SOUTH32 ANNUAL REPORT 2024
We have set a target(3) to halve our operational greenhouse gas (GHG) emissions (Scope 1
and 2) by 2035 from our FY21 baseline(4)
We have set a long-term goal(3) to achieve net zero GHG emissions across all scopes
(Scope 1, 2 and 3) by 2050
Operational water efficiency, which is the percentage of water used for operational
activities which is reused/recycled water, was 68.4 per cent in FY24
416 hectares of land under active rehabilitation in FY24, a 25 per cent increase from FY23
+
Learn more about our approach to climate change and our approach to managing our
environmental impact in our Sustainable Development Report 2024 at www.south32.net.
US$1,160M
spent on local procurement
A$34M procured from Aboriginal and Torres Strait Islander businesses in Australia
US$10M spent on Enterprise and Supplier Development in South Africa(2)
We aim to source responsibly and enhance product stewardship across our value chain,
working with 5,857 direct suppliers in 51 countries and 197 customers in 31 countries
+
Learn more about our approach to responsible value chains in our Sustainable
Development Report 2024 at www.south32.net.
US$621M
in total taxes and royalties paid
Underlying effective tax rate of 39 per cent
Wherever we operate, we seek to work collaboratively with governments to help them
realise value from natural resources and transition towards low-carbon economies
We work with a range of stakeholders and seek to influence public policy to create an
environment that supports the sustainable development of natural resources
+
Learn more about our approach to tax in our Tax Transparency and Payments to
Government Report 2024, and our approach to industry associations
at www.south32.net.
Our capital management framework prioritises maintaining safe and reliable operations
and an investment grade credit rating through the cycle. We intend to distribute a
minimum of 40 per cent of Underlying earnings as ordinary dividends
US$163M in dividends returned to shareholders during FY24
US$35M allocated to our on-market share buy-back during FY24
+
Learn more about our capital management framework in Our strategy on page 19.
Suppliers and Customers
Environment and Climate Change
Governments
Investors
(2) The Enterprise Development component (US$3.7M in FY24) is also captured in our social investment total.
(3) In this report we use particular terminology in relation to climate change. Definitions of the terms 'goal',
'target' and 'low-carbon' when used in the context of climate change are set out in the Glossary of terms and
abbreviations on pages 191 to 198 of this report.
(4) FY21 baseline adjusted to exclude GHG emissions from South Africa Energy Coal and Tasmanian Electro
Metallurgical Company, which were divested in FY21.
OPERATING AND FINANCIAL REVIEW
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SOUTH32 ANNUAL REPORT 2024
Our business explained > Our commodities
HELPING CREATE
A LOW-CARBON FUTURE
Our commodities are used in many aspects of modern life and we are actively
reshaping our portfolio to increase our exposure to commodities critical
to a low-carbon future. Key market sectors where our commodities have an
important role to play include energy and renewables, the automotive industry
including electric vehicles, construction, and consumer goods.
Aluminium value chain
Aluminium is often referred to as the
metal of the future. It is lightweight,
durable, strong, resistant to corrosion,
recyclable and can conduct electricity.
It has a wide range of applications
including construction, electrical
wiring, transportation including electric
vehicles and their batteries, packaging,
consumer goods, and has the potential to
substitute copper for certain applications
in aerospace and rail. We produce both
alumina and aluminium, and have doubled
our low-carbon aluminium(1) capacity since
inception.
(1) A definition of the term 'low-carbon aluminium' when used in the context of climate change is set out in the Glossary of terms and abbreviations on pages 191 to 198
of this report.
Copper
Copper is an excellent conductor of
electricity. It is a key metal used in electric
vehicles and charging infrastructure, and
as the world moves towards electrification
it will be used in power-related
infrastructure including renewable energy
generation. Copper is also widely used
in construction and consumer durables
including household appliances. We hold
an interest in the Sierra Gorda copper
mine in Chile which has embedded options
for further growth, and we are progressing
a pipeline of options to grow our copper
volumes as we seek to capitalise on
the long-term demand outlook for the
commodity.
Zinc, Lead, Silver
Zinc protects steel structures, wind
turbines and solar panels against
corrosion, and zinc oxide coatings help
achieve higher energy conversion in solar
panels. Lead batteries have potential to
be used in energy storage systems to
support uptake of renewable energy.
Silver is used in solar panels, the electrical
systems of vehicles, medical appliances
and consumer electronics. We have
been producing zinc, lead and silver at
Cannington for more than 25 years, and
are investing US$2.16 billion to develop
the Taylor zinc-lead-silver deposit at our
Hermosa project, with first production
expected in the second half of FY27.
14
SOUTH32 ANNUAL REPORT 2024
Nickel
Nickel is used in stainless steel, which is
used in transportation, manufacturing,
household items and surgical instruments.
Nickel has an important role to play as the
world transitions to a more sustainable
future as it is used as an alloy in wind and
solar power infrastructure. Nickel-rich
batteries are also critical for the rapid
adoption of electric vehicles. We are one of
the world’s largest ferronickel producers
with the potential to produce intermediary
products for electric vehicles.
(2) For further information see page 25 of this report.
Manganese
Manganese is used to improve the
quality and strength of steel in major
infrastructure such as hospitals, office
towers and bridges. Manganese also
has the potential to displace cobalt in
lithium-ion batteries, with demand for
manganese-rich cathode chemistries
expected to grow. We are well positioned
to meet future demand as we are
one of the world’s largest producers
of manganese from our operations
in Australia and South Africa, and the
Hermosa Clark development option has
the potential to produce battery-grade
manganese.
Metallurgical coal
Currently there is no commercial scale
alternative to metallurgical coal in the
steelmaking process. The use of high-
quality metallurgical coal that we produce
helps reduce greenhouse gas emissions in
the steel industry through improved blast
furnace efficiency, when compared with
lower-quality metallurgical coal. In February
2024 we entered into an agreement to
sell Illawarra Metallurgical Coal, which is
expected to complete on 29 August 2024(2).
While we have taken the decision to exit
metallurgical coal, we continue to believe
it has an important role in the steelmaking
process for years to come.
Aluminium (kt)
1,138
Alumina (kt)
5,063
Copper (kt)
60.8
Metallurgical coal (kt)
4,305
Silver (koz)
13,273
Lead (kt)
112.4
Zinc (kt)
60.7
Manganese ore (kwmt)
4,499
Nickel (kt)
40.6
FY24 production at a glance
+
Learn more about our portfolio in a low-carbon world in our Sustainable Development Report 2024 at www.south32.net.
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
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SOUTH32 ANNUAL REPORT 2024
At South32, we are united by our belief
that everyone can go home safe and well,
every day, and we remain committed
to pursuing continual improvements in
safety.
We assess our safety performance
through a range of both leading and
lagging indicators. Our significant hazard
frequency, a leading indicator, increased
by 34 per cent compared to FY23,
indicating a positive reporting culture and
increased hazard awareness. Conversely,
our lost time injury frequency, a lagging
indicator, increased by 19 per cent
compared to FY23, underscoring that
while we had no fatalities at our operations
in FY24, we are still seeing too many
serious injuries and we must be relentless
in our pursuit of a safer workplace.
FY24 was the third year of our Safety
Improvement Program, which aims to
achieve a step change in our safety
performance. The program includes
significant investment in safety leadership
through our LEAD Safely Every Day
program and in FY24 we extended this
to frontline employees, a focus that will
continue in FY25.
We are also continuing to embed our
'safety guarantee' across our business,
which is used to instil a belief that
everyone can go home safe and well,
create a sense of chronic unease, reduce
complacency, and assist to reduce risk
tolerance. We do this by asking our people
to reflect on whether they can guarantee
both their safety and that of their
colleagues when executing their role. If the
answer is no, the expectation is that they
stop and ask what would need to be done
differently to provide that guarantee.
Of course, safety means more than
just physical safety. This year we have
progressed the development of our new
psychosocial risk framework which aims
to standardise the way we identify, assess
and mitigate psychosocial risks. We
continue to manage sexual harassment as
a material health and safety risk and our
approach to preventing and addressing
this risk is multi-faceted, involving both
cultural and educational aspects as well as
enhanced controls.
One of the ways to eliminate sexual
harassment in our workplaces is
through inclusion and increased female
representation. More broadly, we know
that an inclusive culture and diverse
workforce leads to better business
outcomes and we remain focused
on shaping a safety focused, high
performance and values-based culture
where everyone feels safe, included and
respected at work.
We made some changes to our Lead
Team in FY24, with Vanessa Torres
moving from Chief Technical Officer to
become our Chief Operating Officer
Australia, and Erwin Schaufler promoted
to Chief Technical Officer. We maintained
50 per cent female representation on
our Lead Team and while we have a
series of targets and actions aimed at
improving inclusion and diversity across
our organisation, our aim remains for our
workforce to reflect the communities in
which we operate.
In Australia, we have reaffirmed our
commitment to reconciliation in our
second Innovate Reconciliation Action
Plan. Launched in July 2024, it outlines
how we are creating opportunities for
Aboriginal and Torres Strait Islander
Peoples and contains more ambitious
goals and targets.
At a global level, the past 12 months have
been marked by a mix of recovery and
volatility. Despite heightened geopolitical
tensions, the macroeconomic outlook
has gradually improved, driven by major
economies including China, the United
States and India. Interest rates remained
high and although global inflation rates
have eased from the peaks experienced in
2022, inflationary pressures have persisted
in some regions.
Severe weather also affected our business
this year, with Cannington impacted
by Tropical Cyclone Kirrily in January
and Australia Manganese significantly
impacted by Tropical Cyclone Megan
in March, resulting in the temporary
suspension of operations on Groote
Eylandt.
I visited Groote Eylandt in the aftermath of
the cyclone and the impact was immense,
with widespread flooding and significant
damage to critical infrastructure. Most
importantly, there were no recordable
injuries. The operational recovery at
Australia Manganese is underway and we
commenced a phased mining restart in
the fourth quarter.
Against this challenging backdrop, we set
consecutive annual production records
at Hillside Aluminium and South Africa
Manganese, and lifted production at
Cannington by 10 per cent. Improved
BUILDING A STRONGER,
SIMPLER BUSINESS
The diligent execution of our strategy is transforming our company. We continue to
optimise our base business, we are unlocking value from our high-quality
development projects in zinc and copper, and we are identifying a pipeline of
prospects for future growth in base metals.
“
We achieved two key strategic milestones this year
which have accelerated our transformation towards
commodities critical for a low-carbon future.”
From the CEO
16
SOUTH32 ANNUAL REPORT 2024
operating performance, disciplined cost
management and higher prices for our key
commodities lifted our financial results to
finish the year.
As a result, Underlying earnings and cash
flow increased in the second half of the
year, and we recorded FY24 Underlying
earnings before interest, tax, depreciation
and amortisation of US$1.8 billion.
Central to our strategy is our commitment
to a strong balance sheet and an
investment grade credit rating through
the cycle. We finished the year with net
debt of US$762 million as we balanced
returning cash to shareholders with
investing in our business.
This year, we have achieved two key
strategic milestones in the evolution of our
business.
Firstly, we announced final investment
approval for the Taylor zinc-lead-silver
deposit at our Hermosa project. Taylor
offers the potential for a long-life,
low-cost, low-carbon operation that is
expected to deliver attractive returns over
multiple decades.
The investment also creates a platform
for further development, with Taylor
designed to be the first phase of a
regional scale opportunity at Hermosa.
Our US$2.16 billion investment in Taylor
will establish infrastructure including
dewatering, power, roads and site facilities,
which will unlock value for future growth
options. These options include the Clark
battery-grade manganese deposit
and potential discoveries in our highly
prospective regional land package that
includes the Peake deposit and Flux
prospect, with recent drilling at Peake
returning further high-grade copper results.
Hermosa is currently the only advanced
project in the United States that could
supply two federally designated critical
minerals, zinc and manganese, and in 2023
it was confirmed as the first mining project
to be added to the FAST-41 process,
enabling a more efficient and transparent
federal permitting process.
Supporting our investment in Taylor is our
view on the markets it will serve. Taylor
is a potential top 10 global zinc producer
and with zinc demand growth expected
to outpace production to 2031 as it plays
a role in global decarbonisation efforts,
we expect higher incentive zinc prices as
Taylor ramps up to nameplate capacity.
Shortly after the Taylor final investment
decision, we announced the sale of
Illawarra Metallurgical Coal for up to
US$1.65 billion. The agreement became
unconditional on 29 July 2024 and is
expected to complete on 29 August 2024.
This transaction will realise significant
value for our shareholders. It will simplify
our business, strengthen our balance
sheet and reduce our capital intensity,
unlocking capital to invest in our high-
quality development projects in copper
and zinc.
As a result of these strategic decisions,
we now have a stronger, simpler portfolio
that is leveraged to commodities critical
for a low-carbon future. We are also
progressing a pipeline of prospects in
targeted regions through the drill bit, with
exploration activity this year including
consolidating our position in the highly
prospective San Juan region of Argentina.
Reshaping our portfolio is a key element
of our approach to climate change, as
is decarbonising our operations. The
majority of our operational greenhouse
gas (GHG) emissions (Scope 1 and 2)
are generated in our aluminium value
chain which is where we are focusing our
decarbonisation efforts.
We converted two coal-fired boilers to
natural gas at Worsley Alumina, reducing
the refinery’s operational GHG emissions
by over 10 per cent against FY21 levels.
At our aluminium smelters in South Africa
and Mozambique, we continue to work
with stakeholders and governments on
identifying and securing long-term, low-
carbon energy solutions.
The actions we take to address climate
change are also relevant to the growing
imperative to protect nature and we plan
to publish our approach to addressing
nature-related risks and opportunities in
FY25.
As we enter our 10th year, the South32
of today looks very different to the one
we established in 2015 and is primarily
focused on our aluminium value chain,
base metals and manganese, an attractive
commodity mix from which we believe we
can grow.
I would like to thank all our teams around
the world for the role they are playing
as we further establish our company
as a global, diversified producer of
commodities critical for a low-carbon
future.
Graham Kerr
Chief Executive Officer
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SOUTH32 ANNUAL REPORT 2024
Our strategy
+
Learn more about our approach to sustainability in our Sustainable Development Report 2024
at www.south32.net.
A STRATEGY
TO ACHIEVE
OUR PURPOSE
Our purpose is at the heart of who we are. Every day, in support of our purpose
and underpinned by our approach to sustainability, our people work to deliver
our strategy for the benefit of our stakeholders.
Our purpose is to make a difference by developing natural resources, improving people's lives now and for
generations to come. We are trusted by our owners and partners to realise the potential of their resources.
Our purpose is underpinned by a simple strategy.
Sustainability is at the heart of our purpose and underpins the delivery of our strategy.
Our approach to sustainability aims to balance environmental, social and economic considerations,
and to support delivery of our purpose and strategy in a way that creates enduring value for our
stakeholders. It comprises five interconnected pillars which focus on areas that are material to our
stakeholders and our business.
We are committed to continuously improving our sustainability performance, optimising our positive
contributions, and minimising our adverse impacts by:
We optimise our business
by working safely, minimising
our impact, consistently
delivering stable and
predictable performance,
and continually improving
our competitiveness.
We unlock the full value
of our business through
our people, innovation,
projects and technology.
We identify and
pursue opportunities to
sustainably reshape our
business for the future,
and create enduring
social, environmental
and economic value.
Protecting
and respecting
our people
Delivering
value to
society
Operating
ethically and
responsibly
Managing our
environmental
impact
Addressing
climate change
18
SOUTH32 ANNUAL REPORT 2024
Delivering our strategy
We deliver our strategy by aligning our
workforce behind seven ‘breakthroughs’
– commitments which shape our annual
business planning process, enabling us to
focus on what’s important.
Our first breakthrough is ‘we all guarantee
everyone goes home safe and well’, which
asks each person in our workforce to take
responsibility for their own safety and
wellbeing, and that of their colleagues. Our
'safety guarantee' is an internal approach
that is used to instil a belief that everyone
can go home safe and well, create a sense
of chronic unease, reduce complacency,
and assist to reduce risk tolerance in
relation to safety and health.
Risk management and corporate
governance
We are governed by robust risk
management and corporate governance
frameworks. Learn more in our Risk
management section on pages 28 to
38, and in our Corporate Governance
Statement 2024 at www.south32.net.
(1) For further information see page 25 of this report.
(2) Total capital allocation since FY16 includes proceeds from the sale of Illawarra Metallurgical Coal.
Climate-related financial
disclosures
Our climate-related financial disclosures,
which we consider to be consistent with
the four recommendations and the 11
recommended disclosures of the Task
Force on Climate-related Financial
Disclosures (TCFD) are set out in the
Addressing Climate Change section and
the Risk management sub-section of the
Our sustainability approach section of the
Sustainable Development Report 2024, as
well as the Emissions Methodology tab in
our Sustainability Databook 2024, both of
which are available at www.south32.net.
We have included our TCFD-aligned
disclosures in the separate Sustainable
Development Report 2024 and
Sustainability Databook 2024 to enable
us to provide this information alongside
detailed updates on our sustainability
activities more widely and our progress
against our Climate Change Action Plan.
Our Standards and Frameworks
Reporting Index 2024, also available at
www.south32.net, sets out each of the
TCFD's 11 recommended disclosures,
and where information relating to each
recommended disclosure can be found
in our Sustainable Development Report
2024 and our Sustainability Databook
2024. As some of our climate-related
financial disclosures are outlined in our
Sustainable Development Report 2024 and
Sustainability Databook 2024, this Annual
Report should be read in conjunction with
these documents and our Standards and
Frameworks Reporting Index 2024.
Capital management framework
Our strategy is underpinned by a disciplined
approach to capital management.
Our capital management framework
remains unchanged, supporting investment
in our business and rewarding shareholders
as our financial performance improves.
Our capital allocation priorities are to
maintain safe and reliable operations and an
investment grade credit rating throughout
the cycle. We intend to distribute a minimum
of 40 per cent of Underlying earnings as
ordinary dividends to our shareholders
following each six-month reporting period.
We encourage internal competition for
excess capital, which can include further
investment in new projects, acquisitions,
greenfield exploration, share buy-backs or
special dividends.
We returned US$198 million to
shareholders during FY24 via ordinary
dividends and our on-market share
buy-back. In February 2024, we took the
decision to cancel our on-market share
buy-back to manage our financial position
and retain the right balance of flexibility,
efficiency and prudence. Reflecting the
Group's strengthened financial position
and our disciplined approach to capital
management, the Board has resolved to
allocate US$200 million to our ongoing
capital management program, to be
returned to shareholders via an on-
market share buy-back, commencing
from completion of the sale of Illawarra
Metallurgical Coal(1) and to be returned by
12 September 2025.
Capital allocation since FY16(2)
41%
20%
14%
19%
2% 4%
US$17.1B
allocated
Capital expenditure
(including equity accounted investments)
Ordinary dividends
Capital management program
Acquisitions
Greenfield exploration
Net cash added to balance sheet
OPERATING AND FINANCIAL REVIEW
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SOUTH32 ANNUAL REPORT 2024
Our strategy in action
OPTIMISE OUR BUSINESS
Working safely
Our FY24 commitments:
〉
At least 90 per cent of LEAD Safely Every Day learning activities completed by leaders;
〉
A significant hazard to significant event near miss ratio of more than 15;
〉
A 60 per cent reduction in the number of injuries and acute illnesses associated with a potential fatality compared to the
FY23 baseline;
〉
A year-on-year reduction in lost time injury frequency (LTIF)(1); and
〉
A reduction in total recordable injury frequency (TRIF)(1) from the FY22 baseline.
Progress during FY24:
(1) Frequency rates as per million hours worked. Incidents are included where South32 controls the work location or controls the work activity.
No fatalities occurred at our operations during FY24 – an outcome
we aim to sustain through our commitment to delivering our
safety transformation.
Nothing is more important than the health, safety and wellbeing
of our people and we are continuing to implement our Safety
Improvement Program, a multi-year program of work launched
in FY22 with the aim of achieving a step change in our safety
performance.
One of the key focus areas of the Safety Improvement Program is
shifting mindsets through leadership. We are investing in safety
leadership through our LEAD Safely Every Day program, with
safety leadership capability workshops and coaching delivered
to over 1,500 leaders to date. In FY24, 96 per cent of LEAD Safely
Every Day learning activities were completed by leaders.
Proactive hazard reporting is an important part of our approach
to safety and this year we have disclosed the significant hazard
to significant event near miss ratio for the first time. This leading
indicator represents how well we are identifying hazards in
comparison to the number of near miss events that are occurring.
The higher the ratio, the more effective we are at identifying
hazards to minimise near misses and injuries. This year’s ratio of
21 indicates improved hazard awareness and a positive reporting
culture.
High potential injuries and illnesses are those which have the
potential for significant harm or could result in a fatality. This
lagging indicator increased by 12 per cent year-on-year, missing
our target and demonstrating that we still have work to do to
eliminate potential fatalities from our business.
Our LTIF increased by 19 per cent compared to FY23, mostly
driven by an increase in lost time injuries at our Australian
operations, and did not meet our target. Our TRIF decreased by
14 per cent compared to FY23 and five per cent compared to
FY22, meeting our target. The year-on-year decrease reflects
significant improvement in the TRIF for Illawarra Metallurgical
Coal, as well as an improvement in contractor TRIF.
We disclose fatalities for contractor activities that are associated
with our operations but take place in locations where we do not
have control. In FY24, an employee from a company contracted
by South Africa Manganese lost their life in a tragic off-site road
trucking accident. We continue to engage with our trucking
contractors in South Africa on ways to improve road safety.
+
Learn more about our approach to health and safety in our
Sustainable Development Report 2024 at www.south32.net.
20
SOUTH32 ANNUAL REPORT 2024
Stable and predictable performance while minimising impact
Our FY24 commitments:
〉
Achieve 97 to 102 per cent of target revenue equivalent production;
〉
Controllable costs within 2.5 per cent of target (adjusted for foreign exchange, price-linked costs, and other adjustments);
〉
Capital expenditure (excluding growth) within five per cent of target (adjusted for foreign exchange);
〉
Growth capital expenditure within 10 per cent of target; and
〉
Achieve target adjusted return on invested capital (ROIC), consistent with our cost, production and capital expenditure
targets.
Progress during FY24:
We achieved 96.5 per cent of target revenue equivalent
production. We set consecutive annual production records
at Hillside Aluminium and South Africa Manganese, and lifted
production at Cannington by 10 per cent despite adverse weather
impacts. This was offset by challenges at other locations including
Australia Manganese which temporarily suspended operations
in March 2024 due to Tropical Cyclone Megan, and Sierra
Gorda where higher plant throughput was offset by lower than
planned copper grades. For more information on our operating
performance, see pages 55 to 66.
Controllable costs were within 1.7 per cent of target, as we
continued our focus on disciplined cost management.
Capital expenditure excluding growth projects was 94 per cent of
target, with investments including additional ventilation capacity
at Illawarra Metallurgical Coal, energy transition projects at
Worsley Alumina and the De-bottlenecking Phase Two project at
Brazil Alumina.
Capital expenditure on growth projects, which was focused on the
Hermosa project, was 93 per cent of target as we installed critical
path infrastructure and progressed studies and permitting for the
Taylor and Clark deposits.
The adjusted ROIC was 69 per cent of target.
+
Learn more about how we seek to minimise our impact in
Create social, environmental and economic value on page 24.
Frontline Focus
The LEAD Safely Every Day program, which forms
part of our global Safety Improvement Program,
was launched in FY23 and in FY24 we extended it
to frontline employees and a sub-set of contractors
at our operations that perform high-risk work, and
functional roles that support them.
While the program’s rollout is tailored, the overall
objectives remain to form a common understanding of
what it means to be a safety leader at South32, embed
a consistent approach to safety risk management, and
empower our people to speak up so that together we
can prevent serious injuries and fatalities.
By the end of FY24, approximately 1,000 frontline
employees in Australia, South Africa and Mozambique
had participated in the program and it’s roll-out will
continue in FY25, where it will be extended to all
operations.
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SOUTH32 ANNUAL REPORT 2024
Our strategy in action continued
UNLOCK THE FULL VALUE OF OUR BUSINESS
Our people are connected and engaged
Our FY24 commitments:
〉
Achieve our annual inclusion and diversity targets and
deliver all activities on the annual inclusion and diversity
action plan; and
〉
Maintain or improve our inclusion index score compared
to FY23.
Progress during FY24:
An inclusive culture and diverse workforce allows for greater
collaboration, innovation, and performance. We set and track
performance against a series of measurable objectives which are
targets and actions aimed at improving inclusion and diversity
in our workplace. In FY24, we met the target for four of our eight
measurable objectives.
There are five measurable objectives for the representation of
women in our workforce and senior roles. The representation
of women in our overall workforce improved, increasing to
20.6 per cent from 20.2 per cent in FY23, however this fell short
of our aspirational goal of 23.5 per cent. The representation
of women on our Board increased to 50 per cent from
44 per cent in FY23, meeting our target of at least 40 per cent.
The representation of women on our Lead Team remained
at 50 per cent and met our target of at least 40 per cent, the
representation of women in our Senior Leadership Team remained
at 30.3 per cent and fell short of our target of 32.7 per cent, and
the representation of women in our Operational Leadership Team
decreased to 25.7 per cent from 28.7 per cent in FY23 and fell
short of our target of 31.5 per cent.
There are two measurable objectives for the representation of
Black People in our South African workforce. The representation
of Black People in our overall workforce in South Africa
improved, increasing to 88.4 per cent from 86.9 per cent in FY23
and meeting our target of at least 85 per cent, however the
representation of Black People in management roles in South
Africa decreased to 51.8 per cent from 55.3 per cent in FY23,
below our target of at least 60 per cent.
The final measurable objective is continuing to target pay equity
for our employees with respect to gender and ethnicity. We
completed our annual pay equity review, investing US$292,000
to improve pay equity and meeting our target of reducing spend
year-on-year to close the pay gap.
Our FY24 inclusion and diversity action plan focused on five
activities, including embedding the performance requirements
of our internal inclusion and diversity standard, conducting
comprehensive sexual harassment risk assessments and rolling
out a discussion series on the important role bystanders can play,
with all five activities completed.
Our annual Your Voice employee survey assesses five dimensions
– safety, leadership, employee engagement, employee experience
and workplace conduct. In FY24, respondents reported an equal
or improved experience in all five dimensions and our inclusion
index score, which measures perceptions of inclusion in our
workplace, increased to 82.3 per cent from 81.5 per cent in FY23(1).
+
Learn more about our approach to people and culture in our
Sustainable Development Report 2024 at www.south32.net.
(1) Given the agreement to sell Illawarra Metallurgical Coal and focus on recovery efforts following Tropical Cyclone Megan at Australia Manganese, employees at these operations
did not participate in this year’s Your Voice employee survey. Survey results presented in this report are calculated on re-baselined data to support year-on-year comparison
against the same operations in scope.
Technology and innovation unlock value
Our FY24 commitments:
〉
Deliver critical technology and innovation programs.
Progress during FY24:
Technology and innovation are key enablers of our transition
towards a low-carbon future and to realising our objective of
safer, cleaner and more productive operations. To focus our
innovation investment in the areas that matter most, in FY20 we
established Innovate32, our strategy-aligned, value-creating,
portfolio approach to enable innovation at South32.
Innovate32 encompasses three innovation workstreams – the
Low Footprint Mission, the Next Generation Mine Mission, and the
Securing Future Resources Mission.
The Low Footprint Mission oversees decarbonisation innovation
initiatives, as well as waste, water and biodiversity initiatives
focused on minimising our environmental impact. A key milestone
in FY24 was the completion of a techno-economic assessment
of catalytic ventilation air methane (VAM) abatement technology
at Illawarra Metallurgical Coal to further investigate its potential.
We also worked with technology vendors, industry partners and
intellectual property owners to develop a plan to commercialise
catalytic VAM abatement solutions.
The Next Generation Mine Mission aims to reshape the way
we mine to support better safety, productivity and emissions
outcomes. In FY24 we continued various processing and
technology trials at Cannington, including battery electric mobile
equipment with the aim of reducing the use of diesel vehicles
and equipment and their associated emissions. Learnings from
the trials will be used to inform our next generation of mines,
including at Hermosa where the underground mine design for
the Taylor development project includes primary and secondary
battery electric charge bay infrastructure for battery electric
production loaders.
Another key focus area for the Next Generation Mine Mission is
utilising artificial intelligence (AI) to unlock value. We recognise
the potential that AI offers and have established a targeted
approach that allows us to scale and unlock value in four areas
that support our strategy and create shareholder value – safety,
cash generation, exploration, and productivity enablers. We
have already unlocked value through AI initiatives at Australia
Manganese, Worsley Alumina and Cerro Matoso, with plans to
scale to other operations. Our work in AI follows responsible
AI frameworks and is underpinned by risk management,
governance, cyber and privacy controls.
The Securing Future Resources Mission focuses on reducing the
level of uncertainty in early mineral exploration phase investment
through innovation in area selection, target identification and
resource evaluation. In FY24, we continued developing orebody
knowledge and processing technologies that will help us unlock
value from complex copper ore bodies.
Learn more about how we are leveraging technology and
innovation, and collaborating with others, in the Addressing
climate change section of our Sustainable Development Report
2024 at www.south32.net.
22
SOUTH32 ANNUAL REPORT 2024
Project execution
Our FY24 commitments:
〉
Complete Taylor deposit shaft pre-sink to plan, present project for final investment decision (FID) and commence and
progress shaft development to plan; and
〉
Progress Clark deposit engineering and federal funding submission for proposed plant on schedule, and progress decline
development to plan.
Progress during FY24:
(2) Refer to market release "Final Investment Approval to Develop Hermosa’s Taylor Deposit" dated 15 February 2024.
(3) Refer to market release "Worsley Alumina Approvals Update" dated 22 July 2024.
In February 2024 we announced final investment approval for
the Taylor zinc-lead-silver deposit(2), the first development at our
Hermosa project and a major milestone aligned with our strategy.
Taylor is expected to deliver attractive returns over multiple
decades, with the feasibility study confirming the potential for a
long-life, low-cost, low-carbon operation. It is expected to reach
first production in the second half of FY27 and deliver nameplate
production in FY30.
Once in production, Taylor will increase our supply of commodities
critical for a low-carbon future and is expected to sustainably
lift Group margins due to its first quartile cost position. With
global zinc demand growth expected to outpace production by
approximately three million tonnes to 2031, we expect higher
incentive prices for zinc as Taylor ramps up to nameplate capacity.
As the first phase of a regional scale opportunity at Hermosa,
Taylor’s infrastructure including dewatering, power, roads and site
facilities, will unlock value for future growth options. These include
Clark, our battery-grade manganese deposit, and potential
discoveries in our highly prospective regional land package, which
has already returned high-grade copper and zinc results from the
Peake deposit and Flux prospect. There is the potential to add
a capital efficient copper circuit to Taylor to process copper-rich
material from Peake.
Taylor has now progressed into execution and our immediate
focus is completing the construction of critical path infrastructure.
The shaft pre-sink has been completed on schedule and
construction of the main access and ventilation shafts is on track
to commence in the first quarter of FY25.
We are progressing Clark to potential development via key
workstreams across study work, product validation and customer
engagements. We have commenced engineering design studies
on the proposed plant for the next phase of metallurgical testing
to evaluate the final capacity, location and estimated capital
costs. We have also commenced construction of an exploration
decline to provide access to ore for demonstration scale output,
which is on track to be completed by the end of 2025. In May
2024 we were awarded a US$20 million grant by the United
States Department of Defense to help accelerate the domestic
production of battery-grade manganese, and we have also
submitted a request for federal funding to support the next
phase of testing.
At Sierra Gorda, we have progressed a feasibility study for the
fourth grinding line expansion, which is expected to deliver an
increase in plant throughput and grow our copper production.
The feasibility study and a final investment decision by the joint
venture partners is expected in the first half of FY25.
At Worsley Alumina, we continue to progress the environmental
approval process for the Worsley Mine Development Project
to enable access to bauxite to sustain production. We have
undertaken a carrying value assessment of Worsley Alumina
having regard to the increased uncertainty created by the
approval process and associated challenging operating
conditions, and have recognised an impairment expense for
Worsley Alumina with our FY24 financial results. We continue to
work collaboratively with the Western Australian Government and
aim to secure environmental approvals by the end of 2024(3).
Looking Back to Look Forward
Our Cannington operation, which has produced zinc, lead and silver for more than
25 years, and the Taylor zinc-lead-silver deposit at our Hermosa project, which we
announced final investment approval to develop in FY24, have similar orebodies.
This has provided an opportunity for the Hermosa team to leverage the extensive
knowledge and experience of the Cannington team in the design of the Taylor
processing plant.
Cannington’s Superintendent Processing visited the project site in May 2024 to
share insights and ideas to help enhance and de-risk the development of Taylor.
Areas for discussion and collaboration have included hazard identification,
concentrator design, water management, and the trials of innovative technologies
at Cannington for potential use at Hermosa. Although Taylor will be a very different
facility to Cannington, the learnings will help set it up for long-term success.
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SOUTH32 ANNUAL REPORT 2024
Our strategy in action continued
IDENTIFY OPPORTUNITIES
Create social, environmental and economic value
Our FY24 commitments:
〉
Implement social investment plans on time and on budget;
〉
Apply our social investment impact measurement framework to our Hotazel Manganese Mines and Hillside Aluminium
economic development plans;
〉
Introductory human rights training completed by all targeted roles and made available to the wider workforce; and
〉
Deliver contextual water target milestones to agreed plan and achieve the FY24 target water use efficiency outcome as
defined within our Sustainability Linked Loan (SLL) framework.
Progress during FY24:
(1) FY21 baseline adjusted to exclude GHG emissions from South Africa Energy Coal and Tasmanian Electro Metallurgical Company, which were divested in FY21.
(2) The grid emission factor measures the amount of GHG emissions per unit of electricity generated. This includes all generation sources such as coal, natural gas, solar and
waste-to-energy.
Social investment plans were implemented for each operation
and we invested US$23.6 million in community initiatives. Our
direct social investment spend was across our four key focus
areas - education and leadership (22 per cent), good health and
social wellbeing (20 per cent), economic participation (45 per cent)
and natural resource resilience (13 per cent).
The economic value of our presence in communities is an
important part of our societal contribution and we develop
economic development plans as required by our internal social
performance standard. These are complementary to our social
investment plans and identify opportunities to contribute to
local communities through employment, procurement, business
development, and regional economic development. In FY24, we
applied our social investment impact measurement framework to
our Hotazel Manganese Mines and Hillside Aluminium economic
development plans which focus on skills development and
Enterprise and Supplier Development (ESD) activities.
We believe that growing and developing small, medium, and
micro enterprises (SMMEs) is fundamental to the transformation
of the South African economy. We collaborate with SMMEs on
ESD and our FY24 ESD expenditure of US$10 million exceeded our
target of US$3.48 million.
In Australia, we are committed to increasing our procurement
of goods and services from Aboriginal and Torres Strait Islander
businesses through a dedicated procurement strategy, with
spend increasing by 11 per cent to A$34 million in FY24.
We have a responsibility to manage human rights risks to people
across our operations and business relationships. Our suite of
human rights training, which includes an introductory human
rights module and two modules on modern slavery and security,
is assigned to selected employees based on their role and is
made available to all employees. The introductory module was
completed by 95 per cent of targeted roles in FY24.
Water is a vital shared resource and a critical input for our
operations. In 2019 and 2022 we established contextual water
targets for five operations which were identified as experiencing
material water-related risks at that time, with two operations
achieving their targets in prior years. For the three that remain, six
out of seven milestones were met in FY24. In FY22, we established
a water efficiency target (WET) for four operations identified as
being exposed to baseline water stress at that time, to collectively
achieve a 10 per cent improvement in water use efficiency by
FY27. The WET is one of three overarching key performance
indicators for our SLL. Progress against the WET remains on
track and we exceeded the FY24 stretch outcome for water use
efficiency as defined within the SLL.
We recognise the importance of protecting and conserving
biodiversity. We owned, leased or managed over 607,000
hectares of land in FY24, approximately three per cent of which
has been disturbed as a result of our activities. Of this disturbed
land, 34 per cent is in various stages of rehabilitation. In FY24,
over 190 hectares of land was disturbed through our activities
and we undertook progressive rehabilitation activities across
approximately 416 hectares, a 25 per cent increase from FY23.
Our approach to climate change is focused on reshaping our
portfolio, decarbonising our operations, working with others, and
understanding and responding to the potential physical impacts
of climate change.
Our reported operational greenhouse gas (GHG) emissions (Scope
1 and 2) for FY24 were 20.3 Mt CO2-e, a six per cent decrease from
FY23 and two per cent decrease from our FY21 baseline(1). Scope
1 GHG emissions decreased by nine per cent year-on-year largely
due to decreased GHG emissions at Worsley Alumina and lower
fugitive emissions from Ilawarra Metallurgical Coal, and Scope 2
GHG emissions decreased by four per cent year-on-year primarily
due to a decrease in the Eskom grid emission factor(2) for our
South African operations.
With 81 per cent of our operational GHG emissions in FY24
generated by three operations – Hillside Aluminium, Worsley
Alumina and Mozal Aluminium, we continue to focus on
decarbonisation programs and initiatives in our aluminium value
chain.
At Worsley Alumina, we converted two coal-fired boilers to natural
gas, progressed the product washing dilution reduction project
into execution, and advanced our pipeline of decarbonisation
studies. At Hillside Aluminium, we converted 36 per cent of pots to
AP3XLE energy efficiency technology and identified that we need
to partner with Eskom and the South African Government towards
a comprehensive low-carbon energy solution for the operation
beyond 2031. We also engaged extensively with stakeholders
including the Government of the Republic of Mozambique to
secure an affordable, long-term low-carbon energy source for
Mozal Aluminium beyond 2026, as there are currently no viable
alternative suppliers of renewable energy at the required scale.
+
Learn more about our approach to sustainability in our
Sustainable Development Report 2024 at www.south32.net.
24
SOUTH32 ANNUAL REPORT 2024
Fuelling Groote Eylandt’s Recovery
In March 2024, Groote Eylandt in Australia’s Northern
Territory was significantly impacted by Tropical Cyclone
Megan, with widespread flooding and damage to critical
infrastructure.
In addition to managing the impact on Australia
Manganese, our Groote Eylandt Mining Company (GEMCO)
team played a key role in supporting communities on the
Eylandt to get back on their feet.
GEMCO performs a unique role by providing a range of
infrastructure and services which the community relies
on, including fuel and electricity supply.
With fuel supply to the Eylandt cut off, the GEMCO team
rationed the operation’s fuel reserves, coordinating
fuel access and ‘manning the pumps’ for approximately
14 weeks to support key service providers such as
emergency services, health, education, Aboriginal
corporations, as well as the public, until fuel deliveries to
the Eylandt resumed in late June.
Sustainably reshape our business for the future
Our FY24 commitments:
〉
Develop and pursue opportunities to optimise our portfolio.
Progress during FY24:
(3) Refer to market release "Sale of Illawarra Metallurgical Coal" dated 29 February 2024.
(4) Refer to media release "Agreement to Divest Interest in Eagle Downs" dated 12 February 2024.
(5) Refer to media release "Agreement to Divest Metalloys Manganese Alloy Smelter" dated 13 June 2024.
(6) Illustrative FY24 Group Underlying revenue. Presented on a proportional consolidation basis and excludes Illawarra Metallurgical Coal, third party product revenue and Group
and unallocated items/eliminations.
In addition to making a final investment decision for the Taylor
deposit at the Hermosa project, we have made other substantial
changes to our portfolio in FY24.
In February 2024 we entered into an agreement to sell Illawarra
Metallurgical Coal for up to US$1.65 billion(3). The agreement
became unconditional on 29 July 2024 and is expected to
complete on 29 August 2024. The transaction will simplify
our business, strengthen our balance sheet and reduce our
capital intensity, unlocking capital to invest in our high-quality
development projects in copper and zinc.
We entered into an agreement to sell our 50 per cent interest
in the Eagle Downs metallurgical coal project, for upfront
consideration of US$15 million, a contingent payment of
US$20 million and a price-linked royalty of up to US$100 million(4).
The transaction completed on 12 August 2024.
We also entered into a binding agreement to sell the Metalloys
manganese alloy smelter(5), with the transaction expected to
complete in the second half of FY25 subject to the satisfaction of
certain conditions.
With these changes, our exposure to commodities critical
for a low-carbon future will be approximately 90 per cent of
Underlying revenue(6). We have added copper and doubled our
low-carbon aluminium capacity since inception, we have exited
lower returning, capital intensive businesses, and we are growing
our zinc and copper volumes through high-quality development
projects.
We have also been active in greenfield exploration in FY24, with
partnerships and prospects in six countries. We have consolidated
our position in the San Juan region of Argentina by increasing our
interest in Aldebaran Resources Inc. to 14.8 per cent, which has
an earn-in to acquire an 80 per cent interest in the Altar copper
project, and by acquiring a 50.1 per cent interest and operatorship
of the Chita Valley copper exploration project. We also completed
a first-time exploration drilling program at our 100 per cent owned
Roosevelt project in Alaska, and extended our strategic alliance
with AusQuest, which is focused on developing high-potential
exploration opportunities in Australia, for a further two years.
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SOUTH32 ANNUAL REPORT 2024
Our strategy in action > Key performance indicators
A BALANCED APPROACH
TO MEASURING
OUR PERFORMANCE
FINANCIAL
Why it matters
Performance in FY24
Production
Copper equivalent production (kt)(1)
1,118
FY23: 1,206
FY22: 1,124
Provides a baseline to easily
benchmark our production
performance against other mining
and metals companies.
Achieved 98 per cent of revised
FY24 copper equivalent production
guidance, with two annual production
records offset by weather and other
operational impacts.
Capital expenditure
Investment (US$M)(2)
1,409
FY23: 1,177
FY22: 723
Measures our approach to investing
in safe and reliable operations,
improvements and life extensions, and
growth options.
Increased our investment in
productivity and improvement
projects and our high-quality
development projects in base metals.
Earnings
Underlying EBITDA (US$M)
1,802
FY23: 2,534
FY22: 4,755
Underlying measures of earnings are
important when assessing underlying
financial and operating performance.
Lower commodity prices and
production volumes, primarily at
Illawarra Metallurgical Coal and
Australia Manganese, more than offset
a reduction in our cost base.
Cash flow
Free cash flow from operations
(US$M)
(80)
FY23: 57
FY22: 2,240
Cash flow measures are important
when assessing underlying financial
and operating performance.
Following a challenging first half,
strong cash generation in the second
half of the year was supported by
improved operating performance,
higher commodity prices and an
unwind of working capital.
Shareholders
Shareholder returns (US$M)(3)
198
FY23: 1,225
FY22: 788
Provides an indicator for shareholders
of how well their investment is
performing.
We returned US$163 million via
fully-franked ordinary dividends and
US$35 million via our on-market
share buy-back, while managing our
financial position and retaining the
right balance of flexibility, efficiency
and prudence.
(1) Copper equivalent production was calculated using FY23 realised prices.
(2) Comprises Capital expenditure, capitalised exploration and evaluation expenditure and the purchase of intangibles. Capital expenditure comprises safe and reliable capital
expenditure, improvement and life extension capital expenditure (including decarbonisation), and growth capital expenditure.
(3) Fully-franked ordinary dividends paid in respect of H2 FY23 (US$145M), fully-franked ordinary dividends paid in respect of H1 FY24 (US$18M) and on-market share buy-back
(US$35M).
26
SOUTH32 ANNUAL REPORT 2024
SUSTAINABILITY
Why it matters
Performance in FY24
Health and safety
Lost time injury frequency
(per million hours worked)(4)
1.9
FY23: 1.6(5)
FY22: 2.0
Nothing is more important than the
health, safety and wellbeing of our
people.
LTIF increased by 19 per cent year-
on-year, mostly driven by an increase
in lost time injuries at our Australian
operations.
People
Employee engagement (per cent)(6)
81
FY23: 80
FY22: 80
Engaging directly with our people
allows us to understand how they
experience all aspects of South32 and
identify areas for improvement.
Our employee engagement score, as
measured in our Your Voice employee
survey, improved by one percentage
point year-on-year.
Community
Social investment (US$M)
23.6
FY23: 27.7
FY22: 31.1
We invest in local communities with
the aim of contributing meaningfully
to their social and economic
development.
Social investment plans were
implemented on time and on budget.
Environment
Operational water efficiency
(per cent)(7)
68.4
FY23: 67.8
FY22: - (data not collected)
Water is a vital shared resource and a
critical input for our operations.
Our operational water efficiency
increased year-on-year,
demonstrating overall improved
management of water resources.
Climate change
Operational greenhouse gas
emissions (Mt CO2-e)
20.3
FY23: 21.7(8)
FY22: 22.0(8)
Human activity is causing climate
change and the impacts are affecting
ecosystems, biodiversity, and
communities around the world.
Our reported Scope 1 and Scope 2
greenhouse gas emissions decreased
by six per cent year-on-year, with
Scope 1 emissions decreasing by
0.9 Mt CO2-e and Scope 2 emissions
decreasing by 0.5 Mt CO2-e.
(4) Frequency rates are per million hours worked. Incidents are included where South32 controls the work location or controls the work activity.
(5) In FY24, seven injuries which occurred in FY23 have been reclassified from restricted work cases to lost time cases, resulting in an increase in LTIF from 1.4 to 1.6.
(6) Given the agreement to sell Illawarra Metallurgical Coal and focus on recovery efforts following Tropical Cyclone Megan at Australia Manganese, employees at these operations
did not participate in this year’s Your Voice employee survey. Survey results presented in this report are calculated on re-baselined data to support year-on-year comparison
against the same operations in scope.
(7) Percentage of water used for operational activities which is reused/recycled water.
(8) In FY24, Illawarra Metallurgical Coal transitioned its greenhouse gas emissions reporting methodology from Continuous Emissions Monitoring to Periodic Emissions
Monitoring, resulting in historical greenhouse gas emissions being revised.
KEY
Strategy pillar
Sustainability pillar
Strategic risks
Remuneration
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SOUTH32 ANNUAL REPORT 2024
MANAGING OUR RISKS
TO PROTECT AND
UNLOCK VALUE
Our approach to risk management is
governed by our risk management
framework, which is defined in our risk
management policy, and delivered
through our system of risk management.
Our internal risk management standard
outlines the minimum mandatory
requirements for the management of
risks that can materially impact our
ability to achieve our purpose, strategy
and business plans. Our system of risk
management is aligned to the principles
of the International Standard for Risk
Management AS/NZS ISO 31000:2018. Our
approach to risk management applies to
all employees, directors and contractors of
South32. Our risks are regularly assessed
and managed at both a company-wide
strategic level and at a tactical level for
operation, project and function risks.
Our risk assessment criteria consider the
potential impact of a risk event both on
our own business and people, as well as
the potential impact on others, such as
our local communities, and impacts on the
environment.
Risk appetite
Risk appetite is the level of residual risk
that we are willing to take in pursuit of our
strategic objectives, which is established
in relation to our operating environment.
Our Board considers and approves the risk
appetite developed by management. Our
internal Risk Appetite Statements outline
the extent to which we are or are not
willing to engage with higher levels of risk
(both threats and opportunities) in order
to realise greater benefit in the pursuit of
our purpose and strategy and in alignment
with our values and Code of Business
Conduct. The Risk and Audit Committee
reviews any significant changes to
material and strategic risks identified by
management (including new and emerging
risks) and considers whether they remain
within the risk appetite. Key risk indicators
(KRIs) are set by management and used
to monitor performance against our set
risk appetite. Understanding our risk
appetite across our strategic risks assists
in decision-making across the Group.
Material risks
We apply the three lines operating model
to our system of risk management, which
determines how our structures, processes,
and organisational roles work together
to facilitate strong risk management
and assurance. This approach is used to
manage our material risks and enables
us to:
–
Provide stable and consistent
processes, tools and routines to
identify and regularly assess the most
impactful threats and opportunities;
–
Deliver predictable outcomes and
prevent unforeseen events with
material impacts;
–
Understand our risks and manage
these at all levels of the organisation;
and
–
Reduce or seek to eliminate risks where
appropriate or improve our processes
using a risk-based approach.
Our material risks are those which can
materially impact our ability to achieve
our purpose, strategy and business
plans. The effective management of our
material risks is routinely assessed by
our Lead Team. An overview of these
risks are reviewed by our Risk and Audit
Committee and Sustainability Committee,
which assist our Board to carry out its
role of overseeing our risk management
and assurance practices. We report
transparent real-time risk data through
our risk management tool, Global360. This
software connects data relating to the
management of our risks, interactions,
events, hazards and assurance actions.
Aside from helping us manage our
business, reliable data on material risks
contributes towards the monitoring and
management of our strategic risks. This
provides insight into trends and emerging
themes that can trigger a review of our
business plans or inform a change in
strategic direction.
Strategic risks
Our strategic risks are risks which can
affect our ability to achieve our strategic
objectives. They have the capacity to
affect all, or a significant part, of our
organisation and therefore tend to have
significant impacts, both negative and
positive. With that in mind, our strategic
risks, associated KRIs and management
responses are monitored over the course
of the year, with formal evaluation and
reporting to the Board twice per year. The
review process is informed by external and
internal events that could have a potential
impact on our organisation, as well as
emerging themes across our material
risks. In FY24, we identified 13 strategic
risks each of which is explained further in
subsequent pages.
FY24 Risk exposure trend key
The inherent risk impact or
likelihood has increased over
the past 12 months (i.e. without
considering internal controls or
management responses).
The inherent risk impact or
likelihood has not changed
significantly over the past 12
months (i.e. without considering
internal controls or management
responses).
The inherent risk impact or
likelihood has decreased over
the past 12 months (i.e. without
considering internal controls or
management responses).
Risk management is fundamental to maximising the value of our business and informing its strategic
direction. Effective risk management enables us to identify priorities, allocate resources, demonstrate
due diligence in discharging legal and regulatory obligations, and meet the standards and expectations
of our stakeholders.
Risk management
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SOUTH32 ANNUAL REPORT 2024
Keeping our people safe and well
A safe and healthy working environment is fundamental to living
our values.
FY24 Risk exposure trend
There have been positive signs of the desired shifts in our
lead safety indicators across FY24. Our operations have
sustained or improved leadership time in field(1), as well as
sustaining the reporting frequency of hazards and near
misses. We continue to embed measures to promote
chronic unease and to inform actions to further drive our
safety culture transformation, including a deliberate focus
on fatality elimination.
Risk appetite
Aligned to our purpose and values, we will not take actions that
compromise the health, safety and wellbeing of our people,
contractors and communities.
Opportunities
Keeping our people safe and well underpins the culture we aspire
to and sets our expectations of each other.
Threats
The impact of not having a safe working environment can be
devastating for our employees, contractors and communities.
It can alter lives and impact shareholder returns, stakeholder
confidence and ultimately our licence to operate.
Our response includes:
–
In everything we do, we focus on the health, safety and
wellbeing of our people, contractors and communities;
–
We have a system of risk management and comprehensive
internal health and safety policies, standards and systems with
associated performance requirements designed to prevent
and mitigate potential exposure to health and safety risks;
–
We value and strive to build inclusion and diversity in our
workplace where everyone is valued and can participate to
achieve their full potential. We do not tolerate any form of
inappropriate conduct which includes bullying, harassment,
discrimination or victimisation;
–
We aim to eliminate or minimise psychosocial hazards across
our workplaces. We have progressed the development of
our new global psychosocial risk framework which aims to
standardise the way that we identify, assess, and mitigate
psychosocial risks across our business;
–
We engage, develop and train our people so that our work is
well designed and executed;
–
We investigate actual and potential significant events that could
have led to severe injury or higher outcomes, put controls in
place and share the learnings across our organisation;
–
We continuously improve our work environment with the aim of
making it safer, healthier and more productive for our people.
We are implementing our multi-year Group-wide Safety
Improvement Program designed with the aim of enhancing
our safety culture and by changing mindsets and behaviours,
achieving a step change in our safety performance; and
–
In line with the three lines operating model, we have assurance
functions independent of our operating activities that provide
assurance against our own comprehensive internal standards.
+
Learn more about our approach to health and safety in our
Sustainable Development Report 2024 at www.south32.net.
(1) In this context “leadership time in field” means, a common core routine undertaken when leaders engage in the workplace.
(2) Determined by reference to the Fraser Institute Annual Survey of Mining Companies 2023.
Portfolio reshaping
Our objective is to improve our return on invested capital and
create shareholder value by increasing our exposure to high-
quality operations in commodities with a strong and sustainable
outlook, in jurisdictions where we believe we can operate in line
with our values and Code of Business Conduct.
FY24 Risk exposure trend
Consistent with the prior year, a constructive mid/long
term outlook for commodities critical for a low-carbon
future continues to drive competition for development
and operating assets in developed and/or low risk
jurisdictions(2), with a scarcity of assets for sale.
Risk appetite
We accept that in actively transforming our portfolio, we need
to take risk to capture opportunities. We will seek to do so in
jurisdictions and commodities where we believe we can operate
or invest in line with our values and Code of Business Conduct.
Opportunities
Increasing our exposure to commodities critical to a low-
carbon future will position our business for a low-carbon future,
in alignment with our strategy. Acquisitions of operations
or development options (including non-operating and non-
controlling shares in these operations and development options)
present us with opportunities to create shareholder value through
increasing our exposure to these commodities. Partnering with
junior explorers also creates opportunities for us in early-stage
exploration in more challenging jurisdictions where we are not
able to leverage our existing operating capabilities.
Threats
Increasing demand for commodities critical to a low-carbon
future may drive higher valuations of acquisition targets, making
acquisitions challenging and potentially value destructive. A
scarcity of assets for sale that meet our strategic objectives
(including commodity, asset quality and jurisdiction) at attractive
valuations or a reliance on exploration to fill our pipeline of
opportunities may impact the pace of transition. Geopolitical
developments may also limit those jurisdictions in which we can
operate or those counterparties with which we can partner or
transact.
Our response includes
–
We are actively reshaping our portfolio towards commodities
critical to a low-carbon future;
–
We take more risk on early-stage exploration projects,
including jurisdictional risk as well as through joint ventures
and earn-ins, but commensurate with the commercial
exposure;
–
We will be flexible on opportunistic acquisitions including non-
controlling and non-operating shareholdings in incorporated or
unincorporated joint ventures; and
–
We carry out an annual review of commodity prices and
exchange rates, to develop long-term views for our portfolio
commodities and foreign exchange rates for the jurisdictions
where we operate. This process is supplemented by tri-annual
updates.
+
Learn more about how we are reshaping our portfolio in Our
strategy in action on page 25.
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Risk management continued
Climate Change and environment
Climate change poses physical risks to our business, our people
and the infrastructure, communities, environment and value
chain on which we rely. The political, social and economic
responses to the challenges posed by climate change and the
transition to a low-carbon economy also pose transition risks
to our business performance (i.e. demand for some of our
commodities, cost and profit margins, social licence, regulatory
exposure, and affordability of secure low-carbon energy and
decarbonisation technology). Learn more about our approach to
climate change, including our detailed assessment of the risks
climate change poses to our business, in the Addressing Climate
Change section of our Sustainable Development Report 2024 and
our Climate Change Action Plan (CCAP), both of which available at
www.south32.net.
We recognise that our operations, people and communities are
dependent on healthy functioning ecosystems. For example,
water scarcity, increased competition for water resources
or increased costs to access water supply can impact our
operations, supply chains and communities. Our operations also
have the potential to impact biodiversity, air quality and land and
water resources. This may result in increased costs to mitigate
or address such impacts, prevent or delay project approvals, and
could cause reputational damage.
FY24 Risk exposure trend
Stakeholder demands and regulatory mechanisms for
climate change mitigation and adaptation as well as
environmental management continued to increase during
FY24. Ongoing technological and commercial uncertainty
in decarbonisation solutions is influencing energy supply
certainty. As Earth’s climate changes, the frequency
and intensity of extreme weather events is expected to
increase, ranging from fire and drought to floods and
landslides.
Risk appetite
We recognise the impact our operations have on the environment
due to the extractive nature of our activities and that the
greenhouse gas emissions associated with our activities
contribute to climate change. We also recognise the role our
industry plays in providing the materials that are essential in the
transition to a low-carbon world and in supporting actions to
limit biodiversity loss. We acknowledge that we have potential
vulnerabilities to the physical impacts of climate change and
exposure to other climate and environment-related risks. We
accept that we need to take risks in order to minimise our
environmental impact and reduce our exposure to physical and
transition climate change risk and environment-related risk. We
seek to take considered risks that may arise as we transform our
portfolio to maintain competitiveness in a low-carbon world and
pursue our greenhouse gas emissions reduction target and goals.
Opportunities
Aligning our business strategy, including how we operate
and what we produce, with stakeholder expectations, future
technologies and evolving climate and environmental policies
and regulations, contributes to a resilient and high performing
portfolio. We aim to increase the efficiency of our operations and
support business continuity through responsibly assessing and
addressing our climate change and environment-related risks,
dependencies and impacts, and increasing the resilience of our
business, our value chain and communities in which we operate.
We aim to collaborate with customers, suppliers, communities,
governments, technology innovators and industry to support the
delivery of our climate change and environment ambitions.
Threats
The complex and pervasive nature of climate change means that
climate and environment-related risks are reflected across our
risk profile. For further details on the potential impacts of climate
change on our strategic risks, refer to the Addressing Climate
Change section of our Sustainable Development Report 2024 and
pages 99 to 101 of our CCAP.
Failure to manage climate and environment-related risks may
impact our ability to secure development approvals, permits
or licences and increase our legal exposures. It may also limit
our ability to access capital, insurances and low-carbon energy,
develop strategic partnerships with Indigenous, Traditional and
Tribal Peoples or environmental organisations, attract and retain
employees, deliver our project portfolio, and grow our business in
existing and new jurisdictions.
Our response includes:
–
Our approach to managing the transition and physical risks of
climate change is outlined in the Addressing Climate Change
section of our Sustainable Development Report and our CCAP;
–
Our sustainability approach, inclusive of our environmental
performance requirements, is guided by the ICMM Mining
Principles, United Nations Global Compact (UNGC) Ten
Principles and United Nations Sustainable Development Goals
and is outlined in our Sustainability Policy and Sustainable
Development Report 2024 at www.south32.net;
–
We seek to manage water resources using a holistic approach
to promote better water use, effective catchment management
and to contribute to improved water security and sanitation;
–
We establish contextual water targets for operations exposed
to water-related material risks with consideration for broader
stakeholder and catchment needs;
–
Our approach to biodiversity conservation addresses
biodiversity impacts with a focus on minimising our operational
impacts through application of the biodiversity mitigation
hierarchy and collaborating with others to contribute towards
biodiversity conservation and restoration;
–
We aim to achieve no net loss outcomes for all new projects
and major expansions to existing projects through a balanced
application of the biodiversity mitigation hierarchy of
avoidance, minimisation, rehabilitation and offsetting;
–
We integrate land management and rehabilitation processes
into our business planning and give consideration to
cumulative impacts when developing management controls to
minimise impacts on surrounding ecosystems;
–
We manage our waste streams to minimise environmental
impact and realise value through a balanced application of the
waste mitigation hierarchy of prevention, minimisation, reuse,
recycle, energy recovery and disposal;
–
We engage regularly with investors, governments, industry
partners, membership-based sustainability organisations,
environmental, social, and governance (ESG) proxy advisers
and ESG activist groups to identify and monitor emerging
environmental, nature and climate change risks, opportunities
and trends; and
–
We are transparent in our disclosure of environment and
climate-related opportunities and threats in our annual
reporting, in accordance with the Global Reporting Initiative
(GRI) Sustainability Reporting Standards and recommendations
of the Task Force on Climate-related Financial Disclosures.
+
Learn more about how we are addressing climate change and
managing our environmental impact in our Sustainable
Development Report 2024 at www.south32.net.
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SOUTH32 ANNUAL REPORT 2024
Maintain, realise or enhance the value
of our Mineral Resources and Ore Reserves
We intend to realise the potential of the resources and reserves
we are entrusted to develop. We work to continually optimise our
operations through sound technical and economic understanding
of our resources and reserves.
FY24 Risk exposure trend
Factors across FY24 influencing value at risk within our
life of operations plans include production complexity,
extreme weather events, commodity market structural
changes and approval delays for specific operations.
However, our approved development path activities
remain on track from FY23.
Risk appetite
We are not willing to take risks that inhibit our ability to realise
the potential of the resources and reserves we are entrusted to
develop.
Opportunities
We continue to enhance our understanding of our resources and
reserves. We leverage this enhanced understanding through
the annual planning cycle to define and assess additional
opportunities to add value to our business.
Threats
If we fail to continually optimise our operations and projects, it
will have a significant impact on shareholder returns, the benefits
our stakeholders receive and ultimately, the sustainability of the
company.
Our response includes:
–
We have capital prioritisation, capital allocation and planning
processes which prioritise the highest-value options across our
portfolio;
–
We apply an annual planning process, that considers the
impact of ESG related matters on our Ore Reserves, with
plans structured to maximise value throughout the life of our
operations;
–
Drill plans and budgets are approved as part of our annual
planning cycle and compliance to those plans is reported
monthly. Where there is material deviation to plan, actions are
taken to get us back on track;
–
We apply a rigorous project development process that
includes independent peer review of project risks and approval
tollgates;
–
We report Mineral Resources and Ore Reserves (including Coal
Resources and Coal Reserves) in accordance with the JORC
Code as required in Chapter 5 of the ASX Listing Rules; and
–
We have an internal closure standard which requires that
our full life of operations value incorporates closure and
rehabilitation liabilities.
+
Learn more about resources and reserves on page 178.
Major external events or natural catastrophes
Our operations and logistics networks can be disrupted by events
such as pandemics, natural disasters and extreme weather
events that could impact people’s safety, wellbeing, security,
the integrity of tailings storage facilities and key operating
infrastructure.
FY24 Risk exposure trend
In Australia across the mining industry, intense climatic
events, ranging from fire and floods to cyclone-driven
extreme rains, affected mining activities leading to the
temporary suspension of operations. For South32 heavy
rain, causing floods, directly impacted both Australia
Manganese and Cannington in FY24.
Risk appetite
We are not willing to take risks that compromise our ability to
manage natural catastrophes. However, we accept we operate
in a diverse range of geographic locations, which are exposed to
natural events and other external events.
Opportunities
Achieving stable and predictable performance enhances the
value proposition to our shareholders, stakeholders and the
communities in which we operate. The better we prepare for, learn
and improve from events, the better we are placed to respond
and aim to reduce the impact of future events – strengthening
our organisational resilience.
Threats
Failure to manage major events or natural catastrophes could
result in a significant event or other long-term damage that could
harm the company’s access to logistics chains and critical goods
and services, operational and financial performance, and licence
to operate. The role of climate change in increasing the frequency
and severity of natural catastrophes is addressed under ‘Climate
change and environment’ on page 30.
Our response includes:
–
When facing potential catastrophes, we put safety and
wellbeing at the heart of everything we do;
–
We use our system of risk management in design, construction
and operation phases to analyse risks, and design and
implement actions that aim to prevent or limit business
impacts;
–
We utilise climate modelling data to inform our long-term plans
and project pipelines, and conduct physical risk assessments
of our assets every two years;
–
We have business continuity and disaster response plans
in place with trigger action response scenarios to facilitate
a rapid response to major events and safely restore our
operations, with the aim of protecting the health and safety of
our people and the communities in which we operate;
–
Consistent with the three lines operating model, we have
assurance functions independent of our operating activities
that provide assurance against our own comprehensive
internal standards including equipment integrity, tailings
management and technical stewardship. Where relevant,
we work with external experts, relevant industry bodies and
technology suppliers, to provide additional assurance and
input; and
–
We purchase insurance coverage against many, but not all,
potential losses or liabilities arising from major events or
natural catastrophes. This coverage has a deductible cost to
the company and limits that mean full financial coverage will
not be achieved.
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Risk management continued
Maintain competitiveness through technology and innovation
Technology and innovation are advancing at a rapid pace.
Companies unable to effectively leverage technology and
innovation may find themselves failing to deliver against
shareholder expectations on returns, unable to attract and
retain talent or, in the example of decarbonisation, failing to
maintain licence to operate. Cyber incidents are becoming more
sophisticated and targeting third party suppliers with weaker
controls to infiltrate larger organisations.
FY24 Risk exposure trend
We continue to see cyberattacks targeting operational
technology systems, including those used by mining
companies. There has been an increase in hackers
targeting personally identifiable information held by third
party suppliers and vendors with immature cyber controls.
The adoption of artificial intelligence (AI), including new
developments in generative AI, has ‘step-changed’ from
previous years and is increasing rapidly across various
industries. These rapid developments present both
opportunities and risks to our business.
Risk appetite
We are not willing to take risks that will result in a loss of data
or disruptions to our operations and projects due to the theft,
disclosure or corruption of information. Aligned to our strategy,
we will pursue technology and innovation that may have a lower
certainty of success where there is commensurate potential for
high return on investment.
Opportunities
To stay competitive, we position our organisation to effectively
identify, develop and adopt sustainable business models,
technologies, AI and innovation in our operations and projects.
Priority innovation opportunities are identified and delivered
through Innovate32, our strategy-aligned, value-focused,
innovation portfolio. This approach will assist us to deliver on
shareholder return expectations and position us for future
business opportunities.
Threats
Failure to keep pace with, and leverage advances in, technology
and innovation could result in reduced shareholder returns and
impact our licence to operate. Failure to adopt automation,
electrification, AI and digital systems could result in deteriorating
performance across safety, productivity, returns and greenhouse
gas emissions. Cybersecurity incidents could pose multiple
risks including disruption to new projects and operations, theft,
disclosure or corruption of information.
Our response includes:
–
We actively manage cybersecurity, privacy and loss of critical
systems risks through our system of risk management;
–
We have developed our cybersecurity strategy and risk
controls aligned to the National Institute of Standards and
Technology cybersecurity framework;
–
We have developed standards, procedures and implemented
tools to proactively manage our cybersecurity and privacy
controls;
–
We have a clearly defined approach to innovation,
improvement and technology;
–
We deliver specific programs focused on adoption and
improvement of critical technology capabilities across multiple
time horizons;
–
We have a value-based ‘portfolio’ approach to testing and
scaling up innovation across the company;
–
We have rigorous internal technology standards and
processes;
–
We benchmark our digital technology performance against
industry best practice and coordinate and integrate
technology advances into our growth portfolio; and
–
We monitor internal customer satisfaction and manage
customer support.
+
Learn more about how technology and innovation are
unlocking value in Our strategy in action on page 22.
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SOUTH32 ANNUAL REPORT 2024
Predictable operational performance
Loss of predictable operational performance will prevent us
from reliably delivering on our strategic objectives. We build
resilience and predictability into our business by sustaining our
ability to keep our people safe and well, effectively managing our
assets, meeting our regulatory and social obligations, managing
cost inflation and consistently delivering quality products to our
customers.
FY24 Risk exposure trend
Over the past year we have experienced both internal
and external events that have impacted predictable
operational performance. While external risks associated
with extreme weather, energy supply, social and labour
unrest remain elevated, our exposure trend remains
neutral relative to recent years. Focus remains on
mitigating our external risk exposure while directly
addressing the root causes of internal production variation
with continued improvement of our management systems.
Risk appetite
We are not willing to take risks that compromise the stable and
predictable performance of our operations.
Opportunities
We mature our management systems to control and continuously
improve our operations and processes, so that we can deliver
stable and predictable performance and unlock the full value of
our business. We invest in our operations to sustain and improve
production capacity that generates reliable cash flow to deliver on
our strategic objectives.
Threats
External volatility and challenges can impact predictable
performance. These include extreme weather events, labour
and supply chain tightness as well as regulatory and geopolitical
change. If we are unable to safely and consistently achieve our
production, cash flow or profitability targets, it could negatively
impact our ability to deliver on our strategic objectives and
negatively impact shareholder returns.
Our response includes:
–
We have embedded, and continuously verify and improve our
safety and risk management systems across our business;
–
We have an effective asset management system in place at
each operation and review our asset health, asset integrity and
capital investments on a regular basis;
–
We actively verify and improve the effectiveness of our
Operating System by embedding our operating practices
including operational planning, execution, review and
improvement;
–
We actively manage risks to our resources and reserves,
mine and operational planning including reconciliation of Ore
Reserves to production, plan and spatial compliance and
management of geotechnical risks;
–
We manage an integrated system of long to short-term planning,
scheduling and budget forecasting processes that considers ESG
themes and optimises the value from our resources;
–
We actively manage product delivery and supply chain risks
including effective sales and operational planning processes,
monitoring of raw material supply and management of target
inventory operating windows; and
–
We carry out rigorous quality assurance programs over our
products and operations.
+
Learn more about our operational performance in Our strategy
in action on page 21.
Delivery of our project portfolio
Delivery of our project portfolio, both brownfield and greenfield,
forms a critical component of our strategy. Delivery of projects
safely, on schedule and within budget allows us to optimise and
unlock the value of our business.
FY24 Risk exposure trend
Approvals and permitting delays, project cost inflation and
constraining market drivers continue to impact project
timelines. Skilled labour shortages, wage and material cost
escalation, as well as supply chain constraints continue to
apply pressure on contract pricing and project investment
risk in the markets where we execute our projects.
Risk appetite
Aligned to our strategy of unlocking value in our business, we will
not take actions that compromise the planning and execution of
our major projects. However, we may accept greater levels of risk
to pursue opportunities to extend the life of existing operations
through brownfield projects and in executing decarbonisation
projects for our assets.
Opportunities
Delivery of our project portfolio on time and within budget allows
us to improve reliability, complement our existing assets, extend
the life of our operations, realise our external commitments and
grow volumes into structurally attractive markets.
Threats
Inability to deliver the project pipeline may impact on our future
cash flows, reputation and return on investments. Known and
emerging uncertainties that may challenge the timely and
successful execution of our projects can include regulatory
approval timeframes, permitting delays, supply chain disruptions,
high inflation, joint venture partner misalignment, and activism.
Our response includes:
–
Our internal investment framework defines a tollgate process
with an independent peer review mechanism to inform key
investment decisions;
–
Our project management framework supports disciplined
project development and delivery;
–
We maintain a life of operation annual planning process. By
evaluating the embedded project options in our operations, we
look to optimise value throughout the life of our operations;
–
We have developed our Operating System for major projects,
and are maturing our performance in delivering projects on
cost and on schedule;
–
Our joint venture agreements include mechanisms such as
technical committees and collaborative reviews to influence
project, schedule and cost outcomes;
–
We apply a standardised valuation methodology with
consistent key macroeconomic assumptions; and
–
We conduct an annual review of commodity prices and
exchange rates which informs our project budgets. This
process is supplemented by tri-annual updates.
+
Learn more about our project execution in Our strategy in
action on page 23.
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Risk management continued
Supply chain security
The inability to procure critical goods and services, such as
raw materials, energy, water, gas, equipment and spare parts,
consumables, technology, corporate services, labour and
logistics, has the potential to impact business performance and
our strategic objectives.
The procurement of critical goods and services must be
undertaken in a manner that aligns to our purpose and values,
meets stakeholder expectations and adheres to the policies and
regulations where we operate. This includes sustainable sourcing
and supporting local communities.
The security of our supply chain is heavily impacted by
pandemics, jurisdictional unrest, geopolitical tensions, climate
change, and a shift from globalism towards protectionism.
FY24 Risk exposure trend
We have seen an increase in levels of global conflict and
geopolitical tension, as well as increases in the frequency
and intensity of climatic events, resulting in increased
protectionism and supply chain regionalisation.
Risk appetite
Aligned to our strategy of optimising our business, we are not
willing to take undue risks that compromise the security of our
supply chain. However, we accept that we have a strong reliance
on certain critical suppliers, particularly to provide energy,
logistics, and raw materials to our operations and we have limited
ability to reduce this reliance.
Opportunities
Optimal and sustainable management of supply chain risk
positions our business to operate safely and reliably, at the
lowest possible cost and in a manner that meets or exceeds
the expectations of our stakeholders. It also provides us with
the ability to influence how others in our industry approach
sustainable sourcing and to position us to benefit as trade flows
respond to rising protectionism, social consciousness, and
general trends to de-risk supply chains.
Threats
Disruption of our supply chain could materially impact our ability
to deliver on our commitments and meet the expectations of
our stakeholders. The global energy transition is increasing the
complexity of our energy procurement activity. Failure to meet
minimum ethical supply chain standards has the potential to
damage our social licence to operate (this is further addressed
under ‘Evolving societal expectations’ on page 36). Climate
change has the potential to increase the frequency and severity
of extreme weather events which may threaten our supply
chains, particularly logistics and the availability of critical goods
and services (this is addressed under ‘Climate change and
environment’ on page 30, and in the Addressing Climate Change
section of our Sustainable Development Report 2024).
Our response includes:
–
We understand, assess and continually monitor the risks in our
supply chains through an integrated system that considers the
value of critical goods and services. This includes risks relating
to potential shortages, critical suppliers and categories,
vendor liquidity, logistics, climate change and decarbonisation,
and modern slavery;
–
Internal and external data is integrated so we have a good
understanding of existing and emerging risks and can take
action to mitigate;
–
We use our understanding of risk to deploy controls to support
predictable operations. This includes working closely with our
vendors and operations to match availability with demand;
understanding options for alternative sources of supply and
implementing multi-source supply where required; optimising
inventory levels; flexing commercial terms and maintaining
up-to-date business continuity plans. We continually optimise
our approach between ‘just in case’ and ‘just in time’ as supply
chain risk ebbs and flows;
–
We build strong strategic partnerships with key suppliers and
customers on a long-term, mutually beneficial basis;
–
We have a clearly defined transformation strategy and
Enterprise Supplier Development program in South Africa
aimed at building and growing small, medium and micro
enterprises;
–
We have Reconciliation Action Plan targets to develop and
support Aboriginal and Torres Strait Islander enterprises in
Australia;
–
We have local procurement initiatives designed to increase
opportunities for local suppliers;
–
We actively review and manage payment terms to support
small and local businesses in all jurisdictions in which we
operate; and
–
We have an established process to assess and mitigate
potential modern slavery risks.
+
Learn more about our responsible supply chain activities in our
Sustainable Development Report 2024 at www.south32.net.
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Shaping our culture and managing diverse talent
We must actively shape and embed our culture to attract,
develop, support, and retain our talented people to deliver a safe
and sustainable business. To align with the evolving needs of our
people, business, and broader stakeholders, we continuously
monitor our culture and seek feedback to enhance the employee
experience.
FY24 Risk exposure trend
Internal feedback and data suggests improvements in
employee experience and a reduction in attrition risk,
coupled with the expectation that global unemployment
rates are expected to hold steady in the near term.
Risk appetite
People underpin everything we do and we are not willing to
take risks that could negatively impact our culture and the way
our people connect to our purpose. However, we recognise our
size and the competitive labour market in which we operate
and therefore must be willing to take risk to build our talent and
succession pipeline.
Opportunities
By shaping and embedding our culture through our systems,
symbols, and behaviours, we will maintain an employee
experience that engages all our people to better deliver our
strategic objectives, together.
Threats
If we are unable to embed our preferred culture, we will likely
have lower levels of engagement, disconnected teams that
lack diversity and operate in silos, and relationship rather than
performance-based decision making. Over time, this may
constrain innovative thinking and impact our ability to attract
and retain talent, which may lead to significant shareholder value
erosion and reputational damage.
Our response includes:
–
Our Code of Business Conduct sets out our expected
standards of workplace behaviours which inform our culture.
Formal training and assessment routines are in place to
educate, reinforce, and assess understanding in our people.
Anyone can report a business conduct concern, anonymously
if preferred, or by using our confidential and independently
administered reporting hotline;
–
We measure and discuss culture using a Culture Tensions
framing model. This process acts as a health check and allows
us to assess positive or negative change and test whether
we are making progress towards our preferred culture that
better balances relationships with performance, systems and
processes with innovation and empowerment;
–
We measure our employee experience, including at
onboarding, annually through our ‘Your Voice’ employee
survey, and at exit. The Your Voice survey responses are
shared with line leaders to enable team-based conversations
that directly empower improvements to the local employee
experience;
–
We have an Inclusion and Diversity Policy, internal inclusion
and diversity standard and a framework which sets out our
commitments, strategy, requirements, measurable objectives
and approach to performance reporting;
–
We have a Leadership Model which strengthens alignment to
our preferred culture and behaviours, and is integrated across
our people systems and processes;
–
We have a performance and goals process which supports
our reward philosophy, and recognises and rewards aligned
leadership behaviours and performance;
–
We design our reward elements in accordance with our global
reward framework taking into consideration local labour
market practices, which enables us to attract appropriate skills
and experience, engage employees and improve performance;
–
We routinely review our key talent and critical role successors
globally, creating individualised plans to further their
development and address talent pipeline risks as appropriate.
This includes targeted retention programs for key talent and/or
team members occupying critical roles;
–
We support employees who undertake further education and
training related to their current or future career with South32;
and
–
We have an internal flexible work procedure which empowers
our leaders to engage with their teams to determine the
ways of working that balance individual, team and business
requirements.
+
Learn more about our people and culture in our Sustainable
Development Report 2024 at www.south32.net.
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Risk management continued
Evolving societal expectations
The expectations of resources companies by employees,
governments, investors, lenders, host communities, customers,
non-governmental organisations and broader society continue to
evolve. To keep pace with these rapidly evolving expectations and
understand the potential impact to our business performance,
reputation and delivery of our strategic objectives, we maintain
an active stakeholder engagement program and undertake
external monitoring on a wide range of financial and ESG
issues, including climate change. We regularly engage with
our stakeholders to understand and respond to their views,
which may be divergent, and aim to identify ways we can create
enduring social, environmental and economic value, in a way that
aligns with our purpose and values.
FY24 Risk exposure trend
This risk is dynamic and expectations, sentiment and
standards continue to evolve broadly as anticipated based
on our active stakeholder engagement program and
external monitoring.
Risk appetite
We are not willing to take risks that will result in a failure to
meet societal expectations, in human rights, cultural heritage,
modern slavery and community safety. However, we accept that
we will be required to take some risks in areas such as impacts
of mining or minerals processing (e.g. on the environment) and
commodity selection that may not completely align with societal
expectations.
Opportunities
Proactive, collaborative and transparent engagement with our
stakeholders builds relationships based on trust and shared
understanding. Our ongoing licence to operate, and ability to
reshape our business for a low-carbon future, is built on our social
performance and contribution to our stakeholders and broader
society.
Threats
Failure to meet evolving societal expectations for ESG
performance could damage our reputation and negatively impact
our licence to operate, limiting our ability to access capital or
markets, retain and attract employees and grow our business in
existing and new jurisdictions.
Our response includes:
–
Our purpose and strategy expressly balance economic
outcomes with social and environmental outcomes, now and
into the future. In the decisions we take, we look to minimise
impact, respect human rights and aim to create enduring
social, environmental and economic value for our stakeholders,
in a way that aligns with our purpose and values;
–
We undertake internal and external stakeholder analysis and
engagement on a wide range of financial and ESG issues,
including an annual materiality process to understand
our material ESG issues. Our approach is aligned with the
ICMM Mining Principles, The UNGC Ten Principles and GRI
Sustainability Reporting Standards;
–
We engage with our customers to understand their
requirements and drivers for responsible production, sourcing
and stewardship in the supply chain. We work with certification
bodies such as the Aluminium Stewardship Initiative to seek
certification against their performance standards to help
facilitate continued access to markets;
–
We work to build strong, positive and meaningful relationships
with local communities. We regularly complete and review
community perception surveys, human rights impact
assessments, social baseline studies and social impact and
opportunity assessments to improve our understanding of the
communities in which we operate;
–
We review and amend our social investment program annually
to align with community and stakeholder priorities. We
measure the outputs and outcomes of our social investments
as it informs future investment decisions and improves social
investment project design;
–
We develop economic development plans at all our
operations which contribute to local and regional economic
development through employment, procurement and
business development. These plans include targets informed
by local context, including women and people with diverse
backgrounds;
–
We engage with Indigenous, Traditional and Tribal Peoples
across our operations to build mutual understanding and
strengthen cultural heritage management. Our engagement
with Indigenous, Traditional and Tribal Peoples throughout
the life of our operations is sensitive to and respects cultural
protocols; and
–
We participate in sustainability reporting transparency
initiatives and ESG rating agency reviews that assess and
score our performance.
+
Learn more about how we are delivering value to society in our
Sustainable Development Report 2024 at www.south32.net.
36
SOUTH32 ANNUAL REPORT 2024
Political risks, actions by governments and/or authorities
Changes in legislation, regulation, policy and geopolitical
activity have the potential to impact our strategic objectives
and the way we work. This includes broader policy decisions
and regulatory changes, related but not limited to, changes to
royalty and taxation policy, nationalisation of mineral resources,
supply chains, renegotiation or nullification of contracts, leases,
permits or agreements, climate change and emissions reduction
requirements and environmental and social performance
requirements. We aim to effectively manage this uncertainty
through engagement with key stakeholders and industry
associations, monitoring of political activity, policy, legislative
and regulatory changes, and by having access to specialised
knowledge.
FY24 Risk exposure trend
Geopolitical volatility increased in FY24 through conflicts
in Ukraine and the Middle East, ongoing US-China
tensions, resulting in increased trade and domestic policy
targeting supply chain resilience. Increased geopolitical
risk is magnified through unstable policy environments
and misinformation risk as major economies conducted
elections in FY24. Tax authority activity has intensified,
with an increase experienced in tax audits and disputes.
Risk appetite
We have a low appetite for activities that are likely to result in
non-compliance with applicable legal or regulatory requirements.
We maintain programs that seek to comply with those
requirements. However, there can be no guarantee that such
programs will always be effective to identify or prevent breaches
of the law. Further, we operate in certain complex environments
and jurisdictions, which are subject to legislative, regulatory
or government policy changes that may adversely impact our
business. Therefore, there will always be residual risk in relation to
compliance with legal and regulatory requirements and changes
to those requirements that may adversely impact our business.
Opportunities
Proactive engagement leading to strong relationships with
governments and authorities provides a mutual understanding of
drivers for decision making. This increases clarity around policy
and regulatory environments, enables appropriate and tailored
responses to issues and provides investment certainty.
Threats
Legislation adverse to our business and regulatory or policy
decisions taken by governments or authorities, particularly
relating to societal expectations, can result in operational
disruption, permitting uncertainty, increases to our tax
obligations, affect future planning or lead to cessation of
operations or non-investment in operations or projects.
Our response includes:
–
We have specialised knowledge through in-house expertise
or the use of external experts, including tax management
capability, tax advice and external affairs advice;
–
We monitor political activity, policy, and legislative and
regulatory changes in the jurisdictions where we operate, and
we also engage with relevant authorities, to understand and
mitigate potential impacts on our business performance;
–
We engage with key stakeholders in all jurisdictions where
we operate, in accordance with our stakeholder engagement
plans;
–
We work through selected industry associations to influence
how the industry is positioned; and
–
We produce an annual Tax Transparency and Payments
to Governments Report, which shows how we meet our
regulatory tax obligations.
+
Learn more about our approach to tax in our Tax Transparency
and Payments to Government Report 2024 at
www.south32.net.
OPERATING AND FINANCIAL REVIEW
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37
SOUTH32 ANNUAL REPORT 2024
Global economic uncertainty and liquidity
We prioritise an investment grade credit rating and a disciplined
approach to allocating capital which aims to keep our balance
sheet strong, providing us with financial flexibility regardless
of market conditions. By creating competition for capital and
investing selectively in our existing operations, growth options
and external opportunities, or by making returns to shareholders,
we aim to maximise total shareholder returns over time.
FY24 Risk exposure trend
External market volatility is largely unchanged and the risk
of default of our investment grade bank counterparties
and customers remained stable in FY24.
Risk appetite
We are not willing to take risks that may limit our ability to
maintain a minimum liquidity balance and/or access to funding on
acceptable terms. We recognise our preferred commodity basket
and our operating costs have the potential for price and exchange
rate volatility outside of our control, and whilst we accept that as a
resource company we are exposed to this inherent risk, we will act
to reduce its impact by understanding its effect on our business.
Opportunities
By investing selectively in our existing operations and growth
options, external opportunities, or by making returns to
shareholders, we aim to maximise total shareholder returns over
time.
Threats
A significant or sharp deterioration in economic conditions can
adversely impact market demand, commodity prices, and/or
exchange rates which has the potential to significantly reduce
profitability, cash flow and returns to shareholders. An increase
in volatility, especially when it has an impact on in-bound and
out-bound supply chains, has the potential to increase working
capital requirements, affecting our liquidity. A reduction in
liquidity available in capital markets has the potential to impact
our balance sheet and ability to pursue our strategy.
Our response includes:
–
We have a diverse portfolio of operations, commodities and
end markets which strengthens our resilience to the disruption
of any one commodity, geography or operation;
–
We prioritise a strong balance sheet and an investment grade
credit rating, with the aim of remaining resilient through
economic cycles;
–
We test our financial strength across a range of scenarios,
including a depressed demand and pricing environment.
We also maintain a minimum liquidity buffer and access to a
diverse range of funding sources;
–
We adjust our capital allocation plans according to market
conditions;
–
We maintain strong relationships with high-quality financial
institutions, customers and suppliers from all around the world;
–
We mostly sell our products with reference to floating, market-
based prices, which are broadly correlated with floating global
currency markets and the input costs we are exposed to; and
–
We carry out an annual review of commodity prices and
exchange rates, which informs our operational plans. This
process is supplemented by tri-annual updates.
+
Learn more about our capital management framework in Our
strategy on page 19.
Risk management continued
38
SOUTH32 ANNUAL REPORT 2024
STRONG SECOND
HALF RESULTS AND
ACCELERATED PORTFOLIO
TRANSFORMATION
Improved operating performance, disciplined cost management and higher prices for our key
commodities lifted our financial results to finish the year, and we we further transformed our portfolio.
The Group uses both International
Financial Reporting Standards (IFRS)
financial measures and non-IFRS financial
measures such as underlying measures of
earnings, effective tax rate (ETR), return
on invested capital (ROIC), cash flow and
net cash/(debt), to assess the Group’s
performance.
The definitions of individual non-IFRS
financial measures used in this report
are set out in the Glossary of terms and
abbreviations starting on page 191.
A reconciliation of the Group’s underlying
financial results to the statutory
information included in the Group’s
consolidated financial statements is
included in note 4(b)(i) to the financial
statements on page 124.
The Directors believe that the non-IFRS
financials measures are relevant to
understanding the underlying financial
and operating performance of the
Group and its operations. These non-
IFRS financial measures provide useful
information, but should not be considered
as an indication of, or an alternative to,
profit/(loss) after tax as an indicator of
actual operating performance or as an
alternative to cash flow as a measure of
liquidity.
In discussing the operating results of
the Group, the focus is on Underlying
earnings attributable to members and
ROIC. Underlying earnings attributable
to members is the key measure that
is used by the Group to assess our
performance, make decisions on the
allocation of resources and assess senior
management’s performance. In addition,
the performance of each of the Group’s
operations and operational management
is assessed based on Underlying EBIT and
Underlying EBITDA.
Management uses these measures
because financing structures and
tax regimes differ across the Group’s
operations and substantial components
of tax and interest charges are levied at
a Group level rather than an operational
level.
The underlying information reflects
the Group’s interest in material equity
accounted joint ventures and is presented
on a proportional consolidation basis.
In order to calculate Underlying EBITDA,
Underlying EBIT and Underlying earnings
attributable to members, the following
items are adjusted as applicable each
period, irrespective of materiality:
–
Exchange rate (gains)/losses on
restatement of monetary items;
–
Impairment losses/(reversals);
–
(Gains)/losses on disposal and/or
consolidation of interests in operations;
–
(Gains)/losses on non-trading derivative
instruments, contingent consideration
and other investments measured at fair
value through profit or loss;
–
Major corporate restructures;
–
Joint venture adjustments for material
equity accounted investments;
–
Exchange rate variations on net cash/
(debt);
–
Tax effect of earnings adjustments; and
–
Exchange rate variations on tax
balances.
In addition, items that do not reflect the
underlying operations of the Group, and
are individually, or in combination with
other related earnings adjustments,
significant to the financial statements,
are excluded to determine Underlying
earnings.
Financial and operational performance summary
OPERATING AND FINANCIAL REVIEW
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SOUTH32 ANNUAL REPORT 2024
Financial and operational performance summary continued
Financial Highlights
US$M
FY24
FY23
% Change
Revenue from continuing operations
5,479
5,646
(3%)
Profit/(loss) before tax and net finance income/(costs) from continuing operations
(735)
(466)
(58%)
Profit/(loss) after tax
(205)
(173)
(18%)
Profit/(loss) after tax attributable to members(1)
(203)
(173)
(17%)
Basic earnings/(loss) per share (US cents)(2)
(4.5)
(3.8)
(18%)
Ordinary dividends per share (US cents)(3)
3.5
8.1
(57%)
Other financial measures
Underlying revenue(4)(5)
8,296
9,050
(8%)
Underlying EBITDA(4)
1,802
2,534
(29%)
Underlying EBITDA margin(4)(6)
22.8%
29.4%
(6.6%)
Underlying EBIT(4)
886
1,616
(45%)
Underlying EBIT margin(4)(7)
11.1%
18.7%
(7.6%)
Underlying earnings(4)(8)
380
916
(59%)
Basic Underlying earnings per share (US cents)(2)(4)
8.4
20.0
(58%)
ROIC(4)
4.5%
10.0%
(5.5%)
Ordinary shares on issue (million)
4,529
4,545
(0.4%)
(1) Members are equity holders of South32 Limited. Amounts reported as attributable to members are stated net of amounts attributable to non-controlling interests.
(2) FY24 basic earnings per share is calculated as Profit/(loss) after tax attributable to members divided by the weighted average number of shares for FY24 (4,519 million). FY24
basic Underlying earnings per share is calculated as Underlying earnings attributable to members divided by the weighted average number of shares for FY24. FY23 basic
earnings per share is calculated as Profit/(loss) after tax attributable to members divided by the weighted average number of shares for FY23 (4,572 million). FY23 basic
Underlying earnings per share is calculated as Underlying earnings divided by the weighted average number of shares for FY23.
(3) FY24 ordinary dividends per share is calculated as H1 FY24 ordinary dividend announced (US$18 million) divided by the number of shares on issue at 31 December 2023
(4,529 million) plus H2 FY24 ordinary dividend announced (US$140 million) divided by the number of shares on issue at 30 June 2024 (4,529 million).
(4) FY23 and FY24 includes discontinued operation Illawarra Metallurgical Coal.
(5) Underlying revenue includes revenue from third party products and services.
(6) Comprises Underlying EBITDA excluding third party products and services EBITDA, divided by Underlying revenue excluding third party products and services revenue. Also
referred to as operating margin.
(7) Comprises Underlying EBIT excluding third party products and services EBIT, divided by Underlying revenue excluding third party products and services revenue.
(8) Refers to Underlying earnings attributable to members.
40
SOUTH32 ANNUAL REPORT 2024
Safety performance
Nothing is more important than the health, safety and well-being of our people. We continue to implement our Safety Improvement
Program, a multi-year global program of work launched in FY22, designed to enhance our safety culture and achieve a step change in
our safety performance. Our LEAD Safely Every Day program includes safety leadership capability workshops and coaching which has
been delivered to over 1,500 leaders since its launch in FY23. In FY24, we extended the program to frontline employees and a subset of
contractors that perform high-risk work at our operations, and functional roles that support them.
We use a range of leading and lagging indicators to assess our safety performance. Our total recordable injury frequency (TRIF) for FY24
improved by 14 per cent to 5.1 (FY23: 5.9), while lost time injury frequency (LTIF) increased to 1.9 in FY24 (FY23: 1.6(9)). Our leading indicator,
significant hazard frequency, increased to 122.3 for FY24 (FY23: 91.6), indicating improved hazard awareness and a positive reporting culture.
Health and safety performance
Performance metric
FY24
FY23(10)
Fatalities from health and safety incidents
0
2
Lost time injury frequency (LTIF)
1.9
1.6(9)
Total recordable injury frequency (TRIF)
5.1
5.9
Total significant hazard frequency
122.3
91.6
People and culture
An inclusive culture and diverse workforce supports greater collaboration, innovation and performance. Building and maintaining a
workforce that represents the communities in which we operate, especially recruiting more women into operational roles, is an industry-
wide challenge that we are working to address.
We track our inclusion and diversity performance against a series of measurable objectives. The below table shows the representation
of women in our workforce, leadership teams and Board, and the representation of Black People in our South African workforce.
Performance improved or was maintained year-on-year for five of the seven FY24 measurable objectives, and we achieved three of the
seven FY24 measurable objectives.
Inclusion and diversity performance
Diversity representation (%)
FY24 measurable objective
FY24
FY23
Women in our workforce
Achieve at least 23.5%
20.6
20.2
Women on our Board
Maintain at least 40%
50.0
44.4
Women in Lead Team
Maintain at least 40%
50.0
50.0
Women in Senior Leadership Team
Achieve at least 32.7%
30.3
30.3
Women in Operational Leadership Team
Achieve at least 31.5%
25.7
28.7
Black People in South Africa in total workforce
Maintain at least 85%
88.4
86.9
Black People in South Africa in management roles
Achieve at least 60%
51.8
55.3
(9) Seven injuries which occurred in FY23 have been reclassified from restricted work cases to lost time cases, resulting in an increase in LTIF from 1.4 to 1.6
(10) Figures in Italics indicate that an adjustment has been made since the figures were previously reported
(11) Target is defined as an intended outcome in relation to which we have identified one or more pathways for delivery of that outcome, subject to certain assumptions or
conditions. Our target is to halve our operational greenhouse gas (GHG) emissions by 2035 compared to our FY21 baseline. FY21 baseline adjusted to exclude GHG emissions
from South Africa Energy Coal and TEMCO, which were divested in FY21.
(12) FY23 downstream transportation and distribution has been restated from 0.9Mt CO2e to 0.4Mt CO2e following a review of the methodology used in this category.
Addressing climate change
We have set a target to halve our operational greenhouse gas (GHG) emissions (Scope 1 and 2) by 2035(11) and a long-term goal to
achieve net zero GHG emissions across all scopes (Scope 1, 2 and 3) by 2050. Our approach to climate change is focused on reshaping
our portfolio to commodities critical in the transition to a low-carbon world, decarbonising our operations, and working with others to
decarbonise the value chain. In FY24, Worsley Alumina converted the first two coal-fired boilers to natural gas, and Hillside Aluminium
converted a further 18 per cent of pots to AP3XLE energy efficiency technology (bringing the total to 36 per cent). Our operational
emissions decreased by 6 per cent and Scope 3 emissions decreased by 17 per cent in FY24.
Greenhouse gas emissions
Million tonnes of CO2 equivalent
FY24
FY23(10)
Operational GHG emissions
20.3
21.7
Scope 3 GHG emissions
54.2
65.0(12)
OPERATING AND FINANCIAL REVIEW
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SOUTH32 ANNUAL REPORT 2024
Financial and operational performance summary continued
Business performance
Aluminium value chain
Alumina
Alumina production was largely unchanged year-on-year at
5.1Mt, with improved plant availability at Brazil Alumina partially
offsetting a temporary bauxite conveyor outage at Worsley
Alumina in Q4 FY24. Production is expected to increase by
approximately 1 per cent in FY25.
Underlying EBITDA increased by US$106 million to US$364 million
in FY24, for an operating margin of 20 per cent, as our average
realised price of alumina increased by 1 per cent and caustic soda
prices declined.
Aluminium
Aluminium production was largely unchanged year-on-year
at 1.1Mt, as Hillside Aluminium achieved record production,
Brazil Aluminium continued to ramp up, and Mozal Aluminium
progressed its recovery plan. Production is expected to increase
by approximately 6 per cent to 1.2Mt in FY25 as Brazil Aluminium
continues to ramp up and Mozal Aluminium delivers its recovery
plan.
Underlying EBITDA decreased by US$115 million to US$121 million
in FY24, for an operating margin of 4 per cent, as a 6 per cent
reduction in the average realised price of aluminium and higher
energy prices more than offset lower smelter raw material input
prices.
Base metals
Copper
Sierra Gorda copper equivalent production decreased by
15 per cent to 73.8kt in FY24, as higher plant throughput was
offset by lower than planned copper grades. Production is
expected to increase by approximately 15 per cent in FY25, with
the continued benefit of the plant de-bottlenecking project and
higher planned copper grades in the next phase of the mine plan.
Underlying EBITDA decreased by US$83 million to US$275 million
in FY24, for an operating margin of 43 per cent, as higher realised
metal prices and lower electricity costs were more than offset by
lower volumes and a one-off workforce payment.
Sierra Gorda progressed the feasibility study for the fourth
grinding line expansion, which has the potential to increase plant
throughput by ~20 per cent to ~58Mtpa (100 per cent basis),
ahead of a planned final investment decision in H1 FY25.
We consolidated our position in the emerging copper district of
San Juan, Argentina, acquiring a 50.1 per cent interest in the
Chita Valley copper project, and increasing our interest in
Aldebaran Resources to 14.8 per cent.
We invested US$27 million in greenfield exploration programs
in FY24, focused on copper exploration prospects in highly
prospective regions.
Following the end of the period, we entered into an earn-in
agreement and strategic alliance with Noronex Limited to identify
and test copper exploration prospects across the Kalahari copper
belt in Namibia.
(13) Refer to market release “Final Investment Approval to Develop Hermosa’s Taylor Deposit” dated 15 February 2024.
(14) Exploration Results and Exploration Targets: The information in this announcement that relates to the Exploration Results and Targets for Taylor, Clark, Peake and Flux is
extracted from the market release “Final investment approval to develop Hermosa’s Taylor deposit” dated 15 February 2024. The information was prepared by D Bertuch,
Competent Person in accordance with the requirements of the JORC Code. South32 confirms that it is not aware of any new information or data that materially affects the
information included in the original market announcement. South32 confirms that the form and context in which the Competent Person’s findings are presented have not been
materially changed from the original market announcement.
Zinc
Cannington payable zinc equivalent production increased by
10 per cent to 285.2kt in FY24, despite adverse weather impacts,
as we realised higher average metal grades. Production is
expected to decline by approximately 12 per cent in FY25 as we
rebuild run of mine stocks and continue to manage a significant
increase in underground activity and complexity.
Underlying EBITDA increased by US$76 million to US$289 million,
for an operating margin of 46 per cent, reflecting higher
production volumes and average realised metal prices.
On 15 February 2024, we announced final investment approval
for the Taylor zinc-lead-silver deposit at our Hermosa project(13),
following completion of a feasibility study which confirmed the
potential for attractive returns over multiple decades.
As the first phase of a regional scale opportunity in Arizona,
United States, Taylor’s infrastructure will unlock value for future
growth options, including the Clark battery-grade manganese
deposit and potential discoveries in our highly prospective
regional land package.
We invested US$372 million at Hermosa in FY24, as we installed
critical path infrastructure and progressed studies and permitting
for Taylor and Clark. We expect to invest US$600 million at
Hermosa in FY25 as we progress construction of Taylor, and an
exploration decline at Clark to enable access to ore for further
product test work.
We invested US$24 million in exploration work at Hermosa
in FY24, successfully returning high-grade copper and zinc
results from Peake and Flux(14), respectively. We expect to invest
US$35 million in FY25 as we complete further exploration at Peake
to test the potential for a continuous structural and lithology
controlled system connecting Taylor and Peake.
Nickel
Cerro Matoso payable nickel production was largely unchanged
at 40.6kt in FY24, supported by improved plant throughput and
nickel grades to finish the year. Production is expected to be
35.0kt in FY25, due to lower planned nickel grades.
Underlying EBITDA decreased by US$150 million to US$96 million
in FY24, for an operating margin of 17 per cent, as a significant
decline in the average realised nickel price and a stronger
Colombian peso more than offset lower price-linked royalties.
We continue to progress our strategic review of Cerro Matoso in
response to structural changes in the nickel market. We expect to
provide information on the outcomes of this review in H2 FY25.
42
SOUTH32 ANNUAL REPORT 2024
Manganese
Australia Manganese
Australia Manganese production decreased by 34 per cent to
2.3Mwmt in FY24, as we temporarily suspended operations in
March 2024 due to the impacts of Tropical Cyclone Megan.
Underlying EBITDA decreased by US$187 million to US$182 million
in FY24, reflecting the impact of Tropical Cyclone Megan.
We continue to implement the operational recovery plan,
dewatering targeted mining pits and commencing a phased
mining restart. Mining activity is expected to increase to support
a planned build in stockpiles ahead of the wet season, with FY25
production guidance set at 1.0Mwmt. Production is expected
to increase to 3.2Mwmt in FY26 as we complete the operational
recovery plan.
Capital expenditure for mine repairs and infrastructure, including
the wharf and a critical bridge, is expected to be approximately
US$125 million in FY25.
Wharf operations are scheduled to recommence in Q3 FY25,
subject to maintaining construction productivity during the wet
season, with sales volumes expected to progressively increase
over Q4 FY25.
Our insurers have confirmed that the damage caused by Tropical
Cyclone Megan is covered under our property damage and
business interruption insurance. We are continuing to work with
our insurers to assess the timing and value of recoveries under
these policies.
South Africa Manganese
South Africa Manganese production increased by 3 per cent
to a record 2.2Mwmt in FY24, as we lifted output of secondary
products to capitalise on stronger manganese prices in Q4 FY24.
Underlying EBITDA decreased by 2 per cent to US$65 million
in FY24, for an operating margin of 19 per cent, as higher sales
volumes were offset by lower realised manganese prices in the
first half of the year.
South Africa Manganese production is expected to be 2.0Mwmt
across FY25 and FY26, as we continue to use higher cost trucking
to optimise sales volumes and margins.
(15) Refer to market release “Sale of Illawarra Metallurgical Coal” dated 29 February 2024. The consideration comprises; upfront cash consideration of US$1,050 million, payable at
completion; deferred cash consideration of US$250 million, payable in 2030; and contingent price-linked cash consideration of up to US$350M, applicable for five years from
the date of completion with no annual cap. The first two years will be calculated and paid on the second anniversary of completion and annually thereafter. The contingent
price-linked consideration will be calculated as 50 per cent of incremental metallurgical coal revenue from equity production, net of royalties, based on the following
metallurgical coal price thresholds: Year 1: US$200/t, Year 2: US$200/t, Year 3: US$190/t, Year 4: US$180/t, Year 5: US$180/t.
(16) Subject to the Eagle Downs project reaching metallurgical coal production of 100,000 tonnes.
(17) Price-linked royalty calculated based on potential future metallurgical coal production and a metallurgical coal index price of at least US$170/t.
Metallurgical coal
Illawarra Metallurgical Coal saleable production decreased by
24 per cent to 4.9Mt in FY24, consistent with guidance, as we
completed planned longwall moves.
Underlying EBITDA decreased by US$333 million to US$522 million
in FY24, for an operating margin of 40 per cent, due to lower
planned volumes and metallurgical coal prices.
On 29 February 2024, we entered into an agreement to sell
Illawarra Metallurgical Coal to an entity owned by
Golden Energy and Resources Pte Ltd and M Resources Pty Ltd,
for cash consideration of up to US$1.65B(15) (the Transaction). The
Transaction is now unconditional and is expected to complete on
29 August 2024.
Following the end of the period, we completed the sale of our
50 per cent interest in the Eagle Downs metallurgical coal project
to a subsidiary of Stanmore Resources Limited for US$15 million in
cash, a contingent payment of US$20 million(16) and a price-linked
royalty of up to US$100 million(17).
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SOUTH32 ANNUAL REPORT 2024
Financial and operational performance summary continued
Financial performance
Profit and Loss
The Group reported a loss after tax attributable to members(18)
of US$203 million in FY24, with impairment expenses for
Worsley Alumina (US$388 million post-tax)(19) and Cerro Matoso
(US$248 million post-tax), partially offset by an impairment
reversal for Illawarra Metallurgical Coal (US$139 million post-
tax). Underlying earnings(20) decreased by US$536 million
to US$380 million in FY24. A reconciliation of profit/(loss) to
Underlying earnings is set out on page 45.
Underlying revenue decreased by US$754 million (or 8 per cent) to
US$8,296 million in FY24 due to lower average commodity prices
(-US$337 million) and lower production volumes predominantly
at Illawarra Metallurgical Coal due to planned longwall moves
(-US$373 million) and at Australia Manganese due to Tropical
Cyclone Megan (-US$159 million). A reconciliation of Underlying
revenue to statutory revenue is included in Note 4 Segment
information to the Financial Report, starting on page 118.
Underlying EBITDA decreased by US$732 million (or 29 per cent)
to US$1,802 million in FY24, for a Group operating margin(21) of
22.8 per cent, as the aforementioned revenue impacts more than
offset a US$124 million reduction in the Group’s cost base(22) as
we continued our focus on disciplined cost management and
benefitted from lower raw material input prices.
Underlying EBIT decreased by US$730 million (or 45 per cent)
to US$886 million in FY24, as Underlying depreciation and
amortisation was largely unchanged at US$916 million.
Cash Flow
Group free cash flow from operations, excluding equity accounted
investments (EAIs), was an outflow of US$80 million in FY24,
reflecting lower commodity prices and metallurgical coal volumes,
and our investment in productivity, improvement and growth
projects.
Separately, we received net distributions(23) of US$53 million
from our manganese and Sierra Gorda EAIs in FY24 (FY23:
US$187 million). The decrease in EAI distributions in FY24
reflected the impact of Tropical Cyclone Megan at Australia
Manganese and our continued investment in projects to grow
future copper production at Sierra Gorda.
Group capital expenditure, excluding EAIs, increased by
US$252 million to US$1,042 million in FY24 as we invested in
critical path infrastructure and studies at our Hermosa project
and additional ventilation capacity at Illawarra Metallurgical Coal.
Group capital expenditure, excluding EAIs, is expected to
decrease by US$52 million to US$990 million in FY25. Safe
and reliable capital expenditure is expected to decrease by
US$293 million with the divestment of Illawarra Metallurgical
Coal, while growth capital expenditure is expected to increase
by US$228 million as we progress construction of Taylor at our
Hermosa project.
(18) Members are equity holders of South32 Limited. Amounts reported as attributable to members are stated net of amounts attributable to non-controlling interests.
(19) Refer to market release “Worsley Alumina Approvals Update” dated 22 July 2024.
(20) Refers to Underlying earnings attributable to members.
(21) Comprises Underlying EBITDA excluding third party products and services EBITDA, divided by Underlying revenue excluding third party products and services revenue. Also
referred to as operating margin.
(22) The Group’s total adjusted cost base of US$6,018 million for FY24 (FY23: US$6,142 million) which excludes third party product costs.
(23) FY24 net distributions from our material equity accounted joint ventures comprises of dividends (+US$90 million), initial funding (-US$30 million) to Australia Manganese to
support recovery plans, a net drawdown of shareholder loans (-US$34 million) from manganese and a distribution (+US$27 million) from Sierra Gorda. The distribution from
Sierra Gorda comprised a repayment of US$27 million of accrued interest.
Capital expenditure for our EAIs increased by US$36 million
to US$315 million in FY24 and is expected to increase by
US$70 million to US$385 million in FY25 as we repair and install
critical infrastructure at Australia Manganese.
We returned US$198 million to shareholders during FY24,
with US$163 million in fully-franked ordinary dividends and
US$35 million via the on-market share buy-back.
Balance Sheet
The Group finished the period with net debt of US$762 million.
Net debt reduced by US$329 million in H2 FY24, supported by
improved operating performance, higher commodity prices and
an unwind of working capital to finish the year.
The sale of Illawarra Metallurgical Coal will further enhance the
Group’s balance sheet strength and flexibility and unlock capital
to invest in our high-quality development projects and growth
options in base metals.
Dividends and Capital Management
Consistent with our policy to distribute a minimum 40 per cent
of Underlying earnings as ordinary dividends, the Board has
resolved to pay a fully-franked final ordinary dividend of US
3.1 cents per share (US$140 million) in respect of H2 FY24,
representing 41 per cent of Underlying earnings.
Reflecting the Group’s strengthened financial position and our
disciplined approach to capital management, the Board has
also resolved to allocate US$200 million to our ongoing capital
management program, to be returned to shareholders via an
on-market share buy-back, commencing from completion of
the sale of Illawarra Metallurgical Coal. This takes total returns
under our capital management program to US$2.5 billion, with
the US$200 million increase in the program to be returned to
shareholders by 12 September 2025.
44
SOUTH32 ANNUAL REPORT 2024
Earnings reconciliation
The Group reported a loss after tax attributable to members of US$203 million in FY24, with impairment expenses for Worsley Alumina
(US$388 million post-tax) and Cerro Matoso (US$248 million post-tax), partially offset by an impairment reversal at Illawarra Metallurgical
Coal (US$139 million post-tax). Underlying earnings decreased by US$536 million to US$380 million.
Consistent with our accounting policies, various items are excluded from the Group’s profit/(loss) to derive Underlying earnings. Total
adjustments to derive Underlying EBIT (US$983 million), shown in the table below, include:
–
Net impairment loss/(reversal) of non-financial assets (+US$604 million):
Impairment expenses
○
Worsley Alumina: (+US$554 million) reflecting increased uncertainty created by the Western Australian Environmental Protection
Authority’s recommended conditions for the Worsley Mine Development Project approval and associated challenging operating
conditions(24);
○
Cerro Matoso: (+US$264 million) reflecting structural changes in the nickel market which are expected to continue to place
pressure on nickel prices and discounts for our ferronickel product;
Impairment reversals
○
Illawarra Metallurgical Coal: (-US$197 million) following the announced sale to an entity owned by Golden Energy and Resources
Pte Ltd and M Resources Pty Ltd(25); and
○
Eagle Downs metallurgical coal project: (-US$17 million) following the announced sale to a subsidiary of
Stanmore Resources Limited(26).
–
Sierra Gorda (+US$155 million) and manganese joint venture adjustments (+US$129 million): to reconcile the equity accounting
position to a proportional consolidation basis. This included adjustment for idle capacity and other remediation related costs
(+US$93 million) at Australia Manganese as a result of Tropical Cyclone Megan;
–
Significant items (+US$50 million): the Group operates a captive insurance program, in which a wholly-owned subsidiary of the Group
insures a number of operations, including Australia Manganese. As a result of Tropical Cyclone Megan, we have recognised a self-
insurance expense of US$50 million with a partially offsetting amount of US$30 million (South32 share) recognised within Australia
Manganese and included in the manganese joint venture adjustments noted above; and
–
Net impairment loss of financial assets (+US$29 million): periodic revaluation of the shareholder loan receivable from
Sierra Gorda reflecting copper prices and other macroeconomic assumptions. An offsetting amount is recorded in the Sierra Gorda
joint venture adjustments noted above.
Further information on these adjustments is included in Note 4 Segment information to the Financial Report, starting on page 118.
Profit/(loss) to Underlying EBITDA reconciliation(27)
US$M
FY24
FY23
Profit/(loss) before tax and net finance income/(costs) from continuing operations
(735)
(466)
Profit/(loss) before tax and net finance income/(costs) from a discontinued operation
638
664
Adjustments to derive Underlying EBIT:
Significant items
50
(186)
Joint venture adjustments
284
291
Exchange rate (gains)/losses on the restatement of monetary items
24
(62)
Net impairment loss/(reversal) of financial assets
29
71
Net impairment loss/(reversal) of non-financial assets
604
1,300
(Gains)/losses on non-trading derivative instruments, contingent consideration and other investments
measured at fair value through profit and loss
(8)
4
Total adjustments to derive Underlying EBIT
983
1,418
Underlying EBIT
886
1,616
Underlying depreciation and amortisation
916
918
Underlying EBITDA
1,802
2,534
Profit/(loss) to Underlying earnings reconciliation(27)
US$M
FY24
FY23
Profit/(loss) after tax attributable to members
(203)
(173)
Total adjustments to derive Underlying EBIT
983
1,418
Total adjustments to derive Underlying net finance costs
(228)
(203)
Total adjustments to derive Underlying income and royalty related tax expense
(172)
(126)
Underlying earnings
380
916
(24) Refer to market release “Worsley Alumina Approvals Update” dated 22 July 2024
(25) Refer to market release “Sale of Illawarra Metallurgical Coal” dated 29 February 2024. The consideration comprises; upfront cash consideration of US$1,050 million, payable
at completion; deferred cash consideration of US$250 million, payable in 2030; and contingent price-linked cash consideration of up to US$350 million, applicable for five
years from the date of completion with no annual cap. The first two years will be calculated and paid on the second anniversary of completion and annually thereafter. The
contingent price-linked consideration will be calculated as 50 per cent of incremental metallurgical coal revenue from equity production, net of royalties, based on the
following metallurgical coal price thresholds: Year 1: US$200/t, Year 2: US$200/t, Year 3: US$190/t, Year 4: US$180/t, Year 5: US$180/t.
(26) Refer to media release “Agreement to divest interest in Eagle Downs” dated 12 February 2024.
(27) FY23 and FY24 includes discontinued operation Illawarra Metallurgical Coal.
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
45
SOUTH32 ANNUAL REPORT 2024
Financial and operational performance summary continued
External factors and trends affecting the Group’s result
Commodity prices and changes in product demand and supply
The Group produces metals, concentrates and ores, for which prices are driven by global demand and supply for each of these
commodities. Average commodity prices were broadly lower across FY24, despite improved demand and constrained supply
supporting prices for our key commodities to finish the year. The prices that the Group obtains for its products are a key driver of
business performance, and fluctuations in these markets affect our results, including cash flows and shareholder returns.
Details of the impact on Underlying EBIT from changes in commodity prices are set out in the Earnings Analysis on page 47.
Exchange rates
The Group is exposed to exchange rate risk on foreign currency sales, purchases and expenses, as no active currency hedging is
undertaken. As the majority of sales are denominated in US dollars, and the US dollar plays a dominant role in the Group’s business,
funds borrowed and held in US dollars provide a natural hedge to currency fluctuations. Operating costs and costs of locally-sourced
equipment are influenced by fluctuations in local currencies, primarily the Australian dollar, South African rand, Brazilian real, Colombian
peso, and Chilean peso.
The Group is also exposed to exchange rate translation risk in relation to net monetary liabilities, being foreign currency denominated
monetary assets and liabilities, including debt, tax and other long-term liabilities.
Details of the impact of foreign currency fluctuations on Underlying EBIT are set out in the Earnings Analysis on page 47.
Earnings analysis
The following key factors influenced Underlying EBIT in FY24, relative to FY23.
Reconciliation of movements in Underlying EBIT (US$M)(28)(29)(30)
0
500
1000
1500
2000
Uncontrollable
1,616
(337)
422
66
(224)
(503)
(181)
FY23 Underlying EBIT
Sales price
Market traded
consumables and
price-linked costs
Foreign exchange
Inflation
Sales volume
Controllable costs
Net finance
costs and tax
27
886
(249)
(259)
2
Other
FY24 Underlying EBIT
Underlying net finance costs
Underlying income
tax expense
Non-controlling interests
380
FY24 Underlying earnings
(28) Sales price variance reflects the revenue impact of changes in commodity prices, based on the current period’s sales volume. Price-linked costs variance reflects the change
in royalties together with the change in input costs driven by changes in commodity prices or market traded consumables. Foreign exchange reflects the impact of exchange
rate movements on local currency denominated costs and sales. Sales volume variance reflects the revenue impact of sales volume changes, based on the comparative
period’s sales prices. Controllable costs variance represents the impact from changes in the Group’s controllable local currency cost base, including the variable cost impact
of production volume changes on expenditure, and period-on-period movements in inventories. The controllable cost variance excludes earnings adjustments including
significant items.
(29) Underlying net finance costs and Underlying income tax expense are actual FY24 results, not year-on-year variances.
(30) South32’s ownership shares of operations are presented as follows: Worsley Alumina (86 per cent share), Brazil Alumina (36 per cent share), Brazil Aluminium (40 per cent
share), Hillside Aluminium (100 per cent), Mozal Aluminium (63.7 per cent share), Sierra Gorda (45 per cent share), Cannington (100 per cent), Hermosa (100 per cent), Cerro
Matoso (99.9 per cent share), Illawarra Metallurgical Coal (100 per cent), Australia Manganese (60 per cent share), South Africa Manganese ore (54.6 per cent share) and
South Africa Manganese alloy (60 per cent share).
46
SOUTH32 ANNUAL REPORT 2024
Earnings Analysis
US$M
Commentary
FY23 Underlying EBIT
1,616
Change in sales price
(337)
Lower average realised prices for our commodities, including:
Aluminium (-US$169 million)
Nickel (-US$143 million)
Manganese (-US$103 million)
Metallurgical coal (-US$26 million) and energy coal (-US$21 million)
Partially offset by higher average realised prices for copper (+US$48 million), silver (+US$42
million), and alumina (+US$21 million)
Net impact of price-linked
costs
422
Lower aluminium smelter raw material input prices (+US$147 million), including pitch and coke
Lower caustic soda prices at Worsley Alumina (+US$83 million) and Brazil Alumina (+US$32
million)
Lower price-linked royalties (+US$72 million)
Lower coal and diesel prices (+US$31 million)
Lower freight and distribution costs (+US$28 million)
Lower electricity prices at Illawarra Metallurgical Coal (+US$20 million)
Change in exchange rates
66
Weaker Australian dollar (+US$58 million), and South African rand (+US$54 million)
Partially offset by a stronger Colombian peso (-US$39 million) and Brazilian real (-US$12 million)
Change in inflation
(224)
Inflation-linked indexation of our Southern African aluminium smelter electricity prices (-US$46
million)
General inflation across Australia (-US$87 million), South America (-US$54 million) and Southern
Africa (-US$36 million)
Change in sales volume
(503)
Lower volumes at Illawarra Metallurgical Coal (-US$373 million), Australia Manganese (-US$159
million) and Sierra Gorda (-US$85 million)
Partially offset by higher volumes at Brazil Aluminium (+US$84 million), Cannington (+US$33
million), Brazil Alumina (+US$24 million) and South Africa Mananganese (+US$8 million)
Controllable costs
(181)
Inventory and volume related movements (-US$184 million) primarily due to a drawdown in
inventories to support higher sales volumes in our aluminium value chain
A planned workforce payment at Sierra Gorda (-US$20 million), following the finalisation of a
new, three-year industrial agreement
Higher contractor and maintenance costs (-US$14 million) including at Sierra Gorda, Hillside
Aluminium and Mozal Aluminium
Partially offset by lower energy costs at Sierra Gorda (+US$18 million), following the transition to
cost efficient, 100 per cent renewable energy supply
Lower consumable and maintenance costs at Cerro Matoso (+US$15 million) as we optimised
our maintenance activity
Other
27
Remediation costs and idle capacity losses at Australia Manganese (+US$93 million), reclassified
as a significant item in accordance with our accounting policies
Higher third party product EBIT (+US$12 million)
Partially offset by our share of the loss from Mineração Rio do Norte (MRN) due to lower bauxite
prices (-US$36 million) and asset write-offs (-US$34 million) including at Australia Manganese
due to Tropical Cyclone Megan
FY24 Underlying EBIT
886
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
47
SOUTH32 ANNUAL REPORT 2024
Financial and operational performance summary continued
Net finance income/(costs)
The Group’s FY24 Underlying net finance costs of US$249 million primarily comprise the unwinding of the discount applied to our closure
and rehabilitation provisions (US$165 million), interest on lease liabilities (US$59 million) largely for our multi-fuel co-generation facility
at Worsley Alumina, and interest on our US$700 million of senior unsecured notes (US$31 million) issued in H2 FY22 to partly fund the
Sierra Gorda acquisition.
Underlying net finance costs reconciliation(31)
US$M
FY24
FY23
Unwind of discount applied to closure and rehabilitation provisions
(165)
(113)
Interest on lease liabilities
(59)
(56)
Interest on senior unsecured notes
(31)
(31)
Change in discount rate on closure and rehabilitation provisions
8
—
Other
(2)
12
Underlying net finance costs
(249)
(188)
Add back earnings adjustment for exchange rate variations on net debt
8
8
Joint venture adjustments(32)
220
195
Total adjustments to derive Underlying net finance costs
228
203
Remove net finance costs from a discontinued operation
10
7
Net finance income/(costs)
(11)
22
Tax expense
The Group’s Underlying income tax and royalty related taxation expense, which includes our material EAIs, decreased by US$253 million
to US$259 million in FY24, for an Underlying effective tax rate (ETR) of 38.8 per cent (FY23: 36.1 per cent). Our Group Underlying ETR
reflects the corporate tax rates(33) and royalty related taxes(34) of the jurisdictions in which we operate and our geographical earnings mix.
The Underlying ETR for our manganese business was 71.3 per cent in FY24, including the royalty related tax(34)at Australia Manganese,
reflecting the derecognition of certain deferred tax assets and reduced profitability as operations at Australia Manganese were
temporarily suspended following Tropical Cyclone Megan. The Underlying ETR for our Sierra Gorda EAI was 0 per cent in FY24, as royalty
related tax(34) was offset by the recognition of deferred tax assets on carry-forward tax losses.
Underlying income tax and royalty related taxation expense reconciliation(31)
US$M
FY24
FY23
Underlying EBIT
886
1,616
Include: Underlying net finance costs
(249)
(188)
Remove: Share of (profit)/loss of EAIs
31
(11)
Underlying profit/(loss) before tax
668
1,417
Income tax expense/(benefit) from continuing operations
(106)
174
Income tax expense/(benefit) from a discontinued operation
193
212
Tax effect of other adjustments to derive Underlying EBIT
122
(3)
Tax effect of other adjustments to derive Underlying net finance costs
(2)
(3)
Exchange rate variations on tax balances
(20)
4
Significant items
15
(23)
Joint venture adjustments relating to income tax(32)
21
96
Joint venture adjustments relating to royalty related tax(32)
36
55
Total adjustments to derive Underlying income tax (expense)/benefit
172
126
Underlying income tax (expense)/benefit
259
512
Underlying effective tax rate
38.8%
36.1%
(31) FY23 and FY24 includes discontinued operation Illawarra Metallurgical Coal.
(32) The underlying information reflects the Group’s interest in material equity accounted joint ventures and is presented on a proportional consolidation basis, which is the
measure used by the Group’s management to assess their performance. The joint venture adjustments reconcile the proportional consolidation to the equity accounting
position included in the Group’s consolidated financial statements.
(33) The corporate tax rates of the geographies where the Group operates include: Australia 30 per cent, South Africa 27 per cent, Colombia 35 per cent, Mozambique 0 per cent,
Brazil 34 per cent and Chile 27 per cent.
(34) Australia Manganese is subject to a royalty related tax equal to 20 per cent of adjusted EBIT. Sierra Gorda is subject to a royalty related tax based on the amount of copper sold
and the mining operating margin, the rate is between 5 per cent and 14 per cent for annual sales over 50kt of refined copper. These royalties are included in Underlying tax
expense.
48
SOUTH32 ANNUAL REPORT 2024
Cash flow
Group free cash flow from operations, excluding EAIs, was an outflow of US$80 million in FY24, reflecting lower commodity prices
and metallurgical coal volumes, and our investment in productivity, improvement and growth projects. Group free cash flow for the
year reflected a significant uplift in H2 FY24 (H2 FY24: +US$397 million, H1 FY24: -US$477 million), supported by improved operating
performance, higher commodity prices, and an unwind of working capital (H2 FY24: US$182 million unwind, H1 FY24: US$276 million
build).
Group capital expenditure, excluding EAIs, increased by US$186 million to US$1,080 million as we invested in critical path infrastructure
and studies at our Hermosa project and additional ventilation capacity at Illawarra Metallurgical Coal.
Group cash tax paid, excluding EAIs, decreased by US$595 million to US$223 million as cash tax normalised following one-off portfolio
related payments in the prior period.
Separately, we received net distributions(35) of US$53 million from our manganese and Sierra Gorda EAIs. Net distributions from our
manganese EAI reflected US$30 million of initial funding provided to Australia Manganese to support recovery plans.
Free cash flow from operations excluding EAIs
US$M
FY24
FY23
Profit/(loss) from continuing and discontinued operations
(97)
198
Non-cash or non-operating items
1,408
1,852
Share of (profit)/loss from EAIs
60
(246)
Change in working capital
(94)
10
Cash generated from operations
1,277
1,814
Total capital expenditure, excluding EAIs, including intangibles and capitalised exploration
(1,080)
(894)
Operating cash flows generated from operations after capital expenditure
197
920
Net interest paid(36)
(54)
(45)
Income tax paid
(223)
(818)
Free cash flow from operations
(80)
57
Working capital movement
US$M
FY24
Commentary
Trade and other receivables
(120)
Timing of shipments and higher commodity prices in Q4 FY24
Inventories
27
Drawdown of aluminium inventory in H2 FY24
Trade and other payables
(7)
Provisions and other liabilities
6
Total working capital movement
(94)
(35) FY24 net distributions from our material equity accounted joint ventures comprises of dividends (+US$90 million), initial funding (-US$30 million) to Australia Manganese to
support recovery plans, a net drawdown of shareholder loans (-US$34 million) from manganese and a distribution (+US$27 million) from Sierra Gorda. The distribution from
Sierra Gorda comprised a repayment of US$27 million of accrued interest.
(36) Net interest paid excludes distributions from material equity accounted investments.
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
49
SOUTH32 ANNUAL REPORT 2024
Financial and operational performance summary continued
Capital expenditure
The Group’s capital expenditure(37), excluding EAIs, increased by US$186 million to US$1,080 million in FY24 as we continued our
investment in productivity, improvement and growth projects:
–
Safe and reliable capital expenditure (US$266 million), including Illawarra Metallurgical Coal (US$337 million), increased by
US$133 million to US$603 million, reflecting elevated capital expenditure at Illawarra Metallurgical Coal for additional ventilation
capacity;
–
Improvement and life extension capital expenditure increased by US$6 million to US$64 million as we completed energy transition
projects at Worsley Alumina and progressed the De-bottlenecking Phase Two project at Brazil Alumina;
–
Growth capital expenditure increased by US$116 million to US$372 million at Hermosa, as we installed critical path infrastructure and
progressed studies and permitting for Taylor and Clark; and
–
Intangibles and capitalised exploration expenditure was US$33 million, as we completed multiple exploration programs across our
portfolio focused on base metals.
Our share of capital expenditure for our material EAIs increased by US$46 million to US$329 million in FY24:
–
Capital expenditure for our manganese EAIs increased by US$25 million to US$109 million, as South Africa Manganese continued
work to access new mining areas and improve rail efficiencies, and Australia Manganese progressed construction of the Eastern
Leases South life extension project, prior to the suspension of operations due to Tropical Cyclone Megan; and
–
Capital expenditure for our Sierra Gorda EAI increased by US$21 million to US$220 million, as the operation continued its investment
in deferred stripping, additional tailing storage infrastructure, plant de-bottlenecking, and the feasibility study for the fourth grinding
line expansion project.
Capital expenditure (South32 share)(37) (38)
US$M
FY24
FY23
Safe and reliable capital expenditure
(266)
(228)
Improvement and life extension capital expenditure
(64)
(58)
Growth capital expenditure
(372)
(256)
Intangibles and the capitalisation of exploration expenditure
(33)
(95)
Discontinued operation - Illawarra Metallurgical Coal
(345)
(257)
Total capital expenditure (excluding EAIs)
(1,080)
(894)
EAIs capital expenditure
(329)
(283)
Total capital expenditure (including EAIs)
(1,409)
(1,177)
Balance sheet
The Group finished the period with net debt of US$762 million. Net debt reduced by US$329 million in H2 FY24, supported by improved
operating performance, higher commodity prices and an unwind of working capital to finish the year.
The sale of Illawarra Metallurgical Coal will further enhance the Group’s balance sheet strength and flexibility and unlock capital to invest
in our high-quality development projects and growth options in base metals.
We continue to prioritise a strong balance sheet and investment grade credit rating through the cycle. Our current BBB+/Baa1 credit
ratings were re-affirmed by S&P Global Ratings and Moody’s, respectively, during FY24. We also retain access to significant liquidity,
having successfully extended our undrawn sustainability-linked revolving credit facility of US$1.4 billion to December 2027 and
US$1.3 billion to December 2028.
Net debt
US$M
FY24
FY23
Cash and cash equivalents
842
1,258
Lease liabilities
(710)
(674)
Other interest bearing liabilities
(894)
(1,067)
Net debt(a)
(762)
(483)
(a) Net debt includes Illawarra Metallurgical Coal and Eagle Downs metallurgical coal which are classified as held for sale.
(37) Total capital expenditure comprises Capital expenditure, capitalised exploration and evaluation expenditure and the purchase of intangibles. Capital expenditure comprises
safe and reliable capital expenditure, improvement and life extension capital expenditure (including decarbonisation), and growth capital expenditure.
(38) South32’s ownership shares of operations are presented as follows: Worsley Alumina (86 per cent share), Brazil Alumina (36 per cent share), Brazil Aluminium (40 per cent
share), Hillside Aluminium (100 per cent), Mozal Aluminium (63.7 per cent share), Sierra Gorda (45 per cent share), Cannington (100 per cent), Hermosa (100 per cent), Cerro
Matoso (99.9 per cent share), Illawarra Metallurgical Coal (100 per cent), Australia Manganese (60 per cent share), South Africa Manganese ore (54.6 per cent share) and
South Africa Manganese alloy (60 per cent share).
50
SOUTH32 ANNUAL REPORT 2024
OUTLOOK
Production
We achieved 98 per cent of revised FY24 copper equivalent production guidance(39), as we set consecutive annual production records at
Hillside Aluminium and South Africa Manganese, and lifted production at Cannington by 10 per cent despite adverse weather impacts.
In FY25, we expect to increase our low-carbon aluminium(40) production by 17 per cent as Brazil Aluminium continues to ramp up and
Mozal Aluminium delivers its recovery plan, and lift copper production by 15 per cent as Sierra Gorda realises higher planned grades.
Australia Manganese has commenced a phased mining restart with mining activity expected to increase to support a planned build in
stockpiles ahead of the wet season. Wharf operations are expected to recommence in Q3 FY25, subject to maintaining construction
productivity during the wet season.
Production guidance (South32 share)(41)
FY24
FY25e(a)
FY26e(a)
Key guidance assumptions
Worsley Alumina
Alumina production (kt)
3,777
3,750
3,750
Constrained bauxite inventories in FY25 and FY26
Brazil Alumina (non-operated)
Alumina production (kt)
1,286
1,350
1,380
Improved plant stability and realisation of benefits from
the De-bottlenecking Phase Two project
Brazil Aluminium (non-operated)
Aluminium production (kt)
104
130
160
Ramping up across all three potlines
Hillside Aluminium
Aluminium production (kt)
720
720
720
Expected to continue to test its maximum technical
capacity
Mozal Aluminium(40)
Aluminium production (kt)
314
360
370
Execution of operational recovery plan and return to
nameplate capacity in H1 FY26
Sierra Gorda (non-operated)
Ore processed (Mt)
21.9
21.8
22.0
Expected to increase copper equivalent production by
15 per cent in FY25 and a further 2 per cent in FY26, with
the continued benefit of the plant de-bottlenecking
project and higher planned copper grades
Payable copper equivalent production (kt)
73.5
84.8
86.1
Payable copper production (kt)
60.8
70.0
74.0
Payable molybdenum production (kt)
0.9
1.3
1.0
Payable gold production (koz)
24.6
25.0
20.0
Payable silver production (koz)
607
550
600
Cannington
Ore processed (kdmt)
2,221
2,100
2,200
Increased underground mine complexity and rebuild of run
of mine stocks in FY25
Payable zinc equivalent production (kt)
302.5
265.4
282.2
Payable silver production (koz)
12,666
11,300
12,000
Payable lead production (kt)
112.4
100.0
110.0
Payable zinc production (kt)
60.7
50.0
50.0
Cerro Matoso
Ore processed (kdmt)
2,774
2,750
Subject
to review
Lower planned nickel grades in FY25
FY26 production guidance is not provided, subject to
strategic review
Payable nickel production (kt)
40.6
35.0
Australia Manganese
Manganese ore production (kwmt)
2,324
1,000
3,200
Mining activity to increase across FY25 and FY26 as we
implement the operational recovery plan
South Africa Manganese
Manganese ore production (kwmt)
2,175
2,000
2,000
Continued use of higher cost trucking to optimise sales
volumes
FY24
FY25e(a)
Key guidance assumptions
Illawarra Metallurgical Coal
Total coal production (kt)
4,938
N/A
Guidance not provided, with the Transaction expected to
complete on 29 August 2024
Metallurgical coal production (kt)
4,305
Energy coal production (kt)
633
(a) The denotation (e) refers to an estimate or forecast year.
(39) Group payable copper equivalent production based on FY24 production guidance, calculated by applying FY23 realised prices for all operations.
(40) Refers to aluminium produced in a process that results in less than 4t CO2-e Scope 1 and Scope 2 GHG emissions per tonne of aluminium.
(41) South32’s ownership shares of operations are presented as follows: Worsley Alumina (86 per cent share), Brazil Alumina (36 per cent share), Brazil Aluminium (40 per cent
share), Hillside Aluminium (100 per cent), Mozal Aluminium (63.7 per cent share), Sierra Gorda (45 per cent share), Cannington (100 per cent), Hermosa (100 per cent), Cerro
Matoso (99.9 per cent share), Illawarra Metallurgical Coal (100 per cent), Australia Manganese (60 per cent share), South Africa Manganese ore (54.6 per cent share) and
South Africa Manganese alloy (60 per cent share).
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
51
SOUTH32 ANNUAL REPORT 2024
Financial and operational performance summary continued
Costs and capital expenditure
Operating unit costs guidance
Operating unit costs were in line with guidance across our operations in FY24, as we continued our focus on disciplined cost
management. This focus, combined with the benefit of lower raw material input prices in our aluminium value chain, resulted in a
2 per cent reduction in our total cost base in FY24(42).
Looking forward, we remain focused on delivering further cost efficiencies to mitigate industry-wide inflationary pressure and lower
planned volumes at certain operations in FY25.
While Operating unit cost guidance is not provided for our aluminium smelters, their cost profile will continue to be influenced by
producer currencies, and the price of raw material inputs and energy. FY25 Operating unit costs for Brazil Aluminium and Mozal
Aluminium are expected to benefit from planned production growth of 25 per cent and 15 per cent, respectively.
Operating unit cost(43)
FY24
H1 FY24
H2 FY24
FY25e(a)(b)
Key guidance assumptions
Worsley Alumina
(US$/t)
269
258
280
290
Constrained bauxite supply, higher caustic soda
prices and price-linked royalties
Brazil Alumina (non-operated)
(US$/t)
323
325
320
Not
provided
Will continue to be influenced by the price of raw
material inputs and energy
Brazil Aluminium (non-operated)
(US$/t)
3,500
4,025
3,160
Not
provided
To benefit from a planned 25 per cent increase in
production in FY25, and continue to be influenced by
the price of raw material inputs and energy
Hillside Aluminium
(US$/t)
2,115
2,135
2,097
Not
provided
Will continue to be influenced by the price of raw
material inputs, the South African rand and inflation-
linked energy costs
Mozal Aluminium
(US$/t)
2,371
2,461
2,238
Not
provided
To benefit from a planned 15 per cent increase in
production in FY25, and continue to be influenced by
the price of raw material inputs and energy
Sierra Gorda (non-operated)
(US$/t)(c)
17.0
18.8
15.2
16.0
Moderation in labour costs following the prior period’s
workforce payment
Cannington
(US$/t)(c)
154
150
159
170
Lower planned mill throughput
Cerro Matoso
(US$/lb)
5.10
5.57
4.73
5.65
Lower planned nickel grades, partially offset by lower
price-linked royalties and a weaker Colombian peso
Australia Manganese
(US$/dmtu, FOB)
2.32
2.15
N/A
Not
provided
Subject to operational recovery plan and volumes in
H2 FY25
South Africa Manganese
(US$/dmtu, FOB)
2.67
2.59
2.78
3.00
Higher price-linked royalties and in-land logistics
costs
(a) FY25e Operating unit cost guidance includes royalties (where appropriate) and the influence of exchange rates, and includes various assumptions for FY25, including: an
alumina price of US$480/t; a manganese ore price of US$7.80/dmtu for 44 per cent manganese product; a nickel price of US$7.50/lb; a silver price of US$27.8/troy oz; a lead
price of US$2,070/t (gross of treatment and refining charges); a zinc price of US$2,750/t (gross of treatment and refining charges); a copper price of US$4.40/lb (gross of
treatment and refining charges); a molybdenum price of US$17.50/lb (gross of treatment and refining charges); a gold price of US$2,300/troy oz; an AUD:USD exchange rate
of 0.65; a USD:ZAR exchange rate of 18.50; a USD:COP exchange rate of 4,100; USD:CLP exchange rate of 900; and a reference price for caustic soda; which reflect forward
markets as at August 2024 or our internal expectations.
(b) The denotation (e) refers to an estimate or forecast year.
(c) US dollar per tonne of ore processed. Periodic movements in finished product inventory may impact Operating unit costs.
(42) The Group’s total adjusted cost base of US$6,018M for FY24 (FY23: US$6,142 million) which excludes third party product costs
(43) Operating unit cost is Underlying revenue less Underlying EBITDA, excluding third party products and services, divided by sales volumes. Operating cost is Underlying
revenue less Underlying EBITDA excluding third party products and services. Manganese Australia FY24 average manganese content of external ore sales was 42.4 per cent
on a dry basis (FY23: 43.8 per cent). 98 per cent of FY24 external manganese ore sales (FY23: 96 per cent) were completed on a CIF basis. FY24 realised FOB ore prices and
Operating unit costs have been adjusted for freight and marketing costs of US$42 million (FY23: US$62 million), consistent with our FOB cost guidance. Manganese South
Africa FY24 average manganese content of external ore sales was 38.8 per cent on a dry basis (FY23: 39.1 per cent). 89 per cent of FY24 external manganese ore sales (FY23:
88 per cent) were completed on a CIF basis. FY24 realised FOB ore prices and Operating unit costs have been adjusted for freight and marketing costs of US$28 million (FY23:
US$61 million), consistent with our FOB cost guidance.
52
SOUTH32 ANNUAL REPORT 2024
Capital expenditure guidance (excluding exploration and intangibles)
FY25 Group capital expenditure, excluding EAIs, is expected to decrease by US$52 million to US$990 million, reflecting lower sustaining
capital expenditure with the divestment of Illawarra Metallurgical Coal, partially offset by higher growth capital expenditure at Hermosa
as we progress construction of Taylor and the exploration decline for Clark:
–
Safe and reliable: expected to decrease by US$293 million to US$310 million following the divestment of Illawarra Metallurgical Coal;
–
Improvement and life extension: expected to increase by US$13 million to US$80 million, as we complete work for new mining areas
and decarbonisation projects at Worsley Alumina; and
–
Growth: expected to increase by US$228 million to US$600 million at Hermosa, as we construct infrastructure for Taylor
(~US$530 million), progress studies and key infrastructure for Clark (~US$40 million) and complete work across the broader project
(~US$30 million).
FY25 capital expenditure for our material EAIs is expected to increase by US$70 million to US$385 million, as we invest to support the
resumption of operations at Australia Manganese and advance projects to grow future copper volumes at Sierra Gorda:
–
Manganese EAIs: expected to increase by US$67 million to US$175 million as we invest US$125 million at Australia Manganese to
repair and install critical infrastructure, including the wharf and a critical bridge. Our insurers have confirmed that the damage
caused by Tropical Cyclone Megan is covered under our property damage and business interruption insurance. We are continuing to
work with our insurers to assess the timing and value of recoveries under these policies; and
–
Sierra Gorda: expected to be largely unchanged at US$210 million as we continue to invest in deferred stripping and additional
tailings capacity. We expect to update guidance following a final investment decision for the fourth grinding line expansion, planned
for H1 FY25.
Capital expenditure excluding exploration and intangibles (South32 share)(44)
US$M
FY24
FY25e(a)
Worsley Alumina
69
90
Brazil Alumina
58
60
Brazil Aluminium
8
10
Hillside Aluminium
38
60
Mozal Aluminium
22
25
Cannington
37
45
Cerro Matoso
34
20
Illawarra Metallurgical Coal
337
—(b)
Safe and reliable capital expenditure (excluding EAIs)
603
310
Worsley Alumina
37
45
Brazil Alumina
22
3
Other operations
8
32
Improvement and life extension capital expenditure (excluding EAIs)
67
80
Hermosa
372
600
Growth capital expenditure
372
600
Total capital expenditure (excluding EAIs)
1,042
990
Total capital expenditure (including EAIs)
1,357
1,375
Capital expenditure for EAIs excluding exploration and intangibles (South32 share)(44)
US$M
FY24
FY25e(a)
Sierra Gorda
175
185
Australia Manganese
39
125
South Africa Manganese
31
35
Safe and reliable capital expenditure (EAIs)
245
345
Sierra Gorda
32
25(c)
Australia Manganese
26
–
South Africa Manganese
12
15
Improvement and life extension capital expenditure (EAIs)
70
40
Total capital expenditure (EAIs)
315
385
(a) The denotation (e) refers to an estimate or forecast year.
(b) FY25 capital expenditure guidance is not provided for Illawarra Metallurgical Coal, with the sale expected to complete on 29 August 2024.
(c) We expect to update FY25 capital expenditure guidance following a final investment decision for the fourth grinding line project, planned for H1 FY25.
(44) South32’s ownership shares of operations are presented as follows: Worsley Alumina (86 per cent share), Brazil Alumina (36 per cent share), Brazil Aluminium (40 per cent
share), Hillside Aluminium (100 per cent), Mozal Aluminium (63.7 per cent share), Sierra Gorda (45 per cent share), Cannington (100 per cent), Hermosa (100 per cent), Cerro
Matoso (99.9 per cent share), Illawarra Metallurgical Coal (100 per cent), Australia Manganese (60 per cent share), South Africa Manganese ore (54.6 per cent share) and
South Africa Manganese alloy (60 per cent share).
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
53
SOUTH32 ANNUAL REPORT 2024
Financial and operational performance summary continued
Capitalised exploration guidance
FY25 Group capitalised exploration, including EAIs, is expected to be US$50 million as we continue base metals exploration programs
across our portfolio. This includes exploration programs at our Hermosa project as we continue to test the Peake copper deposit(45), and
at Sierra Gorda’s Catabela Northeast copper porphyry exploration prospect.
Capitalised exploration (South32 share)(46)
US$M
FY24
FY25e(a)
Capitalised exploration (excluding EAIs)
34
40
EAIs capitalised exploration
14
10
Capitalised exploration (including EAIs)
48
50
(a) The denotation (e) refers to an estimate or forecast year.
Other expenditure guidance
Other expenditure items presented below are on a proportional consolidation basis including our manganese and Sierra Gorda EAIs.
FY24
FY25e(a)
Commentary
Group and unallocated expense in Underlying
EBIT (excluding Hermosa, greenfield exploration
and third party products and services EBIT)
(US$M)
96
100
Reflects a normalised run-rate
Hermosa expenses included in Underlying EBIT
(US$M)
24
30
Work across the broader Hermosa project
Underlying depreciation and amortisation
(US$M)
916
810
Reflects divestment of Illawarra Metallurgical Coal
Underlying net finance costs
(US$M)
249
190
Reflects divestment of Illawarra Metallurgical Coal
Greenfield exploration
(US$M)
27
30
Greenfield exploration activity targeting base metals
in highly prospective regions
(a) The denotation (e) refers to an estimate or forecast year.
(45) Exploration Results and Exploration Targets: The information in this announcement that relates to the Exploration Results and Targets for Taylor, Clark, Peake and Flux is
extracted from the market release “Final investment approval to develop Hermosa’s Taylor deposit” dated 15 February 2024. The information was prepared by D Bertuch,
Competent Person in accordance with the requirements of the JORC Code. South32 confirms that it is not aware of any new information or data that materially affects the
information included in the original market announcement. South32 confirms that the form and context in which the Competent Person’s findings are presented have not been
materially changed from the original market announcement.
(46) South32’s ownership shares of operations are presented as follows: Worsley Alumina (86 per cent share), Brazil Alumina (36 per cent share), Brazil Aluminium (40 per cent
share), Hillside Aluminium (100 per cent), Mozal Aluminium (63.7 per cent share), Sierra Gorda (45 per cent share), Cannington (100 per cent), Hermosa (100 per cent), Cerro
Matoso (99.9 per cent share), Illawarra Metallurgical Coal (100 per cent), Australia Manganese (60 per cent share), South Africa Manganese ore (54.6 per cent share) and
South Africa Manganese alloy (60 per cent share).
54
SOUTH32 ANNUAL REPORT 2024
OPERATION ANALYSIS
A summary of the underlying performance of the Group’s operations is presented below and a more detailed analysis is presented on
pages 56 to 66. Unless otherwise stated: all metrics reflect South32’s share; Operating unit cost is Underlying revenue less Underlying
EBITDA excluding third party products and services divided by sales volumes; Operating cost is Underlying revenue less Underlying
EBITDA excluding third party products and services; and Realised sales price is calculated as Underlying revenue excluding third party
products and services divided by sales volume.
Operations table (South32 share)(47)(48)
Underlying revenue
Underlying EBIT
US$M
FY24
FY23
FY24
FY23
Worsley Alumina
1,356
1,363
131
68
Brazil Alumina
484
456
(11)
(45)
Brazil Aluminium
242
166
(121)
(136)
Hillside Aluminium
1,720
1,823
130
191
Mozal Aluminium
812
886
(30)
56
Sierra Gorda
647
684
143
217
Cannington
631
542
206
142
Hermosa
–
–
(28)
(19)
Cerro Matoso
556
698
35
189
Australia Manganese
436
688
61
266
South Africa Manganese
343
344
45
45
Third party products and services(49)
388
399
7
12
Inter-segment / Group and unallocated
(780)
(782)
(123)
(84)
South32 Group (excluding Illawarra Metallurgical Coal)
6,835
7,267
445
902
Illawarra Metallurgical Coal(50)
1,461
1,783
441
714
South32 Group
8,296
9,050
886
1,616
(47) South32’s ownership shares of operations are presented as follows: Worsley Alumina (86 per cent share), Brazil Alumina (36 per cent share), Brazil Aluminium (40 per cent
share), Hillside Aluminium (100 per cent), Mozal Aluminium (63.7 per cent share), Sierra Gorda (45 per cent share), Cannington (100 per cent), Hermosa (100 per cent), Cerro
Matoso (99.9 per cent share), Illawarra Metallurgical Coal (100 per cent), Australia Manganese (60 per cent share), South Africa Manganese ore (54.6 per cent share) and
South Africa Manganese alloy (60 per cent share).
(48) Figures in Italics indicate that an adjustment has been made since the figures were previously reported.
(49) FY24 Third party products and services sold comprise US$170 million for aluminium, US$3 million for alumina, US$79 million for freight services, US$102 million for raw
materials and US$34 million for manganese. Underlying EBIT on third party products and services comprise nil for aluminium, US$10 million for alumina, US$(2) million for
freight services, US$(1) milllion for raw materials and nil for manganese. FY23 Third party products and services sold comprise US$86 million for aluminium, US$25 million for
alumina, US$106 million for freight services, US$149 million for raw materials and US$33 million for manganese. Underlying EBIT on third party products and services comprise
US$(1) million for aluminium, US$13 million for alumina, US$(1) million for freight services, US$1 million for raw materials and nil for manganese.
(50) Illawarra Metallurgical Coal’s FY24 and restated FY23 underlying results include third party product and services. FY24 Third party products and services sold was
US$237 million and Underlying EBIT was US$28 million. FY23 Third party products and services sold was US$140 million and Underlying EBIT was US$11 million.
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
55
SOUTH32 ANNUAL REPORT 2024
Financial and operational performance summary continued
WORSLEY ALUMINA
Location: Western Australia, Australia
South32 share: 86 per cent
Worsley Alumina is an integrated bauxite mining and
alumina refining operation in the South West of Western
Australia. Alumina from Worsley Alumina is exported to our
Hillside Aluminium and Mozal Aluminium smelters and other
smelters around the world.
South32 holds an 86 per cent share in Worsley Alumina, while
Japan Alumina Associates (Australia) Pty Ltd owns 10 per cent
and Sojitz Alumina Pty Ltd owns four per cent.
Volumes
Worsley Alumina saleable production decreased by 2 per cent
(or 62kt) to 3,777kt in FY24, as a temporary outage of the bauxite
conveyor impacted bauxite supply to the refinery in Q4 FY24.
Production is expected to be 3,750kt across FY25 and FY26 as we
manage bauxite inventories due to delays in regulatory approvals
for new mining areas, and complete additional conveyor
maintenance. The refinery is expected to operate at nameplate
capacity of 4.6Mtpa (100 per cent basis) from FY27, subject to the
receipt of approvals for new mining areas.
On 8 July 2024, the WA Environmental Protection Authority
(WA EPA) published its recommendation that the Worsley Mine
Development Project be approved, subject to conditions. If
imposed in their current form, several conditions would create
significant operating challenges. We have lodged an appeal
in relation to the WA EPA assessment report, and continue to
work collaboratively with the Western Australian Government to
enable Worsley Alumina to continue to meet the State’s robust
environmental standards. We are aiming to secure the required
environmental approvals by the end of CY24.
Operating costs
Operating unit costs decreased by 8 per cent, to US$269/t
in FY24, as lower caustic soda prices (FY24: US$460/t, FY23:
US$659/t), freight rates and a weaker Australian dollar, more than
offset higher energy costs as we converted the first two coal-fired
boilers to natural gas.
We expect FY25 Operating unit costs to increase by 8 per cent,
to US$290/t, due to the impact of constrained bauxite supply,
higher caustic soda prices (FY25e: ~US$500/t) and price-linked
royalties(51).
Financial performance
Underlying EBIT increased by 93 per cent (or US$63 million),
to US$131 million in FY24, as higher average alumina prices
(+US$11 million), lower caustic soda costs (+US$81 million)
and freight rates on sales (+US$18 million), more than offset
lower sales volumes (-US$18 million) and higher energy costs
(-US$8 million).
(51) FY25 Operating unit cost guidance includes royalties (where appropriate) and the influence of exchange rates, and includes various assumptions for FY25, including: an
alumina price of US$480/t; a manganese ore price of US$7.80/dmtu for 44 per cent manganese product; a nickel price of US$7.50/lb; a silver price of US$27.8/troy oz; a lead
price of US$2,070/t (gross of treatment and refining charges); a zinc price of US$2,750/t (gross of treatment and refining charges); a copper price of US$4.40/lb (gross of
treatment and refining charges); a molybdenum price of US$17.50/lb (gross of treatment and refining charges); a gold price of US$2,300/troy oz; an AUD:USD exchange rate
of 0.65; a USD:ZAR exchange rate of 18.50; a USD:COP exchange rate of 4,100; USD:CLP exchange rate of 900; and a reference price for caustic soda; which reflect forward
markets as at August 2024 or our internal expectations.
Capital expenditure
Safe and reliable capital expenditure increased by US$20 million
to US$69 million in FY24 and is expected to be US$90 million in
FY25 as we continue our investment in infrastructure to access
new mining areas and additional bauxite residue disposal
capacity.
Improvement and life extension capital expenditure increased
by US$4 million to US$37 million in FY24 and is expected to
be US$45 million in FY25 as we progress the Worsley Mine
Development Project and decarbonisation projects at the refinery.
Safety
FY24
FY23
Lost Time Injury Frequency (LTIF)
1.6
0.6
Total Recordable Injury Frequency (TRIF)
8.0
8.6
South32 share
FY24
FY23
Alumina production (kt)
3,777
3,839
Alumina sales (kt)
3,767
3,817
Realised alumina sales price (US$/t)
360
357
Operating unit cost (US$/t)
269
291
South32 share (US$M)
FY24
FY23
Underlying revenue
1,356
1,363
Underlying EBITDA
324
251
Underlying EBIT
131
68
Net operating assets
1,813
2,457
Capital expenditure
106
82
Safe and reliable
69
49
Improvement and life extension
37
33
Social Investment
0.9
1.1
56
SOUTH32 ANNUAL REPORT 2024
BRAZIL ALUMINA
Location: Pará and Maranhão, Brazil
South32 investment: Bauxite - 33 per cent
South32 share: Alumina - 36 per cent
Brazil Alumina includes the non-operated Mineração Rio do
Norte (MRN) bauxite mine and the non-operated Alumar
alumina refinery. Our share of bauxite produced from MRN is
supplied to the Alumar refinery. The alumina produced from
Alumar refinery is supplied to the co-located Alumar
aluminium smelter and exported to other smelters around
the world.
South32 holds a 33 per cent interest in MRN. Glencore holds
45 per cent and Rio Tinto Alcan holds 22 per cent. We also hold
a 36 per cent share of the Alumar alumina refinery. Alcoa holds
54 per cent and Rio Tinto Alcan holds 10 per cent.
Volumes
Brazil Alumina saleable production increased by 2 per cent
(or 24kt) to 1,286kt in FY24, with improved plant availability in H2
FY24. Production is expected to increase by 5 per cent to 1,350kt
in FY25 and a further 2 per cent to 1,380kt in FY26 as the refinery
begins to realise the benefits of the De-bottlenecking Phase Two
project.
Operating costs
Operating unit costs decreased by 12 per cent, to US$323/t in
FY24, as the refinery delivered improved volumes and benefitted
from lower prices for caustic soda (FY24: US$469/t, FY23:
US$722/t), coal-linked energy, and bauxite from MRN linked to
alumina and aluminium prices on a trailing basis.
While Operating unit cost guidance is not provided for this non-
operated facility, we expect FY25 Operating unit costs to benefit
from higher planned volumes and a further reduction in energy
prices.
Financial performance
Underlying EBIT improved by US$34 million, to a loss of
US$11 million in FY24, as higher sales volumes (+US$16 million)
and average realised alumina prices (+US$12 million), together
with lower prices for caustic soda (+US$32 million), energy
(+US$28 million) and bauxite (+US$9 million), more than offset a
stronger Brazilian real (-US$4 million).
Our share of the loss from our equity interest in MRN was
US$30 million in FY24 (FY23: profit of US$6 million), which
reflected lower bauxite prices.
(52) The information in this report that refers to production target and forecast financial information for MRN is based on Proved (8 per cent) and Probable (1 per cent) Ore Reserves
and Measured (91 per cent) Mineral Resources. The Mineral Resources and Ore Reserves underpinning the Production Target have been prepared by Competent Persons in
accordance with the requirement of the JORC Code and is available on pages 177 to 186. South32 confirms that all material assumptions underpinning the production target
and forecast financial information derived from production target continues to apply and have not materially changed.
Capital expenditure
Safe and reliable capital expenditure increased by US$13 million
to US$58 million in FY24 and is expected to be US$60 million in
FY25 as we continue our investment in additional bauxite residue
disposal capacity.
Improvement and life extension capital expenditure increased by
US$9 million to US$22 million in FY24 as we completed key work
for the refinery’s De-bottlenecking Phase Two project. Our spend
is expected to significantly reduce to US$3 million in FY25.
The partners of MRN continue to progress a feasibility study for
the West Zone project, which has the potential to extend the life
of the bauxite mine by more than 20 years(52). A final investment
decision for an enabling transmission line to connect MRN to the
Brazilian power grid is anticipated during FY25. The transmission
line will enable MRN to replace its current diesel-powered
generation with renewable energy sources, reducing operating
costs and GHG emissions.
South32 share
FY24
FY23
Alumina production (kt)
1,286
1,262
Alumina sales (kt)
1,282
1,237
Realised sales price (US$/t)
378
369
Operating unit cost (US$/t)(a)
323
368
South32 share (US$M)
FY24
FY23
Underlying revenue
484
456
Underlying EBITDA
40
7
Underlying EBIT
(11)
(45)
Net operating assets
736
738
Capital expenditure
80
58
Safe and reliable
58
45
Improvement and life extension
22
13
(a) Excludes the profit/(loss) from our equity interest in MRN.
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
57
SOUTH32 ANNUAL REPORT 2024
Financial and operational performance summary continued
BRAZIL ALUMINIUM
Location: Maranhão, Brazil
South32 share: 40 per cent
The Brazil Aluminium smelter was restarted during FY22
after being on care and maintenance since 2015. Brazil
Aluminium produces aluminium for domestic and export
markets, with alumina supplied by the co-located Alumar
refinery. Our share of Brazil Aluminium production is
powered by 100 per cent renewable power.
South32 holds a 40 per cent share in the non-operated Alumar
aluminium smelter. Alcoa Corporation holds a 60 per cent share.
Volumes
Brazil Aluminium saleable production increased by 51 per cent
(or 35kt) to 104kt in FY24, as the smelter continued to ramp up all
three potlines. Production is expected to increase by 25 per cent
to 130kt in FY25 and a further 23 per cent to 160kt in FY26.
Operating costs
Operating unit costs decreased by 20 per cent, to US$3,500/t in
FY24, as the smelter continued to ramp up and benefitted from
lower prices for smelter raw material inputs.
While Operating unit cost guidance is not provided for this non-
operated facility, we expect FY25 Operating unit costs to benefit
from a 25 per cent increase to production volumes as the smelter
continues to ramps up.
Financial performance
Underlying EBIT improved by US$15 million, to a loss of
US$121 million in FY24, as higher sales volumes (+US$84 million)
and lower smelter raw material input prices (+US$26 million),
more than offset lower average realised aluminium prices
(-US$8 million), a stronger Brazilian real (-US$8 million), and
production and inventory related costs (-US$75 million) as the
smelter continued to ramp up.
Capital expenditure
Capital expenditure was US$8 million in FY24 and is expected to
be US$12 million in FY25.
South32 share
FY24
FY23
Aluminium production (kt)
104
69
Aluminium sales (kt)
102
68
Realised sales price (US$/t)
2,373
2,452
Operating unit cost (US$/t)
3,500
4,357
South32 share (US$M)
FY24
FY23
Underlying revenue
242
166
Underlying EBITDA
(115)
(129)
Underlying EBIT
(121)
(136)
Net operating assets
68
28
Capital expenditure
8
9
Safe and reliable
8
9
Improvement and life extension
–
–
58
SOUTH32 ANNUAL REPORT 2024
HILLSIDE ALUMINIUM
Location: KwaZulu-Natal, South Africa
South32 share: 100 per cent
Hillside Aluminium is located in Richards Bay, South Africa,
and is the largest aluminium smelter in the southern
hemisphere. The smelter produces high-quality, primary
aluminium for domestic and export markets.
Volumes
Hillside Aluminium saleable production increased by 1kt to
a record 720kt in FY24, as the smelter continued to test its
maximum technical capacity, despite the impact of
load-shedding. Production is expected to be sustained at 720kt(53)
across FY25 and FY26.
Operating costs
Operating unit costs decreased by 3 per cent, to US$2,115/t in
FY24, as the smelter continued its strong operating performance
and benefitted from lower prices for smelter raw material inputs,
more than offsetting additional maintenance.
While Operating unit cost guidance is not provided, the cost
profile of the smelter will continue to be heavily influenced by the
price of smelter raw material inputs, including alumina supplied by
our Worsley Alumina refinery, and other external factors including
the South African rand and inflation-linked energy costs.
The smelter’s electricity is supplied by Eskom under a contract
to 2031, with a tariff that is South African rand based and a rate
of escalation linked to the South Africa Producer Price Index. We
continue to work with Eskom and other stakeholders in the South
African energy sector on pathways to secure lower carbon(54)
electricity supply.
Financial performance
Underlying EBIT decreased by 32 per cent (or US$61 million),
to US$130 million in FY24, as lower average realised aluminium
prices (-US$107 million) and maintenance costs (-US$9 million),
more than offset lower prices for smelter raw material inputs
(+US$89 million).
130 pots were relined at a cost of US$327 thousand per pot
in FY24 (FY23: 96 pots at US$281k per pot), with ~130 pots
scheduled to be relined in FY25. The smelter is deploying
AP3XLE energy efficiency technology in its pot relining activity to
further enhance the smelter’s energy efficiency and reduce GHG
emissions. At the end of FY24, 36 per cent of the pots had been
relined using AP3XLE technology.
Capital expenditure
Capital expenditure increased by US$22 million to US$40 million in
FY24 and is expected to increase to US$65 million in FY25 as we
replace the smelter’s pot tending assemblies. We expect capital
expenditure to remain elevated across FY25 and FY26 as we
substantially complete our investment in pot tending assemblies.
(53) Production guidance for Hillside Aluminium and Mozal Aluminium does not assume any load-shedding impact on production.
(54) Refers to lower levels of GHG emissions when compared to the current state. Where used in relation to South32’s products or portfolio, it refers to enhancement of existing
methods, practices and technologies to substantially lower the level of embodied GHG emissions as compared to the current state.
Safety
FY24
FY23
Lost Time Injury Frequency (LTIF)
0.8
1.7
Total Recordable Injury Frequency (TRIF)
1.6
3.0
South32 share
FY24
FY23
Aluminium production (kt)
720
719
Aluminium sales (kt)
720
719
Realised sales price (US$/t)
2,389
2,535
Operating unit cost (US$/t)
2,115
2,178
South32 share (US$M)
FY24
FY23
Underlying revenue
1,720
1,823
Underlying EBITDA
197
257
Underlying EBIT
130
191
Net operating assets
805
845
Capital expenditure
40
18
Safe and reliable
38
16
Improvement and life extension
2
2
Social Investment
7.3
9.1
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
59
SOUTH32 ANNUAL REPORT 2024
Financial and operational performance summary continued
MOZAL ALUMINIUM
Location: Maputo, Mozambique
South32 share: 63.7 per cent
Mozal Aluminium is located near Maputo, Mozambique, and
is a significant industrial employer in the country. The
smelter produces high-quality, primary aluminium for
domestic and export markets.
South32 holds a 63.7 per cent share of Mozal Aluminium. The
Industrial Development Corporation of South Africa Limited holds
32.4 per cent and the Government of the Republic of Mozambique
holds 3.9 per cent (through preference shares).
Volumes
Mozal Aluminium saleable production decreased by 9 per cent
(or 31kt), to 314kt in FY24, as the smelter progressed its recovery
plan, while managing the impact of load-shedding. Production
is expected to increase by 15 per cent to 360kt(55) in FY25, and
a further 3 per cent to 370kt(54) in FY26 as the smelter returns
toward nameplate capacity.
FY26 production guidance is subject to the extension of the
current power supply agreement for Mozal Aluminium, which
expires in March 2026. We continue to work with Eskom and
the Government of the Republic of Mozambique to extend the
smelter’s hydro-electric power supply, as there are currently no
viable alternative suppliers of renewable energy at the required
scale.
Operating costs
Operating unit costs increased by 2 per cent, to US$2,371/t in
FY24, with sequentially lower Operating unit costs across H2 FY24
of US$2,238/t (H1 FY24: US$2,461/t) as the smelter progressed
its recovery plan and benefitted from lower smelter raw material
input prices.
While Operating unit cost guidance is not provided, we expect
FY25 Operating unit costs to benefit from a 15 per cent increase
in production volumes as the smelter delivers its recovery plan.
The smelter's cost base will continue to be heavily influenced
by the price of smelter raw material inputs, including alumina
supplied by our Worsley Alumina refinery, and other external
factors including the South African rand and inflation-linked
indexation of energy costs.
Financial performance
Underlying EBIT decreased by US$86 million, to a loss of
US$30 million in FY24, as lower average realised aluminium prices
(-US$54 million) and sales volumes (-US$20 million), together
with higher energy (-US$17 million) and maintenance costs
(-US$9 million), more than offset lower prices for smelter raw
material inputs (+US$60 million).
136(56) pots were relined at a cost of US$377 thousand per
pot in FY24 (FY23: 82 pots at US$318 thousand per pot) using
AP3XLE technology. We expect to reline ~150 pots in FY25 as we
progressively return pots to operation as part of the recovery
plan.
(55) Production guidance for Hillside Aluminium and Mozal Aluminium does not assume any load-shedding impact on production.
(56) Presented on a 100 per cent basis.
Capital expenditure
Capital expenditure was US$23 million in FY24 and is expected to
be US$25 million in FY25 as we continue our investment in plant
upgrades.
Safety
FY24
FY23
Lost Time Injury Frequency (LTIF)
0.6
0.4
Total Recordable Injury Frequency (TRIF)
1.5
1.5
South32 share
FY24
FY23
Aluminium production (kt)
314
345
Aluminium sales (kt)
326
334
Realised sales price (US$/t)
2,491
2,653
Operating unit cost (US$/t)
2,371
2,329
South32 share (US$M)
FY24
FY23
Underlying revenue
812
886
Underlying EBITDA
39
108
Underlying EBIT
(30)
56
Net operating assets
498
578
Capital expenditure
23
17
Safe and reliable
22
16
Improvement and life extension
1
1
Social Investment
2.2
1.8
60
SOUTH32 ANNUAL REPORT 2024
SIERRA GORDA
Location: Antofagasta, Chile
South32 share: 45 per cent
Sierra Gorda is a large scale, open-pit mine in the prolific
Antofagasta copper mining region, that produces copper,
molybdenum, gold and silver.
South32 holds a 45 per cent share in Sierra Gorda via the Sierra
Gorda S.C.M. incorporated Joint Venture, alongside 55 per cent
joint venture partner KGHM Polska Miedz.
Volumes
Sierra Gorda payable copper equivalent production decreased
by 15 per cent (or 12.7kt) to 73.8kt in FY24, as higher plant
throughput delivered by the de-bottlenecking project was
more than offset by lower than planned copper grades and
molybdenum recoveries in the current phase of the mine plan.
Production is expected to increase by approximately 15 per cent
to 84.8kt in FY25 and a further 2 per cent to 86.1kt in FY26, as the
operation continues to benefit from the de-bottlenecking project
and realises higher metal grades in the next phase of the mine
plan.
Operating costs
Operating unit costs increased by 10 per cent, to US$17.0/t ore
processed in FY24, in line with guidance, as the operation incurred
a planned one-off workforce payment following the finalisation of
a new three-year industrial agreement.
We expect FY25 Operating unit costs to decrease by 6 per cent
to US$16.0/t ore processed, reflecting the normalisation of labour
costs, and maintenance efficiencies(57).
Financial performance
Underlying EBIT decreased by 34 per cent, (or US$74 million) to
US$143 million in FY24, as higher average realised metal prices
(+US$48 million) and lower electricity costs (+US$18 million), under
a cost efficient, 100 per cent renewable electricity contract, were
more than offset by lower sales volumes (-US$85 million), the one-
off workforce payment (-US$20 million), higher maintenance costs
(-US$10 million) and local inflationary pressures (-US$14 million).
(57) FY25 Operating unit cost guidance includes royalties (where appropriate) and the influence of exchange rates, and includes various assumptions for FY25, including: an
alumina price of US$480/t; a manganese ore price of US$7.80/dmtu for 44 per cent manganese product; a nickel price of US$7.50/lb; a silver price of US$27.8/troy oz; a lead
price of US$2,070/t (gross of treatment and refining charges); a zinc price of US$2,750/t (gross of treatment and refining charges); a copper price of US$4.40/lb (gross of
treatment and refining charges); a molybdenum price of US$17.50/lb (gross of treatment and refining charges); a gold price of US$2,300/troy oz; an AUD:USD exchange rate
of 0.65; a USD:ZAR exchange rate of 18.50; a USD:COP exchange rate of 4,100; USD:CLP exchange rate of 900; and a reference price for caustic soda; which reflect forward
markets as at August 2024 or our internal expectations.
(58) Sierra Gorda and Cannington Operating unit cost is Underlying revenue less Underlying EBITDA divided by ore processed. Periodic movements in finished product inventory
may impact Operating unit costs.
Capital expenditure
Safe and reliable capital expenditure was US$175 million in FY24
and is expected to be US$185 million in FY25 as the operation
continues deferred stripping activity and invests in additional
tailings infrastructure.
Improvement and life extension capital expenditure was
US$32 million in FY24 as the operation completed plant
de-bottlenecking work and progressed the feasibility study for
the fourth grinding line expansion.
We expect to spend US$25 million in H1 FY25, ahead of the
planned completion of the feasibility study for the fourth grinding
line project. The project has the potential to increase plant
throughput by ~20 per cent to ~58Mtpa, lifting copper production
and lowering Operating unit costs.
We expect to update FY25 capital guidance following the final
investment decision for the fourth grinding line project.
South32 share
FY24
FY23
Ore mined (Mt)
19.9
26.0
Ore processed (Mt)
21.9
21.2
Ore grade processed (%, Cu)
0.36
0.42
Payable copper equivalent
production (kt)
73.8
86.5
Payable copper production (kt)
60.8
70.7
Payable molybdenum production (kt)
0.9
1.2
Payable gold production (koz)
24.6
28.8
Payable silver production (koz)
607
630
Payable copper sales (kt)
60.9
71.8
Payable molybdenum sales (kt)
1.3
1.3
Payable gold sales (koz)
24.9
29.1
Payable silver sales (koz)
605
639
Realised copper sales price (US$/lb)
3.86
3.51
Realised molybdenum sales price (US$/lb)
20.60
21.28
Realised gold sales price (US$/oz)
2,129
1,821
Realised silver sales price (US$/oz)
24.8
21.9
Operating unit cost
(US$/t ore processed)(58)
17.0
15.4
South32 share (US$M)
FY24
FY23
Underlying revenue
647
684
Underlying EBITDA
275
358
Underlying EBIT
143
217
Net operating assets
1,664
1,588
Capital expenditure
207
196
Safe and reliable
175
151
Improvement and life extension
32
45
Exploration expenditure
13
7
Exploration expensed
—
4
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
61
SOUTH32 ANNUAL REPORT 2024
Financial and operational performance summary continued
CANNINGTON
Location: Queensland, Australia
South32 share: 100 per cent
Cannington is an underground mine located in
north-west Queensland, Australia, that produces
high-grade lead and zinc concentrates with a high silver
content.
Volumes
Cannington payable zinc equivalent production increased by
10 per cent to 285.2kt in FY24, despite adverse weather impacts,
as the operation realised higher average metal grades.
Looking ahead, a significant increase in underground activity
and complexity is expected to drive greater variability in mine
performance as the underground mine progresses toward the
end of its life. Due to these factors and the need to rebuild run
of mine stocks following adverse weather impacts in H2 FY24,
payable zinc equivalent production is expected to be 265.4kt in
FY25 (ore processed 2,100kdmt, silver 11,300koz, lead 100.0kt,
zinc 50.0kt). Production is then expected to increase by 6 per cent
in FY26 to 282.2kt payable zinc equivalent (ore processed
2,200kdmt, silver 12,000koz, lead 110.0kt, zinc 50.0kt) with
improved plant throughput.
Operating costs
Operating unit costs were largely unchanged at US$154/t in FY24,
as higher plant throughput and a weaker Australian dollar were
offset by additional contractor costs to support the planned
increase in underground activity.
We expect FY25 Operating unit costs to increase by 10 per cent,
to US$170/t, reflecting the volume impact of lower ore
processed(59).
Financial performance
Underlying EBIT increased by 45 per cent (or US$64 million),
to US$206 million in FY24, as higher average metal prices
(+US$56 million) and sales volumes (+US$33 million), more than
offset additional contractor costs to deliver planned underground
activity (-US$8 million) and higher local gas prices (-US$5 million).
Capital expenditure
Capital expenditure decreased by US$23 million to US$38 million
in FY24, following the transition to 100 per cent truck haulage in
the prior period. We expect to invest US$45 million in FY25 as we
continue to invest in underground development.
(59) FY25 Operating unit cost guidance includes royalties (where appropriate) and the influence of exchange rates, and includes various assumptions for FY25, including: an
alumina price of US$480/t; a manganese ore price of US$7.80/dmtu for 44 per cent manganese product; a nickel price of US$7.50/lb; a silver price of US$27.8/troy oz; a lead
price of US$2,070/t (gross of treatment and refining charges); a zinc price of US$2,750/t (gross of treatment and refining charges); a copper price of US$4.40/lb (gross of
treatment and refining charges); a molybdenum price of US$17.50/lb (gross of treatment and refining charges); a gold price of US$2,300/troy oz; an AUD:USD exchange rate
of 0.65; a USD:ZAR exchange rate of 18.50; a USD:COP exchange rate of 4,100; USD:CLP exchange rate of 900; and a reference price for caustic soda; which reflect forward
markets as at August 2024 or our internal expectations.
(60) Sierra Gorda and Cannington Operating unit cost is Underlying revenue less Underlying EBITDA divided by ore processed. Periodic movements in finished product inventory
may impact Operating unit costs.
Safety
FY24
FY23
Lost Time Injury Frequency (LTIF)
5.6
4.8
Total Recordable Injury Frequency (TRIF)
15.8
11.0
South32 share
FY24
FY23
Ore mined (kwmt)
2,252
2,223
Ore processed (kdmt)
2,221
2,156
Ore grade processed (g/t, Ag)
205
187
Ore grade processed (%, Pb)
5.9
5.6
Ore grade processed (%, Zn)
3.7
3.8
Payable zinc equivalent production (kt)
285.2
259.6
Payable silver production (koz)
12,666
11,183
Payable lead production (kt)
112.4
101.7
Payable zinc production (kt)
60.7
59.2
Payable silver sales (koz)
11,793
10,739
Payable lead sales (kt)
102.4
99.0
Payable zinc sales (kt)
60.1
58.1
Realised silver sales price (US$/oz)
24.8
21.1
Realised lead sales price (US$/t)
2,002
1,919
Realised zinc sales price (US$/t)
2,230
2,151
Operating unit cost
(US$/t ore processed)(60)
154
153
South32 share (US$M)
FY24
FY23
Underlying revenue
631
542
Underlying EBITDA
289
213
Underlying EBIT
206
142
Net operating assets
150
172
Capital expenditure
38
61
Safe and reliable
37
60
Improvement and life extension
1
1
Exploration expenditure
9
8
Exploration expensed
6
6
Social Investment
0.4
0.5
62
SOUTH32 ANNUAL REPORT 2024
CERRO MATOSO
Location: Córdoba, Colombia
South32 share: 99.9 per cent
Cerro Matoso is an integrated nickel laterite mine and
smelter located in northern Colombia that produces
ferronickel used to make stainless steel.
South32 owns 99.9 per cent of Cerro Matoso. Current and former
employees own 0.02 per cent, with the balance of shares held in a
reserve account following a buy-back.
We continue to progress our strategic review of Cerro Matoso in
response to structural changes in the nickel market. We expect to
provide information on the outcome of this review in H2 FY25.
Volumes
Cerro Matoso payable nickel production was largely unchanged
at 40.6kt in FY24, supported by improved plant throughput
and nickel grades to finish the year. Production is expected
to be 35.0kt in FY25, reflecting lower planned nickel grades.
FY26 production guidance is not provided as it is subject to the
outcomes of the strategic review.
Operating costs
Operating unit costs were largely unchanged at US$5.10/lb in
FY24, beating our already lowered guidance by 2 per cent, as we
realised further cost efficiencies and benefitted from lower price-
linked royalties, offsetting a stronger Colombian peso.
We expect FY25 Operating unit costs to increase by 11 per cent to
US$5.65/lb, reflecting the volume impact of lower planned nickel
grades, partially offset by a weaker Colombian peso and lower
price-linked royalties(61).
Financial performance
Underlying EBIT decreased by US$154 million, to US$35 million in
FY24, as a significant decline in the average realised nickel price
(-US$143 million) and a stronger Colombian peso (-US$39 million),
more than offset lower price-linked royalties (+US$36 million).
Underlying EBIT improved by US$63 million to US$49 million in H2
FY24 (H1 FY24: EBIT loss of US$14 million) as we took action to
protect margins, and price realisations for our ferronickel product
improved (H2 FY24: ~21 per cent, H1 FY24: ~29 per cent discount
to the LME Nickel Index).
Capital expenditure
Capital expenditure was US$34 million in FY24 and is expected to
reduce by US$14 million to US$20 million in FY25 as we prioritise
our capital program.
(61) FY25 Operating unit cost guidance includes royalties (where appropriate) and the influence of exchange rates, and includes various assumptions for FY25, including: an
alumina price of US$480/t; a manganese ore price of US$7.80/dmtu for 44 per cent manganese product; a nickel price of US$7.50/lb; a silver price of US$27.8/troy oz; a lead
price of US$2,070/t (gross of treatment and refining charges); a zinc price of US$2,750/t (gross of treatment and refining charges); a copper price of US$4.40/lb (gross of
treatment and refining charges); a molybdenum price of US$17.50/lb (gross of treatment and refining charges); a gold price of US$2,300/troy oz; an AUD:USD exchange rate
of 0.65; a USD:ZAR exchange rate of 18.50; a USD:COP exchange rate of 4,100; USD:CLP exchange rate of 900; and a reference price for caustic soda; which reflect forward
markets as at August 2024 or our internal expectations.
(62) Cerro Matoso realised nickel sales price is inclusive of by-products.
Safety
FY24
FY23
Lost Time Injury Frequency (LTIF)
2.3
1.3
Total Recordable Injury Frequency (TRIF)
2.7
1.6
South32 share
FY24
FY23
Ore mined (kwmt)
5,195
5,560
Ore processed (kdmt)
2,774
2,807
Ore grade processed (%, Ni)
1.60
1.62
Payable nickel production (kt)
40.6
40.8
Payable nickel sales (kt)
40.9
40.8
Realised nickel sales price (US$/lb)(62)
6.17
7.76
Operating unit cost (US$/lb)
5.10
5.03
South32 share (US$M)
FY24
FY23
Underlying revenue
556
698
Underlying EBITDA
96
246
Underlying EBIT
35
189
Net operating assets
91
363
Capital expenditure
34
38
Safe and reliable
34
33
Improvement and life extension
–
5
Exploration expenditure
3
2
Exploration expensed
3
2
Social Investment
2.6
4.8
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
63
SOUTH32 ANNUAL REPORT 2024
Financial and operational performance summary continued
AUSTRALIA MANGANESE
Location: Northern Territory, Australia
South32 share: 60 per cent
Australia Manganese consists of Groote Eylandt Mining
Company (GEMCO) in the Northern Territory, Australia.
GEMCO is an open-cut mining operation that produces
high-grade manganese ore.
South32 holds a 60 per cent share in GEMCO and Anglo American
Plc holds the remaining 40 per cent.
On 16 to 17 March 2024, Tropical Cyclone Megan severely
impacted operations at GEMCO, with record rainfall and the
second strongest wind gusts in the past 20 years. The intense
weather system resulted in widespread flooding and significant
damage to critical infrastructure.
Following Tropical Cyclone Megan, we continue to implement the
operational recovery plan, dewatering targeted mining pits and
commencing a phased mining restart. Mining activity is expected
to increase to support a planned build in stockpiles ahead of the
wet season. Wharf operations are scheduled to recommence in
Q3 FY25, subject to maintaining construction productivity during
the wet season, with sales volumes expected to progressively
increase over Q4 FY25.
Volumes
Australia Manganese saleable production decreased by
34 per cent (or 1,221kwmt), to 2,324kwmt in FY24, as we
temporarily suspended operations in March 2024.
Production is expected to be 1,000kwmt in FY25 and 3,200kwmt
in FY26 as we complete the operational recovery plan.
Operating costs
Operating unit costs increased by 23 per cent, to US$2.32/dmtu in
FY24, due to lower volumes as a result of Tropical Cyclone Megan.
FY25 Operating unit cost guidance is not currently provided and
is subject to the operational recovery plan and volumes in H2
FY25.We expect to incur additional idle capacity and remediation
related costs in FY25 as we implement the operational recovery
plan, which will be excluded from FY25 Underlying earnings as an
earnings adjustment.
Financial performance
Underlying EBIT decreased by 77 per cent (or US$205 million) to
US$61 million in FY24. Separately we incurred idle capacity and
other remediation costs of US$93 million that were excluded from
Underlying EBIT as an earnings adjustment.
(63) Volumes and prices do not include any third party trading that may be undertaken independently of equity production. Realised ore prices are calculated as external sales
Underlying revenue less freight and marketing costs, divided by external sales volume.
(64) Manganese Australia FY24 average manganese content of external ore sales was 42.4 per cent on a dry basis (FY23: 43.8 per cent). 98 per cent of FY24 external manganese
ore sales (FY23: 96 per cent) were completed on a CIF basis. FY24 realised FOB ore prices and Operating unit costs have been adjusted for freight and marketing costs of
US$42 million (FY23: US$62 million), consistent with our FOB cost guidance.
(65) FOB Ore Operating unit cost is Underlying revenue less Underlying EBITDA, freight and marketing costs, divided by ore sales volume.
Capital expenditure
Capital expenditure for mine repairs and infrastructure, including
the wharf and a critical bridge, is expected to be approximately
US$125 million in FY25.
Our insurers have confirmed that the damage caused by Tropical
Cyclone Megan is covered under our property damage and
business interruption insurance. We are continuing to work with
our insurers to assess the timing and value of recoveries under
these policies.
Safety
FY24
FY23
Lost Time Injury Frequency (LTIF)
4.0
1.5
Total Recordable Injury Frequency (TRIF)
8.4
6.3
South32 share
FY24
FY23
Manganese ore production (kwmt)
2,324
3,545
Manganese ore sales (kwmt)
2,573
3,261
Realised external manganese ore sales
price (US$/dmtu, FOB)(63)(64)
3.77
4.59
Ore operating unit cost (US$/dmtu,
FOB(64)(65)
2.32
1.88
South32 share (US$M)
FY24
FY23
Underlying revenue
436
688
Underlying EBITDA
182
369
Underlying EBIT
61
266
Net operating assets
166
239
Capital expenditure
65
58
Safe and reliable
39
41
Improvement and life extension
26
17
Exploration expenditure
1
1
Exploration expensed
–
–
Social Investment
1.0
0.8
64
SOUTH32 ANNUAL REPORT 2024
SOUTH AFRICA
MANGANESE
Location: Northern Cape and Gauteng, South Africa
South32 share: Ore - 54.6 per cent, Alloy - 60 per cent
South Africa Manganese consists of two manganese mines
in the Kalahari Basin, and the Metalloys manganese alloy
smelter which was placed on care and maintenance in FY20.
Hotazel Manganese Mines (HMM) is located in the Kalahari Basin.
South32 holds a 60 per cent interest in Samancor Holdings
(Pty) Ltd (Samancor Holdings) and Anglo American Plc holds
the remaining 40 per cent. Samancor Holdings indirectly owns
74 per cent of HMM, which gives South32 its ownership interest.
The remaining 26 per cent of HMM is owned by Broad-Based
Black Economic Empowerment (B-BBEE) entities(66).
South32 holds an effective 60 per cent interest in Samancor
Manganese (Pty) Ltd (Metalloys manganese alloy smelter). In June
2024, South Africa Manganese entered into a binding agreement
to divest Metalloys, subject to the satisfaction of conditions(67).
Volumes
South Africa Manganese saleable production increased by
3 per cent (or 67kwmt) to a record 2,175kwmt in FY24, as we
lifted output of secondary products to capitalise on stronger
manganese prices in Q4 FY24.
Production is expected to be 2,000kwmt across FY25 and FY26 as
we continue to use higher cost trucking to optimise sales volumes
and margins.
Operating costs
Operating unit costs were largely unchanged at US$2.67/dmtu in
FY24, as higher volumes and a weaker South African rand partially
offset higher in-land logistics costs and local inflationary cost
pressures.
We expect FY25 Operating unit costs to increase by 12 per cent
to US$3.00/dmtu, due to higher price-linked royalties and in-land
logistics costs(68).
Financial performance
Ore Underlying EBIT decreased by 6 per cent (or US$3 million),
to US$48 million in FY24, as higher sales volumes (+US$8 million)
and a weaker South African rand (+US$11 million) were more than
offset by lower average realised manganese prices (-US$9 million),
higher in-land logistics costs (-US$12 million) and local inflationary
pressures (-US$11 million).
(66) The remaining 26 per cent of HMM is owned by B-BBEE entities, of which 17 per cent of the interests were acquired using vendor finance with the loans repayable via
distributions attributable to these parties, pro rata to their share in HMM. Until these loans are repaid, the Group's interest in HMM is accounted for at 54.6 per cent.
(67) Refer to media release “Agreement to divest Metalloys manganese alloy smelter” dated 13 June 2024.
(68) FY25 Operating unit cost guidance includes royalties (where appropriate) and the influence of exchange rates, and includes various assumptions for FY25, including: an
alumina price of US$480/t; a manganese ore price of US$7.80/dmtu for 44 per cent manganese product; a nickel price of US$7.50/lb; a silver price of US$27.8/troy oz; a lead
price of US$2,070/t (gross of treatment and refining charges); a zinc price of US$2,750/t (gross of treatment and refining charges); a copper price of US$4.40/lb (gross of
treatment and refining charges); a molybdenum price of US$17.50/lb (gross of treatment and refining charges); a gold price of US$2,300/troy oz; an AUD:USD exchange rate
of 0.65; a USD:ZAR exchange rate of 18.50; a USD:COP exchange rate of 4,100; USD:CLP exchange rate of 900; and a reference price for caustic soda; which reflect forward
markets as at August 2024 or our internal expectations.
(69) Volumes and prices do not include any third party trading that may be undertaken independently of equity production. Realised ore prices are calculated as external sales
Underlying revenue less freight and marketing costs, divided by external sales volume.
(70) Manganese South Africa FY24 average manganese content of external ore sales was 38.8 per cent on a dry basis (FY23: 39.1 per cent). 89 per cent of FY24 external manganese
ore sales (FY23: 88 per cent) were completed on a CIF basis. FY24 realised FOB ore prices and Operating unit costs have been adjusted for freight and marketing costs of
US$28 million (FY23: US$61 million), consistent with our FOB cost guidance.
(71) FOB Ore Operating unit cost is Underlying revenue less Underlying EBITDA, freight and marketing costs, divided by ore sales volume.
Capital expenditure
Safe and reliable capital expenditure increased by US$15 million
to US$31 million in FY24 and is expected to be US$35 million
in FY25 as we continue our investment in rail infrastructure to
improve safety and efficiencies, and new mobile fleet.
Improvement and life extension capital expenditure was
US$12 million in FY24 and is expected to be US$15 million in FY25
as we advance work to access new mining areas and increase
future production capacity at our high-grade underground
Wessels mine.
Safety
FY24
FY23
Lost Time Injury Frequency (LTIF)
1.6
0.7
Total Recordable Injury Frequency (TRIF)
2.5
0.7
South32 share
FY24
FY23
Manganese ore production (kwmt)
2,175
2,108
Manganese ore sales (kwmt)
2,116
2,065
Realised external manganese ore sales
price (US$/dmtu, FOB)(69)(70)
3.53
3.58
Ore operating unit cost (US$/dmtu, FOB)
(70)(71)
2.67
2.64
South32 share (US$M)
FY24
FY23
Underlying revenue
343
344
Manganese ore
343
344
Manganese alloy
–
–
Underlying EBITDA
65
66
Manganese ore
68
72
Manganese alloy
(3)
(6)
Underlying EBIT
45
45
Manganese ore
48
51
Manganese alloy
(3)
(6)
Net operating assets/(liabilities)
200
143
Manganese ore
271
214
Manganese alloy
(71)
(71)
Capital expenditure
43
25
Safe and reliable
31
16
Improvement and life extension
12
9
Exploration expenditure
–
1
Exploration expensed
–
1
Social Investment
2.3
3.2
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
65
SOUTH32 ANNUAL REPORT 2024
ILLAWARRA
METALLURGICAL COAL
Location: New South Wales, Australia
South32 share: 100 per cent
Illawarra Metallurgical Coal operates two underground
metallurgical coal mines in the southern coalfields of New
South Wales, Australia.
We expect to complete the sale of Illawarra Metallurgical Coal for
total cash consideration of up to US$1.65B(72), on 29 August 2024.
Volumes
Illawarra Metallurgical Coal saleable production decreased by
24 per cent (or 1,582kt), to 4,938kt in FY24, in line with guidance,
as the operation completed planned longwall moves.
FY25 production guidance is not provided, as the sale is expected
to completed on 29 August 2024.
Operating costs
Operating unit costs increased by 18 per cent, to US$150/t in
FY24, as we completed planned longwall moves.
Financial performance
Underlying EBIT decreased by 38 per cent (or US$273 million), to
US$441 million in FY24, as lower sales volumes (-US$373 million)
due to planned longwall moves, and lower average realised prices
(-US$47 million), more than offset lower price-linked royalties
(+US$30 million) and local electricity prices (+US$20 million).
Depreciation and amortisation decreased by US$60 million to
US$81 million, as Illawarra Metallurgical Coal ceased depreciating
upon classification as a discontinued operation and held for sale
since February 2024(72).
Capital expenditure
Capital expenditure increased by US$92 million to US$340 million
in FY24 as we continued a significant investment in additional
ventilation capacity at Appin.
(72) Refer to market release “Sale of Illawarra Metallurgical Coal” dated 29 February 2024. The consideration comprises; upfront cash consideration of US$1,050 million, payable
at completion; deferred cash consideration of US$250 million, payable in 2030; and contingent price-linked cash consideration of up to US$350 million, applicable for five
years from the date of completion with no annual cap. The first two years will be calculated and paid on the second anniversary of completion and annually thereafter. The
contingent price-linked consideration will be calculated as 50% of incremental metallurgical coal revenue from equity production, net of royalties, based on the following
metallurgical coal price thresholds: Year 1: US$200/t, Year 2: US$200/t, Year 3: US$190/t, Year 4: US$180/t, Year 5: US$180/t.
(73) Figures in Italics indicate that an adjustment has been made since the figures were previously reported.
(74) Illawarra Metallurgical Coal revenue includes metallurgical coal and energy coal sales revenue.
Safety
FY24
FY23
Lost Time Injury Frequency (LTIF)
3.4
4.3
Total Recordable Injury Frequency (TRIF)
11.2
21.3
South32 share
FY24
FY23
Metallurgical coal production (kt)
4,305
5,497
Energy coal production (kt)
633
1,023
Metallurgical coal sales (kt)
4,172
5,402
Energy coal sales (kt)
699
957
Realised metallurgical coal sales price
(US$/t)
275
279
Realised energy coal sales price (US$/t)
107
144
Operating unit cost (US$/t)
150
127
South32 share (US$M)(a)
FY24
FY23(73)
Underlying revenue(74)
1,461
1,783
Underlying EBITDA
522
855
Underlying EBIT
441
714
Net operating assets
1,236
901
Capital expenditure
340
248
Safe and reliable
337
242
Improvement and life extension
3
6
Exploration expenditure
10
17
Exploration expensed
5
9
Social Investment
1.2
0.9
(a) Illawarra Metallurgical Coal has been classified as a discontinued operation and
held for sale since February 2024(72). As a result, the FY24 and restated FY23
underlying results reflect those of the discontinued operation, including third party
products and services. Net operating assets represent the assets and directly
associated liabilities classified as held for sale for FY24 and the restated equivalent
amounts for FY23.
Financial and operational performance summary continued
66
SOUTH32 ANNUAL REPORT 2024
Corporate directory
GOVERNANCE
Governance at a glance
68
Board of Directors
70
Directors’ report
75
Lead Team
80
Remuneration report
82
67
SOUTH32 ANNUAL REPORT 2024
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
67
SOUTH32 ANNUAL REPORT 2024
Length of tenure
(Non-Executive Directors)
Gender diversity
(all Directors)
Location
(Non-Executive Directors)
Ethnicity
(all Directors)
3
6
5
5
2
2
5
1
1
1
7
0-3 years
3-6 years
6-10 years
Female
Male
Australia
Southern Africa
Americas
White British or other White
(including minority-white groups)
Asian/Asian British
Black/African/Caribbean/Black
British
Not specified/prefer not to say
OUR BOARD
IN ACTION
Governance at a glance
The role of our Board is to represent shareholders and to promote and protect
the interests of the Group. In FY24 our Board met 16 times, hosted our Annual
General Meeting, and engaged with shareholders and other stakeholders.
Directors also conducted site visits to Worsley Alumina, Cannington, Australia
Manganese, Mozal Aluminium and the Singapore office.
Board Composition as at 30 June 2024
Our Board visits Cannington
The April 2024 Board program was held in Brisbane, Australia
and included a visit to the Cannington operation in north-west
Queensland.
While at the operation, Directors visited both underground and
surface facilities, spending time in the field with employees to
monitor and assess workplace culture and hear first-hand about
challenges they face.
The Directors were joined by select employees from our
Australian Operations for a lunch and learn session focused on
safety, enabling Directors to better understand safety routines
and interactions experienced at operations and the practical
deployment of our LEAD Safely Every Day training program.
Directors also participated in Active Bystander training, which
builds upon the Living our Code training series and focuses on
the important role of bystanders in helping reduce unsafe and
disrespectful behaviours.
As part of the Board and Committee meetings, the Board
received briefings from external presenters on the management
of sexual harassment, and an update on the political landscape in
South Africa leading into the national election in May 2024.
68
SOUTH32 ANNUAL REPORT 2024
•
Governed the Group, having regard to our purpose, strategy,
values and culture, our shareholders as a whole, and the interests
of other stakeholders;
•
Maintained oversight of the integration of ESG considerations,
including our response to the risks and opportunities that climate
change presents, into our strategy and capital allocation, budget,
risk oversight and governance;
•
Engaged in ongoing education including briefings from internal
and external experts on governance developments including
cyber security, workplace sexual harassment, climate and
biodiversity, Australian industrial relations reform and work health
and safety;
•
Approved the appointment of Ms Sharon Warburton as a Non-
Executive Director;
•
Maintained oversight of key talent;
•
Approved the revised Board Charter and Terms of Reference for
each of the Board’s standing Committees which were reviewed
and updated to reflect evolving governance, societal and business
issues such as climate change, psychosocial safety, workplace
sexual harassment, cyber security and data privacy; and
•
Reported on gender and ethnicity representation on the Board,
confirming that our Board represents a broad cultural, ethnic,
background and geographic mix, and achieves its gender diversity
objectives.
•
Worked with our Lead Team to set the direction and tone for a
workplace culture that aligns with our purpose, reflects our values,
and supports the delivery of our strategy;
•
Approved our updated Code of Business Conduct and Speak Up
Policy;
•
Monitored culture through visits to our operations and offices,
operational deep-dives, and management presentations, applying
a `Culture Health Check' tool to assess alignment of our culture
with our purpose, strategy and values, and evaluating results
of our annual Your Voice employee survey and actions taken to
address improvement areas;
•
Maintained oversight of our approach to inclusion and diversity,
monitored progress against our inclusion and diversity
measurable objectives and approved our revised Inclusion and
Diversity Policy; and
•
Visited Hotham Park, a recreational facility near the Boddington
bauxite mine, of which Worsley Alumina is a founding partner
and the Malhampsene Primary School near the Mozal Aluminium
smelter.
•
Maintained oversight of strategy development and
implementation;
•
Participated in a dedicated Strategy Day and engaged with
management on strategic issues;
•
Approved decisions to reshape our portfolio towards commodities
for a low-carbon future, including:
•
The final investment for development of the Taylor deposit at
the Hermosa project in Arizona, United States;
•
The sale of Illawarra Metallurgical Coal in New South Wales,
Australia(1); and
•
The divestment of our 50 per cent interest in the Eagle Downs
metallurgical coal project in Queensland, Australia(2).
•
Maintained oversight of our pipeline of decarbonisation initiatives;
•
Maintained oversight of energy supply challenges at Hillside
Aluminium and Mozal;
•
Maintained oversight of our greenfield exploration strategy and
framework, including key exploration partnerships and projects
targeting base metals around the world;
•
Maintained oversight of the alignment our remuneration and
benefits framework with our purpose, strategy, values, and
culture;
•
Approved our capital management program; and
•
Engaged with shareholders and other stakeholders on financial,
operational, remuneration and other matters.
•
Maintained oversight of, and a focus on, our approach to safety
and our safety performance;
•
Monitored progress of our multi-year Safety Improvement Program,
which aims to achieve a step change in our safety performance;
•
Maintained oversight of our approach to serious injury risk
reduction through significant incident investigation reviews with
management and material safety risk deep-dives during visits to
our operations;
•
Discussed safety performance at each Sustainability Committee
meeting including progress of our LEAD Safely Every Day training
program;
•
Continued to focus on the management of workplace
sexual harassment as a material health and safety risk and
implementation of appropriate controls;
•
Maintained oversight of Australia Manganese following Tropical
Cyclone Megan in March 2024, focusing initially on the safety of
our people and the community on Groote Eylandt as a priority,
followed by a phased return to mining activities;
•
Participated in Active Bystander training which forms part of the
Living our Code training and discussion series; and
•
Heard first-hand from operational employees to better
understand safety routines and interactions and the practical
application of our LEAD Safely Every Day training program, safety
interactions in the field, and the impact of our Safety Improvement
Program training on employees and contractors.
Board focus areas and activities in FY24
Safety and performance
Culture
Strategy
Governance
+
Learn more about our key corporate governance policies and practices in our Corporate Governance Statement 2024
at www.south32.net
(1) For further information see page 25 of this report.
(2) For further information see page 25 of this report.
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
69
SOUTH32 ANNUAL REPORT 2024
Chair appointment
Nomination and Governance Committee
Remuneration Committee
Risk and Audit Committee
Sustainability Committee
Committee membership key:
N
R
RA
S
N
R
Board of Directors
Career summary: Ms Wood has worked in legal practice and
business.
In 2001, Ms Wood joined BHP and held several global executive
leadership roles, including Group Company Secretary, Chief
Governance Officer, Chief People Officer and President People and
Public Affairs (Corporate Affairs). Following her retirement in 2014,
she continued as an adviser to BHP’s Board and Chief Executive
Officer until 2015. She also chaired the BHP Foundation until
2019, overseeing grant provisions for not-for-profit organisations
to deliver global programs in the areas of natural resource
governance, human capability and social inclusion, and conserving
and sustainably managing natural environments. Before joining
BHP, she worked at Bonlac Foods Limited, where she spent five
years as General Counsel and Company Secretary.
Other key positions Ms Wood has held include being a member
of the Takeovers Panel from 2000 to 2012, and roles with the
Australian Securities and Investments Commission (Business
Consultative Panel) and the Australian Government’s Business
Regulatory Advisory Group.
External appointments: Ms Wood is a Director of the Robert Salzer
Foundation, serves as an ambassador for the Australian Indigenous
Education Foundation and is a member of the Advisory Board of
the Sir John Monash Leadership Academy. She was also appointed
as a Director of the Stars Foundation in August 2024. Ms Wood was
a Non-Executive Director of ASX-listed Djerriwarrh Investments
Limited from July 2016 until January 2024.
Skills and experience: Ms Wood brings extensive corporate
governance expertise to her roles as Chair of our Board and
the Nomination and Governance Committee. In these roles, her
experienced leadership promotes a cohesive environment of
constructive challenge and oversight. Ms Wood’s substantial tenure
as a global executive within the resources industry means that she
brings a strong understanding of the regulatory landscape and the
key strategic risks and opportunities for a global mining and metals
company. Her expertise in shaping culture (including through
organisational and remuneration design), public policy, social
performance and stakeholder engagement enables her to bring
valuable insights in these areas.
Career summary: Mr Kerr joined BHP in 1994 and held a wide range
of operational and commercial roles across the business, including
Chief Financial Officer Stainless Steel Materials, Vice President
Finance Diamonds and Finance Director for the BHP Canadian
Diamonds Company.
In 2004, Mr Kerr joined Iluka Resources Limited as General Manager
Commercial. He returned to BHP in 2006, leading to his appointment
as President of Diamonds and Specialty Products where he was
accountable for the Ekati Diamond Mine in Canada, the Richards
Bay Minerals joint venture in South Africa, diamonds exploration
in Angola, the Corridor Sands Project in Mozambique and the
development of BHP’s potash portfolio in Canada.
Mr Kerr was appointed BHP’s Chief Financial Officer in 2011, a role
which he held until 2015 when he left to lead South32 through its
demerger from BHP and listing in three countries.
External appointments: Mr Kerr is a Director of CEOs for Gender
Equity, the Minerals Council of Australia and the Fremantle Football
Club.
Skills and experience: Mr Kerr’s strong track record in resources
development, and global experience as a commercial and
operational leader within the resources industry, means that he
brings deep mining and metals expertise and exceptional financial
acumen. His health and safety expertise, and passion for promoting
inclusion and diversity, are valued contributions to our Board as it
oversees our commitment to elevate our safety performance and
instil a culture where everyone feels safe and respected at work.
Mr Kerr’s strong focus on a purpose-driven and values-led future for
South32 make him a trusted leader as we progress the next phase
of our strategy.
Ms Karen Wood BEd, LLB (Hons), 68
Chair and Independent Non-Executive Director
Appointed: 1 November 2017; Chair: 12 April 2019
Location: Australia
Graham Kerr BBus, FCPA, 53
Chief Executive Officer and Managing Director
Appointed: October 2014; Managing Director: 21 January 2015
Location: Australia
70
SOUTH32 ANNUAL REPORT 2024
N
R
RA
N
RA
S
Career summary: Mr Cooper qualified as a chartered accountant in
Australia, leading to a 40-year career in the finance and accounting
profession. He has held a number of senior tax and finance roles,
including Partner at Ernst & Young, Partner / Business Unit Leader,
Tax Practice at PricewaterhouseCoopers and Managing Partner for
Arthur Andersen in Perth (for just over 10 years), during which time
he specialised in the mining, energy and utility sectors.
Other key positions Mr Cooper has held include Commissioner and
Chairman of the Insurance Commission of Western Australia and
Pro Chancellor of the University of Western Australia.
Throughout his career, Mr Cooper has had extensive involvement in
community activities, including serving as Commissioner and Chair
of the West Australian Football Commission and as a Member of the
State Health Research Advisory Council (Western Australia).
In 2014 Mr Cooper was awarded an Officer of the Order of Australia.
He was also named West Australian of the Year in the Professions
category in 2015.
External appointments: Mr Cooper is a Director of St John of God
Australia Limited and Wright Prospecting Pty Ltd. Mr Cooper was
a Non-Executive Director of ASX-listed Woodside Energy Group
Limited from February 2013 until April 2024.
Skills and experience: Mr Cooper brings exceptional financial
acumen and accounting expertise, a strong understanding of
legal and regulatory compliance and substantial experience in
risk management oversight to our Board, all of which also make
him a highly capable Risk and Audit Committee Chair. His listed
company experience and expertise in capital management and
corporate development are highly valued by our Board as it
oversees the implementation of our strategy, as is his strong focus
on organisational philosophy, values and standards.
Career summary: Dr Liu completed her undergraduate study in
Chongqing University in China and her PhD in Extractive Metallurgy
at Imperial College in the United Kingdom, before joining the Rio
Tinto Group as a senior research scientist in 1988.
Over her 26-year career with Rio Tinto, Dr Liu held various roles
in smelting operations, including General Manager Operations
at Bell Bay (Tasmania), leading to other senior operational and
management roles, including Managing Director Technical Services,
where she led Rio Tinto’s global technical services unit. Prior to
her retirement, Dr Liu was President and Chief Executive Officer
of Rio Tinto Minerals, with responsibility for integrated operations
of mining, processing, supply chain, marketing and sales for its
Borates business in the United States, Europe and Asia.
Dr Liu has served as Vice President of the Board of the Australian
Aluminium Council, a Board Member of the California Chamber of
Commerce, a Director of Melbourne Business School and Chancellor
of Queensland University of Technology. She has also served as a
Non-Executive Director at Newcrest Mining Limited (September
2015 until November 2020) and Iluka Resources Limited (February
2016 until April 2019).
External appointments: Dr Liu was a Non-Executive Director
of ASX-listed Incitec Pivot Limited from November 2019 until
May 2024.
Skills and experience: With her accomplished career as a global
executive in the resources industry, Dr Liu brings to our Board
expertise in mining and processing operations, the execution of
major capital projects and commodity value chain management.
Her high financial acumen, expertise in health and safety and
strong understanding of the key environmental impacts, risks
and opportunities relevant to our operations, make her a valued
contributor to the Committees on which she serves. Dr Liu’s
knowledge and experience in technology and innovation, together
with her technical background, is an asset to our Board as it
oversees our advancement towards a low-carbon future.
Mr Frank Cooper AO, BCom, FCA, FAICD, 68
Independent Non-Executive Director
Appointed: 7 May 2015
Location: Australia
Dr Xiaoling Liu BEng (Extractive Metallurgy),
PhD (Extractive Metallurgy), FAusIMM, FTSE, GAICD, 67
Independent Non-Executive Director
Appointed: 1 November 2017
Location: Australia
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
71
SOUTH32 ANNUAL REPORT 2024
Chair appointment
Nomination and Governance Committee
Remuneration Committee
Risk and Audit Committee
Sustainability Committee
Committee membership key:
N
R
RA
S
N
N
RA
S
Board of Directors continued
Career summary: Mr Mesquita is a qualified Metallurgical Engineer.
He has worked in the mining and metals industry for more than
40 years and has extensive experience in leading mining and
processing operations and major capital projects.
Mr Mesquita spent 30 years with BHP where he held various
positions in the company’s base metals and aluminium businesses,
including Asset President of Mozal Aluminium and Asset President
of Escondida – the world’s largest copper mine. During this time he
also served as Vice President Major Projects where he led the base
metals projects program, overseeing more than US$10 billion in
mining investments in countries including Chile, Australia and Peru.
Mr Mesquita has also previously advised mining companies and
private equity funds on acquisitions of mining assets in South
America and from 2014 to 2015 he was a Non-Executive Director
of Mineracao Serra Verde, a mid-sized rare earth minerals mine in
central Brazil.
In the first half of 2022, Mr Mesquita was a consultant for South32
providing in-country support following our acquisition of a
45 per cent interest in the Sierra Gorda copper mine.
External appointments: None
Skills and experience: Mr Mesquita has extensive experience
in the global mining and metals industry with a particular focus
on base metals and aluminium in the Americas and Africa. His
previous roles and first-hand experience of working at projects
in an operational capacity means he brings a unique and diverse
perspective to our Board. This, together with his experience in
leading complex operations with responsibility for safety, volume
and costs, support our strategy of optimising our business by
working safely, minimising our impact, consistently delivering
stable and predictable performance, and continually improving our
competitiveness.
Career summary: Dr Mtoba qualified as a chartered accountant in
South Africa and joined Deloitte and Touche in 1988, specialising in
financial services. She was one of the first African Black women to
be appointed Partner by one of the Big Four accounting firms, and
was later appointed Chairperson of Deloitte Southern Africa.
Dr Mtoba is President and founder of TEACH South Africa, which
recruits skilled teachers for underprivileged schools. She has held
several board positions at organisations focused on economic
development and community engagement, including the New
Partnership for Africa’s Development Business Foundation and
the African Union Foundation. Dr Mtoba has also been President
of the Association for the Advancement of Black Accountants and
Business Unity South Africa and chaired the University of Pretoria
Council for over 10 years.
Other positions Dr Mtoba has held include being a member of the
International Monetary Fund Advisory Group of Sub-Saharan Africa,
the World Economic Forum Global Advisory Council, the United
Nations Global Compact Board and a Director of the International
Women’s Forum (South Africa). She has received several awards for
contributions to business and society, including Most Outstanding
Leadership Women of the Year (Africa Economy Builders, 2018).
External appointments: Dr Mtoba is currently a Non-Executive
Director and Deputy Chair of the Public Investment Corporation
Limited and Chair of its Audit Committee, a Director of Discovery
Bank Holdings Limited and Lead Independent Director and Audit
Committee Chair of Discovery Bank Limited, a Director of Vumelana
Advisory Fund, and a Director of Chapter Zero Southern Africa.
Skills and experience: Dr Mtoba’s tenure as partner and a leader
at one of Africa’s predominant financial professional services
firms, and the numerous roles she has held in local, regional and
international organisations and forums, means that she provides
our Board with considerable financial, economic and public policy
expertise and leadership. Dr Mtoba brings a strong focus on culture
and her expertise in social performance and community and
stakeholder engagement are an asset to our Board as it supports
our aspiration to contribute social and economic value where we
operate.
Mr Carlos Mesquita BEng (MetalEng), MBA, 66
Independent Non-Executive Director
Appointed: 1 May 2023
Location: Chile
Dr Ntombifuthi (Futhi) Mtoba CA(SA), DCom (Honoris Causa),
BCompt (Hons), HDip Banking Law, BA (Econ)(Hons), BA (Arts), 69
Independent Non-Executive Director
Appointed: 7 May 2015
Location: South Africa
72
SOUTH32 ANNUAL REPORT 2024
N
S
N
R
S
Career summary: Ms Nelson has a Bachelor of Science in
Agricultural Economics (Cum Laude) from the University of KwaZulu-
Natal in South Africa. She also holds a Bachelor of Arts and Master
of Arts in Philosophy, Politics and Economics from the University of
Oxford in the United Kingdom, where she was a Rhodes Scholar.
Ms Nelson has a 30-year career researching and advocating for
sustainable business practices and was the founding Director of
the Harvard Kennedy School’s Corporate Responsibility Initiative,
where she is now a senior research fellow. She is a non-resident
senior fellow in the Global Economy and Development program at
Brookings and a former senior associate of Cambridge University’s
Programme for Sustainability Leadership.
Ms Nelson served on ExxonMobil’s External Sustainability Advisory
Panel from 2010 to 2023, the Independent Advisory Panel to the
ICMM’s Resource Endowment Initiative and on advisory councils for
other companies, the World Bank Group and the United Nations.
She also worked for The Prince of Wales International Business
Leaders Forum in the United Kingdom, the World Business Council
for Sustainable Development in Africa, FUNDES in Latin America
and as a Vice President at Citibank working in Asia, Europe and the
Middle East.
In December 2023, Ms Nelson was appointed a Companion of
the Order of Saint Michael and Saint George in the UK’s Overseas
and International Honours List for services to business and to
sustainability.
External appointments: Ms Nelson is currently a Non-Executive
Director of NYSE-listed Newmont Mining Corporation (since 2011)
and Chair of its Safety and Sustainability Committee. Ms Nelson is
currently a member of the World Economic Forum’s (WEF) Global
Future Council on Good Governance, WEF’s Climate Governance
Community of Experts and WEF’s Stewardship Council for Food
Systems. Ms Nelson is also a Co-Chair of the Business Commission
to Tackle Inequality and an Emeritus Director of the World
Environment Center.
Skills and experience: Ms Nelson’s career comprises a portfolio
of roles across academia as well as international policy, business
leadership groups and not-for-profit organisations. She has
expertise in sustainable development including in human
rights, cultural heritage and Indigenous issues and a significant
understanding of climate change and biodiversity issues.
Ms Nelson’s strong focus on sustainable development, together
with her passion for building partnerships between business,
government and civil society, is an asset to our Board given this is at
the heart of our purpose and underpins the delivery of our strategy.
Career summary: Mr Osborn worked as an engineer in the
telecommunications and iron ore industries, before joining Alcoa
(Australia) in 1979.
Mr Osborn held several senior management positions with Alcoa
over the course of his career, including having accountability for its
Asia-Pacific manufacturing operations in China, Japan, Korea and
Australia. In 2001 he was appointed Managing Director, leading an
integrated business comprised of bauxite mining, alumina refining,
coal mining, power generation and aluminium smelting until his
retirement in 2008.
Since 2008, Mr Osborn has served as a Non-Executive Director in
the mining, energy and construction industries. Most recently, he
was a Non-Executive Director of Wesfarmers Limited from March
2010 to October 2021.
Other key roles Mr Osborn has held include Chairman of the
Australian Institute of Marine Science, Chairman of the Western
Australia Branch of the Australia Business Arts Foundation and
Vice President of the Chamber of Commerce and Industry, Western
Australia.
Mr Osborn is also a recipient of the WA Business Leader Award
(2007) and the Australian Institute of Company Directors Award for
Excellence (2018).
External appointments: None.
Skills and experience: Mr Osborn brings expertise in mining
and smelting operations, large-scale capital projects and
commodity value chain management to our Board. His broad
skills and experience in health and safety management and
strong understanding of the key environmental issues, risks and
opportunities relevant to our operations, are an asset to our Board
as it oversees our commitments to improve our safety performance,
our approach to sustainability-related risks and opportunities and
how we manage our environmental impact. Mr Osborn’s experience
leading large workforces, expertise in overseeing remuneration
design and implementation and strong focus on sustainability,
make him a highly capable Remuneration Committee Chair.
Ms Jane Nelson CMG, BSc Agricultural Economics (Cum Laude), BA,
MA (Philosophy, Politics and Economics), 64
Independent Non-Executive Director
Appointed: 1 May 2023
Location: United States
Mr Wayne Osborn Dip Elect Eng, MBA, FTSE, 72
Independent Non-Executive Director
Appointed: 7 May 2015
Location: Australia
OPERATING AND FINANCIAL REVIEW
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FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
73
SOUTH32 ANNUAL REPORT 2024
Chair appointment
Nomination and Governance Committee
Remuneration Committee
Risk and Audit Committee
Sustainability Committee
Committee membership key:
N
R
RA
S
N
R
S
N
RA
Board of Directors continued
Career summary: Mr Rumble is a qualified geologist. He joined
Richards Bay Minerals (at that time, a joint venture between
BHP and the Rio Tinto Group) in 1980, working in smelting and
metallurgy, and held various management positions before
becoming Chief Executive Officer in 1996. Prior to that appointment,
Mr Rumble spent just under three years with Rio Tinto’s iron and
titanium business as Director of International Sales and Marketing.
He was appointed President and Chief Executive Officer of Rio Tinto
Iron and Titanium Inc. in Canada in 2000. In 2001, Mr Rumble joined
Impala Platinum, where he held the role of Chief Executive Officer
until 2007 after which he moved to junior miner SUN Mining (part of
the SUN Group), also as Chief Executive Officer.
Since his retirement as an executive in 2008, Mr Rumble has
held Non-Executive Director positions at BHP and South African
infrastructure and resources company, Aveng Limited.
External appointments: Mr Rumble is currently a Director of
Enzyme Technologies (Pty) Limited and Elite Wealth (Pty) Limited.
Skills and experience: With his substantial tenure as an executive
leader in the resources industry, Mr Rumble brings deep knowledge
and experience in mining and smelting operations. His expertise
in geological and geoscience matters and strong understanding
of the key environmental impacts, risks and opportunities relevant
to our business, enhance our Board’s capability to oversee our
sustainability commitments, risks and impacts. These skills,
together with his health and safety management expertise and
proficiency in risk management, make him a valuable member
of the Sustainability Committee. Mr Rumble was Chair of the
Sustainability Committee from 2015 until April 2024.
Career summary: Ms Warburton is a chartered accountant
with more than 25 years’ experience across the major project
infrastructure, property development, and resources industries.
She has previously held executive roles with Brookfield Multiplex,
Citigroup, and Rio Tinto, working across Australia, Asia, Europe
and the Middle East. Ms Warburton’s previous board experience
includes as a Director of Perth Children’s Hospital Foundation, Gold
Road Resources Limited, NEXTDC Limited, Barminco, Western
Power, Northern Australia Infrastructure Facility and Blackmores
Limited. Ms Warburton was also a Director of Fortescue Metals
Group.
In 2014, Ms Warburton was awarded Western Australia Telstra
Business Woman of the Year.
External appointments: Ms Warburton is currently a Non-
Executive Director of ASX-listed Northern Star Resources Limited
(since 2021), Wesfarmers Limited (since 2019) including Chair of
its Audit and Risk Committee, and Worley Limited (since 2019)
including Chair of its Audit and Risk Committee. Ms Warburton
is also an Independent Director of Mirvac Funds Management
Australia Limited, Thiess Group Holdings Pty Limited and Karlka
Nyiyaparli Aboriginal Corporation. From May 2015 until April 2024,
Ms Warburton was a part-time member of the Takeovers Panel. She
is a member of Chief Executive Women and an Adjunct Professor in
Leadership and Strategy at the Curtin University School of Business.
Skills and experience: Ms Warburton is a prominent and highly
credentialled Director. Her extensive experience in areas of
corporate strategy, business operations, accounting and finance,
major project construction, risk management and governance
contribute to the Board’s broad range of skills and support the
delivery of our strategy.
Mr Keith Rumble BSc, MSc (Geology), 70
Independent Non-Executive Director
Appointed: 27 February 2015
Location: South Africa
Ms Sharon Warburton BBus (Accounting and Business Law), FCA,
FAICD, 54
Independent Non-Executive Director
Appointed: 28 November 2023
Location: Australia
74
SOUTH32 ANNUAL REPORT 2024
Directors' report
This report is presented by the Board of Directors of South32
Limited, together with the Group’s Financial report, for the
financial year ended 30 June 2024.
This report is prepared in accordance with the requirements of
the Corporations Act, with the following information forming part
of this report:
–
Operating and Financial Review on the inside front cover to
page 66;
–
Director biographical information on pages 70 to 74;
–
Remuneration report on pages 82 to 108;
–
Note 19(b) Financial risk management objectives and policies
on pages 151 to 154;
–
Note 20 Share capital on page 154;
–
Note 21 Auditor’s remuneration on page 155;
–
Note 22 Employee share ownership plans on pages 155 to 158;
–
Note 31 Subsequent events on page 167;
–
Directors’ declaration on page 170;
–
Auditor’s independence declaration on page 171;
–
Resources and Reserves on pages 177 to 186;
–
Shareholder information on pages 188 to 190; and
–
Corporate directory on page 199.
Directors and meetings
At the date of this report, the Directors in office were:
Ms Karen Wood
Appointed 1 November 2017
Mr Graham Kerr
Appointed 21 January 2015
Mr Frank Cooper AO
Appointed 7 May 2015
Dr Xiaoling Liu
Appointed 1 November 2017
Mr Carlos Mesquita
Appointed 1 May 2023
Dr Ntombifuthi (Futhi) Mtoba
Appointed 7 May 2015
Ms Jane Nelson
Appointed 1 May 2023
Mr Wayne Osborn
Appointed 7 May 2015
Mr Keith Rumble
Appointed 27 February 2015
Ms Sharon Warburton
Appointed 28 November 2023
You can find information about our Directors’ qualifications,
experience, special responsibilities and other directorships on
pages 70 to 74.
Board and Committee meetings and Director
attendance
There are 10 regularly scheduled meetings of our Board each
year and Committee meetings are also held during this time.
Additional meetings are convened as required to address
business critical issues.
During FY24, there were a total of 16 Board meetings. Six of these
were held face-to-face at either one of our offices or geographic
areas of operation. The additional non-scheduled meetings
were held to consider options in relation to the sale of Illawarra
Metallurgical Coal, Director succession planning and other critical
business issues.
Throughout the year, Directors conducted site visits to Australia
Manganese, Worsley Alumina, Cannington and Mozal Aluminium,
the Singapore office, and all attended a dedicated strategy day
held in June 2024. In addition to the site visits, during FY24 our
Board continued to stay connected with our operations by way of
operational overviews and briefing sessions conducted as part of
the Board program.
To help it carry out its responsibilities, our Board has four
standing Board Committees. From time to time and on an “as
needs basis”, the Board creates other committees to address
important matters and areas of focus for the business. For
example, a committee was established to oversee the Group’s
sale of Illawarra Metallurgical Coal.
All Directors have a standing invitation to attend all Committee
meetings, and in practice, all Directors generally attend all
meetings.
The number of Board and Committee meetings held in FY24, as
well as the Directors who attended them, can be found in Table
1.1.
Our Chair sets the agenda for each Board meeting, with the
Chief Executive Officer (CEO) and the Company Secretary. The
meetings typically include:
–
Minutes of the previous meeting and matters arising;
–
Report from our Chair;
–
Update on various governance matters;
–
CEO’s report;
–
Finance report;
–
Commercial report;
–
Reports on major projects and strategic matters;
–
Board Committee Chair reports;
–
Continuous disclosure checkpoint; and
–
Closed sessions with Directors and closed sessions with Non-
Executive Directors only.
Our Directors receive regular updates from management on a
range of relevant issues, including safety (with a broad focus
covering both physical and psychosocial safety, as well as
sexual harassment), climate change, greenhouse gas emissions
reduction targets, evolving regulations and policy developments,
workplace culture, inclusion and diversity, cultural heritage,
community matters, business integrity, and litigation. Additionally,
they receive reports for discussion on operational performance,
corporate culture and leadership, corporate governance, and
other business matters, including market updates and research.
In between meetings, our Board receives regular reports from
senior management on matters, including (but not limited to):
–
Sustainability (including health and safety) performance;
–
Financial and production performance;
–
Cyber security and privacy;
–
Government relations and political affairs;
–
Investor relations hosted engagements (including
environmental, social and governance updates);
–
Project updates (including pending investment decisions) and
other significant business imperatives;
–
Market and commodity updates; and
–
Relevant media coverage.
As part of their ongoing education and training, during FY24 our
Board received external briefings on various matters including
cyber security risk, climate and biodiversity risk governance and
disclosure matters, workplace sexual harassment, the political
landscape and developments in South Africa and Australian
workplace relations reforms.
OPERATING AND FINANCIAL REVIEW
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FINANCIAL REPORT
RESOURCES AND RESERVES
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75
SOUTH32 ANNUAL REPORT 2024
Table 1.1 Board and Committee Meeting Attendance in FY24
Board
Nomination and
Governance Committee
Remuneration
Committee
Risk and Audit
Committee
Sustainability
Committee
Eligible(1)
Attended(2)
Eligible(1)
Attended(2)
Eligible(1)
Attended(2)
Eligible(1)
Attended(2)
Eligible(1)
Attended(2)
K Wood
16
16
9
9
7
7
-
11
-
8
G Kerr (CEO)
16
16
-
9
-
7
-
11
-
8
F Cooper
16
16
9
9
7
7
11
11
-
8
X Liu(3)
16
16
9
9
-
7
11
11
8
8
C Mesquita
16
16
9
9
-
7
-
11
8
8
N Mtoba
16
16
9
9
-
7
11
11
-
8
J Nelson
16
16
9
9
-
7
-
11
8
8
W Osborn(4)
16
16
9
9
7
7
9
11
8
8
K Rumble(3)
16
16
9
9
7
7
-
11
8
8
S Warburton(4)(5)
8
8
2
5
-
3
2
5
-
4
Member
Chair
(1) Indicates the number of meetings held during FY24 while the Director was a member of the Board or Committee.
(2) Indicates the number of meetings the Director attended during FY24.
(3) Effective 1 April 2024, X Liu was appointed Chair of the Sustainability Committee (replacing K Rumble in that role).
(4) Effective 1 April 2024, S Warburton was appointed a member of the Nomination and Governance Committee and Risk and Audit Committee, and W Osborn ceased to be a
member of the Risk and Audit Committee.
(5) S Warburton was appointed as a Director effective 28 November 2023.
Diversity representation
We aim to be welcoming and inclusive, and embrace and celebrate differences. We know an inclusive and diverse workforce is safer
and allows for greater collaboration, innovation and performance. Learn more about our commitment to inclusion and diversity in our
Inclusion and Diversity Policy available at www.south32.net.
We are committed to building and maintaining an inclusive and diverse workforce that reflects the communities in which we operate.
Diversity is a key attribute of high performance in a well-functioning Board and Lead Team, and offers benefits including varied thoughts
and perspectives along with unique insights and healthy challenge, which lead to better decision-making as we execute our strategy.
We consider inclusion and diversity in tandem, grounded in mutual respect, where each person’s unique differences are recognised,
valued, and celebrated.
Our vision for diversity considers the broadest definition of difference, including but not limited to gender, ethnicity, nationality, cultural
background, geographic location, language/accent, religious beliefs, socio-economic background, neurodiversity, disability, physical
attributes, appearance, age, education, family responsibilities and sexuality.
Table 1.2 Gender and ethnicity representation on the Board and Executive Management as at 30 June 2024
Board and Executive Management diversity
Number of
Board
members
Percentage of
the Board
Number of
senior
positions on
the Board
(CEO, CFO, SID
and Chair)(1)
Number in
Executive
Management(2)
Percentage of
Executive
Management
Gender identity
Men
5
50.0%
1
4
44.4%
Women
5
50.0%
1
5
55.6%
Not specified / prefer not to say
-
-
-
-
-
Ethnic background
White British or other White (including minority-white groups)
7
70.0%
2
6
66.7%
Mixed/Multiple Ethnic Groups
-
-
-
2
22.2%
Asian/Asian British
1
10.0%
-
1
11.1%
Black/African/Caribbean/Black British
1
10.0%
-
-
-
Other ethnic group
-
-
-
-
-
Not specified / prefer not to say
1
10.0%
-
-
-
(1) The United Kingdom (UK) Financial Conduct Authority (FCA) prescribes that the senior positions on the Board are the Chair, CEO, Chief Financial Officer (CFO) and Senior
Independent Director (SID). For South32, the senior positions on the Board are only the Chair and the CEO. In line with market practice for Australian listed companies, the CFO
does not sit on the Board and South32 does not have a SID as this role is not required under the corporate governance code South32 applies, being the ASX Principles and
Recommendations.
(2) In accordance with the UK Listing Rules, Executive Management includes the Lead Team (our most senior executive body below the Board) and the Company Secretary,
excluding administrative and support staff.
The FCA requires listed companies to publish information on gender and ethnic representation of the Board and Executive Management
including demonstrated performance against the FCA’s diversity and inclusion targets, namely that at least 40 per cent of the Board are
women, at least one of the senior Board positions is held by a woman and at least one member of the Board is from a non-white ethnic
minority background. South32 meets or exceeds all of these targets, as set out in Table 1.2.
The data presented in Table 1.2 was collected via self-reported questionnaires completed by all members of the Board and Executive
Management that included the definitions prescribed by the UK Listing Rules.
Directors' report continued
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SOUTH32 ANNUAL REPORT 2024
Principal activities, state of affairs and review of
operations
Principal activities and significant changes during the
financial year
In FY24, the principal activities of the Group were mining and
metals production, from a portfolio of assets that included
bauxite, alumina, aluminium, copper, zinc, lead, silver, nickel,
manganese and metallurgical coal.
In February 2024, the Group announced its decision to enter into
a binding agreement to sell Illawarra Metallurgical Coal subject
to the completion of certain conditions which were achieved on
29 July 2024.
In March 2024, Tropical Cyclone Megan severely impacted
operations at Australia Manganese, causing significant damage to
critical infrastructure and a temporary suspension of operations.
Phased mining operations resumed in June 2024 with wharf
export capability scheduled to commence in Q3 FY25, subject to
maintaining construction productivity during the wet season.
There were no other significant changes in the Group’s principal
activities during the financial year.
State of affairs
There were no significant changes in the Group’s state of
affairs during the financial year, other than the Group’s binding
agreement to sell Illawarra Metallurgical Coal, which is expected
to complete on 29 August 2024, the temporary suspension of
operations at Australia Manganese due to Tropical Cyclone
Megan, and as set out in the Operating and Financial Review on
the inside front cover to page 66.
Review of operations, likely developments and
expected results
A review of the Group’s FY24 operations is set out in the
Operating and Financial Review on the inside front cover to
page 66.
The Operating and Financial Review also includes likely
developments in the Group’s operations in future financial years
and expected results of those operations.
Dividends
We paid the following dividends during FY24:
Total dividend
Payment date
Final dividend of US 3.2 cents per share
(fully-franked) for the year ended
30 June 2023
US$145
million
12 October
2023
Interim dividend of US 0.4 cents per
share (fully-franked) for the half-year
ended 31 December 2023
US$18
million
4 April
2024
Matters since the end of the financial year
Refer to note 31 to the financial statements (Subsequent events)
on page 167.
No other matters or circumstances have arisen since the end
of the financial year that have significantly affected, or may
significantly affect, the operations, results of operations or state
of affairs of the Group in subsequent accounting periods.
Directors’ relevant interests in shares
Table 1.3 Directors’ Relevant Interests in South32 Limited
Shares
Director
Number of South32 Limited shares in which a relevant
interest is held as at the date of this Directors’ Report
K Wood
367,825
G Kerr (CEO)(1)
8,502,545
F Cooper
128,010
X Liu
66,000
C Mesquita
177,440
N Mtoba
71,386
J Nelson
-
W Osborn
174,104
K Rumble
161,380
S Warburton
42,870
(1) At the date of this Directors’ Report, G Kerr’s total interest includes 2,040,944
South32 Limited ordinary shares and 6,461,601 rights over South32 Limited shares
held under the South32 Equity Incentive Plan.
Rights and options over South32 Limited shares
No rights or options over South32 Limited ordinary shares are
held by any of our Non-Executive Directors.
Our CEO and Managing Director, Graham Kerr, holds rights over
South32 Limited shares, granted under the South32 Equity
Incentive Plan. You can find more details about this in the
Remuneration report on page 82.
The total number of rights over South32 Limited shares on issue
as at 30 June 2024 is set out in note 22 to the financial statements
(Employee share ownership plans) on pages 155 to 158. No rights
have been granted since the end of FY24. As of the date of this
report, the total number of rights over South32 Limited shares on
issue is 47,648,705.
No shares have been issued on vesting of rights during or since
the end of FY24.
South32 Limited has not had any options on issue during or since
the end of FY24.
Company Secretary
Claire Tolcon LLB, BComm, FGIA, GAICD
Claire Tolcon is our Company Secretary and was appointed to
this position on 30 October 2020. Claire joined South32 in 2017
and was a corporate lawyer in our legal team before moving
into Company Secretariat. Prior to South32, Claire held the role
of General Counsel and Company Secretary for a number of
Australian Securities Exchange (ASX) listed entities, before this
she was a partner of a corporate law firm in Perth. She holds
a Bachelor of Laws and Bachelor of Commerce from Murdoch
University, a Graduate Diploma of Applied Finance and Investment
from Kaplan Business School and is a Fellow of the Governance
Institute of Australia.
OPERATING AND FINANCIAL REVIEW
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FINANCIAL REPORT
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77
SOUTH32 ANNUAL REPORT 2024
Indemnities and insurance
The South32 Limited Constitution requires that we indemnify
each Director and Company Secretary (as well as employees
appointed as directors and secretaries of a Group company) on
a full indemnity basis and to the extent permitted by law against
liability incurred by them in their capacity as an officer of any
Group company. The Directors and the Company Secretary
named in this report have the benefit of this indemnity (as do
individuals who formerly held one of these positions).
As permitted by our Constitution, South32 Limited has entered
into Deeds of Indemnity, Access and Insurance with each of the
Company’s Directors, Company Secretary and the CFO under
which we agree to indemnify those persons on a full indemnity
basis and to the extent permitted by law.
We purchase directors and officers liability insurance which
insures against certain liabilities (subject to exclusions) in
respect of current and former Directors and other Officers of
the Group. Due to confidentiality obligations and undertakings
of the insurance, we can’t disclose any further details about the
premium or insurance.
During FY24 and as at the date of this Directors’ report, no
indemnity in favour of a current or former Director or Officer of
the Group has been called on.
Corporate Governance
Under ASX Listing Rule 4.10.3, ASX listed entities are required
to benchmark their corporate governance practices against
the fourth edition of the ASX Corporate Governance Council’s
Corporate Governance Principles and Recommendations (ASX
Recommendations).
South32 is compliant with all relevant ASX Recommendations.
Our Corporate Governance Statement 2024 is available at
www.south32.net. It also contains the information required under
the UK FCA’s Disclosure Guidance and Transparency Rules.
Auditor
Our External Auditor has provided an independence declaration
in accordance with the Corporations Act, which is set out on page
171 and forms part of this report.
Non-audit services
No non-audit services were undertaken by, and no amounts in
respect of such services were paid or are payable to, our External
Auditor during FY24. Refer to Note 21 to the financial statements
(Auditor’s remuneration) on page 155.
Political donations and social investment
Our Code of Business Conduct sets out our approach to political
donations and social investment.
In FY24, we made no political donations to any political party,
politician, political party official, elected official or candidate for
public office in any country. On occasion, our representatives
attend political events that charge an attendance fee where
attendance is approved beforehand in accordance with our
internal approval requirements. We record the details of
attendances and the relevant costs at a corporate level.
In FY24, we contributed US$24 million in social investment that
comprised direct investment, in-kind support and administrative
costs. For more information on our social investment, please refer
to our Sustainable Development Report 2024, available at
www.south32.net.
Proceedings on behalf of South32
No proceedings have been brought or intervened in on our behalf,
nor any application made, under section 237 of the Corporations
Act.
Environmental performance
Performance in relation to environmental regulation
We seek to be compliant with all applicable environmental laws
and regulations relevant to our operations.
We classify environmental incidents based on actual and potential
impact type as defined by our internal material risk management
standard. In FY24, there were no environmental events that
resulted in a major impact to the environment.
Fines and prosecutions
During FY24, we have not identified any instances of significant
non-compliance with applicable laws and regulations, or received
any significant fines, non-monetary sanctions or prosecutions.
We define significant non-compliances with laws and regulations
based on internal materiality thresholds. This may include non-
compliances with laws and regulations that result in significant
health, safety, community, reputational, legal, or financial impacts.
Prosecutions, fines, or non-monetary sanctions are disclosed
where they relate to a reported significant non-compliance.
Rounding of amounts
South32 Limited is an entity to which the Australian Securities
and Investments Commission (ASIC) Corporations (Rounding
in Financial/Directors’ Reports) Instrument 2016/191 (ASIC
Instrument 2016/191) applies. We have rounded amounts in this
report in accordance with ASIC Instrument 2016/191. This means
the amounts in this report and the financial statements have been
rounded to the nearest million US dollars, unless stated otherwise.
Directors' report continued
78
SOUTH32 ANNUAL REPORT 2024
Responsibility statement
The Directors state that to the best of their knowledge:
(a) The consolidated financial statements and notes on pages
110 to 167 were prepared in accordance with applicable
accounting standards, give a true and fair view of the assets,
liabilities, financial position, and profit and loss of the Group
and the undertakings included in the consolidation taken as a
whole; and
(b) The Directors’ report includes a fair review of the development
and performance of the business and the position of the Group
and the undertakings included in the consolidation taken as
a whole, together with a description of the principal risks and
uncertainties the Group faces.
This Directors’ report and the responsibility statement are made
in accordance with a resolution of the Board.
Karen Wood
Chair
Graham Kerr
Chief Executive Officer and Managing Director
Date: 29 August 2024
OPERATING AND FINANCIAL REVIEW
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SOUTH32 ANNUAL REPORT 2024
Lead Team
Graham Kerr
BBUS, FCPA, 53
Chief Executive Officer
and Managing Director
See page 70 for Graham Kerr’s
qualifications and experience.
Sandy Sibenaler
BCom, MFin, CA, GAICD, 42
Chief Financial Officer
Sandy Sibenaler joined
South32 in 2021 and became
our Chief Financial Officer in
April 2023, with responsibility
for Financial Reporting,
Management Reporting,
Treasury, Business Evaluation,
Tax, Investor Relations and
Group Assurance. Prior to
this role, Sandy was our Vice
President Finance.
Sandy has more than 20
years of treasury, finance
and commercial experience
in the resources sector. Prior
to joining South32, she held
a number of senior finance
and commercial roles at
Woodside and BHP including
Vice President of Treasury
and Insurance, General
Manager Logistics and Finance
Reporting Manager.
Sandy holds a Bachelor of
Commerce from the University
of Western Australia, a Master
of Finance from Kaplan
Business School, is a Fellow
of Chartered Accountants
Australia and New Zealand and
a Graduate of the Australian
Institute of Company Directors.
Vanessa Torres
BSc (Chemical), MEng, DEng,
GAICD 54
Chief Operating Officer
Australia
Vanessa Torres became our
Chief Operating Officer in
March 2024 and is responsible
for Worsley Alumina,
Cannington and Australia
Manganese. She joined
South32 in 2018 as our Chief
Technology Officer, and her
role was broadened to Chief
Technical Officer in 2020.
Before joining South32,
Vanessa was Vice President
Operational Infrastructure
for BHP Western Australia
Iron Ore. She has over 30
years of global mining
experience across Australia,
Canada, Brazil, Peru and
New Caledonia, and has held
various senior roles at BHP and
Vale in strategy, operations,
projects and business
development. Her multi-
commodity experience spans
base metals, bulk materials,
battery minerals and precious
metals.
Vanessa holds Doctorate and
Master degrees in Minerals
Engineering from the
University of Sao Paulo, and a
Bachelor of Science from the
Federal University of Minas
Gerais, Brazil. She was a
Visiting Scholar at the
University of British Columbia,
Canada, where her research
focused on the application of
artificial intelligence to the
mining industry. Vanessa is
also a Graduate of the
Australian Institute of
Company Directors.
Noel Pillay
NHDP Mech Eng, 56
Chief Operating Officer
Southern Africa and Colombia
Noel Pillay became our Chief
Operating Officer in October
2021 and is responsible for our
operations in Southern Africa
and Colombia.
Prior to this role, Noel was
Vice President Operations at
Worsley Alumina where he was
responsible for the operation’s
safety, production and cost
performance. Before his time
at Worsley Alumina, Noel was
Vice President Operations at
Hillside Aluminium in South
Africa.
Before joining South32, Noel
worked for BHP from 1994 as
a Maintenance Engineer at
Hillside Aluminium and has
held several leadership roles
in Maintenance, Production,
Business Improvement and
Human Resources in South
Africa and Australia.
Noel is a trained Mechanical
Engineer and holds a National
Higher Diploma from the
University of Johannesburg.
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SOUTH32 ANNUAL REPORT 2024
Simon Collins
BE (Mining), MBA, 51
Chief Development Officer
Simon Collins has been our
Chief Development Officer
since October 2018. He is
responsible for Exploration,
Corporate Development, Brazil
Alumina, Brazil Aluminium and
Sierra Gorda.
Simon has 30 years of
experience in the resources
industry in senior leadership,
commercial and business
development roles. Before
joining South32, he worked
for BHP for more than a
decade, providing leadership
to commercial and business
development teams in
Australia, Africa and the
Americas. He began his career
in mine operations in Australia
and then South Africa.
Simon holds a Master of
Business Administration from
London Business School and
a Bachelor of Engineering
(Mining) from the University of
New South Wales.
Erwin Schaufler
MSc, Mag.rer.soc.oec.,
GAICD, 48
Chief Technical Officer
Erwin Schaufler became our
Chief Technical Officer in
March 2024, with responsibility
for Technology, Innovation,
Business Optimisation, Global
Business Services, Capital
Projects, Planning, Health,
Safety, Environment and
Technical Stewardship.
Prior to this role, Erwin held
various leadership roles at
Worsley Alumina for more
than six years including Vice
President Operations and
General Manager Refinery.
Before his time at Worsley
Alumina, Erwin played a key
role in the establishment
of the Marketing function
when South32 was formed in
2015 and led the design and
implementation of a revised
Marketing strategy.
Before joining South32 Erwin
worked at BHP for eight years,
firstly in the Technology team
where he held various senior
roles before joining Marketing
in distribution and supply
chain in 2011.
Erwin holds a Master of
Science in Logistics and Supply
Chain from Cranfield University
in the United Kingdom, a
Magister rerum socialium
oeconomicarumque (Master
of Business Administration)
from Vienna University of
Economics and Business, is
a Graduate of the Australian
Institute of Company
Directors, and has completed
the Advanced Management
Program at INSEAD.
Kelly O’Rourke
LLB, BCom, MAICD, 45
Chief Legal and External
Affairs Officer
Kelly O’Rourke was appointed
to the Lead Team in November
2020 and is our Chief Legal
and External Affairs Officer,
with responsibility for Legal,
Company Secretariat, Business
Integrity, Communications,
Community, Government and
Sustainability Strategy.
Kelly joined South32 in 2016
as Vice President of Corporate
Affairs and Investor Relations.
She previously worked at BHP
for nine years where she held
senior roles in Legal, Business
Development, Mergers and
Acquisitions and the Office of
the Chief Executive.
Kelly has more than 20
years of experience in the
mining industry across
legal, commercial, business
development, mergers and
acquisitions, external affairs
and community roles across
Australia, Asia, the United
Kingdom, Europe, Africa and
the Americas.
Kelly holds a Bachelor of
Laws (Distinction) from
The University of Western
Australia, a Bachelor of
Commerce from Curtin
University and is a Member
of the Australian Institute of
Company Directors.
Katie Tovich
BCom, CA, GAICD, 54
Chief Human Resources and
Commercial Officer
Katie Tovich joined South32
in 2015 and became our
Chief Human Resources and
Commercial Officer in April
2023, with responsibility for our
Human Resources, Marketing
and Supply functions. Katie
was our Chief Financial Officer
from May 2019 to March 2023
and prior to this role, was Vice
President Corporate Affairs
and Investor Relations, as well
as Head of Treasury.
Katie brings more than 30
years of global experience in
the resources sector. Before
joining South32, she held
senior finance and marketing
roles at BHP in Australia and
Asia, including Vice President
Corporate Finance, Head of
Finance Worsley Alumina
and Vice President Finance
Marketing – Carbon Steel
Materials. Earlier in her mining
career, she held finance and
marketing leadership positions
at WMC Resources Limited in
Australia and North America.
Katie holds a Bachelor of
Commerce from the University
of Tasmania, is a Member
of Chartered Accountants
Australia and New Zealand and
is a Graduate of the Australian
Institute of Company Directors.
OPERATING AND FINANCIAL REVIEW
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INFORMATION
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SOUTH32 ANNUAL REPORT 2024
From the Remuneration Committee Chair
On behalf of the Board, I’m pleased to
present the Remuneration report for FY24.
FY24 performance
Nothing is more important than the health,
safety and wellbeing of our people. In FY24
we worked to further embed our ‘safety
guarantee’ to instil a belief that everyone
can go home safe and well, create a sense
of chronic unease, reduce complacency,
and assist to reduce risk tolerance in
relation to safety and health.
We continued to implement our Safety
Improvement Program, a multi-year
program of work which aims to achieve a
step change in our safety performance,
and we use a range of metrics to assess
this including both leading and lagging
indicators. While we had no fatalities at
our operations in FY24 and our leading
indicators improved year-on-year, we
did not meet the targets for some of our
lagging indicators, indicating that we have
further work to do to eliminate serious
injuries from our business.
Effective risk management is an important
part of our approach to keeping our
people safe and well and we maintained
98 per cent compliance to our scheduled
risk routines, including undertaking risk
reviews, verifying controls and closing risk-
related actions.
We know an inclusive and diverse
workforce is safer and can enhance
performance. Our inclusion and diversity
measurable objectives are targets and
actions aimed at improving inclusion
and diversity in our workplace. While
we did not meet all of our targets,
the representation of women in our
overall workforce improved, as did
the representation of Black People in
our overall workforce in South Africa.
Pleasingly, our inclusion index score, which
is measured through our annual Your Voice
employee survey, improved year-on-year
to 82.3 per cent.
Other important sustainability measures
include our social and environmental
performance. We invested US$23.6 million
in community initiatives in Australia,
South Africa, Mozambique, Colombia
and the United States, and introductory
human rights training was completed by
95 per cent of targeted roles.
We view water as a vital shared resource
and are committed to working towards
sustainably managing water resources
within our operations, meeting or
exceeding the majority of our water-
related targets and milestones in FY24.
Against the backdrop of an uncertain
geopolitical and market environment, we
set consecutive annual production records
at two operations and lifted production
at Cannington by 10 per cent despite
adverse weather impacts. We finished the
year strongly, and delivered Underlying
earnings before interest, tax, depreciation
and amortisation of US$1.8 billion.
We returned US$198 million to
shareholders during FY24 via ordinary
dividends and our on-market share
buy-back. Consistent with our policy to
distribute a minimum of 40 per cent of
Underlying earnings as ordinary dividends,
the Board has resolved to pay a fully-
franked final ordinary dividend of US
3.1 cents per share (US$140 million) in
respect of the second half of FY24.
Reflecting the Group’s strengthened
financial position and our disciplined
approach to capital management, the
Board has also resolved to allocate
US$200 million to our ongoing capital
management program, to be returned to
shareholders via an on-market share buy-
back, commencing from completion of the
sale of Illawarra Metallurgical Coal.
This year, we achieved a major milestone
aligned with our strategy, by presenting
the Taylor zinc-lead-silver development
option at our Hermosa project to the
Board for a final investment decision, with
the Board approving its development.
As the first phase of a regional scale
opportunity at Hermosa, Taylor’s
infrastructure will unlock value for
future growth options including Clark,
our battery-grade manganese deposit,
and potential discoveries in our highly
prospective regional land package.
Taylor is now in the execution phase and
our immediate focus is the construction
of critical path infrastructure including
the main access and ventilation shafts,
which is on track to commence in the first
quarter of FY25.
We are also progressing Clark to potential
development via key workstreams and
have commenced construction of an
exploration decline to provide access to
ore for demonstration scale output.
Our performance during the year is
recognised in our Business Scorecard,
a key component of our short-term
incentive (STI), where an overall outcome
of 91.1 per cent (out of a possible
150 per cent) was achieved. See page 93
for more information.
CREATING VALUE
FOR OUR STAKEHOLDERS
The Remuneration Committee assists the Board to oversee the remuneration and
benefits framework for South32, providing assurance that remuneration
arrangements support the delivery of our purpose and strategy, are aligned to our
values and are in the long-term interests of our shareholders.
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SOUTH32 ANNUAL REPORT 2024
FY24 reward outcomes
Our executive reward framework for FY24
remained unchanged and consisted of
fixed remuneration, STI and long-term
incentive (LTI).
In September 2023, fixed remuneration
increases were applied for our Executive
key management personnel (KMP), which
aligned with increases applied to the
broader workforce and were disclosed
in our 2023 Remuneration report. These
increases support us to remain market
competitive, as well as recognise the
performance and experience of our
Executive KMP.
For FY24, we adjusted the measures
in our Business Scorecard to increase
the weighting of safety and culture,
and environment and social measures,
while maintaining focus on financial
measures and strategic delivery.
Taking into consideration the Business
Scorecard outcome, the Board's decision
not to apply a Business Modifier, and
individual performance and behaviours,
the CEO STI outcome was 73 per cent of
maximum with other Executive KMP STI
outcomes ranging from 53 to 82 per cent
of maximum (see page 96 for more
information).
The LTI is the component of executive
remuneration most closely linked to the
shareholder experience as it rewards
executives for the delivery of returns
that exceed peer benchmarks across a
four-year period. South32 delivered a total
shareholder return (TSR) of 109 per cent
over the four-year performance period
of the FY21 LTI, resulting in a 33 per cent
vesting outcome (see page 97 for more
information).
The Board has approved the performance-
based Transitional LTI awards for Chief
Operating Officers Jason Economidis and
Noel Pillay to partially vest, noting this
award was granted to Jason and Noel
in FY22 when they were permanently
appointed to the Lead Team to avoid a
potential gap in vesting arising from their
transition from the Management Share
Plan to the LTI.
All LTI awards granted to permanent
members of the Lead Team, including
those designated as Executive KMP,
are subject to company performance
hurdles. However, we allow individuals
promoted into the Lead Team to retain
awards granted when they were in prior
management roles. As a result, our
Chief Financial Officer, Sandy Sibenaler,
continues to hold service-based awards
that were granted prior to joining the
Lead Team and becoming a member of
Executive KMP. The Board has approved
some of these awards to vest.
Our current LTI framework also includes
two strategic measures. The first of these
relates to our approach to climate change,
and in FY24 we continued to take action to
meet our target to halve our operational
greenhouse gas emissions (Scope 1 and
2) by 2035 from our FY21 baseline. The
second relates to portfolio management
and we have made substantial changes
to our portfolio in FY24 including entering
into an agreement to sell Illawarra
Metallurgical Coal, which is expected to
complete on 29 August 2024, unlocking
significant value and further streamlining
our portfolio toward base metals. We
also entered into agreements to sell
our 50 per cent interest in the Eagle
Downs metallurgical coal project and the
Metalloys manganese alloy smelter.
Looking forward to FY25
Following completion of our annual
benchmarking process, the Board
awarded a four per cent increase to the
fixed remuneration of our CEO to maintain
fixed remuneration at competitive levels
in alignment with our reward framework.
Increases of between four and six per cent
were awarded to other Executive KMP,
while Board fees for the Chair and other
Non-Executive Directors will increase by
2.5 and four per cent respectively. These
will take effect from 1 September 2024.
Our FY25 STI and LTI metrics will continue
to focus executives on the safe delivery
of our business priorities and the creation
of sustainable, long-term value for our
shareholders as we increase our exposure
to commodities critical for a low-carbon
future.
I look forward to continuing to engage with
our shareholders and sharing in the future
success of South32.
Wayne Osborn
Chair, Remuneration Committee
OPERATING AND FINANCIAL REVIEW
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RESOURCES AND RESERVES
INFORMATION
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SOUTH32 ANNUAL REPORT 2024
Remuneration report
FY24 at a glance
Portfolio transformation:
Taylor development
final investment decision
Agreement to sell Illawarra
Metallurgical Coal
Four-year total shareholder return(2):
109%
Underlying EBITDA(1):
US$1,802M
Total shareholder return (TSR)(3)
Diagram 1.1 - Four-year South32 TSR relative to key indices (A$)
South32
ASX100
FTSE100
S&P500
Total Shareholder Return
-20%
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
Jul-20
Jul-21
Jul-22
Jul-23
Jul-24
(1) This number has not been prepared in accordance with International Financial Reporting Standards (IFRS). Refer to pages 118 to 128 for the basis of the underlying information
and a reconciliation to statutory earnings.
(2) TSR calculation uses June 2020 average return at the start and June 2024 average return at the end of the measured period.
(3) Rolling 22 business day average TSR.
Table 1.1 outlines historic business performance outcomes.
Table 1.1 – Business performance
Performance measures(1)
FY24
FY23
FY22
FY21
FY20
Underlying EBITDA (US$M)(2)(3)
1,802
2,534
4,755
1,856
1,458
Underlying earnings (US$M)(2)(3)(4)
380
916
2,602
489
193
Closing net cash/(debt) (US$M)
(762)
(483)
538
406
298
Movement in adjusted ROIC (percentage)(5)
(5.0)
(6.6)
0.4
0.7
0.0
Closing share price on 30 June (A$)(6)
3.66
3.76
3.94
2.93
2.04
Dividends/special dividends paid (US cents per share)
3.6
21.9
14.2
2.4
5.0
Total recordable injury frequency (TRIF) (per million hours worked)
5.1
5.9
5.3
4.3
4.2
(1) The financial information in this table has not been prepared in accordance with IFRS. Refer to pages 118 to 128 for the basis of the underlying information and a reconciliation
to statutory earnings.
(2) The underlying information reflects the Group’s interest in material equity accounted investments and is presented on a proportional consolidation basis. Refer to pages 118 to
128 for the basis of the underlying information and a reconciliation to statutory earnings.
(3) On 29 February 2024, South32 announced the sale of Illawarra Metallurgical Coal to an entity owned by Golden Energy and Resources Pte Ltd and M Resources Pty Ltd. As
a result, Illawarra Metallurgical Coal was classified as a discontinued operation and held for sale from that date. Illawarra Metallurgical Coal remains part of the Group until
the sale's completion which is expected be on 29 August 2024. In the meantime, the Group's underlying financial results include the financial contribution from Illawarra
Metallurgical Coal.
(4) Refers to Underlying earnings attributable to members.
(5) The movement in adjusted ROIC (FY24: ((5.0 per cent)) is calculated as the difference between adjusted ROIC for the current performance period (FY24: 5.0 per cent) less ROIC
from the previous performance period (FY23: 10.0 per cent) and represents the impacts of sales volumes (FY24: (5.2 per cent)) and other business performance impacts (FY24:
0.2 per cent) on ROIC. ROIC is calculated as Underlying EBIT (FY23: US$1,616 million) less the discount on rehabilitation provisions included in net finance costs, tax effected by
the Group’s Underlying effective tax rate (ETR) including our material equity accounted investments on a proportional consolidation basis (FY23: US$657 million), divided by the
sum of the average balance of fixed assets and inventories (FY23: US$9,640 million) (including our material equity accounted investments on a proportional consolidation basis
(FY23: US$2,599 million) and excluding the average balance of any rehabilitation assets, the impact of impairment and impairment reversal, and unproductive capital (FY23:
US$(2,605 million))). Refer to pages 118 to 128 for the basis of underlying information and a reconciliation to statutory earnings.
(6) The closing share price on 28 June 2019 (the last trading day in FY19) was A$3.18.
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SOUTH32 ANNUAL REPORT 2024
FY24 key management personnel (KMP)
Our KMP consist of our Board (including the Chief Executive Officer), and members of the Lead Team who have authority and
responsibility for planning, directing and controlling the activities of the Group directly or indirectly. Table 1.2 below provides an
overview of our KMP in FY24.
Table 1.2 – KMP in FY24
Non-Executive Directors
FY24 Term
Executive KMP
FY24 Term
K Wood(1)
Full year
G Kerr – Chief Executive Officer (CEO)
Full year
F Cooper AO(1)
Full year
S Sibenaler – Chief Financial Officer (CFO)
Full year
X Liu
Full year
J Economidis(2) – Chief Operating Officer (COO) Australia
Ceased on 13 March 2024
C Mesquita
Full year
V Torres – COO Australia(3)
Appointed on 14 March 2024
N Mtoba
Full year
N Pillay – COO Southern Africa and Colombia
Full year
J Nelson
Full year
W Osborn(4)
Full year
K Rumble(1)
Full year
S Warburton
Appointed on 28 Nov 2023
(1) Remuneration Committee member.
(2) Upon ceasing as a member of KMP, J Economidis transitioned into the role of Director Illawarra Metallurgical Coal.
(3) Prior to commencing as COO Australia, and a member of KMP, V Torres was Chief Technical Officer.
(4) Remuneration Committee Chair.
FY24 Executive KMP remuneration overview
CEO fixed remuneration
increase:
4.5%
Range of Executive KMP STI outcomes as a
percentage of maximum STI opportunity:
53% to 82%
FY21 LTI vesting
outcome:
33%
Fixed
remuneration
The Board awarded a 4.5 per cent increase to the fixed remuneration of our CEO, Graham Kerr, from 1 September 2023 in
recognition of his extensive experience and skill set. This adjustment aligned with the salary increase applied for the
broader Australian workforce.
Fixed remuneration for other Executive KMP was also increased by between 4.5 and six per cent. Increases were aligned
with those applied to the workforce in the relevant geographies (Australia and South Africa).
FY24 STI
In FY24, our performance against our Business Scorecard measures resulted in an outcome of 91.1 per cent (out of a
possible 150 per cent). The Board determined that no Business Modifier would be applied to any Executive KMP in
FY24 (see page 95).
Overall STI outcomes for Executive KMP ranged from 53 per cent to 82 per cent of maximum with Graham receiving
73 per cent of maximum.
LTI vesting
in 2024
South32 delivered TSR of 109 per cent over the four-year performance period, which exceeded the world index TSR
by 30.5%, but was two per cent below the threshold level of TSR performance against the customised global mining
index. Accordingly, our Board approved one-third of the FY21 LTI award to vest and the remainder to lapse.
South32 does not offer retention rights to permanent members of the Lead Team, including those who are Executive
KMP. However, employees who are promoted into Executive KMP roles retain unvested awards granted under the
Management Share Plan (MSP) while in their prior role. These awards are a combination of performance rights and
retention rights. The FY21 MSP performance rights award granted to Sandy, Jason and Noel prior to their permanent
appointment to the Lead Team has the same performance conditions as the FY21 LTI. Accordingly, our Board
approved one-third of the award to vest and the remainder to lapse.
As the three-year service-based condition of the FY22 MSP retention rights award granted to Sandy prior to her
appointment to the Lead Team was met, our Board approved this award to vest in full.
Our Board approved the grant of an FY22 Transitional LTI award to Jason and Noel on their permanent appointments to
the Lead Team. This performance tested award is designed to address the potential shortfall in vesting that arises from
the transition from the MSP, which includes three-year retention rights, to the four-year LTI Plan. South32 relative TSR
performance over the three-year performance period resulted in a partial vesting outcome of 70.4 per cent (see page 97
for more detail).
FY24 realised pay
Realised pay for the CEO (see page 86) was A$7.935M (FY23:$3.377M). The increase compared to FY23 reflects an
above target STI outcome and the LTI partially vesting for the first time since FY19.
The Board considered all components of remuneration in reviewing the FY24 reward outcomes to align with our
guiding principles (see page 87) and believes the FY24 realised pay for the CEO reflects performance (both in the
year and also across the four-year performance period for the LTI).
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
85
SOUTH32 ANNUAL REPORT 2024
Remuneration report continued
Realised pay for Executive KMP in FY24
Realised pay is the value of reward received by Executive KMP in relation to the financial year, rather than potential pay that may be
earned or disclosed statutory pay. We publish this information to enable shareholders to better understand the pay delivered to our
Executive KMP through our reward framework (including the application of Board discretion) and how this is aligned to the performance
of South32 over time.
The intention of our reward framework (see our guiding principles on page 87) is to deliver realised pay outcomes that reflect Company
performance, the contribution of the Executive KMP to that performance and the shareholder experience. The Board and Remuneration
Committee consider that our realised pay outcomes reflect this objective.
FY24 realised pay for Executive KMP, outlined in Table 1.3, includes:
–
Fixed remuneration earned in FY24 (including superannuation);
–
Other cash and non-monetary benefits earned in FY24;
–
Total FY24 STI earned (including cash and deferred rights) based on performance during this financial year (see page 96); and
–
LTI awards that vested based on performance and/or service conditions to 30 June 2024 (see page 99).
Realised pay is likely to vary substantially, either up or down, from statutory remuneration and from target remuneration (see page 90)
because a significant portion of our Executive KMP pay is ‘at risk’ and based on performance measures. Furthermore, as the LTI
is measured over a four-year performance period, vesting outcomes will not always correlate to the TSR outcomes for a single year. In
FY24, realised pay for the CEO exceeded target remuneration (see page 90) for the first time since FY19. The above target outcome was
primarily the result of strong total shareholder returns over the four-year LTI award performance period which resulted in one-third of
the FY21 LTI award vesting.
Table 1.3 – Realised pay in respect of FY24 (A$’000)
Executive KMP
Fixed
remuneration
Other(1)
STI cash
STI deferred
LTI(2)(3)
Total realised
pay
G Kerr
FY24
1,978
56
1,306
1,306
3,289
7,935
FY23
1,891
48
719
719
-
3,377
S Sibenaler(4)(5)
FY24
862
8
640
640
230
2,380
FY23
576
37
249
84
89
1,035
J Economidis(6)
FY24
851
15
903
-
867
2,636
FY23
812
12
352
352
372
1,900
V Torres(7)
FY24
862
29
474
474
841
2,680
FY23
-
-
-
-
-
-
N Pillay
FY24
701
27
445
445
503
2,121
FY23
678
26
248
248
324
1,524
(1) Other includes such items as car parking, insurances and tax advice provided to Executive KMP.
(2) Value of the LTI is based on a closing share price on 28 June 2024 of A$3.66 (FY24) and 30 June 2023 of A$3.76 (FY23).
(3) LTI includes MSP awards granted to S Sibenaler, J Economidis and N Pillay prior to their permanent appointments to the Lead Team and Transitional LTI awards granted to J
Economidis and N Pillay following their permanent appointments to the Lead Team (see page 99).
(4) S Sibenaler became CFO and a member of Executive KMP on 1 April 2023. Prior to this, she was Vice President Finance. FY23 realised pay reflects nine months in her prior role
and three months as CFO.
(5) Other for S Sibenaler in FY23 includes the pro-rated pay out of a retention agreement of A$35,500 relating to her service as Vice President Finance that was paid prior to
becoming a member of Executive KMP.
(6) J Economidis ceased to be COO Australia and a member of the Executive KMP on 13 March 2024 and transitioned into the role of Director Illawarra Metallurgical Coal. FY24
realised pay includes the period as Director of Illawarra Metallurgical Coal. Should J Economidis cease employment upon completion of the sale of Illawarra Metallurgical Coal,
his employment contract in respect of his role as Director of Illawarra Metallurgical Coal provides for him to receive accelerated vesting of STI rights and for a pro rata portion
of his LTI rights to remain on foot and eligible for vesting in the ordinary course. No amounts have been included in the table above in respect of the potential accelerated
vesting of STI rights or apportioned LTI rights.
(7) V Torres became COO Australia and a member of Executive KMP on 14 March 2024. V Torres’ FY24 realised pay includes the period as Chief Technical Officer prior to becoming
a member of Executive KMP.
CEO Pay Ratio
As part of our commitment to pay transparency, we have calculated the ratio of our CEO’s total realised pay to the median total realised
pay for all our employees globally. This results in an FY24 CEO pay ratio of 57:1 (FY23 26:1). The pay ratio is expected to vary from year
to year, given the significant portion of our CEO’s pay which is ‘at risk’. The increase in the pay ratio between FY23 and FY24 reflects a
higher STI outcome and the LTI partially vesting for the CEO in FY24.
CEO total realised pay has been calculated in accordance with the method used in Table 1.3. For all other employees, realised pay is
for the 12-month period to 30 June 2024 and includes all allowances, annual incentive payments received and the value of shares that
vested in the period, but excludes other non-monetary benefits. Pension contributions have been calculated based on the cost to the
Group of the contributions made in the 12-month period. Employees on an international assignment, employees who have relocated
internationally during the financial year and employees who joined or left the Group after 1 July 2023 have been excluded from the
calculation.
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SOUTH32 ANNUAL REPORT 2024
Our reward framework
The pages of the Remuneration report that follow (together with Table 1.1 – Business performance on page 84 and Table 1.2 – KMP
in FY24 on page 85) have been prepared in accordance with section 300A of the Corporations Act 2001 (Cth) (the Act) and audited
as required by section 308(3C) of the Act. These sections relate to those persons who were KMP of South32 during FY24, being the
individuals listed in Table 1.2 on page 85.
Remuneration governance
The roles and responsibilities of our Board, Remuneration Committee, management and external advisors in relation to remuneration for
Executive KMP and employees of South32 are outlined below.
Board
Our Board maintains overall responsibility for overseeing the remuneration policy and the principles and
processes that underpin it. It approves the remuneration arrangements for our CEO and Non-Executive
Directors. Changes to the Director fee pool and equity grants to the CEO are approved by shareholders.
Remuneration Committee
The Remuneration Committee approves reward arrangements for our executives including those
appointed to Executive KMP roles (other than the CEO).
By taking advice from other Board Committees (such as the Sustainability and Risk and Audit
Committees), the Remuneration Committee helps the Board oversee our remuneration policy, its specific
application to the CEO, Lead Team and Non-Executive Directors and, in general, our employees.
The Remuneration Committee provides oversight to gain assurance that remuneration arrangements are
equitable and aligned to the long-term interests of shareholders, operate within risk appetite and
support our purpose, strategy and values.
CEO and management
Our CEO makes recommendations to the Remuneration Committee regarding our executives, and how
the remuneration policy and framework applies to our employees.
Management provides information and recommendations to the Remuneration Committee to help it
consider and implement approved arrangements.
External advisors
Independent external advisors may be engaged either directly by the Remuneration Committee, or via
management. These advisors provide information on remuneration-related issues, including
benchmarking information and market data.
The Remuneration Committee did not receive recommendations from external advisors, including
remuneration consultants, in relation to KMP in FY24.
We seek information and analysis from a range of data sources. This allows us to make decisions that are informed, objective, weighted
and aligned to the requirements of the Company, and consistent with our guiding principles.
Reward practices and outcomes
Our Guiding Principles
Purpose
and Strategy
How we work
Shareholders
Performance
Market
We align short-term and long-term
performance measures to our
purpose and strategy. This includes
our efforts to:
–
Optimise our business by
working safely, minimising our
impact, consistently delivering
stable and predictable
performance and continually
improving our competitiveness;
–
Unlock the full value of our
business through our people,
innovation, projects and
technology; and
–
Identify and pursue
opportunities to sustainably
reshape our business for the
future, and create enduring
social, environmental and
economic value.
Our culture is grounded
in our values and is at
the core of how we
deliver our purpose and
strategy. You’ll see it
reflected in our values,
the decisions we take,
the courage we show
and the legacy we leave.
Supporting this is a
strong belief that
culture can be actively
shaped through a focus
on what we prioritise,
what we measure, what
we reward and who we
appoint.
Our reward framework
focuses executives and
management on
delivering superior TSR.
We do this through
share ownership and LTI
performance measures
aligned to the
shareholder experience.
We value feedback and
regularly engage with
investors and proxy
advisors.
Our reward outcomes
align to performance by
providing a large part of
executive pay ‘at risk’
based on financial and
non-financial measures.
STI outcomes reflect
performance over the
financial year, while LTI
outcomes reflect
performance over a
four-year period.
Our reward is designed
to be competitive and
to attract and retain
talented executives.
We benchmark our
reward levels by
considering similar
sized companies on the
Australian Securities
Exchange (ASX), as well
as our global mining
peer group.
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Remuneration report continued
Components of our reward for FY24
Our intention
Attract and retain
talented executives
to lead South32
The majority of pay at risk reflects our commitment to pay for performance
and deliver value to shareholders
Reward business and individual
performance in the financial year
Drive long-term performance
and ownership behaviours
Component
Fixed Remuneration Short-Term Incentive
Long-Term Incentive
The why
Fixed remuneration is
set with reference to
the median of our peer
groups, reflecting each
member of Executive
KMP’s responsibilities,
location, skills and
experience.
STI focuses efforts on our key priorities both
in the financial year and into the future. It
aims to motivate Executive KMP to achieve
challenging performance objectives. Our STI
reflects performance during the year and
measures outcomes within management’s
control.
LTI is directly linked to:
–
Relative TSR so that Executive KMP pay outcomes are
aligned with the shareholder experience over the longer
term; and
–
Two strategic measures so that Executive KMP pay
outcomes are aligned to the business priorities that we
believe will underpin the long-term success of South32.
The how
Base salary and
superannuation.
–
Fifty per cent paid in cash annually.
–
Fifty per cent delivered in rights to
receive South32 shares(1), deferred
for two years(2). For rights that vest,
Executive KMP are entitled to receive
a cash payment equivalent to the
dividends that would have been paid had
the Executive KMP held South32 shares
between the grant date and the date
the rights convert to South32 shares (a
dividend equivalent payment)(3).
Rights to receive South32 shares that are subject to meeting
performance conditions over the four-year performance period.
Our
approach
in FY24
We benchmark our
fixed remuneration
and target
remuneration against
two key peer groups
that reflect our profile
as a Company and the
markets in which we
operate and compete
for talent. Our peer
groups are:
–
An ASX peer
group based on
companies with
half to double
our market
capitalisation
(excluding foreign
domiciled entities
and real estate
investment trusts);
and
–
An international
mining peer
group of 16
companies with
a similar market
capitalisation,
commodity mix
and/or global
presence to
South32 (see Our
global mining peer
group below).
Quantum (percentage of fixed
remuneration):
Target value
Maximum
opportunity
Executive KMP
120%
180%
Business Scorecard: The Business
Scorecard reflects a balance of financial and
non-financial measures that are a priority in
the financial year. The financial measures
remove the impact of commodity prices and
foreign exchange so that we reward for
items management can control.
Performance measures:
■ Safety and culture (25%)
■ Environment and social (10%)
■ Financial (57.5%)
■ Strategic delivery (7.5%)
Business Modifier: As Scorecard measures
do not always reflect all aspects of
performance across a year, and to mitigate
any unintended reward outcomes, the Board
has the discretion to apply a Business
Modifier to the Business Scorecard
outcome. The Business Modifier may be
applied to Executive KMP on an individual or
group basis, having regard to the
perspectives of stakeholders including
employees, shareholders and communities.
Individual performance and behaviours:
The Board also considers an Executive
KMP’s individual performance, taking into
account their areas of responsibility and the
alignment of their behaviours with our
values (i.e. how outcomes have been
achieved).
Quantum (percentage of fixed remuneration):
The quantum for FY24 was determined by multiplying fixed
remuneration by the following face value percentages:
Target value
Face value
CEO
120%
200%
Other Executive KMP
80%
133%
Performance measures:
■ TSR relative to EMIX Global Mining Index constituents
(53.3%)
■ TSR relative to MSCI World Index (26.7%)
■ Climate change strategic measure (10%)
■ Portfolio management strategic measure (10%)
TSR performance: Eighty per cent of the LTI is assessed based
on our TSR performance compared to two comparator groups,
these being:
–
Two-thirds, or 53.3 per cent of the total award, is tested relative
to the TSR performance of the companies that comprise the
EMIX Global Mining Index at the start of the performance
period (i.e. at 1 July 2023 for the FY24 LTI award)(4); and
–
One-third, or 26.7 per cent of the total award, is tested
relative to the TSR of the MSCI World Index.
Strategic measures: The strategic measures, which each have
a weighting of 10 per cent of the LTI, are:
–
Our response to climate change; and
–
The transition of our portfolio towards commodities critical
to a low-carbon future.
More detail on the measures and our progress against them is
outlined on page 100.
Vesting scale:
Vesting outcome(5)
0%
40%
100%
EMIX Global Mining
Index constituents*
TSR <= 50th
percentile
TSR > 50th
percentile
TSR => 75th
percentile
MSCI World Index*
TSR < index
TSR
TSR = index
TSR
TSR => index
TSR + 23.9%
Strategic
Measures
Vesting outcomes will be determined by the
Board at the end of the performance period.
*Vesting between 40 per cent and 100 per cent is on a straight-line basis.
The Board has the discretion to adjust the TSR vesting outcome
(both upwards and downwards) so that the overall vesting
outcome is appropriate and aligned with our guiding principles
(see page 87). There is no retesting if the performance condition
is not met at the end of the performance period.
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Our global
mining peer
group
The global mining peer group, used as one of our reference points for benchmarking FY24 fixed remuneration and total
reward levels, included the following companies:
Agnico Eagle Mines, Alcoa, Anglo American, AngloGold Ashanti, Antofagasta, Barrick Gold, First Quantum Minerals, Fortescue,
Freeport-McMoRan, Gold Fields, Kinross Gold, Lundin Mining, Newcrest Mining, Newmont, Northern Star Resources and Teck
Resources.
Minimum
shareholding
requirement
A minimum shareholding requirement (MSR), equal to 100 per cent of fixed remuneration for Executive KMP, drives a long-
term focus and alignment with our shareholders. The MSR applies to all Lead Team members, including those who are
Executive KMP, and must be obtained within five years of appointment to the Lead Team. The valuation approach applied to
determine the MSR uses the South32 Limited share price at the time the assessment is made. See page 107 for our Executive
KMP shareholdings.
Our service
contracts
Contracts are entered into by Executive KMP in their personal capacity. At present the key terms for all Executive KMP include:
–
No fixed term;
–
Six months’ notice by either party or payment by the company in lieu of notice;
–
Termination without notice for serious misconduct;
–
One month’s notice by the Executive KMP(6) where a fundamental change occurs that materially diminishes their status,
duties, authority or terms and conditions (receiving payment in lieu of six months’ notice);
–
A maximum payment in lieu of notice of six months’ fixed remuneration; and
–
Post-employment restraints for a period of up to six months after their employment with the Group ends.
Shareholder approval was granted at the 2021 Annual General Meeting (AGM) for Executive KMP termination benefits and will
be sought again at the 2024 AGM.
(1) References in this Remuneration report to ‘South32 shares’ are references to fully paid ordinary shares in South32 Limited.
(2) Deferred rights are subject to a service condition only as performance conditions are applied during the STI performance year.
(3) We introduced dividend equivalent payments on FY24 Deferred STI awards to increase the alignment between executives and shareholder interests during the STI deferral
period. The dividend equivalent payment will be paid in cash at the time the Deferred STI awards convert to shares. No dividend equivalent payment is payable in respect of
any rights that lapse.
(4) The constituent group is fixed for the four-year performance period with Board discretion to adjust the constituent group to take into account events such as takeovers,
mergers or demergers that may occur during the performance period.
(5) The Board and Remuneration Committee use information from an external provider to inform them of the TSR performance of the relevant index and companies to assess the
vesting outcome for the LTI.
(6) Some legacy executive employment contracts, including for the CEO, allow resignation without notice if a fundamental change occurs.
Linking reward and environmental, social and governance (ESG) topics
The ‘at risk’ components of our Executive KMP reward include ESG measures that align remuneration with our performance on ESG
topics, as explained below.
STI
The Business Scorecard reflects a balance of financial and non-financial measures that reflect the key focus areas in the financial year.
From an ESG perspective, 35 per cent of the FY24 Business Scorecard was assessed against ‘sustainability’ metrics, which include
safety and culture metrics (safety and health, risk management and people) and environment and social performance metrics (social
performance and water performance).
The overall Business Scorecard outcome is also subject to the Business Modifier. The Business Modifier allows the Board to
appropriately adjust the Business Scorecard outcome. We have a track record of applying the Business Modifier to reflect non-financial
performance and the overall shareholder experience (see page 95).
Further detail on our STI is included in the short-term incentive for FY24 section starting on page 92.
LTI
Twenty per cent of the FY24 LTI directly links executive reward to climate change and the transition of our portfolio towards
commodities critical to a low-carbon future. More detail on the strategic measures and our progress against them is outlined on page
100.
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Remuneration report continued
Target remuneration for FY24
South32 sets target remuneration for each member of Executive KMP at a competitive level to attract and retain appropriate talent in
the markets in which we operate. Our target remuneration is informed by the South32 reward framework (see page 87) that outlines the
key factors the Board takes into consideration in setting Executive KMP reward and the strategic drivers of pay at South32.
It is important that reward levels fairly reflect the responsibilities and contribution of the Executive KMP and that outcomes are aligned
to performance and the delivery of TSR. As a result, a meaningful portion of our Executive KMP remuneration is at risk, contingent on
individual and Company performance measures.
Target remuneration, as outlined below, assumes on-target performance for the STI and considers the difficulty of achieving LTI vesting
given the performance hurdles. The figures reflected in the diagram below are therefore based on the STI paid at target (120 per cent of
fixed remuneration) and the LTI vesting at 120 per cent of fixed remuneration which reflects the difficulty of achieving the performance
hurdles.
Based on these principles, target remuneration for Executive KMP as at 30 June 2024 is illustrated in Diagram 1.2.
Diagram 1.2 – FY24 target remuneration (A$’000)(1)
2,389
694
685
694
566
1,195
520
514
520
424
1,195
520
514
520
424
1,991
867
856
867
707
0
2,000
4,000
6,000
G Kerr
6,770
(71% at risk)
S Sibenaler
2,601
(67% at risk)
J Economidis
2,569
(67% at risk)
V Torres
N Pillay(2)
2,601
(67% at risk)
2,121
(67% at risk)
Fixed remuneration
STI (cash)
STI (deferred rights)
LTI
(1) Target remuneration reflects a full year in the Executive KMP role.
(2) Target remuneration for N Pillay has been converted to A$ using an exchange rate of AUD: ZAR 12.27.
FY24 target remuneration relative to peer groups (unaudited)
We have operations and offices on six continents and compete for talent globally.
The diagrams below illustrate the measured approach we have adopted in positioning CEO fixed remuneration and target remuneration
for FY24 compared to relevant benchmarks, being the ASX peer group and the global mining peer group (see page 88). CEO fixed
remuneration is comparable to the median for both peer groups. CEO target remuneration is aligned to the upper quartile for the ASX
peer group, but below the global mining peer group median.
Diagram 1.3 – CEO fixed remuneration vs. peers
Diagram 1.4 – CEO target remuneration vs. peers
0
1,000
2,000
3,000
ASX peers
Global mining peers
A$’000
South32
1,991
0
3,000
6,000
9,000
12,000
ASX peers
Global mining peers
A$’000
South32
6,770
South32
Median
Upper and lower quartiles
South32
Median
Upper and lower quartiles
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Range of possible remuneration outcomes
As actual business and individual achievement over the performance period determines reward outcomes, the pay received by
Executive KMP each year will vary.
Diagram 1.5 illustrates the range of possible remuneration outcomes for the CEO, based on three performance outcome scenarios:
minimum, target and maximum. While the figures in Diagram 1.5 and explanation are for the CEO, similar analysis can be undertaken for
other Executive KMP to assess the minimum and maximum range of pay outcomes.
Diagram 1.5 – Range of CEO remuneration outcomes (A$’000)
Fixed remuneration
STI (cash)
STI (deferred rights)
LTI
0
2,000
4,000
6,000
8,000
10,000
6,770
(71% at risk)
Minimum
Target(1)
Maximum
9,557
(79% at risk)
2,389
3,982
1,195
1,792
1,195
1,792
1,991
1,991
1,991
(1) The target LTI value reflects the difficulty of achieving the performance hurdles.
In the Minimum scenario, no STI or LTI is paid. The CEO would receive fixed remuneration, inclusive of superannuation, of A$1,991,000.
Target outcomes would be achieved where the business meets the STI performance measures, resulting in the STI being paid at
target levels (120 per cent of fixed remuneration, with half deferred into rights) and the LTI vesting at target (120 per cent of fixed
remuneration).
To deliver a Maximum outcome for the STI (i.e. 180 per cent of fixed remuneration, with half deferred into rights), South32 would
need to achieve the stretch targets for every metric in the Business Scorecard. For the LTI to vest in full (i.e. at 200 per cent of fixed
remuneration), over the four-year performance period:
–
The South32 TSR would need to meet or exceed the TSR of the company at the 75th percentile in the EMIX Global Mining Index
constituent group;
–
The South32 TSR would need to exceed the MSCI World Index by 23.9 per cent; and
–
The Board would need to assess performance against both strategic measures as outstanding.
Deferred STI and LTI in the Target and Maximum scenarios do not incorporate future share price movements or any dividend equivalent
payments that may be made on Deferred STI awards.
Fixed remuneration for FY24
On 1 September 2023, the CEO received an increase to fixed remuneration of 4.5 per cent from A$1,906,000 to A$1,991,000 in
recognition of his extensive experience and skill set. This was his third increase in fixed remuneration since commencing in role in 2015.
Sandy, Jason and Noel received fixed remuneration increases of between 4.5 and six per cent which aligned with the increases applied
to the broader workforce in the relevant geographies (4.5 per cent in Australia and six per cent in South Africa).
Table 1.4 – Fixed remuneration for Executive KMP in FY24, effective 1 September 2023(1)
Executive KMP
FY23 fixed remuneration
FY24 fixed remuneration
Increase
%
G Kerr
A$1,906,000
A$1,991,000
4.5
S Sibenaler(2)
A$830,000
A$867,000
4.5
J Economidis(3)
A$819,000
A$856,000
4.5
V Torres(4)
-
A$867,000
-
N Pillay(5)
ZAR 8,190,000
ZAR 8,680,000
6.0
(1) Fixed remuneration reflects a full year in the Executive KMP role.
(2) FY23 fixed remuneration for S Sibenaler was effective from commencing as CFO and a member of Executive KMP on 1 April 2023.
(3) FY24 fixed remuneration for J Economidis was effective until he ceased to be COO Australia and a member of Executive KMP on 13 March 2024.
(4) FY24 fixed remuneration for V Torres was effective from commencing as COO Australia and a member of Executive KMP on 14 March 2024.
(5) Fixed remuneration for N Pillay is denominated in ZAR. Using an exchange rate of AUD:ZAR 12.27, FY24 fixed remuneration is A$707,416.
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Overall
STI Outcome
Target: 120%
Maximum: 180%
(of fixed remuneration)
3
Individual
Outcome
INDIVIDUAL PERFORMANCE
AND BEHAVIOURS
0%-150%
2
South32
Business Outcome
BUSINESS
SCORECARD
0%-150%
Target 100%
BUSINESS
MODIFIER
Discretion +/-
x
1A
1B
x
=
Remuneration report continued
Short-term incentive for FY24
Determining STI awards
Diagram 1.6 – Determination of STI awards
As outlined on page 88, the STI is intended to focus and reward Executive KMP for delivering on our key business priorities both in the
financial year and into the future. The overall STI outcome is determined by assessing three key inputs: the Business Scorecard, the
Business Modifier and individual performance and behaviours.
The Business Scorecard includes a balanced range of measures that consider both our financial and non-financial performance, and
help our Executive KMP focus on outcomes that are within their control and a priority for the year.
The Business Modifier considers overall business outcomes or other factors that are not specifically contemplated in the Business
Scorecard, such as:
–
Significant safety or environmental events;
–
The shareholder experience;
–
Significant reputational issues; and
–
An assessment of risk, culture or any other item that the Board considers appropriate.
The Business Modifier, based on Board discretion, adjusts the overall Business Scorecard outcome so that STI outcomes reflect
business performance, including both what has been delivered and how it has been achieved. The outcome may be positive or negative
and may be applied to Executive KMP on an individual or a group basis depending on the factors under consideration.
Together, the Business Scorecard and the Business Modifier determine the South32 Business Outcome.
Individual performance is measured based on delivery against the relevant business plans. Executives are also assessed on
demonstrated behaviour aligned to our values (i.e. both on what is achieved and how it is achieved).
What this means in practice
Our Business Scorecard includes measures that are within
our executives' control, and, as such, will not always mirror
underlying South32 financial outcomes. Diagram 1.7 outlines
the CEO's STI outcomes approved by the Board over the past
five years.
In FY24, we maintained a strong focus on cost management
and achieved a number of production records across our
business. However, Underlying earnings was impacted by
weaker commodity prices and lower production volumes,
predominantly at Illawarra Metallurgical Coal, where we
completed planned longwall moves, and at Australia
Manganese due to Tropical Cyclone Megan.
Our Business Scorecard outcome of 91.1 per cent reflected
a target outcome for our sustainability focused metrics,
but a below target outcome for our financial metrics, driven
primarily by our adjusted ROIC performance (refer to pages
93 and 94). The CEO’s STI outcome incorporated the Business
Scorecard outcome, the Board’s decision not to apply a
Business Modifier (refer page 95), and a 120 per cent individual
outcome in recognition of Graham’s outstanding leadership
during the year (refer page 96).
Diagram 1.7 – CEO STI outcome vs. Underlying earnings(1)
42%
73%
South32 Underlying earnings US$M
STI % of maximum
-
FY20
FY21
FY22
FY23
FY24
US$M
STI % of maximum
500
1,000
1,500
2,000
2,500
3,000
0%
25%
50%
75%
100%
42%
54%
74%
(1) Refers to Underlying earnings attributable to members.
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1A
FY24 Business Scorecard
Table 1.5 – FY24 Business Scorecard outcomes
Scorecard measure
Performance
Zero
Target Maximum
Target
Outcome
Safety and culture
25.0%
23.3%
Safety and health(1)
At least 90 per cent of LEAD Safely Every Day learning
activities completed by leaders.
A significant hazard to significant event near miss
reporting ratio of more than 15.
A 20 per cent reduction in the number of people
exposed to potential material health exposures above
200 per cent of the occupational exposure limit (OEL)
compared to the FY23 baseline.
A 60 per cent reduction in the number of injuries and
acute illnesses associated with a potential fatality
compared to the FY23 baseline.
A year-on-year reduction in lost time injury frequency
(LTIF).
A reduction in TRIF from the FY22 baseline.
96 per cent of LEAD Safely Every Day learning activities were
completed by leaders.
The significant hazard to significant event near miss ratio at the
end of FY24 was 21.
Potential material health exposures above 200 per cent of OEL
decreased by 10.5 per cent compared to the FY23 baseline.
The number of injuries and acute illnesses associated with a
potential fatality increased by 12 per cent compared to the FY23
baseline.
LTIF was 1.9, an increase from the FY23 LTIF of 1.6.
TRIF was 5.1, which is a five per cent reduction compared to the
FY22 baseline.
15.0%
11.6%
Risk management
Maintain more than 95 per cent compliance to
scheduled risk routines.
Risks requiring significant improvement are less than
10 per cent of the total material risk profile.
More than 95 per cent of current critical controls are
categorised against the hierarchy of controls.
Delivered 98 per cent compliance to scheduled risk routines.
Risks requiring significant improvement averaged seven per cent of
the total material risk profile.
99 per cent of current critical controls were categorised against the
hierarchy of controls.
In addition, four of the five stretch targets were met.
5.0%
6.5%
People(1)
Achieve our annual inclusion and diversity targets.
Deliver all activities on the annual inclusion and
diversity action plan.
Maintain or improve average inclusion index score
compared to FY23.
One out of four of the targets for the representation of women in
our workforce(2) and one out of two of the targets for the
representation of Black People in our South African workforce were
achieved.
Our pay equity review was completed, investing US$292,000 to
improve pay equity and meeting our target.
All activities on the annual inclusion and diversity action plan were
completed.
Our inclusion index score, as measured in the Your Voice employee
survey, improved by 0.8 per cent compared to FY23(3), which
exceeded target.
5.0%
5.2%
Environment and social
10.0%
11.8%
Social performance(1)
Implement social investment plans on time and on
budget.
Apply our social investment impact measurement
framework to our Hotazel Manganese Mines and
Hillside Aluminium economic development plans.
Introductory human rights training completed by all
targeted roles and made available to the wider
workforce.
Social investment plans were implemented on time and on budget
and we invested US$23.6M in community initiatives.
The social investment impact measurement framework was applied
to the Hotazel Manganese Mines and Hillside Aluminium economic
development plans.
Introductory human rights training was completed by 95 per cent
of targeted roles and made available to the wider workforce.
5.0%
4.9%
Water performance(1)
Deliver contextual water target milestones to agreed
plan and achieve the FY24 target water use efficiency
outcome as defined within our Sustainability Linked
Loan (SLL) framework.
Six out of seven contextual water target milestones were met and
we exceeded the FY24 stretch outcome for water use efficiency as
defined within the SLL.
5.0%
6.9%
(1) Further information on this Business Scorecard measure can be found in the Our strategy in action section on pages 20 to 27 and/or our Sustainable Development Report 2024
at www.south32.net.
(2) The representation of women on our Board is excluded from the Business Scorecard People metric given it is not within management’s control.
(3) Given the agreement to sell Illawarra Metallurgical Coal and focus on recovery efforts following Tropical Cyclone Megan at Australia Manganese, employees at these operations
did not participate in this year's Your Voice employee survey. Survey results presented in this report are calculated on re-baselined data to support year-on-year comparison
against the same operations in scope.
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Remuneration report continued
Scorecard measure
Performance
Zero
Target Maximum
Target
Outcome
Financial
57.5%
48.9%
Production(4)
Achieve 97 to 102 per cent of target revenue
equivalent production.
Revenue equivalent production was 96.5 per cent of target.
15.0%
14.3%
Controllable cost(4)
Deliver controllable costs that are within 2.5 per cent of
target (adjusted for foreign exchange, price-linked
costs, and other adjustments).
Controllable costs were within 1.7 per cent of target, reflecting a
saving of US$44M.
10.0%
10.0%
Capital expenditure(4)
Capital expenditure (excluding growth) is within five
per cent of target (adjusted for foreign exchange).
Growth capital expenditure is within 10 per cent of
target.
Capital expenditure (excluding growth) was 94 per cent of target.
Growth capital expenditure was 93 per cent of target.
7.5%
7.4%
Adjusted ROIC(5)
Achieve target adjusted ROIC, consistent with our cost,
production and capital expenditure targets.
Adjusted ROIC was 69 per cent of target.
25.0%
17.2%
Strategic delivery
7.5%
7.1%
Hermosa project(6)
Taylor. Complete shaft pre-sink to plan, present
project for final investment decision (FID) and
commence and progress shaft development to plan.
Clark. Progress engineering and federal funding
submission for the proposed plant on schedule.
Progress decline development to plan.
Taylor. The shaft pre-sink was completed on schedule. The project
was presented for FID in February 2024 (and approved).
Construction of the main access and ventilation shafts is on track to
commence in the first quarter of FY25.
Clark. Engineering design studies on the proposed plant for the
next phase of metallurgical testing commenced. A request for
federal funding was submitted. Construction of an exploration
decline commenced.
7.5%
7.1%
Total
100%
91.1%
(4) Excludes non-operated entities (Sierra Gorda, Brazil Alumina and Brazil Aluminium). In line with our standard approach which removes factors outside management's control,
the outcome includes adjustment for material weather related events.
(5) Includes non-operated entities (Sierra Gorda, Brazil Alumina and Brazil Aluminium). In line with our standard approach which removes factors outside management's control,
the outcome includes adjustment for material weather related events.
(6) Further information on this Business Scorecard measure can be found in the Our strategy in action section on pages 20 to 27.
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SOUTH32 ANNUAL REPORT 2024
1B
FY24 Business Modifier
The Board has discretion to adjust the overall Business Outcome by applying the Business Modifier. In considering the application of the
Business Modifier for FY24, the Board was primarily focused on three things. First, the impact of Tropical Cyclone Megan on Australia
Manganese, second, the impairment expense for Worsley Alumina, and third, the impairment expense for Cerro Matoso.
The Board deliberated on the circumstances relating to the impact of Tropical Cyclone Megan on the operations at Australia
Manganese, which resulted in operations being temporarily suspended. The severe weather system developed quickly, resulting in
record rainfall that flooded mining pits, and caused significant damage to critical infrastructure. The Company's insurers have confirmed
that the damage caused by Tropical Cyclone Megan is covered under our insurance and we continue to work with our insurers to assess
the timing and value of recoveries under these policies.
The Board considered the July 2024 Western Australian Environmental Protection Authority (WA EPA) assessment report, which
recommended that the Worsley Mine Development Project may be implemented, subject to conditions. The environmental approval
process, which commenced in 2019, involved extensive environmental assessment and consultation with a range of stakeholders.
Several of the recommended conditions go beyond reasonable measures for managing the environmental risks of the proposal based
on scientific assessment and decades of operating experience, are not practicable, and are inconsistent with other governmental
regulation and policy. Worsley Alumina has lodged an appeal in relation to the WA EPA assessment report and aims to secure
environmental approvals for the project by the end of 2024. As a result of the recommended conditions, we recognised an impairment
expense for Worsley Alumina that reflects increased uncertainty for the project approval and associated challenging operating
conditions.
Finally, the Board reviewed the circumstances leading to the impairment expense for Cerro Matoso which reflected structural changes
in the nickel market that are expected to continue to place pressure on nickel prices and discounts for our ferronickel product.
After carefully considering all the circumstances leading up to the damage at Australia Manganese, and the impairment expenses at
Worsley Alumina and Cerro Matoso, the Board formed the view that they were outside the control of management and that no Business
Modifier would be applied to any Executive KMP.
Table 1.6 outlines the Business Modifiers the Board has applied to the Business Scorecard for each Executive KMP role over the last five
years.
Table 1.6 – Application of the Business Modifier by the Board (multiplier applied to the Business Scorecard outcome)
Modifier for
Modifier applied in previous years
FY24
FY23(1)
FY22(2)
FY21
FY20
CEO
-
-25%
-20%
-20%
-30%
COO Southern Africa
and Colombia
-20%
-20%
-20%
-30%
-10%
Other Executive KMP
-10%
-10%
-5%
-15%
-5%
-5%
(1) In FY23, the Board decided to apply a Business Modifier of -10 per cent for J Economidis, and a Business Modifier of negative five per cent for other Executive KMP.
(2) In FY22, the Board decided to apply a Business Modifier of -20 per cent for the COO Southern Africa and Colombia at the time of the fatality, a Business Modifier of -10 per cent
for J Economidis and N Pillay, and a Business Modifier of negative five per cent for the CFO.
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SOUTH32 ANNUAL REPORT 2024
Remuneration report continued
2
FY24 individual performance
Our Board considers the individual scorecard outcomes for Executive KMP with regard to what was delivered and how it was delivered.
The Board recognised Graham's outstanding leadership and development of his Lead Team. Furthermore, the Board recognised his
personal impact in leading our improved safety performance and the further transformation of our portfolio towards commodities
critical to a low carbon future.
Individual outcomes applied to the other Executive KMP reflected the performance in their areas of accountability and development in
their respective roles. These outcomes ranged from 88 per cent to 135 per cent, as indicated in Table 1.7 below.
3
Overall FY24 STI outcome
Overall STI outcomes for FY24 are determined through our Board’s assessment of the business and individual outcomes, as outlined in
Table 1.7.
Table 1.7 – STI earned by Executive KMP in respect of FY24 performance
Business
Scorecard
Outcome %
Business
Modifier
+/- %
Individual
Outcome %
Overall STI
Outcome
(% of Target)
Total STI
Awarded
Cash
Deferred
rights
Percentage of maximum STI
Awarded
Forfeited
Executive KMP
(1A)
(1B)
(2)
1A x (1+1B) x (2)
(A$’000)
(A$’000)(1)
(A$’000)(1)
(%)
(%)
G Kerr
91.1
-
120
109.3
2,612
1,306
1,306
73
27
S Sibenaler
91.1
-
135
123.0
1,280
640
640
82
18
J Economidis(2)
91.1
-
88
80.2
578
578
-
53
47
V Torres(3)
91.1
-
100
91.1
282
141
141
61
39
N Pillay(4)
91.1
-
115
104.8
890
445
445
70
30
(1) The cash portion of the STI will be paid in September 2024. The deferred rights to South32 shares are anticipated to be granted in or around December 2024 and will be due to
vest in August 2026. A dividend equivalent payment will also be made when the rights vest. The deferred rights remain subject to continued service with the Group.
(2) J Economidis ceased to be a member of Executive KMP on 13 March 2024. Details in the above table are for his period as a member of Executive KMP. J Economidis' overall STI
outcome for the period as Director IMC, which is not reflected in the table, was 106 per cent. The entire value of his FY24 STI will be paid in cash in September 2024.
(3) V Torres was appointed as a member of Executive KMP on 14 March 2024. Details in the above table are for her period as a member of Executive KMP.
(4) The total STI awarded, cash and deferred rights values for N Pillay are denominated in ZAR and have been converted to A$ using an exchange rate of AUD: ZAR 12.27.
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SOUTH32 ANNUAL REPORT 2024
Long-term incentive
FY21 LTI and MSP Performance award
Our FY21 LTI award was tested subject to performance conditions over a four-year period from 1 July 2020 to 30 June 2024 and
continued service until the vesting date. Two-thirds of the award was subject to TSR performance over the four-year period with
reference to a global mining index (the IHS Markit Global Mining Index, constrained by company and sector(1)). For the LTI awards
granted from FY16 to FY21, we used a customised IHS Markit Global Mining Index as a TSR performance comparator. The index is
customised by applying a cap on the index weight of each individual company and the index weight of each sector (such as gold) except
the diversified mining sector, which is excluded from capping and redistribution. Applying these limits results in a rebalancing across the
remaining companies and sectors in the index.
The remaining one-third was subject to TSR performance over the four-year period measured with reference to a world index (the MSCI
World Index).
Sandy, Jason and Noel were granted the FY21 MSP Performance award prior to their permanent appointments as members of the Lead
Team. This award has the same performance and vesting conditions as our FY21 LTI award.
For the LTI and MSP Performance awards to vest in full, our TSR performance needed to outperform both indices by at least
23.9 per cent over the four-year performance period (equivalent to 5.5 per cent per annum cumulative). Our TSR exceeded the world
index TSR by 30.5 per cent, but failed to meet the threshold level of performance required against the global mining index (see Diagram
1.8 and Table 1.8). As a result, our Board approved one-third of the awards to vest and the remainder to lapse.
Diagram 1.8 – South32 TSR relative to comparator groups (A$)
Diagram 1.9 – Vesting scale
South32
Global mining index
World index
Total Shareholder Return
-20%
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
Jul-20
Jul-21
Jul-22
Jul-23
Jul-24
100% vesting
40% vesting
0% vesting
TSR = index
TSR
TSR => index TSR
by 23.9%
Table 1.8 – South32 FY21 LTI and MSP Performance award vesting outcomes
TSR performance(1)(2)
Vesting
outcome
Index
weighting
Weighted
vesting outcome
Index
(A)
South32
(B)
Required for
100% vesting
Achieved
(B-A)
(C)
(D)
(C x D)
Global mining index
111.0%
109%
Index+23.9%
(2.0%)
0%
2/3
0%
World index
78.5%
Index+23.9%
30.5%
100%
1/3
33.3%
33.3%
(1) TSR calculation uses June 2020 average return at the start and June 2024 average return at the end of the measured period.
(2) The Board and Remuneration Committee use information from an external provider to inform them of the performance of the relevant index to assess the vesting outcome.
FY22 MSP Retention award
Although South32 does not offer MSP Retention awards to permanent members of the Lead Team, including those who are Executive
KMP, when individuals are promoted to Lead Team roles, they retain any unvested MSP awards that may vest while they are members of
KMP. Sandy was granted an FY22 MSP Retention award prior to her appointment as a member of the Lead Team. As the service-based
condition of this award was met, our Board approved this award to vest in full.
The structure of the MSP is detailed on page 107.
(1) Following the decommissioning of the IHS Markit Global Mining index on 31 July 2023, the Board and Remuneration Committee considered a range of alternative global mining
sector measures. The Board determined that the S&P Global Mining index, customised to apply constraints which cap the weight of each sector except the diversified mining
sector, was the most suitable replacement to assess performance for the remainder of the performance period. This was due to its close performance correlation to the IHS
Markit Global Mining index (on a customised basis) over the period 1 July 2020 to 31 July 2023.
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SOUTH32 ANNUAL REPORT 2024
Remuneration report continued
FY22 Transitional LTI award
We granted the FY22 Transitional LTI awards to Jason and Noel on their permanent appointments to the Lead Team. The award was
designed to address the potential shortfall in vesting in August 2024 that arises from the transition from the MSP, which includes
Retention awards with a three-year service period condition, to the four-year performance period of the LTI.
This Transitional LTI award was subject to the same TSR performance conditions as the FY22 LTI award, but over a three-year period.
Two-thirds of the award was measured with reference to a global mining index (the constituents of the IHS Markit Global Mining Index at
the start of the performance period) and one third with reference to a world index (the MSCI World Index). The performance period for
this award was from 1 July 2021 to 30 June 2024. For the Transitional LTI award to vest in full, our TSR performance needed to:
–
Equal or exceed the TSR of the company at the 75th percentile when ranking the TSR of the constituents of the IHS Markit Global
Mining Index at the start of the performance period (refer Diagram 1.11 for further information on the vesting scale); and
–
Outperform the MSCI World Index by at least 17.4 per cent over the performance period, equivalent to 5.5 per cent per annum
cumulative (refer Diagram 1.12 for further information on the vesting scale).
Our TSR ranked at the 66th percentile amongst the global mining sector index constituents and outperformed the MSCI world index by
3.9 per cent (see Diagram 1.10 and Table 1.9). As a result, our Board approved 70.4 per cent of the rights to vest and the remainder to
lapse.
Diagram 1.10 – South32 TSR relative to comparator groups
Diagram 1.11 – Global mining index constituents
vesting scale
-20%
0%
20%
40%
60%
80%
100%
Jul-21
Jul-22
Jul-23
Jul-24
Total Shareholder Return
South32 (A$)
World index (A$)
Global mining index median constituent
Global mining index 75th percentile constituent
100% vesting
40% vesting
0% vesting
TSR > median
constituent
TSR
TSR => 75th
percentile
constituent TSR
Diagram 1.12 –World index TSR vesting scale
100% vesting
40% vesting
0% vesting
TSR = index
TSR
TSR => Index
by 17.4%
Table 1.9 – South32 FY22 Transitional LTI award vesting outcomes
TSR performance(1)(2)
Vesting
outcome
Metric
weighting
Weighted
vesting outcome
Required
for 40% vesting
South32
Required for 100%
vesting
Achieved
(C)
(D)
(C x D)
Global mining index constituents
>50th Percentile(3)
46.6%
75th Percentile(4)
66th Percentile
78.9%
2/3
52.6%
World index
42.7%(5)
Index+17.4%
3.9%
53.4%
1/3
17.8%
70.4%
(1) TSR calculation uses June 2021 average return at the start and June 2024 average return at the end of the measured period.
(2) The Board and Remuneration Committee use information from an external provider to inform them of the TSR performance to assess the vesting outcome.
(3) The TSR of the company at the 50th percentile in the constituent group over the three year performance period was 19.1 per cent.
(4) The TSR of the company at the 75th percentile in the constituent group over the three year performance period was 75.3 per cent.
(5) Reflects the MSCI World Index TSR over the three year performance period.
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SOUTH32 ANNUAL REPORT 2024
Summary of LTI outcomes in FY24
Table 1.10 – South32 LTI awards vested or lapsed
Executive KMP
Award
Number of
rights granted
Number of
rights vested
Number of
rights lapsed
Value at
grant(1)
(A$'000)
Value
lapsed(2)
(A$'000)
Value of
share price
movement(3)
(A$'000)
Value at
vesting(4)
(A$'000)
G Kerr
FY21 LTI
2,695,544
898,514
1,797,030
5,445
3,630
1,474
3,289
S Sibenaler
FY21 MSP Performance
59,405
19,801
39,604
120
80
32
72
FY22 MSP Retention
43,246
43,246
-
124
-
34
158
J Economidis
FY21 MSP Performance
495,049
165,016
330,033
1,000
667
271
604
FY22 Transitional LTI
102,094
71,874
30,220
293
87
57
263
V Torres
FY21 LTI
689,108
229,702
459,406
1,392
928
377
841
N Pillay
FY21 MSP Performance
215,655
71,885
143,770
436
290
117
263
FY22 Transitional LTI
93,034
65,495
27,539
267
79
52
240
(1) ‘Value at grant’ is the number of rights granted multiplied by the grant determination price in June 2020 of A$2.02 (for the FY21 LTI/FY21 MSP Performance) and June 2021 of
A$2.87 (for the FY22 MSP Retention/FY22 Transitional LTI), based on the volume weighted average price (VWAP) of South32 shares traded on the ASX over the last 10 trading
days in June of the respective year.
(2) ‘Value lapsed’ is the number of rights lapsed/forfeited based on performance relative to the performance measures, multiplied by the grant determination price of A$2.02 (for
the FY21 LTI/FY21 MSP Performance) and A$2.87 (for the FY22 MSP Retention/FY22 Transition LTI).
(3) ‘Value of share price movement’ is the number of shares that vested, multiplied by the difference between the grant determination price of A$2.02 (for the FY21 LTI/FY21
MSP Performance) and A$2.87 (for the FY22 MSP Retention/FY22 Transitional LTI) and the share price at 30 June 2024 of A$3.66. This reflects the value added/(lost) due to the
change in share price over the performance period.
(4) ‘Value at vesting’ is the number of shares approved to vest, multiplied by the closing share price of South32 shares on 30 June 2024 of A$3.66.
LTI granted in FY24
FY24 LTI Plan
Each year we grant performance rights to our Executive KMP. Our FY24 LTI Plan awards, which were granted in December 2023, have
a four-year performance period and are subject to performance hurdles (see page 88). Shareholders approved, under ASX Listing Rule
10.14, the grant of rights for the CEO at the AGM on 26 October 2023.
FY24 Transitional LTI
In FY24, the Remuneration Committee approved a one-off Transitional LTI award for Sandy following her appointment to the Lead Team.
The award is designed to address the potential shortfall in vesting in August 2026 that arises from the transition from the MSP, which
includes Retention awards with a three-year service period condition, to the four-year performance period of the LTI.
This award is performance based and has the same TSR performance conditions as the FY24 LTI but is measured over a three-year
period. More information on this award is provided on page 107.
Table 1.11– FY24 LTI and Transitional LTI grants
Reward determination(1)
Executive KMP
Award
Face value
(% of fixed
remuneration)
Face value
(A$’000)
Target value(2)
(% of fixed
remuneration)
Target value
(A$’000)
Grant (December
2023):
Number of rights
granted(3)
Anticipated
vesting date
G Kerr
FY24 LTI
200
3,982
120
2,389
1,047,894
August 2027
S Sibenaler
FY24 LTI
133
1,153
80
694
303,450
August 2027
FY24 Transitional LTI
37.5
325
20
173
85,559
August 2026
J Economidis
FY24 LTI
133
1,138
80
685
299,600
August 2027
V Torres(4)
FY24 LTI
133
1,153
80
694
303,450
August 2027
N Pillay(5)
FY24 LTI
133
927
80
557
243,820
August 2027
(1) The grant of awards is based on the face value as outlined in Components of our reward (see page 88).
(2) The target value considers the difficulty of achieving performance hurdles.
(3) The number of awards granted to Executive KMP in December 2023 is calculated by dividing the face value by the VWAP of South32 shares traded on the ASX over the last 10
trading days of June 2023, being A$3.80. The fair value at grant for accounting purposes, as calculated by an external provider, was A$1.54 per right for the FY24 LTI and A$1.21
per right for the FY24 Transitional LTI award.
(4) V Torres become a member of Executive KMP on 14 March 2024, after the FY24 LTI award was granted to her in December 2023.
(5) Fixed remuneration for N Pillay is denominated in ZAR and was converted to A$ using an exchange rate of AUD: ZAR 12.46 to determine his FY24 award.
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SOUTH32 ANNUAL REPORT 2024
Remuneration report continued
FY24 LTI strategic measures performance update
In FY22 we introduced two strategic measures, with a total weighting of 20 per cent of our LTI grant, to directly link executive
remuneration to our approach to climate change and the transition of our portfolio towards commodities critical for a low-carbon future.
Vesting outcomes for the strategic measures will be determined by the Board following the end of each four-year performance period
(e.g. on 30 June 2027 for the FY24 LTI award), based on our ability to make material progress in these areas, while aiming to protect and
create shareholder value. The Board’s rationale in assessing performance and determining the vesting outcome for each measure will
be clearly articulated and shared with shareholders following the Board’s assessment.
Table 1.12 below summarises the progress made against the strategic measures over the FY22 to FY24 period.
Table 1.12 – Strategic measures update
Measure
Progress against Measure(1)
Climate change
We are taking action to meet our
target to reduce our operational
greenhouse gas (GHG) emissions
(Scope 1 and 2) by 50 per cent by
2035, from an FY21 baseline(2), in
accordance with our 2022 Climate
Change Action Plan, which includes:
–
The advancement of conceptual
projects through our capital
investment tollgates, and the
successful commissioning of
identified emissions reduction
projects;
–
The ongoing assessment of new
technologies and alternative
energy sources; and
–
Continued participation and
direct investment in research and
development partnerships.
Consistent with our purpose, we will
work to provide a just transition
towards net zero in a way that
supports our people, local
communities and other
stakeholders.
Since FY22, we have invested US$67 million in decarbonisation projects and studies. Our focus has
been on improving energy efficiency, transitioning to low-carbon energy, and developing technology
solutions with key milestones that included:
Advancements of conceptual projects
–
Progressing the coal to gas project at Worsley Alumina from pre-feasibility study in FY22 to
the conversion of two of the five coal-fired boilers to natural gas. In FY24, this contributed to a
14 per cent reduction in the refinery’s operational GHG emissions against FY21 levels;
–
Progressing decarbonisation studies through the various project phases at Worsley Alumina,
including mud-washing through feasibility study(3), waste to heat digestion through pre-feasibility,
and mechanical vapour recompression and calciner flue gas heat recovery through concept studies.
–
Progressing AP3XLE energy efficiency technology from feasibility study phase in FY22 to the
conversion of 36 per cent of pots at Hillside Aluminium to AP3XLE technology; and
–
Exceeding our 67 per cent target for post drainage capture efficiency (PDCE) of coal seam gas at
Appin mine, Illawarra Metallurgical Coal (61 per cent in FY21).
Assessment of new technologies and alternative energy sources
–
Progressing the energy supply project at Hillside Aluminium from a pre-feasibility study in FY22 to
a Request for Information (RFI) from South African Independent Power producers in FY24. This RFI
demonstrated the potential to procure affordable renewable energy, but identified several key risks
and uncertainties;
–
Progressing from a pilot plant scale trial of ventilation air-methane mitigation technology at Illawarra
Metallurgical Coal in FY22 through the feasibility project development stages to detailed design for a
commercial-scale project
–
Continuing to work closely with the Government of the Republic of Mozambique and Eskom to
secure hydro-electric power for Mozal Aluminium beyond Q3 FY26. In FY24, this contributed to the
formation of a ministerial taskforce to accelerate progress; and
–
Incorporating low-carbon design principles into the feasibility study for the Hermosa Taylor
development project.
Participation and investment in research and development partnerships
–
Contributing to the Electric Mine Consortium infrastructure workstream by trialling light electric
vehicles in FY23, and in FY24 an electric integrated tool carrier, and equipment chargers at
Cannington.
Just transition
–
Completing a study of the potential workforce impacts from our Worsley Alumina decarbonisation
plans to inform our just transition planning.
(1) Further information on the progress of items listed can be found in our Sustainable Development Report 2024 at www.south32.net.
(2) FY21 baseline adjusted to exclude GHG emissions from South Africa Energy Coal and Tasmanian Electro Metallurgical Company, which were divested in FY21.
(3) Project returned to the pre-feasibility study stage due the capital intensity of the expected abatement compared to other potential projects.
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SOUTH32 ANNUAL REPORT 2024
Measure
Progress against Measure(1)
Portfolio management
We are planning to further reshape
our portfolio and increase our
exposure to commodities critical for
a low-carbon future by:
–
Optimising our existing portfolio
by responsibly transferring
ownership of non-core operations
or transitioning them to closure;
–
Developing or acquiring
operations which are cash
generative through the cycle,
improving the overall quality of
our business;
–
Building a high-quality portfolio
of greenfield and brownfield
exploration and development
options; and
–
Maintaining discipline by
adhering to our proven capital
management framework.
We have made significant progress over the last three years in this transformative area, shifting our
portfolio towards commodities critical for a low carbon future. Key milestones have included:
Optimising our portfolio
–
Entering into an agreement to sell Illawarra Metallurgical Coal. The sale will unlock significant value,
further streamline our portfolio toward base metals, simplify our business, strengthen our balance
sheet and reduce our sustaining capital intensity; and
–
Entering into binding agreements to sell our 50 per cent interest in the Eagle Downs metallurgical
coal project and our 60 per cent interest in the Metalloys manganese alloy smelter.
Developing and acquiring operations
–
Expanding our low-carbon aluminium capacity by increasing our interests in Mozal (by 16.6 per cent)
and restarting the 40 per cent owned Brazil Aluminium smelter in FY22 utilising 100 per cent
renewable energy;
–
Derisking bauxite supply for Brazil Alumina by increasing our interest in Mineração Rio do Norte
(MRN) by 18.2 per cent and progressing the West Zone project; and
–
Entering into the global copper market by acquiring a 45 per cent interest in Sierra Gorda copper
mine.
Exploration and development options
–
Exercising our earn-in right with Minsud Resources and acquiring 50.1 per cent and taking control
and operatorship of the Chita Valley copper exploration project in San Juan Province, Argentina; and
–
Undertaking exploratory drill programs at Hermosa’s Peake prospect in FY23 and Flux prospect in
FY24 and confirming target prospectivity.
Adhering to our capital management framework
–
Prioritising the allocation of excess capital to projects that we expect will create enduring
shareholder value.
Terms and conditions of rights awarded under equity plans
Type of equity
We deliver Deferred STI and LTI equity awards, including Transitional LTI and MSP awards, in the form of share
rights. These are rights to receive fully paid ordinary shares in South32 Limited (or at the Board’s discretion, a
cash equivalent amount) subject to meeting specific performance and/or vesting conditions. As the rights are
an element of remuneration, no amount is payable by employees to be allocated the rights. If the rights vest,
no consideration or exercise price is payable for the allocation of shares. As rights are automatically exercised
on vesting, they do not have an expiry date.
Dividend and voting rights
Rights carry no entitlement to voting or dividends. Rights to be granted in or around December 2024 for the
FY24 Deferred STI awards will include an entitlement to a cash dividend equivalent payment paid in full at
vesting (but only in respect of those Deferred STI rights that vest). No other rights carry a dividend equivalent
entitlement.
Cessation of employment
Unless our Board determines otherwise:
–
Resignation or termination for cause: all unvested rights lapse;
–
Death, serious injury, disability or illness that prevents continued employment or total permanent disability:
all unvested rights vest immediately; and
–
Other circumstances, generally:
•
Deferred STI awards: all unvested rights vest immediately;
•
LTI and MSP Performance awards: all unvested rights are pro-rated and the reduced portion remains on
foot and eligible for vesting in the ordinary course, subject to any applicable performance hurdles; and
•
MSP Retention awards: all unvested rights are pro-rated and the reduced portion vests immediately.
Where awards are pro-rated, the remaining portion lapses.
Change of control
Our Board can determine the level of vesting (if any) having regard to the portion of the vesting period
elapsed, performance to date against any applicable performance conditions and other factors they deem
appropriate.
Malus and clawback
Our Board can reduce or clawback all vested and unvested STI and LTI awards in certain circumstances so that
executives do not obtain an inappropriate benefit. These circumstances are broad, and can include:
–
An executive engaging in misconduct;
–
A material misstatement of our accounts that results in vesting;
–
Behaviours of executives that bring South32 into disrepute;
–
A significant unexpected or unintended consequence or outcome; and
–
Any other factor our Board deems justifiable.
Rights to participate
in new issues
A participant cannot take part in new issues of securities in relation to their unvested rights. However, the
relevant plan rules include specific provisions dealing with rights issues, bonus issues and corporate actions,
and other capital reconstructions.
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
101
SOUTH32 ANNUAL REPORT 2024
Remuneration report continued
Non-Executive Director remuneration
Components of our reward for FY24
Component
Board fees
Committee fees
Travel allowance
The why
As a global company, it’s important
that we offer competitive Non-
Executive Director fees to help us
attract the appropriate level of
experience from a diverse global
pool.
Our Board fees reflect the size,
complexity and global nature of our
business and acknowledge the
responsibilities of serving on our
Board.
To preserve the independence of our
Non-Executive Directors, their
remuneration does not have an ‘at
risk’ element.
We pay Committee fees to recognise
the additional responsibilities
associated with participating on a
Board Committee.
Our Board meetings are ordinarily held in
Australia, South Africa and North and South
America (see page 75 for more details).
Site visits are also an important part of our
Board program, giving Directors:
–
A better understanding of workplace
culture through interactions with site-
based employees;
–
An improved understanding of local and
operational risks;
–
A chance to participate in continuous
education; and
–
On-the-ground experience.
As these meetings (site visits and other
engagements) take time and commitment,
particularly if they are in remote locations,
we provide our Non-Executive Directors with
a travel allowance.
The how
Board fee inclusive of
superannuation.
We pay a fixed fee to our Board Chair
for all responsibilities, including
participation on any Board
Committees.
Other Non-Executive Directors
receive Committee Chair and
member fees (where applicable).
For air travel to a Board commitment that is
greater than three hours but less than 10
hours to the destination, a one-off allowance
of A$5,000 per trip applies. Where air travel
is greater than 10 hours to the destination,
the allowance per trip is A$10,000.
The travel allowance is only paid where
travel is undertaken and does not apply to
domestic travel to a scheduled Board
meeting.
Fee pool
The maximum aggregate amount we can pay our Non-Executive Directors remains at A$3.9 million per annum (fee pool). We
will seek shareholder approval before making any changes to this pool.
Minimum
shareholding
requirement
Each Non-Executive Director is required to accumulate a minimum shareholding of one year’s Board fees within a
reasonable period. See page 107 for shareholdings of our Non-Executive Directors.
FY24 Non-Executive Director fees
We review fees every year and may receive external advice to help us do so. We based the review of FY24 fees on data provided by
external consultants. This resulted in no change to the Board fees for the Chair and other Non-Executive Directors fees from FY23.
The table below outlines the fee levels for FY24.
Table 1.13 – FY24 Board and Committee fees, effective 1 September 2023
Fee
Description
FY24 fee
(A$ per annum)
Increase %
from FY23 fee
Board fees
Board of Directors
Chair of the Board
Other Non-Executive Directors
595,250
195,000
-
-
Committee fees(1)
Risk and Audit, Remuneration, and Sustainability Committees
Committee Chair
Members
46,000
23,000
-
-
(1) No Committee Chair or member fees were paid in FY24 for participation on the Nomination and Governance Committee.
102
SOUTH32 ANNUAL REPORT 2024
FY24 Non-Executive Director remuneration
In Table 1.14, we have set out the statutory disclosures required under the Act and in accordance with Australian Accounting Standards,
in respect of FY24 remuneration paid to Non-Executive Directors.
Table 1.14 – Non-Executive Director remuneration (A$’000)
Short-term benefits
Post-
employment
benefits
Non-Executive Director
FY24 term
Board and
Committee
fees
Non-monetary
benefits(1)
Other cash
allowances and
benefits(2)
Superannuation
Total
K Wood
Full year
FY24
568
-
15
27
610
FY23
567
-
20
25
612
F Cooper AO
Full year
FY24
237
-
15
27
279
FY23
238
-
10
25
273
X Liu
Full year
FY24
219
-
15
27
261
FY23
215
-
30
25
270
C Mesquita
Full year
FY24
215
4
60
3
282
FY23
33
-
10
-
43
N Mtoba
Full year
FY24
215
3
40
3
261
FY23
214
4
40
3
261
J Nelson
Full year
FY24
215
2
60
3
280
FY23
33
-
5
-
38
W Osborn
Full year
FY24
254
-
20
27
301
FY23
238
-
35
25
298
K Rumble
Full year
FY24
255
3
50
3
311
FY23
260
2
45
3
310
S Warburton(3)
Part year
FY24
105
-
15
16
136
FY23
-
-
-
-
-
Total
FY24
2,283
12
290
136
2,721
FY23
1,798
6
195
106
2,105
(1) Includes assistance with tax return preparation.
(2) Includes travel allowances paid.
(3) Appointed on 28 November 2023.
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
103
SOUTH32 ANNUAL REPORT 2024
Remuneration report continued
Looking forward to FY25
No major changes are proposed to the reward framework for FY25. The Board routinely reviews the reward framework to assess its
effectiveness in attracting and retaining Executive KMP whilst also incorporating the necessary flexibility to reward our Executive KMP
for performance that is aligned with the interests of stakeholders.
Fixed remuneration
The Board approved increases to the fixed remuneration of Executive KMP for FY25 to maintain fixed remuneration at competitive levels
in alignment with our reward framework (see Table 1.15).
Table 1.15 – Fixed remuneration for Executive KMP in FY25, effective 1 September 2024
Executive KMP
FY24 fixed remuneration
(A$)
FY25 fixed remuneration
(A$)
Increase
%
G Kerr
1,991,000
2,070,000
4.0%
S Sibenaler
867,000
910,000
5.0%
V Torres
867,000
902,000
4.0%
N Pillay(1)
ZAR 8,680,000
ZAR 9,201,000
6.0%
(1) Fixed remuneration for N Pillay is denominated in ZAR. Using an exchange rate of AUD:ZAR 12.27, FY25 fixed remuneration is A$749,878.
Short-term incentive
The structure of our STI plan will remain unchanged for FY25 and is outlined in Diagram 1.13.
Diagram 1.13 – FY25 STI Business Scorecard performance metrics
Measures
Performance metrics
FY25 weighting
Safety and culture
Safety and health, risk management, people
25.0%
Environment and social
Social performance, water performance
10.0%
Financial
Production, cost, capital expenditure, adjusted ROIC
57.5%
Major projects delivery
Hermosa project milestones
7.5%
Business Scorecard
100%
X
Business Modifier
Consider factors that are not specifically contemplated in the Business Scorecard
+/-
=
South32 Business Outcome
Reflects our performance over the financial year
Long-term incentive
The LTI plan design will remain unchanged for FY25. We will continue to measure our performance over a four-year period with
80 per cent assessed based on TSR performance relative to two comparator groups and 20 per cent assessed against two strategic
measures, climate change and portfolio management, each with a 10 per cent weighting.
Director Fees
Effective 1 September 2024, Board fees for the Chair will increase by 2.5 per cent and by four per cent for other Non-Executive Directors
as outlined in Table 1.16 below. There will be no change to Committee fees or the travel allowance. Total fees paid to Non-Executive
Directors in FY25 will not exceed the fee pool (A$3.9M).
Table 1.16 – FY25 Board and Committee fees – effective 1 September 2024
Fee
Description
FY24 fee
(A$ per
annum)
FY25 fee
(A$ per
annum)
Increase %
from
FY24 fee
Board fees
Board of Directors
Chair of the Board
595,250
610,000
2.5%
Other Non-Executive Directors
195,000
202,750
4.0%
Committee fees(1)
Risk and Audit, Remuneration, and Sustainability Committees
Committee Chair
46,000
46,000
-
Members
23,000
23,000
-
(1) No Committee Chair or member fees are typically paid for participation on the Nomination and Governance Committee.
104
SOUTH32 ANNUAL REPORT 2024
Statutory disclosures
Statutory remuneration table for Executive KMP
In the following table, we have set out the statutory disclosures required under the Act and in accordance with the Australian
Accounting Standards. The amounts shown reflect the remuneration for each member of Executive KMP that relates to their service as
KMP in FY24.
Table 1.17 – Statutory remuneration of Executive KMP in FY24 (A$’000)
Short term benefits
Post
employment
benefits
Share based payments(4)
Percentage of
total
remuneration
which is
performance
tested
Executive KMP
Salary
Cash
bonus(1)
Non-
monetary
benefits(2)
Superannuation
Termination
benefits
Other
long-term
benefits(3)
LTI / MSP
STI
Total
remuneration
G Kerr
FY24
1,813
1,306
56
29
-
184
2,674
1,025
7,087
71%
FY23
1,651
719
48
28
-
176
2,605
833
6,060
69%
S Sibenaler(5)
FY24
817
640
8
29
-
78
334
235
2,141
56%
FY23
195
84
1
6
-
19
49
9
363
39%
J Economidis(6) FY24
536
578
11
20
-
55
550
178
1,928
68%
FY23
716
352
12
26
-
74
748
271
2,199
62%
V Torres(7)
FY24
249
141
9
9
-
23
217
123
771
62%
FY23
-
-
-
-
-
-
-
-
-
-
N Pillay(8)
FY24
630
445
27
-
-
82
607
290
2,081
64%
FY23
631
248
26
-
-
79
593
151
1,728
57%
Total
FY24
4,045
3,110
111
87
-
422
4,382
1,851
14,008
FY23
3,193
1,403
87
60
-
348
3,995
1,264
10,350
(1) STI is provided half in cash (which is included in the cash bonus column of the table) in September following the end of the performance period and half in deferred rights
(which is included in the share-based payments column of the table). The value of the deferred equity portion is amortised over the vesting period.
(2) Non-monetary benefits are non-pensionable and include such items as insurances, car parking and personal tax assistance.
(3) Other long-term benefits is the accounting expense of annual and long-service leave accrued.
(4) The related awards were not actually provided to the Executive KMP. The figures are calculated in accordance with Australian Accounting Standards and are the amortised fair
values of equity and equity-related instruments that have been granted to Executive KMP. Refer to Table 1.18 on page 106 in this report for information on awards outstanding
during FY24.
(5) FY23 remuneration for S Sibenaler is for the period from when she commenced as a member of Executive KMP (1 April 2023).
(6) FY24 remuneration for J Economidis is for the period until he ceased to be a member of Executive KMP (13 March 2024). From 14 March 2024, J Economidis transitioned into the
role of Director Illawarra Metallurgical Coal. J Economidis’ employment contract in respect of his role as Director Illawarra Metallurgical Coal provides for accelerated vesting of
Deferred STI rights and for a pro rated portion of his LTI rights to remain on foot and eligible for vesting in the ordinary course should his employment with South32 cease as a
result of the sale of Illawarra Metallurgical Coal completing. No amounts have been included as remuneration in the table above in respect of his service as Director Illawarra
Metallurgical Coal, nor has any value been attributed to the acceleration of his unvested Deferred STI awards upon cessation of his employment with South32.
(7) FY24 remuneration for V Torres is for the period from when she commenced as a member of Executive KMP (14 March 2024).
(8) FY24 salary for N Pillay is denominated in ZAR and has been converted to A$ using an exchange rate of AUD: ZAR 12.27. FY23 salary for N Pillay was converted to A$ using an
exchange rate of AUD: ZAR 11.96.
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
105
SOUTH32 ANNUAL REPORT 2024
Remuneration report continued
Details of rights held by Executive KMP
In the following table, we have set out more information about the rights over South32 shares held by Executive KMP, including the
movements in rights held during FY24. No closely related parties of any Executive KMP are issued rights over South32 shares.
See page 101 for terms and conditions of rights awarded under our equity plans.
Table 1.18 – Detail and movement of rights over South32 shares held by Executive KMP during FY24
Award(1)(2)
Opening
balance at
1 July 2023
Grant date
Granted
in FY24(3)
Vested in FY24
Lapsed / forfeited or
other change in FY24
Closing
balance at
30 June
2024(6)
Anticipated
vesting
date(4)
Executive KMP
Number
Number
Number(4)
%(5)
Number
%(5)
Number
G Kerr
7,118,582
1,281,440
242,160
12
1,696,261
88
6,461,601
FY23 Deferred STI (S)
-
04-Dec-23
233,546
-
-
-
-
233,546
Aug-25
FY24 LTI (P)
-
04-Dec-23
1,047,894
-
-
-
-
1,047,894
Aug-27
FY22 Deferred STI (S)
283,289
08-Dec-22
-
-
-
-
-
283,289
Aug-24
FY23 LTI (P)
934,313
08-Dec-22
-
-
-
-
-
934,313
Aug-26
FY21 Deferred STI (S)
242,160
06-Dec-21
-
242,160
100
-
-
-
Aug-23
FY22 LTI (P)
1,267,015
06-Dec-21
-
-
-
-
-
1,267,015
Aug-25
FY21 LTI (P)
2,695,544
04-Dec-20
-
-
-
-
-
2,695,544
Aug-24
FY20 LTI (P)
1,696,261
06-Dec-19
-
-
-
1,696,261
100
-
Aug-23
S Sibenaler
284,124
416,299
23,762
100
-
-
676,661
FY23 Deferred STI (S)
-
04-Dec-23
27,290
-
-
-
-
27,290
Aug-25
FY24 LTI (P)
-
04-Dec-23
303,450
-
-
-
-
303,450
Aug-27
FY24 Transitional LTI (P)
-
04-Dec-23
85,559
-
-
-
-
85,559
Aug-26
FY23 MSP Retention (S)
32,113
08-Dec-22
-
-
-
-
-
32,113
Aug-25
FY23 MSP Performance (P)
53,522
08-Dec-22
-
-
-
-
-
53,522
Aug-26
FY22 MSP Retention (S)
43,246
06-Dec-21
-
-
-
-
-
43,246
Aug-24
FY22 MSP Performance (P)
72,076
06-Dec-21
-
-
-
-
-
72,076
Aug-25
FY21 MSP Retention (S)
23,762
06-May-21
-
23,762
100
-
-
-
Aug-23
FY21 MSP Performance (P)
59,405
06-May-21
-
-
-
-
-
59,405
Aug-24
J Economidis(6)
1,631,118
413,834
136,637
47
155,763
53
1,752,552
FY23 Deferred STI (S)
-
04-Dec-23
114,234
-
-
-
-
114,234
Aug-25
FY24 LTI (P)
-
04-Dec-23
299,600
-
-
-
-
299,600
Aug-27
FY22 Deferred STI (S)
112,504
08-Dec-22
-
-
-
-
-
112,504
Aug-24
FY23 LTI (P)
266,977
08-Dec-22
-
-
-
-
-
266,977
Aug-26
FY21 Deferred STI (S)
37,628
06-Dec-21
-
37,628
100
-
-
-
Aug-23
FY22 LTI (P)
362,094
06-Dec-21
-
-
-
-
-
362,094
Aug-25
FY22 Transitional LTI (P)
102,094
06-Dec-21
-
-
-
-
-
102,094
Aug-24
FY21 MSP Retention (S)
99,009
04-Dec-20
-
99,009
100
-
-
-
Aug-23
FY21 MSP Performance (P)
495,049
04-Dec-20
-
-
-
-
-
495,049
Aug-24
FY20 MSP Performance (P)
155,763
06-Dec-19
-
-
-
155,763
100
-
Aug-23
V Torres(7)
1,847,582
-
-
-
-
-
1,847,582
FY23 Deferred STI (S)
134,201
04-Dec-23
-
-
-
-
-
134,201
Aug-25
FY24 LTI (P)
303,450
04-Dec-23
-
-
-
-
-
303,450
Aug-27
FY22 Deferred STI (S)
106,735
08-Dec-22
-
-
-
-
-
106,735
Aug-24
FY23 LTI (P)
270,563
08-Dec-22
-
-
-
-
-
270,563
Aug-26
FY22 LTI (P)
343,525
06-Dec-21
-
-
-
-
-
343,525
Aug-25
FY21 LTI (P)
689,108
04-Dec-20
-
-
-
-
-
689,108
Aug-24
N Pillay
1,162,203
321,530
86,262
39
135,708
61
1,261,763
FY23 Deferred STI (S)
-
04-Dec-23
77,710
-
-
-
-
77,710
Aug-25
FY24 LTI (P)
-
04-Dec-23
243,820
-
-
-
-
243,820
Aug-27
FY22 Deferred STI (S)
61,336
08-Dec-22
-
-
-
-
-
61,336
Aug-24
FY23 LTI (P)
240,246
08-Dec-22
-
-
-
-
-
240,246
Aug-26
FY22 LTI (P)
329,962
06-Dec-21
-
-
-
-
-
329,962
Aug-25
FY22 Transitional LTI (P)
93,034
06-Dec-21
-
-
-
-
-
93,034
Aug-24
FY21 MSP Retention (S)
86,262
04-Dec-20
-
86,262
100
-
-
-
Aug-23
FY21 MSP Performance (P)
215,655
04-Dec-20
-
-
-
-
-
215,655
Aug-24
FY20 MSP Performance (P)
135,708
06-Dec-19
-
-
-
135,708
100
-
Aug-23
(1) At the time of vesting, the quantum of all awards that vest based on performance and/or service conditions will automatically convert to South32 ordinary shares, in the
participant’s name, for nil consideration (unless the Board exercises its discretion to settle awards in cash instead of allocating shares). Any rights that do not vest will
immediately lapse, hence there is no expiry date associated with the awards. (S) - Service only or (P) - Performance and Service conditions apply. As rights are subject to
service and/or performance conditions, the minimum possible total value of rights granted under South32 equity plans for future financial years is nil and the maximum
possible total value is the number of rights multiplied by the market price of South32 shares on the date of vesting.
(2) Further details regarding each of the prior year equity grants are described in past South32 Annual Reports.
(3) The fair value for awards granted in FY24 is the grant date fair value for accounting purposes being A$2.88 for the FY23 Deferred STI award, A$1.54 for the FY24 LTI award and
A$1.21 for the FY24 Transitional LTI award. Shareholders approved, under ASX Listing Rule 10.14, the grant of rights for the CEO at the AGM on 26 October 2023.
(4) Rights that vested in FY24 converted to South32 ordinary shares for nil consideration on 25 August 2023. The South32 closing share price on this date was A$3.48. The vesting
outcome for FY21 LTI awards, FY22 Transitional LTI awards, FY21 MSP Performance awards and FY22 MSP Retention awards scheduled to vest in August 2024 is summarised
on page 99.
(5) The percentage is based on the maximum number of rights available to vest in FY24.
(6) J Economidis ceased to be COO Australia and a member of the Executive KMP on 13 March 2024. Closing balance is at this date.
(7) V Torres became COO Australia and a member of the Executive KMP on 14 March 2024. Opening balance is at this date.
106
SOUTH32 ANNUAL REPORT 2024
Details of MSP and Transitional LTI awards
Key terms and performance conditions of MSP and Transitional LTI awards are outlined below in Table 1.19. For additional terms of the
rights granted under the two plans, see Terms and conditions of rights awarded under equity plans on page 101.
Table 1.19 – Key terms and performance conditions of awards(1)
Award
Key Terms and Performance Conditions
MSP
The MSP is our LTI plan for eligible employees below Lead Team level. The Plan has two elements:
–
Retention rights with a three-year vesting and service period from 1 July to 30 June, vesting in August three years from
grant provided employees remain employed in the Group(2); and
–
Performance rights with a four-year performance and service period from 1 July to 30 June, vesting in August four years
from grant, subject to the same performance and vesting conditions as the LTI for Executive KMP for that year (see
page 88). There is no retesting if the performance condition is not met and any rights that don’t vest will immediately
lapse.
Rights do not carry any entitlement to voting, dividends or dividend equivalent payments.
Transitional
LTI plan
When an executive is promoted to a role in the Lead Team, they move from the MSP (three-year retention rights and
four-year performance rights) to the LTI plan for the Lead Team (four-year performance rights). The Transitional LTI is a
one-off award that may be granted to address the potential shortfall in vesting after three years.
These awards have the same TSR performance conditions as LTI awards granted in the same year except these awards
have a three-year performance period.
Details of Transitional LTI awards held at 30 June 2024 are outlined in Table 1.18. Further details about Transitional LTI
awards granted in earlier years are described in past South32 Annual Reports.
(1) See page 88 for key terms of the LTI.
(2) The retention rights are subject to a service condition. Performance hurdles are factored into the performance rights component of MSP awards.
Shareholdings of KMP
The minimum shareholding requirement for Executive KMP is summarised on page 89.
For Non-Executive Directors, the valuation approach used to determine the minimum shareholding requirement of one year’s Board
fees is the cost to the Non-Executive Director to acquire the shares, except for shares acquired at demerger which are valued based on
the closing South32 Limited share price on 18 May 2015 (A$2.05). As at 30 June 2024, Dr Ntombifuthi (Futhi) Mtoba, Ms Jane Nelson and
Ms Sharon Warburton did not meet this requirement. The percentage of fees reflected in the Table 1.20 below is based on our share
price at 30 June 2024.
Table 1.20 – South32 shares held directly, indirectly or beneficially by each member of KMP, including their related parties
Held at
1 July 2023
Received on
vesting of rights
Received as
remuneration
Other net
change(1)
Held at
30 June 2024
% of Board Fees/
fixed
remuneration(2)
Non-Executive Directors
K Wood
367,825
-
-
-
367,825
226
F Cooper AO
128,010
-
-
-
128,010
240
X Liu
66,000
-
-
-
66,000
124
C Mesquita
177,440
-
-
-
177,440
333
N Mtoba
71,386
-
-
-
71,386
134
J Nelson
-
-
-
-
-
-
W Osborn
174,104
-
-
-
174,104
327
K Rumble
161,380
-
-
-
161,380
303
S Warburton(3)
42,870
-
-
-
42,870
80
Executive KMP
G Kerr
1,976,772
242,160
-
(177,988)
2,040,944
375
S Sibenaler
-
23,762
-
-
23,762
10
J Economidis(4)
111,764
136,637
-
(64,220)
184,181
79
V Torres(5)
462,313
-
-
-
462,313
195
N Pillay
322,038
86,262
-
(38,819)
369,481
191
(1) Other net change includes purchases, and sales and transfers of vested shares.
(2) Based on Board fees and fixed remuneration at 30 June 2024 and the closing share price of South32 shares as at that date of A$3.66.
(3) S Warburton was appointed as a Non-Executive Director on 28 November 2023. Opening balance is as at this date.
(4) J Economidis ceased to be COO Australia and a member of Executive KMP on 13 March 2024. Closing balance is at this date.
(5) V Torres became COO Australia and a member of Executive KMP on 14 March 2024. Opening balance is at this date.
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
107
SOUTH32 ANNUAL REPORT 2024
Remuneration report continued
Additional information
Transactions with KMP
There are no amounts payable to any KMP at 30 June 2024.
During FY24, there were no transactions between KMP or their close family members and the Group other than as described in this
report.
There are no loans with any KMP.
A number of Directors of the Group have control or joint control of other entities (also known as personal entities). During the year, there
have been no transactions between those entities and the Group, and no amounts were owed by or to the Group from those entities.
This Remuneration report was approved by our Board on 29 August 2024.
108
SOUTH32 ANNUAL REPORT 2024
FINANCIAL REPORT
Consolidated income statement
110
Consolidated statement of comprehensive income
111
Consolidated balance sheet
112
Consolidated cash flow statement
113
Consolidated statement of changes in equity
114
Notes to financial statements – Basis of preparation
115
1.
Reporting entity
115
2.
Basis of preparation
115
3.
New standards and interpretations
117
Notes to financial statements – Results for the year
118
4.
Segment information
118
5.
Expenses excluding finance costs
128
6.
Tax
129
7.
Dividends
132
8.
Earnings per share
132
Notes to financial statements – Operating assets and liabilities
133
9.
Trade and other receivables
133
10. Inventories
133
11. Property, plant and equipment
134
12. Intangible assets
137
13. Impairment of non-financial assets
138
14. Trade and other payables
144
15. Provisions
144
Notes to financial statements – Capital structure and financing
147
16. Cash and cash equivalents
147
17. Interest bearing liabilities
147
18. Net finance income/(costs)
148
19. Financial assets and financial liabilities
149
20. Share capital
154
Notes to financial statements – Other notes
155
21. Auditor’s remuneration
155
22. Employee share ownership plans
155
23. Contingent assets and liabilities
158
24. Subsidiaries
159
25. Equity accounted investments
160
26. Interests in joint operations
162
27. Key management personnel
162
28. Related party transactions
163
29. Parent entity information
164
30. Assets and liabilities held for sale and discontinued operations
165
31. Subsequent events
167
Consolidated entity disclosure statement
168
Directors’ declaration
170
Lead auditor’s independence declaration
171
Independent auditor’s report
172
109
SOUTH32 ANNUAL REPORT 2024
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
109
SOUTH32 ANNUAL REPORT 2024
US$M
Note
FY24
FY23
Restated(1)
Continuing operations
Revenue:
Group production
5,021
5,152
Third party products and services
458
494
4
5,479
5,646
Other income
108
343
Expenses excluding finance costs
5
(6,263)
(6,696)
Share of profit/(loss) of equity accounted investments
25
(59)
241
Profit/(loss) from continuing operations
(735)
(466)
Comprising:
Group production
(742)
(478)
Third party products and services
7
12
Profit/(loss) from continuing operations
(735)
(466)
Finance income
222
220
Finance costs
(233)
(198)
Net finance income/(costs)
18
(11)
22
Profit/(loss) before tax from continuing operations
(746)
(444)
Income tax (expense)/benefit
6
106
(174)
Profit/(loss) for the year from continuing operations
(640)
(618)
Discontinued operation
Profit/(loss) after tax from a discontinued operation
30
435
445
Profit/(loss) for the year
(205)
(173)
Attributable to:
Equity holders of South32 Limited
(203)
(173)
Non-controlling interests
(2)
–
Profit/(loss) for the year from continuing operations attributable to equity holders of
South32 Limited:
Basic earnings/(loss) per share (cents)
8
(14.1)
(13.5)
Diluted earnings/(loss) per share (cents)
8
(14.1)
(13.5)
Profit/(loss) for the year attributable to equity holders of South32 Limited:
Basic earnings/(loss) per share (cents)
8
(4.5)
(3.8)
Diluted earnings/(loss) per share (cents)
8
(4.5)
(3.8)
(1) Refer to note 30 Assets and liabilities held for sale and discontinued operations.
The accompanying notes form part of the consolidated financial statements.
Consolidated income statement
for the year ended 30 June 2024
110
SOUTH32 ANNUAL REPORT 2024
US$M
Note
FY24
FY23
Profit/(loss) for the year
(205)
(173)
Other comprehensive income
Items that may be reclassified to the Consolidated income statement:
Translation of foreign operations
3
–
Share of other comprehensive income/(loss) of equity accounted investments
25
–
6
Total items that may be reclassified to the Consolidated income statement
3
6
Items that will not be reclassified to the Consolidated income statement:
Investments in equity instruments designated as fair value through other comprehensive income
(FVOCI):
Net fair value gains/(losses)
(27)
(11)
Income tax (expense)/benefit
(2)
3
Gains/(losses) on pension and medical schemes
15
4
3
Income tax (expense)/benefit recognised within other comprehensive income
(1)
(1)
Total items that will not be reclassified to the Consolidated income statement
(26)
(6)
Total other comprehensive income/(loss)
(23)
–
Total comprehensive income/(loss)
(228)
(173)
Attributable to:
Equity holders of South32 Limited
(228)
(173)
Non-controlling interests
–
–
The accompanying notes form part of the consolidated financial statements.
Consolidated statement of comprehensive income
for the year ended 30 June 2024
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
111
SOUTH32 ANNUAL REPORT 2024
US$M
Note
FY24
FY23
ASSETS
Current assets
Cash and cash equivalents
16
842
1,258
Trade and other receivables
9
634
778
Other financial assets
19
1
1
Inventories
10
985
1,102
Current tax assets
69
54
Other assets
43
46
Assets held for sale
30
1,825
–
Total current assets
4,399
3,239
Non-current assets
Trade and other receivables
9
2,083
1,923
Other financial assets
19
89
118
Inventories
10
63
82
Property, plant and equipment
11
6,503
8,050
Intangible assets
12
221
242
Equity accounted investments
25
396
499
Deferred tax assets
6
481
390
Other assets
10
21
Total non-current assets
9,846
11,325
Total assets
14,245
14,564
LIABILITIES
Current liabilities
Trade and other payables
14
805
985
Interest bearing liabilities
17
223
365
Current tax payables
15
10
Provisions
15
179
194
Deferred income
49
6
Liabilities directly associated with assets held for sale
30
573
–
Total current liabilities
1,844
1,560
Non-current liabilities
Trade and other payables
14
1
19
Interest bearing liabilities
17
1,343
1,376
Other financial liabilities
19
17
37
Deferred tax liabilities
6
165
210
Provisions
15
1,904
1,986
Deferred income
–
1
Total non-current liabilities
3,430
3,629
Total liabilities
5,274
5,189
Net assets
8,971
9,375
EQUITY
Share capital
20
13,216
13,251
Treasury shares
20
(43)
(51)
Reserves
(3,575)
(3,553)
Accumulated losses
(638)
(271)
Total equity attributable to equity holders of South32 Limited
8,960
9,376
Non-controlling interests
11
(1)
Total equity
8,971
9,375
The accompanying notes form part of the consolidated financial statements.
Consolidated balance sheet
as at 30 June 2024
112
SOUTH32 ANNUAL REPORT 2024
US$M
Note
FY24
FY23
Restated(1)
Operating activities
Profit/(loss) before tax from continuing operations
(746)
(444)
Profit/(loss) before tax from a discontinued operation
30
628
657
Adjustments for:
Significant items
98
(186)
Depreciation and amortisation expense
643
653
Net impairment loss/(reversal) of financial assets
29
71
Net impairment loss/(reversal) of non-financial assets
604
1,300
Employee share awards expense
22
24
Net finance (income)/costs
21
(15)
Share of (profit)/loss of equity accounted investments
60
(246)
(Gains)/losses on derivative instruments, contingent consideration and other investments
measured at fair value through profit or loss (FVTPL)
(3)
(6)
Other non-cash or non-operating items
15
(4)
Changes in assets and liabilities:
Trade and other receivables
(120)
178
Inventories
27
(126)
Trade and other payables
(7)
(45)
Provisions and other liabilities
6
3
Cash generated from operations
1,277
1,814
Interest received
85
78
Interest paid
(112)
(109)
Income tax paid
(223)
(818)
Dividends received
2
3
Dividends received from equity accounted investments
90
223
Net cash flows from operating activities
1,119
1,191
Investing activities
Purchase of property, plant and equipment
(1,042)
(790)
Exploration expenditure
(75)
(98)
Exploration expenditure expensed and included in operating cash flows
41
59
Purchase of intangible assets
(4)
(65)
Proceeds from sale of intangible assets
34
73
Investment in financial assets
(112)
(179)
Proceeds from financial assets
42
117
Payments for the acquisition of subsidiaries and joint operations, net of their cash
(4)
(25)
Proceeds from the disposal of subsidiaries and joint operations, net of their cash
30
42
–
Investments in equity accounted investments
(30)
–
Net cash flows from investing activities
(1,108)
(908)
Financing activities
Proceeds from interest bearing liabilities
200
–
Repayment of interest bearing liabilities
(410)
(133)
Purchase of shares by Employee Share Ownership Plan (ESOP) Trusts
(11)
(33)
Share buy-back
(35)
(218)
Dividends paid
7
(163)
(1,007)
Contributions from non-controlling interests
2
–
Net cash flows from financing activities
(417)
(1,391)
Net decrease in cash and cash equivalents
(406)
(1,108)
Cash and cash equivalents, net of overdrafts, at the beginning of the year
1,258
2,365
Effect of foreign exchange rate changes on cash and cash equivalents
(10)
1
Cash and cash equivalents, net of overdrafts, at the end of the year
16
842
1,258
(1) Refer to note 30 Assets and liabilities held for sale and discontinued operations.
The accompanying notes form part of the consolidated financial statements.
Consolidated cash flow statement
for the year ended 30 June 2024
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
113
SOUTH32 ANNUAL REPORT 2024
Attributable to equity holders of South32 Limited
US$M
Share
capital
Treasury
shares
Financial
assets
reserve(1)
Employee
share awards
reserve(2)
Other
reserves(3)
Accumulated
losses
Total
Non-
controlling
interests(4)
Total
equity
Balance as at 1 July 2023
13,251
(51)
(14)
52
(3,591)
(271)
9,376
(1)
9,375
Profit/(loss) for the year
–
–
–
–
–
(203)
(203)
(2)
(205)
Other comprehensive income/(loss)
–
–
(29)
–
1
3
(25)
2
(23)
Total comprehensive income/(loss)
–
–
(29)
–
1
(200)
(228)
–
(228)
Transactions with owners:
Dividends
–
–
–
–
–
(163)
(163)
–
(163)
Shares bought back and cancelled
(35)
–
–
–
–
–
(35)
–
(35)
Employee share entitlements for
unvested awards, net of tax
–
–
–
26
–
–
26
–
26
Employee share awards vested and
lapsed, net of tax
–
19
–
(20)
–
(4)
(5)
–
(5)
Purchase of shares by ESOP Trusts
–
(11)
–
–
–
–
(11)
–
(11)
Equity issued to holders of non-
controlling interest
–
–
–
–
–
–
–
2
2
Acquisition of subsidiary with non-
controlling interest
–
–
–
–
–
–
–
10
10
Balance as at 30 June 2024
13,216
(43)
(43)
58
(3,590)
(638)
8,960
11
8,971
Balance as at 1 July 2022
13,469
(32)
(6)
45
(3,597)
901
10,780
(1)
10,779
Profit/(loss) for the year
–
–
–
–
–
(173)
(173)
–
(173)
Other comprehensive income/(loss)
–
–
(8)
–
6
2
–
–
–
Total comprehensive income/(loss)
–
–
(8)
–
6
(171)
(173)
–
(173)
Transactions with owners:
Dividends
–
–
–
–
–
(1,007)
(1,007)
–
(1,007)
Shares bought back and cancelled
(218)
–
–
–
–
–
(218)
–
(218)
Employee share entitlements for
unvested awards, net of tax
–
–
–
29
–
–
29
–
29
Employee share awards vested and
lapsed, net of tax
–
14
–
(22)
–
6
(2)
–
(2)
Purchase of shares by ESOP Trusts
–
(33)
–
–
–
–
(33)
–
(33)
Balance as at 30 June 2023
13,251
(51)
(14)
52
(3,591)
(271)
9,376
(1)
9,375
(1)
Represents the fair value movement in financial assets designated as FVOCI.
(2)
Represents the accrued employee entitlements to share awards that have not yet vested.
(3)
Primarily consists of the common control transaction reserve of US$3,569 million, which reflects the difference between consideration paid and the carrying value of assets and
liabilities acquired, as well as the gains/losses on disposal of entities as part of the demerger of the Group in 2015.
(4)
Primarily relates to the minority shareholder (49.9 per cent) of Minera Sud Argentina S.A. (MSA), which holds the Chita Valley copper porphyry exploration project in Argentina.
The Group acquired a 50.1 per cent interest in MSA in April 2024.
The accompanying notes form part of the consolidated financial statements.
Consolidated statement of changes in equity
for the year ended 30 June 2024
114
SOUTH32 ANNUAL REPORT 2024
This section sets out the accounting policies that relate to the consolidated financial statements of South32 Limited (referred to as
the Company) and its subsidiaries and joint arrangements (collectively, the Group) as a whole. Where an accounting policy, critical
accounting estimate, assumption or judgement is specific to a note, these are described within the note to which they relate. These
policies have been consistently applied to all periods presented, except as described in note 3 New standards and interpretations.
The consolidated financial statements of the Group for the year ended 30 June 2024 were authorised for issue in accordance with a
resolution of the Directors on 29 August 2024.
1. Reporting entity
South32 Limited is a for-profit company limited by shares incorporated in Australia. South32 Limited has a primary listing on the
Australian Securities Exchange (ASX), a secondary listing on the Johannesburg Stock Exchange (JSE), is admitted to listing in the equity
shares (international commercial companies secondary listing) category of the Official List of the UK Financial Conduct Authority and its
ordinary shares are traded on the London Stock Exchange (LSE).
The nature of the operations and principal activities of the Group are described in note 4 Segment information.
2. Basis of preparation
The consolidated financial statements are general purpose financial statements which:
– Have been prepared in accordance with the requirements of the Corporations Act 2001, Australian Accounting Standards and other
authoritative pronouncements of the Australian Accounting Standards Board (AASB), International Financial Reporting Standards
(IFRS) Accounting Standards and other authoritative pronouncements of the International Accounting Standards Board (IASB);
– Have been prepared on a historical cost basis, except for post-retirement assets and obligations, derivative financial instruments and
certain other financial assets and liabilities which are required to be measured at fair value;
– Are presented in US dollars, with all values rounded to the nearest million dollars (US$M or US$ million) unless otherwise stated, in
accordance with ASIC Corporations Instrument 2016/191;
– Adopt all new and amended accounting standards and interpretations issued by the AASB and IASB that are relevant to the
operations of the Group and effective for reporting periods beginning on or after 1 July 2023. Refer to note 3 New standards and
interpretations for further details; and
– Do not early adopt any accounting standards and interpretations that have been issued or amended but are not yet effective as
described in note 3 New standards and interpretations.
(a) Basis of consolidation
The consolidated financial statements comprise the financial statements of the Group. A list of material subsidiaries at year end is
contained in note 24 Subsidiaries.
The financial statements of subsidiaries are prepared for the same reporting period as the parent entity, using consistent accounting
policies.
(b) Foreign currency translation
The functional currency of the majority of the Group’s operations is the US dollar, as this is assessed to be the principal currency of the
economic environments in which they operate.
Transactions denominated in foreign currencies are initially recorded in the functional currency using the exchange rate at the date of
the underlying transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the rate of exchange
at year end. Exchange gains or losses on translation are included in the Consolidated income statement, except for gains or losses on
translation of foreign-denominated closure and rehabilitation provisions for operating sites, which are capitalised in property, plant
and equipment, and gains or losses on translation of operations with non-USD functional currencies, which are recognised in other
comprehensive income.
(c) Key estimates, assumptions and judgements
The preparation of the consolidated financial statements has required management to apply accounting policies and methodologies
that are based on complex and subjective estimates, assumptions and judgements. Management based its estimates and judgements
on historical experience and assumptions it believes to be reasonable and realistic based on the current environment. Actual results
may differ from those reported in these statements due to the uncertainties that characterise the assumptions and conditions on which
the estimates are based.
Specific sources of uncertainty identified by the Group are set out on the following pages and/or together with the applicable note, as
follows:
Key estimates, assumptions and judgements
Recognition of deferred taxes
note 6
Uncertain tax matters
note 6
Useful economic lives of assets
note 11
Impairment of non-financial assets
note 13
Closure and rehabilitation provisions
note 15
Expected credit loss on credit-impaired financial assets
note 19
Notes to financial statements – Basis of preparation
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
115
SOUTH32 ANNUAL REPORT 2024
2. Basis of preparation continued
(c) Key estimates, assumptions and judgements continued
In addition to the specific sources of uncertainty noted, the following assumptions are considered pervasive to the financial statements
as a whole:
Climate change-related risks and opportunities
The key estimates, assumptions and judgements made in these consolidated financial statements take into account the Group’s
expectations of, and approach to, climate change-related risks and opportunities, and are consistent with the Group’s reporting on
climate-related matters.
These expectations may affect the Group’s financial results and financial position in a number of ways, including the following:
– The useful lives of assets, and therefore the depreciation charged in the Consolidated income statement, may be impacted by
changes in life of operation plans (refer to note 11 Property, plant and equipment);
– Asset recoverable amounts may be affected by changes in estimated future cash flows driven by, for example, changes in forecast
commodity prices, operating costs, carbon prices, and the costs related to the physical impacts of climate change (refer to note
13 Impairment of non-financial assets and note 19(b)(iii) Credit risk: Shareholder loan receivable from Sierra Gorda);
– The commercial viability of exploration areas of interest may impact the recoverability of exploration and evaluation assets (refer to
note 13 Impairment of non-financial assets); and
– Timing and cost of closure and rehabilitation activities (refer to note 15 Provisions).
The carrying amount of the associated deferred tax assets/liabilities may change due to changes in estimates of the likely recovery of
the related tax benefits.
Global transition to a low-carbon world
While we are committed to the goals of the Paris Agreement, current global signposts continue to point towards a probable trajectory
of at least 2°C climate change-related warming which informs our base case(1) for global transition to a low-carbon world. Our base case
commodity price outlook is developed on an annual basis through a bottom-up approach, and is informed by the prevailing market and
policy signposts, study findings by established external organisations and internal research. The Group also considers projections of
global and regional economic growth, demographic changes, and technological evolution to inform our commodity demand outlook,
forecast commodity prices and carbon prices. Any change in our base case may in turn impact our Ore Reserve estimates, life of
operation plans, production volumes and future costs.
The Group’s key estimates, assumptions and judgements with respect to transition risks and opportunities are based on the Group’s
expectations and assessments at the date of this report, and actual results may differ. Government policies and market developments
continue to drive uncertainty in commodity and carbon price outlooks, which may impact the Group’s approach to climate change and
assumptions and judgements, which may in turn result in material changes to financial results and the carrying values of assets and
liabilities in future reporting periods.
Physical impacts of climate change
The Group’s operations are located in regions that may experience climate-related extremes, including but not limited to, extreme
temperatures, bushfires, tropical cyclones, flooding and/or droughts. The Group has performed a baseline risk assessment of the
physical impacts of climate change on its operated portfolio, with the assessment based on scenarios RCP4.5 and RCP8.5 as described
by the Intergovernmental Panel on Climate Change (IPCC)(2).
Longer term assets (including those that move into closure) are likely to face more significant challenges due to the expected severity
of climate risks manifesting over longer timeframes. Climate change is likely to exacerbate the risks to water supply, storage and usage
that we currently manage, particularly for operations in areas of water scarcity and other sensitive environmental aspects.
Risks associated with the physical impacts of climate change are contemplated during the development of our life of operation plans
(including closure estimates) and additional capital costs and/or increases to operating costs are incorporated into our forward-looking
estimates when deemed appropriate. The Group’s ongoing analysis of reasonable alternative assumptions with respect to future
climate conditions has not identified any additional indicator that the carrying value of assets cannot be recovered or that useful lives of
assets will be shortened.
The Group’s key estimates, assumptions and judgements with respect to the physical impacts of climate change are based on the
Group’s expectations and assessments as at the date of this report, and actual results may differ. The high degree of uncertainty around
the nature, timing and magnitude of weather events and long-term changes in climate patterns, as well as the Group’s continued
physical risk assessment process and the development of its direct adaptation strategies, may result in material changes to financial
results and the carrying value of assets and liabilities in future reporting periods.
Notes to financial statements – Basis of preparation continued
(1) By contrast, our 1.5°C scenario, which is primarily based on the International Energy Agency’s Net Zero Emissions 2050 scenario (IEA NZE), is utilised by the Group to assess
the resilience of our portfolio under a rapid global transition. The IEA NZE sets out one credible pathway to achieving a 1.5°C outcome by 2050, providing a set of general
assumptions on commodity demand drivers, scrap availability, material efficiency and carbon prices.
(2) There are four Representative Concentration Pathways (RCPs) representing possible future greenhouse gas emissions and concentration scenarios. RCP4.5 equates to between
1.1°C and 2.6°C of climate change-related warming by the end of the century. RCP8.5 equates to between 2.6°C and 4.8°C of climate change-related warming by the end of the
century.
116
SOUTH32 ANNUAL REPORT 2024
2. Basis of preparation continued
(c) Key estimates, assumptions and judgements continued
Mineral Resources and Ore Reserves
Estimating the quantity and/or grade of Mineral Resources requires the location, quantity, grade (or quality), continuity and other
geological characteristics to be known, estimated or interpreted from specific geological evidence and knowledge, including sampling,
in order to satisfy the requirement that there are reasonable prospects for eventual economic extraction. This process may require
complex and difficult geological assessments to interpret the data.
An Ore Reserve is the economically mineable part of the Measured and/or Indicated Mineral Resource that can be legally extracted, or
where there is a reasonable expectation that approvals for extraction will be granted. In order to estimate Ore Reserves, consideration
is required for a range of modifying factors, including mining, processing, metallurgical, infrastructure, economic, marketing, legal,
environmental, social and governmental. When reporting Ore Reserves, the relevant studies, to at least a pre-feasibility level, must
demonstrate that, at the time of reporting, extraction could be reasonably justified, including a consideration of forecast sales prices.
The Group reports Mineral Resources and Ore Reserves in accordance with the Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves (JORC Code), and the ASX Listing Rules Chapter 5: Additional reporting on mining and oil and gas
production and exploration activities.
Because the economic assumptions used to estimate the Ore Reserves change from period to period, and because additional
geological data is generated during the course of operations, estimates of the Mineral Resources and Ore Reserves may change from
period to period. The Group’s planning processes consider the impacts of climate change on its Ore Reserves, including assessments of
operating costs and the impact of potential extreme weather events on the expectation of economic extraction.
The Group may also include Exploration Targets in determining the recoverable amount of a cash generating unit (CGU) or an
exploration area of interest.
Similar to climate change-related risks and opportunities, changes in the Group’s estimates of Mineral Resources and Ore Reserves,
including exploration targets, may affect the Group’s financial results and financial position in a number of ways, including asset
recoverable amounts, useful lives of assets, commercial viability of exploration areas of interest, timing and cost of closure and
rehabilitation activities, and the recovery of any associated deferred tax assets.
3. New standards and interpretations
(a) New accounting standards and interpretations effective from 1 July 2023
The following new accounting standards and interpretations have been published and are effective for the year ended 30 June 2024:
– Amendments to AASB 7, AASB 101, AASB 108 and AASB 134 – Disclosure of Accounting Policies and Definition of Accounting
Estimates; and
– Amendments to AASB 1 and AASB 112 – Deferred Tax related to Assets and Liabilities arising from a Single Transaction.
The Group has reviewed these amendments and concluded that none have a material impact on the Group.
(b) New accounting standards and interpretations issued but not effective
The following new accounting standards and interpretations have been published but are not yet effective for the year ended 30 June
2024:
– Amendments to AASB 101 – Classification of Liabilities as Current or Non-current;
– Amendments to AASB 10 and AASB 128 – Sale or Contribution of Assets between an Investor and its Associate or Joint Venture;
– Amendments to AASB 16 – Lease Liability in a Sale and Leaseback;
– Amendments to AASB 121 – The Lack of Exchangeability; and
– AASB 18 – Presentation and Disclosure in Financial Statements.
The Group has reviewed these amendments and improvements, and with the exception of the item listed below, does not expect them
to have a material impact on the Group.
AASB 18 Presentation and Disclosure in Financial Statements
AASB 18 was issued in June 2024 and will replace AASB 101 Presentation of Financial Statements, effective for annual periods beginning
on or after 1 January 2027. The new standard introduces new classification and presentation requirements, primarily impacting the
Consolidated income statement and related notes, as well as introducing additional disclosure requirements for management-defined
performance measures.
The Group is in the process of assessing the impact of the new standard, however it is not expected to have an impact on the
recognition and measurement of assets, liabilities, income and expenses, and is expected to only result in changes in the classification
and presentation of these in the financial statements, as well as some additional disclosures in the notes.
The Group does not intend to early adopt any of the new standards or interpretations. It is expected that where applicable, these
standards and interpretations will be adopted on each of the respective effective dates.
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
117
SOUTH32 ANNUAL REPORT 2024
Notes to financial statements – Results for the year
This section focuses on the financial performance of the Group, covering both profitability and the resulting return to shareholders via
earnings per share.
4. Segment information
(a) Description of segments
The operating segments (also referred to as operations) are organised and managed separately according to their location and the
nature of products produced.
The Lead Team (the chief operating decision makers) and the Board of Directors monitor the segment results regularly for the purpose
of making decisions about resource allocation and assessing performance.
The principal activities of each operating segment are summarised as follows:
Operating segment
Principal activities
Worsley Alumina
Integrated bauxite mine and alumina refinery in Australia
Brazil Alumina
Integrated bauxite mine and alumina refinery in Brazil
Brazil Aluminium
Aluminium smelter in Brazil
Hillside Aluminium
Aluminium smelter in South Africa
Mozal Aluminium
Aluminium smelter in Mozambique
Sierra Gorda
Copper mine in Chile
Cannington
Silver, lead and zinc mine in Australia
Hermosa
Base metals exploration and development project in the United States
Cerro Matoso
Integrated laterite ferronickel mine and smelting complex in Colombia
Illawarra Metallurgical Coal(1)
Metallurgical coal mines in Australia
Australia Manganese
Manganese ore mine in Australia
South Africa Manganese
Manganese ore mines in South Africa
(1) In February 2024, the Group announced its decision to enter into a binding agreement to sell Illawarra Metallurgical Coal, which is expected to complete on 29 August 2024. Refer
to note 30 Assets and liabilities held for sale and discontinued operations.
All operations are operated by the Group except Brazil Alumina, Brazil Aluminium and Sierra Gorda.
(b) Segment results
The segment information reflects the Group’s interest in subsidiaries and joint operations, as well as material equity accounted joint
ventures on a proportional consolidation basis. The segment information includes non-IFRS financial measures.
Segment performance is measured by Underlying EBIT and Underlying EBITDA. Underlying EBIT is profit/(loss) before net finance
income/(costs), income tax expense/(benefit) and other earnings adjustment items. Underlying EBITDA is Underlying EBIT before
depreciation and amortisation.
Reconciliations of the underlying segment information to the statutory information included in the Group’s consolidated financial
statements are set out in note 4(b)(i) Underlying results reconciliation, including joint venture adjustments which reconcile the
proportional consolidation of the material equity accounted joint ventures back to their statutory equity accounting positions.
The Group’s material equity accounted joint ventures are Sierra Gorda, Australia Manganese and South Africa Manganese, including an
allocation of Manganese Marketing, refer to note 25 Equity accounted investments.
The Group separately discloses sales of group production from sales of third party products and services because of the significant
difference in profit margin earned on these sales.
It is the Group’s policy that inter-segment transactions are made on an arm’s length basis.
Group and unallocated items/eliminations represent group centre functions and consolidation adjustments.
Group financing and income taxes are primarily managed on a Group basis and are not allocated to operating segments.
Total assets and liabilities for each continuing operating segment represent operating assets and liabilities which predominantly exclude
the carrying amount of non-material equity accounted investments, cash, interest bearing liabilities, tax balances and certain other
financial assets and liabilities.
118
SOUTH32 ANNUAL REPORT 2024
4. Segment information continued
(b) Segment results continued
Revenue recognition
Revenue is measured based on the consideration specified in the contract with a customer and excludes amounts collected on behalf of
third parties. Revenue is not reduced for royalties and other taxes payable from Group production.
The following is a description of the principal activities from which the Group generates its revenue:
Revenue from the sale of commodities
The Group primarily sells the following commodities: alumina, aluminium, copper, silver, lead, zinc, nickel, metallurgical coal and
manganese ore. The sales of these commodities are considered to be performance obligations as they are the contractual promises by
the Group to transfer distinct goods to customers.
The transaction price allocated to each performance obligation is recognised as the performance obligation is satisfied. Satisfaction
occurs when control of the promised commodity is transferred to the customer.
For the sale of commodities, revenue is therefore recognised at a point in time, net of treatment and refining charges (where applicable).
The majority of the Group’s sales agreements specify that title passes on the bill of lading date (the date the commodity is delivered
to the shipping agent) and is assessed to be the point of time in which control over the commodity passes to the customer. For these
sales, revenue is recognised on the bill of lading date. For certain sales, title passes and revenue is recognised when the goods have
been delivered to the customer.
For certain commodities, the sales price is determined on a provisional basis at the date of sale and adjustments to the sales price
subsequently occur based on movements in quoted market or contractual prices up to the date of final pricing. The period between
provisional invoicing and final pricing is up to 180 days. Revenue on provisionally priced sales is recognised based on the estimated
fair value of the total consideration receivable. The revenue adjustment mechanism embedded within provisionally priced sales
arrangements has the characteristics of a commodity derivative. Accordingly, the fair value of the final sales price adjustment is re-
estimated continuously and changes in fair value are disclosed separately as ‘other’ revenue. In all cases, fair value is estimated by
reference to forward market prices.
Revenue from the provision of freight services
The Group sells most of its commodities on either Free On Board (FOB) or Cost, Insurance, and Freight (CIF) Incoterms. In the case of CIF
Incoterms, the Group is responsible for shipping services after the date at which control of the commodities passes to the customer at
the port of loading. The provision of shipping services in these types of arrangements are a distinct service (and therefore a separate
performance obligation) to which a portion of the transaction price should be allocated and recognised over time as the shipping
services are provided. The Group also provides third party freight services which are recognised as the shipping service is provided.
The Group does not separately disclose sales revenue from freight services as it does not consider this necessary in order to
understand the impact of economic factors on the Group.
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
119
SOUTH32 ANNUAL REPORT 2024
Notes to financial statements – Results for the year continued
4. Segment information continued
(b) Segment results continued
FY24
US$M
Worsley
Alumina
Brazil Alumina
Brazil
Aluminium
Hillside
Aluminium
Mozal
Aluminium
Revenue from customers
1,355
483
242
1,717
812
Other revenue(3)
1
1
–
3
–
Total underlying revenue
1,356
484
242
1,720
812
Comprising:
Group production
717
343
242
1,720
812
Third party products and services(4)
–
–
–
–
–
Inter-segment revenue
639
141
–
–
–
Total underlying revenue
1,356
484
242
1,720
812
Underlying EBITDA
324
40
(115)
197
39
Underlying depreciation and amortisation
(193)
(51)
(6)
(67)
(69)
Underlying EBIT
131
(11)
(121)
130
(30)
Comprising:
Group production
131
19
(121)
130
(30)
Exploration expensed
–
–
–
–
–
Third party products and services(4)
–
–
–
–
–
Share of profit/(loss) of equity accounted investments
–
(30)
–
–
–
Underlying EBIT
131
(11)
(121)
130
(30)
Underlying net finance costs
Underlying income tax (expense)/benefit
Underlying royalty related tax (expense)/benefit
Underlying earnings
Total adjustments to profit/(loss)(5)
Profit/(loss) for the year
Underlying exploration expenditure
–
–
–
–
–
Underlying capital expenditure(6)
106
80
8
40
23
Underlying equity accounted investments
–
20
–
–
–
Total underlying assets(7)
3,009
898
119
1,100
663
Total underlying liabilities(7)
1,196
162
51
295
165
(1) The segment information reflects the Group’s interest in material equity accounted joint ventures and is presented on a proportional consolidation basis, which is the measure
used by the Group’s management to assess their performance. The Group’s underlying results includes the proportional elimination of revenue and corresponding expenses
relating to freight services provided by the Group to material joint ventures of US$104 million, and third party product revenue of US$34 million included in Group and unallocated
items/eliminations. Refer to note 4(b)(i) Underlying results reconciliation for the joint venture adjustments that reconcile the underlying proportional consolidation to the statutory
equity accounting positions included in the Group’s consolidated financial statements.
(2) The Illawarra Metallurgical Coal operating segment has been classified as a discontinued operation. Refer to note 30 Assets and liabilities held for sale and discontinued
operations.
(3) Underlying other revenue relates to fair value movements on provisionally priced contracts.
(4) Underlying revenue on third party products and services sold from continuing operations comprises US$170 million for aluminium, US$3 million for alumina, US$34 million
for manganese, US$79 million for freight services and US$102 million for raw materials. Underlying EBIT on third party products and services sold from continuing operations
comprises US$10 million for alumina, US$(2) million for freight services and US$(1) million for raw materials.
(5) Represents the total of all adjustments made to profit/(loss) from operations, net finance income/(costs) and income tax (expense)/benefit. Refer to note 4(b)(i) Underlying results
reconciliation for further details.
(6) Underlying capital expenditure excludes the purchase of intangibles and capitalised exploration expenditure.
(7) Total underlying assets and liabilities for each continuing operating segment represent operating assets and liabilities which predominantly exclude the carrying amount of non-
material equity accounted investments, cash, interest bearing liabilities, tax balances and certain other financial assets and liabilities.
120
SOUTH32 ANNUAL REPORT 2024
Continuing operations
Discontinued
operation
Sierra Gorda(1)
Cannington
Hermosa
Cerro Matoso
Australia
Manganese(1)
South Africa
Manganese(1)
Group and
unallocated
items/
eliminations
Group
underlying
results from
continuing
operations(1)
Illawarra
Metallurgical
Coal(2)
Group
underlying
results(1)
632
611
–
562
447
337
(391)
6,807
1,469
8,276
15
20
–
(6)
(11)
6
(1)
28
(8)
20
647
631
–
556
436
343
(392)
6,835
1,461
8,296
647
631
–
556
436
343
–
6,447
1,224
7,671
–
–
–
–
–
–
388
388
237
625
–
–
–
–
–
–
(780)
–
–
–
647
631
–
556
436
343
(392)
6,835
1,461
8,296
275
289
(24)
96
182
65
(88)
1,280
522
1,802
(132)
(83)
(4)
(61)
(121)
(20)
(28)
(835)
(81)
(916)
143
206
(28)
35
61
45
(116)
445
441
886
143
212
(28)
38
61
45
(96)
504
419
923
–
(6)
–
(3)
–
–
(27)
(36)
(5)
(41)
–
–
–
–
–
–
7
7
28
35
–
–
–
–
–
–
–
(30)
(1)
(31)
143
206
(28)
35
61
45
(116)
445
441
886
(239)
(10)
(249)
(92)
(131)
(223)
(36)
–
(36)
78
300
378
(718)
135
(583)
(640)
435
(205)
13
9
24
3
1
–
29
79
10
89
207
38
372
34
65
43
1
1,017
340
1,357
–
–
–
–
–
–
–
20
6
26
1,878
569
1,571
334
596
390
2,325
13,452
1,794
15,246
214
419
136
243
430
190
2,216
5,717
558
6,275
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
121
SOUTH32 ANNUAL REPORT 2024
Notes to financial statements – Results for the year continued
4. Segment information continued
(b) Segment results continued
FY23 Restated(1)
US$M
Worsley
Alumina
Brazil Alumina
Brazil
Aluminium
Hillside
Aluminium
Mozal
Aluminium
Revenue from customers
1,364
456
166
1,822
888
Other revenue(3)
(1)
–
–
1
(2)
Total underlying revenue
1,363
456
166
1,823
886
Comprising:
Group production
642
395
166
1,823
886
Third party products and services(4)
–
–
–
–
–
Inter-segment revenue
721
61
–
–
–
Total underlying revenue
1,363
456
166
1,823
886
Underlying EBITDA
251
7
(129)
257
108
Underlying depreciation and amortisation
(183)
(52)
(7)
(66)
(52)
Underlying EBIT
68
(45)
(136)
191
56
Comprising:
Group production
68
(51)
(136)
191
56
Exploration expensed
–
–
–
–
–
Third party products and services(4)
–
–
–
–
–
Share of profit/(loss) of equity accounted investments
–
6
–
–
–
Underlying EBIT
68
(45)
(136)
191
56
Underlying net finance costs
Underlying income tax (expense)/benefit
Underlying royalty related tax (expense)/benefit
Underlying earnings
Total adjustments to profit/(loss)(5)
Profit/(loss) for the year
Underlying exploration expenditure
–
–
–
–
–
Underlying capital expenditure(6)
82
58
9
18
17
Underlying equity accounted investments
–
51
–
–
–
Total underlying assets(7)
3,578
880
91
1,156
778
Total underlying liabilities(7)
1,121
142
63
311
200
(1) The Illawarra Metallurgical Coal operating segment has been reclassified as a discontinued operation. Refer to note 30 Assets and liabilities held for sale and discontinued
operations.
(2) The segment information reflects the Group’s interest in material equity accounted joint ventures and is presented on a proportional consolidation basis, which is the measure
used by the Group’s management to assess their performance. The Group’s underlying results includes the proportional elimination of revenue and corresponding expenses
relating to freight services provided by the Group to material joint ventures of US$128 million, and third party product revenue of US$33 million included in Group and unallocated
items/eliminations. Refer to note 4(b)(i) Underlying results reconciliation for the joint venture adjustments that reconcile the underlying proportional consolidation to the statutory
equity accounting positions included in the Group’s consolidated financial statements.
(3) Underlying other revenue relates to fair value movements on provisionally priced contracts.
(4) Underlying revenue on third party products and services sold from continuing operations comprises US$86 million for aluminium, US$25 million for alumina, US$33 million for
manganese, US$106 million for freight services and US$149 million for raw materials. Underlying EBIT on third party products and services sold from continuing operations
comprises US$(1) million for aluminium, US$13 million for alumina, US$(1) million for freight services and US$1 million for raw materials.
(5) Represents the total of all adjustments made to profit/(loss) from operations, net finance income/(costs) and income tax (expense)/benefit. Refer to note 4(b)(i) Underlying results
reconciliation for further details.
(6) Underlying capital expenditure excludes the purchase of intangibles and capitalised exploration expenditure.
(7) Total underlying assets and liabilities for each continuing operating segment represent operating assets and liabilities which predominantly exclude the carrying amount of non-
material equity accounted investments, cash, interest bearing liabilities, tax balances and certain other financial assets and liabilities.
122
SOUTH32 ANNUAL REPORT 2024
Continuing operations
Discontinued
operation
Sierra Gorda(2)
Cannington
Hermosa
Cerro Matoso
Australia
Manganese(2)
South Africa
Manganese(2)
Group and
unallocated
items/
eliminations
Group
underlying
results from
continuing
operations(2)
Illawarra
Metallurgical
Coal(1)
Group
underlying
results(2)
682
554
–
698
720
369
(381)
7,338
1,809
9,147
2
(12)
–
–
(32)
(25)
(2)
(71)
(26)
(97)
684
542
–
698
688
344
(383)
7,267
1,783
9,050
684
542
–
698
688
344
–
6,868
1,643
8,511
–
–
–
–
–
–
399
399
140
539
–
–
–
–
–
–
(782)
–
–
–
684
542
–
698
688
344
(383)
7,267
1,783
9,050
358
213
(15)
246
369
66
(52)
1,679
855
2,534
(141)
(71)
(4)
(57)
(103)
(21)
(20)
(777)
(141)
(918)
217
142
(19)
189
266
45
(72)
902
714
1,616
221
148
(19)
191
266
46
(42)
939
707
1,646
(4)
(6)
–
(2)
–
(1)
(42)
(55)
(9)
(64)
–
–
–
–
–
–
12
12
11
23
–
–
–
–
–
–
–
6
5
11
217
142
(19)
189
266
45
(72)
902
714
1,616
(182)
(6)
(188)
(246)
(211)
(457)
(55)
–
(55)
419
497
916
(1,037)
(52)
(1,089)
(618)
445
(173)
7
8
20
2
1
1
51
90
17
107
196
61
256
38
58
25
3
821
248
1,069
–
–
–
–
–
–
–
51
7
58
1,811
575
1,095
581
660
326
2,564
14,095
1,420
15,515
223
403
96
218
421
183
2,240
5,621
519
6,140
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
123
SOUTH32 ANNUAL REPORT 2024
Notes to financial statements – Results for the year continued
4. Segment information continued
(b) Segment results continued
(i)
Underlying results reconciliation
The following tables reconcile the underlying segment information to the statutory information included in the Group’s consolidated
financial statements:
FY24
US$M
Continuing
operations
Discontinued
operation(1)
Total
Underlying EBIT
445
441
886
Significant items(2)
(50)
–
(50)
Joint venture adjustments(3)(4)
(284)
–
(284)
Exchange rate gains/(losses) on restatement of monetary items(5)
(24)
–
(24)
Net impairment (loss)/reversal of financial assets(5)(6)
(29)
–
(29)
Net impairment (loss)/reversal of non-financial assets(5)(7)
(801)
197
(604)
Gains/(losses) on non-trading derivative instruments, contingent consideration and other
investments measured at FVTPL(5)
8
–
8
Profit/(loss) from operations
(735)
638
(97)
Underlying net finance costs
(239)
(10)
(249)
Joint venture adjustments(3)(4)
220
–
220
Exchange rate variations on net debt
8
–
8
Net finance income/(costs)
(11)
(10)
(21)
Underlying income tax (expense)/benefit
(92)
(131)
(223)
Underlying royalty related tax (expense)/benefit
(36)
–
(36)
Tax effect of significant items(2)
15
–
15
Joint venture adjustments relating to income tax expense(3)(4)
21
–
21
Joint venture adjustments relating to royalty related tax expense(3)(4)
36
–
36
Tax effect of other adjustments to derive Underlying EBIT
180
(58)
122
Tax effect of other adjustments to derive Underlying net finance costs
(2)
–
(2)
Exchange rate variations on tax balances
(16)
(4)
(20)
Income tax (expense)/benefit
106
(193)
(87)
Underlying earnings
78
300
378
Total adjustments to profit/(loss)
(718)
135
(583)
Profit/(loss) for the year
(640)
435
(205)
Underlying earnings attributable to:
Equity holders of South32 Limited
80
300
380
Non-controlling interests
(2)
–
(2)
(1) Refer to note 30 Assets and liabilities held for sale and discontinued operations.
(2) Refer to note 4(b)(ii) Significant items.
(3) The segment information reflects the Group’s interest in material equity accounted joint ventures and is presented on a proportional consolidation basis, which is the measure
used by the Group’s management to assess their performance. Joint venture adjustments reconcile the proportional consolidation to the statutory equity accounting positions,
recognised in share of profit/(loss) of equity accounted investments in the Consolidated income statement.
(4) The net impact of all joint venture adjustments to the Group’s profit/(loss) for the year amounted to US$(7) million of which US$28 million related to the Sierra Gorda segment,
US$(27) million related to the Australia Manganese segment and US$(8) million related to the South Africa Manganese segment. The Sierra Gorda joint venture adjustments
include a revaluation gain of US$29 million (US$22 million post-tax) relating to the shareholder loan payable that was eliminated from the Group's Underlying earnings upon
proportional consolidation. The Australia Manganese joint venture adjustments include significant items of US$(63) million (US$(28) million post-tax) as outlined in note 4(b)
(ii) Significant items.
(5) Recognised in expenses excluding finance costs in the Consolidated income statement.
(6) Refer to note 19 Financial assets and financial liabilities.
(7) Refer to note 13 Impairment of non-financial assets.
124
SOUTH32 ANNUAL REPORT 2024
4. Segment information continued
(b) Segment results continued
(i)
Underlying results reconciliation continued
FY23 Restated(1)
US$M
Continuing
operations
Discontinued
operation(1)
Total
Underlying EBIT
902
714
1,616
Significant items(2)
237
(51)
186
Joint venture adjustments(3)(4)
(291)
–
(291)
Exchange rate gains/(losses) on restatement of monetary items(5)
61
1
62
Net impairment (loss)/reversal of financial assets(5)(6)
(71)
–
(71)
Net impairment (loss)/reversal of non-financial assets(5)(7)
(1,300)
–
(1,300)
Gains/(losses) on non-trading derivative instruments, contingent consideration and other
investments measured at FVTPL(5)
(4)
–
(4)
Profit/(loss) from operations
(466)
664
198
Underlying net finance costs
(182)
(6)
(188)
Joint venture adjustments(3)(4)
195
–
195
Exchange rate variations on net debt
9
(1)
8
Net finance income/(costs)
22
(7)
15
Underlying income tax (expense)/benefit
(246)
(211)
(457)
Underlying royalty related tax (expense)/benefit
(55)
–
(55)
Tax effect of significant items(2)
(39)
16
(23)
Joint venture adjustments relating to income tax expense(3)(4)
96
–
96
Joint venture adjustments relating to royalty related tax expense(3)(4)
55
–
55
Tax effect of other adjustments to derive Underlying EBIT
(2)
(1)
(3)
Tax effect of other adjustments to derive Underlying net finance costs
(3)
–
(3)
Exchange rate variations on tax balances
20
(16)
4
Income tax (expense)/benefit
(174)
(212)
(386)
Underlying earnings
419
497
916
Total adjustments to profit/(loss)
(1,037)
(52)
(1,089)
Profit/(loss) for the year
(618)
445
(173)
Underlying earnings attributable to:
Equity holders of South32 Limited
419
497
916
Non-controlling interests
–
–
–
(1) The Illawarra Metallurgical Coal operating segment has been reclassified as a discontinued operation. Refer to note 30 Assets and liabilities held for sale and discontinued
operations.
(2) Refer to note 4(b)(ii) Significant items.
(3) The segment information reflects the Group’s interest in material equity accounted joint ventures and is presented on a proportional consolidation basis, which is the measure
used by the Group’s management to assess their performance. Joint venture adjustments reconcile the proportional consolidation to the statutory equity accounting positions,
recognised in share of profit/(loss) of equity accounted investments in the Consolidated income statement.
(4) The net impact of all joint venture adjustments to the Group’s profit/(loss) for the year amounted to US$55 million of which US$46 million related to the Sierra Gorda segment,
US$(3) million related to the Australia Manganese segment and US$12 million related to the South Africa Manganese segment. The Sierra Gorda joint venture adjustments include
a revaluation gain of US$71 million (US$52 million post-tax) relating to the shareholder loan payable that was eliminated from the Group's Underlying earnings upon proportional
consolidation.
(5) Recognised in expenses excluding finance costs in the Consolidated income statement.
(6) Refer to note 19 Financial assets and financial liabilities.
(7) Refer to note 13 Impairment of non-financial assets.
OPERATING AND FINANCIAL REVIEW
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FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
125
SOUTH32 ANNUAL REPORT 2024
Notes to financial statements – Results for the year continued
4. Segment information continued
(b) Segment results continued
(i)
Underlying results reconciliation continued
FY24
US$M
Group
underlying
results
Joint venture
adjustments
Discontinued
operation
adjustments(1)
Group
statutory
results
Total revenue
8,296
(1,356)
(1,461)
5,479
Depreciation and amortisation
916
(273)
(81)
562
Share of profit/(loss) of equity accounted investments
(31)
(29)
1
(59)
Exploration expenditure(2)
89
(14)
–
75
Capital expenditure(2)
1,357
(315)
–
1,042
Equity accounted investments
26
376
(6)
396
Total assets
15,246
(1,001)
–
14,245
Total liabilities
6,275
(1,001)
–
5,274
(1) Refer to note 30 Assets and liabilities held for sale and discontinued operations.
(2) The Group statutory results include the cash flows from discontinued operations, consistent with the Consolidated cash flow statement.
FY23 Restated(1)
US$M
Group
underlying
results
Joint venture
adjustments
Discontinued
operation
adjustments(1)
Group
statutory
results
Total revenue
9,050
(1,621)
(1,783)
5,646
Depreciation and amortisation
918
(265)
(141)
512
Share of profit/(loss) of equity accounted investments
11
235
(5)
241
Exploration expenditure(2)
107
(9)
–
98
Capital expenditure(2)
1,069
(279)
–
790
Equity accounted investments
58
441
–
499
Total assets
15,515
(951)
–
14,564
Total liabilities
6,140
(951)
–
5,189
(1) Refer to note 30 Assets and liabilities held for sale and discontinued operations.
(2) The Group statutory results include the cash flows from discontinued operations, consistent with the Consolidated cash flow statement.
(ii) Significant items
Significant items are those items, not separately identified in note 4(b)(i) Underlying results reconciliation, whose nature and amount are
considered significant to the Group’s consolidated financial statements.
FY24
US$M
Gross
Tax
Net
Tropical Cyclone Megan impacts
(50)
15
(35)
Total significant items
(50)
15
(35)
Tropical Cyclone Megan impacts
In March 2024, Tropical Cyclone Megan severely impacted operations at Groote Eylandt Mining Company Pty Ltd (GEMCO). The weather
system resulted in widespread flooding and significant damage to infrastructure, including the wharf, port and a critical bridge, resulting
in the temporary suspension of operations. Amounts incurred directly or indirectly as a result of Tropical Cyclone Megan, including
insurance related income and expenses, do not reflect the performance of the underlying operation and have been classified as
significant items.
The Group operates a captive insurance program, in which a wholly owned subsidiary within the Group insures a number of our
operations, including GEMCO. As a result of Tropical Cyclone Megan, the Group recognised an insurance expense incurred by its captive
insurer of US$50 million (US$35 million post-tax) in expenses excluding finance costs in the Consolidated income statement, and was
included within Group and unallocated items/eliminations.
Australia Manganese incurred a net loss of US$63 million (US$28 million post-tax) which was recognised in share of profit/(loss) of equity
accounted investments in the Consolidated income statement. The net loss of US$28 million included expenses related to idle capacity
charges, asset write-offs, repairs and clean-up costs, partially offset by lower income and royalty taxes, and the Group's share of the
insurance income described above. The net loss of US$28 million was included in the joint venture adjustments in the underlying results
reconciliation.
During 2025, the Group expects to incur further costs and considers it probable to recover amounts through insurance, which will also
be classified as significant items. No contingent asset has been disclosed for any further anticipated insurance recoveries as a reliable
estimate cannot be made at present.
126
SOUTH32 ANNUAL REPORT 2024
4. Segment information continued
(b) Segment results continued
(ii) Significant items continued
FY23
US$M
Gross
Tax
Net
Disposal of royalties
189
(56)
133
Assets write-off
(51)
16
(35)
Tax adjustments relating to the Sierra Gorda acquisition
–
17
17
Vendor indemnity relating to the Sierra Gorda acquisition
48
–
48
Total significant items
186
(23)
163
Disposal of royalties
On 19 July 2022, the Group divested four royalties to Ecora Resources PLC (formerly known as Anglo Pacific Group PLC) in exchange
for consideration comprising an upfront cash payment of US$48 million, deferred cash consideration of US$55 million, US$78 million
in equity and a variable consideration receivable valued at US$10 million. The equity in Ecora Resources PLC has been recognised as
an investment in equity instruments designated at FVOCI. The variable consideration is payable if certain production and price-linked
conditions are met prior to 2032, up to a maximum of US$15 million.
The royalties were recognised as intangible assets with a nominal carrying value. On completion the Group recognised other income,
net of transaction costs, of US$189 million (US$133 million post-tax) in the Consolidated income statement and was included in Group
and unallocated items/eliminations.
Assets write-off
On 23 August 2022, the Group announced that it would not proceed with an investment in the Dendrobium Next Domain project
at Illawarra Metallurgical Coal following its consideration of recently completed study work and extensive analysis of alternatives
considered for the complex. As a result of the decision in August 2022, the Group wrote off US$51 million (US$35 million post-tax) of
costs previously capitalised in relation to the project which were recognised within expenses excluding finance costs in the Consolidated
income statement. The write-off related to capitalised exploration and evaluation assets previously included in property, plant and
equipment on the Consolidated balance sheet.
Tax adjustments relating to the Sierra Gorda acquisition
During FY23, the Group recognised an income tax benefit of US$31 million relating to tax liabilities recognised on the acquisition
of Sierra Gorda during FY22. The US$31 million benefit comprises a reassessment of US$17 million and a foreign exchange gain of
US$14 million which is separately reported as part of exchange variations of tax balances. The tax adjustments relating to the Sierra
Gorda acquisition have been excluded from the Group’s Underlying income tax expense on the basis that they do not relate to
assessable income earned during its ownership.
Vendor indemnity relating to the Sierra Gorda acquisition
On 17 May 2023, Chilean Mining Tax reforms were passed by the Chilean Congress and subsequently enacted in August 2023. As part
of the Group's acquisition of Sierra Gorda during FY22, the Group had the right to claim an indemnity from the vendors for any mining
tax changes enacted prior to December 2025. As a result of these changes the Group recognised other income of US$48 million in the
Group's Consolidated income statement in relation to the indemnity, which was subsequently received from the vendors in FY24.
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
127
SOUTH32 ANNUAL REPORT 2024
4. Segment information continued
(c) Geographical information
The geographical information below analyses statutory Group revenue from continuing operations and non-current assets by
location. Revenue is primarily presented by the geographical destination of the product and non-current assets are presented by the
geographical location of the operations.
US$M
Revenue from external customers
Non-current assets
FY24
FY23
Restated(1)
FY24
FY23
Australia
359
263
3,350
5,239
Brazil
112
192
797
765
China
622
695
–
–
Italy
330
338
–
–
Japan
304
313
–
–
Middle East
319
269
–
–
Netherlands(2)
948
1,056
1,769
1,604
South Africa
392
495
868
882
South Korea
299
249
–
–
United States of America
397
419
1,661
1,193
Rest of Africa
283
346
435
488
Rest of Asia
319
386
79
100
Rest of Europe
458
321
8
1
Rest of North America
244
234
2
1
Rest of Oceania
93
70
–
–
Rest of South America
–
–
307
544
Unallocated assets(3)
–
–
570
508
Total
5,479
5,646
9,846
11,325
(1) Refer to note 30 Assets and liabilities held for sale and discontinued operations.
(2) Non-current assets include the non-current portion of the shareholder loan receivable from Sierra Gorda.
(3) Comprises other financial assets and deferred tax assets.
5. Expenses excluding finance costs
US$M
Note
FY24
FY23
Restated(1)
Changes in inventories of finished goods and work in progress
49
(49)
Raw materials and consumables used
2,426
2,592
Wages, salaries and redundancies
554
527
Pension and other post-retirement obligations
51
51
External services (including transportation)
909
873
Third party commodity purchases
436
471
Depreciation and amortisation
562
512
Exchange rate (gains)/losses on restatement of monetary items
24
(61)
(Gains)/losses on derivative instruments, contingent consideration and other investments measured at
FVTPL
(3)
(6)
Government and other royalties paid and payable
142
179
Exploration expenditure incurred and expensed
36
50
Net impairment loss/(reversal) of financial assets
19
29
71
Net impairment loss/(reversal) of non-financial assets
13
801
1,300
Short-term, low-value and variable lease rentals
58
50
All other operating expenses
189
136
Total
6,263
6,696
(1) Refer to note 30 Assets and liabilities held for sale and discontinued operations.
Notes to financial statements – Results for the year continued
128
SOUTH32 ANNUAL REPORT 2024
6. Tax
Income tax expense comprises current and deferred tax and is recognised in the Consolidated income statement except to the extent
that it relates to items recognised directly in the Consolidated statement of comprehensive income.
(a) Income tax expense
US$M
FY24
FY23
Restated(1)
Current income tax (expense)/benefit
(213)
(476)
Deferred income tax (expense)/benefit
126
90
Total income tax (expense)/benefit
(87)
(386)
Income tax (expense)/benefit attributable to:
Continuing operations
106
(174)
Discontinued operation(1)
(193)
(212)
Total income tax (expense)/benefit
(87)
(386)
(1) Refer to note 30 Assets and liabilities held for sale and discontinued operations.
(b) Reconciliation of prima facie tax expense to income tax expense
US$M
FY24
FY23
Restated(1)
Profit/(loss) before tax from continuing operations
(746)
(444)
Profit/(loss) before tax from a discontinued operation
628
657
Deduct: Share of profit/(loss) of equity accounted investments included in continuing operations
(59)
241
Deduct: Share of profit/(loss) of equity accounted investments included in a discontinued operation
(1)
5
Profit/(loss) subject to tax
(58)
(33)
Income tax on profit/(loss) calculated at 30 per cent
18
10
Tax rate differential on non-Australian income
4
1
Exchange variations and other translation adjustments
(20)
4
Withholding tax on distributed earnings
–
(36)
Derecognition of future tax benefits(2)
(14)
(55)
Non-deductible impairment charges(2)
(77)
(333)
Colombian royalty expense
23
(24)
Tax adjustments relating to the Sierra Gorda acquisition(3)
–
31
Prior year adjustments
(10)
4
Other
(11)
12
Total income tax (expense)/benefit
(87)
(386)
(1) Refer to note 30 Assets and liabilities held for sale and discontinued operations.
(2) FY24 primarily relates to the impairment of Cerro Matoso, which resulted in the Group derecognising US$38 million of deferred tax assets and incurring US$38 million of non-
deductible tax expenses. FY23 primarily relates to the impairment of the Taylor Deposit at Hermosa, which resulted in the Group derecognising US$53 million of deferred tax
assets and incurring US$315 million of non-deductible tax expenses. Refer to note 13 Impairment of non-financial assets.
(3) Refer to note 4(b)(ii) Significant items.
Profit/(loss) from equity accounted investments has been taxed in companies other than South32 Limited, being the companies whose
results are disclosed as equity accounted investments in the consolidated financial statements. Refer to note 25 Equity accounted
investments for further details of the Group’s equity accounted investments.
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
129
SOUTH32 ANNUAL REPORT 2024
6. Tax continued
(c) Movement in deferred tax balances
The composition of the Group’s net deferred tax assets and liabilities recognised on the Consolidated balance sheet, including amounts
classified as held for sale, and the deferred tax expense (charged)/credited to the Consolidated income statement, including from
discontinued operations, is as follows:
US$M
Deferred tax assets
Deferred tax liabilities
Deferred tax (charged)/credited
to the Consolidated income
statement(1)
FY24
FY23
FY24(1)
FY23
FY24
FY23
Type of temporary difference
Depreciation
96
253
103
261
1
2
Employee benefits
45
49
(21)
(12)
5
1
Closure and rehabilitation
251
234
(56)
(59)
14
34
Other provisions
14
–
(3)
(13)
4
–
Deferred charges
–
(52)
83
–
(31)
8
Non tax-depreciable fair value adjustments, revaluations
and mineral rights
(8)
(95)
2
11
96
–
Tax-effected losses
94
15
–
(54)
25
57
Brazil deferral incentive(2)
–
–
61
70
9
(6)
Leases
20
(1)
(2)
(1)
22
(1)
Other
(31)
(13)
9
7
(19)
(5)
Total
481
390
176
210
126
90
(1) Deferred tax liabilities include US$11 million classified as held for sale on the Consolidated balance sheet in FY24. Deferred tax expense charged/(credited) to the Consolidated
income statement includes US$103 million (FY23: US$2 million) from discontinued operations. Refer to note 30 Assets and liabilities held for sale and discontinued operations.
(2) Our Brazilian subsidiary has received a 75 per cent corporate income tax deferral due to the reinvestment of capital in the North East regions of Brazil. The tax is deferred until
earnings are repatriated from Brazil.
Deferred tax is provided using the balance sheet liability method, providing for the tax effect of temporary differences between the
carrying amount of assets and liabilities for financial reporting purposes and the amounts used for tax assessment or deduction
purposes.
To the extent that an item’s tax base is solely derived from the amount deductible under capital gains tax legislation, deferred tax is
determined as if such amounts are not deductible in determining future assessable income.
(d) Unrecognised deferred tax assets and liabilities
The composition of the Group’s unrecognised deferred tax assets and liabilities is as follows:
US$M
FY24
FY23
Unrecognised deferred tax assets
Tax-effected losses(1)
61
58
Mineral rights
617
617
Impairment of investments in subsidiaries
1,233
949
Closure and rehabilitation
99
48
Depreciable assets
70
32
Other temporary differences
6
1
Total unrecognised deferred tax assets
2,086
1,705
Unrecognised deferred tax liabilities
Taxable temporary differences associated with investments and undistributed earnings in subsidiaries
36
33
Total unrecognised deferred tax liabilities
36
33
(1) Represents tax losses that have no expiry.
Notes to financial statements – Results for the year continued
130
SOUTH32 ANNUAL REPORT 2024
6. Tax continued
(e) Tax consolidation
South32 Limited and its 100 per cent owned Australian resident subsidiaries have formed a tax consolidated group with effect
from 25 May 2015. South32 Limited is the head entity of the tax consolidated group. Members of the Group have entered into a tax
sharing agreement in order to allocate income tax expense to the wholly-owned subsidiaries on a stand-alone basis. The tax sharing
arrangement provides for the allocation of income tax liabilities between the entities should the head entity default on its tax payment
obligations. The possibility of such a default is considered remote at the date of this report.
Members of the tax consolidated group have also entered into a tax funding agreement. The Group has applied its allocation approach
in determining the appropriate amount of current taxes to allocate to members of the tax consolidated group. The tax funding
agreement provides for each member of the tax consolidated group to pay or receive a tax equivalent amount to or from the head
entity in accordance with their notional current tax liability or current tax asset. Such amounts are reflected in amounts receivable from
or payable to the head entity in their accounts and are settled as soon as practicable after lodgement of the consolidated return and
payment of the tax liability.
(f) Future tax developments
The Group continues to monitor the Organisation for Economic Co-operation and Development’s Two Pillar Solution in all countries in
which the Group operates.
Pillar One measures currently apply only to multinational enterprises that have a global turnover exceeding €20 billion and profitability
exceeding 10 per cent, and therefore does not apply to the Group. Pillar Two measures seek to introduce a 15 per cent global minimum
tax and will apply to the Group given its annual turnover exceeds the €750 million threshold. The Group notes that in Australia, draft
legislation has been introduced into Parliament but has not yet been enacted, with effect from 1 January 2024. The Group also notes
that other jurisdictions in which the Group operate have either announced their intention to implement or have enacted Pillar Two
legislation.
The Group has adopted the guidance contained in the IASB issued International Tax Reform - Pillar Two Model Rules, which amended
IAS 12 Income Taxes, released in May 2023 and applied the mandatory temporary exception to recognise and disclose information
about deferred tax assets and liabilities related to Pillar Two income taxes. The Group is continuing to evaluate the cash tax implications
and other impacts of the Pillar Two model rules, and does not expect the impact on the Group to be material.
(g) Tax transparency report
More detail of the Group’s tax outcomes, including country-by-country reporting is included in the 2024 Tax Transparency and Payments
to Government Report.
Key estimates, assumptions and judgements
Deferred tax
Judgement is required in assessing whether deferred tax assets and certain deferred tax liabilities are recognised on the
Consolidated balance sheet. Deferred tax assets are recognised only where it is considered more likely than not that they will be
recovered, which is dependent on the generation of sufficient future taxable profits. Deferred tax liabilities arising from temporary
differences in investments, caused principally by retained earnings held in foreign tax jurisdictions, are recognised unless
repatriation of retained earnings can be controlled and are not expected to occur in the foreseeable future.
Assumptions about the generation of future taxable profits and repatriation of retained earnings depend on management’s
estimates of future cash flows. These depend on estimates of future production and sales volumes, commodity prices, climate
change-related impacts, Mineral Resources and Ore Reserves, operating costs, closure and rehabilitation costs, capital
expenditure, dividends and other capital management transactions.
Uncertain tax matters
Judgements are required about the application of the inherently complex income tax legislation in Colombia and Brazil. These
judgements are subject to risk and uncertainty, hence there is a possibility that changes in circumstances will alter expectations,
which may impact the amount of deferred tax assets and deferred tax liabilities recognised on the Consolidated balance sheet
and the amount of other tax losses and temporary differences not yet recognised.
Where the final tax outcomes are different from the amounts that were initially recorded, these differences impact the current
and deferred tax provisions in the period in which the determination is made. Measurement of uncertain tax and royalty matters
considers a range of possible outcomes, including assessments received from tax authorities. Where management is of the view
that potential liabilities have a low probability of crystallising, or it is not possible to quantify them reliably, they are disclosed as
contingent liabilities.
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
131
SOUTH32 ANNUAL REPORT 2024
7. Dividends
US$M
FY24
FY23
Prior year final dividend(1)
145
646
Prior year special dividend
–
138
Interim dividend(2)
18
223
Total dividends declared and paid during the year
163
1,007
(1) On 24 August 2023, the Directors resolved to pay a fully franked final dividend of US 3.2 cents per share (US$145 million) in respect of the 2023 financial year. The dividends were
paid on 12 October 2023.
(2) On 15 February 2024, the Directors resolved to pay a fully franked interim dividend of US 0.4 cents per share (US$18 million) in respect of the 2024 financial half year. The
dividends were paid on 4 April 2024.
Franking account
US$M
FY24
FY23
Franking credits at the beginning of the financial year
538
678
Credits arising from tax paid/payable by South32 Limited(1)
137
243
Credits arising from receipt of franked dividends
32
68
Utilisation of credits arising from the payment of franked dividends
(72)
(426)
Exchange rate variations
–
(25)
Total franking credits available at the end of the financial year(2)
635
538
(1) Includes the Australia FY24 income tax liability of US$19 million.
(2) The payment of the final franked FY24 dividend declared after 30 June 2024 will decrease the franking account balance by US$60 million. Refer to note 31 Subsequent events.
8. Earnings per share
Basic earnings/(loss) per share amounts are calculated based on profit or loss attributable to equity holders of South32 Limited and the
weighted average number of shares outstanding during the year.
Diluted earnings/(loss) per share amounts are calculated based on profit or loss attributable to equity holders of South32 Limited and
the weighted average number of shares outstanding after adjustment for the effects of all dilutive potential shares.
The following reflects the profit or loss and share data used in the basic and diluted earnings/(loss) per share computations:
Profit/(loss) attributable to equity holders
US$M
FY24
FY23
Restated(1)
Continuing operations
(638)
(618)
Discontinued operation(1)
435
445
Profit/(loss) attributable to equity holders of South32 Limited (basic)
(203)
(173)
Profit/(loss) attributable to equity holders of South32 Limited (diluted)
(203)
(173)
(1) Refer to note 30 Assets and liabilities held for sale and discontinued operations.
Weighted average number of shares
Million
FY24
FY23
Basic earnings/(loss) per share denominator(1)
4,519
4,572
Diluted earnings/(loss) per share denominator(2)
4,519
4,572
(1) The basic earnings/(loss) per share denominator is the aggregate of the weighted average number of shares after deduction of the weighted average number of treasury shares
outstanding and shares permanently cancelled through the on-market share buy-back program.
(2) The diluted earnings/(loss) per share calculation excludes 17,831,040 (FY23: 26,994,090) shares contingently issuable under ESOP plans, subject to service and performance
conditions, which are considered anti-dilutive.
Earnings/(loss) per share
US cents
FY24
FY23
Restated(1)
Continuing operations
Basic earnings/(loss) per share
(14.1)
(13.5)
Diluted earnings/(loss) per share
(14.1)
(13.5)
Attributable to ordinary equity holders of South32 Limited
Basic earnings/(loss) per share
(4.5)
(3.8)
Diluted earnings/(loss) per share
(4.5)
(3.8)
(1) Refer to note 30 Assets and liabilities held for sale and discontinued operations.
Notes to financial statements – Results for the year continued
132
SOUTH32 ANNUAL REPORT 2024
This section shows the assets used to generate the Group’s trading performance and the liabilities incurred. Assets and liabilities
relating to the Group’s financing activities are addressed in the capital structure and financing section, notes 16 to 20.
9. Trade and other receivables
US$M
FY24
FY23
Current
Trade receivables
398
395
Loans to equity accounted investments(1)(2)
73
114
Other receivables
163
269
Total current trade and other receivables(3)
634
778
Non-current
Loans to equity accounted investments(1)(2)
1,933
1,790
Other receivables
150
133
Total non-current trade and other receivables(3)
2,083
1,923
(1) Refer to note 28 Related party transactions.
(2) Includes a purchased credit-impaired receivable which is classified as current of US$45 million and non-current of US$1,769 million (FY23: current of US$107 million and non-
current of US$1,604 million). Refer to note 19 Financial assets and financial liabilities.
(3) Net of allowances for expected credit losses of US$2 million (FY23: US$2 million).
Trade receivables generally have terms of up to 30 days.
10. Inventories
US$M
FY24
FY23
Current
Raw materials and consumables
484
519
Work in progress
299
333
Finished goods
202
250
Total current inventories
985
1,102
Non-current
Raw materials and consumables
41
57
Work in progress
22
25
Total non-current inventories
63
82
The value of inventories carried at net realisable value as at 30 June 2024 was US$15 million (FY23: US$222 million). Inventory write-
downs of US$3 million (FY23: US$18 million) were recognised in the year.
Inventories are valued at the lower of cost and net realisable value. Cost is determined primarily on the basis of average cost. For
processed inventories, cost is derived on an absorption costing basis. Cost comprises the cost of purchasing raw materials and the cost
of production, including attributable overheads.
Notes to financial statements – Operating assets and liabilities
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
133
SOUTH32 ANNUAL REPORT 2024
Notes to financial statements – Operating assets and liabilities continued
11. Property, plant and equipment
FY24
US$M
Land and buildings
Plant and equipment
Other mineral
assets(1)
Assets under
construction
Exploration
and
evaluation
Total
Right-of-use
assets
Owned
assets
Right-of-use
assets
Owned
assets
Cost
At the beginning of the year
43
2,413
1,051
13,408
4,470
1,235
245
22,865
Additions
2
–
72
51
–
901
53
1,079
Foreign exchange
movements in closure and
rehabilitation provisions(2)
–
–
–
(11)
–
–
–
(11)
Disposals
(2)
–
–
(50)
(54)
(21)
–
(127)
Reclassified as held for sale(3)
(6)
(125)
(29)
(2,093)
(1,187)
(477)
(38)
(3,955)
Transfers and other
movements
–
55
–
337
102
(314)
(180)
–
At the end of the year
37
2,343
1,094
11,642
3,331
1,324
80
19,851
Accumulated depreciation
and impairments
At the beginning of the year
18
1,516
380
9,533
3,053
170
145
14,815
Depreciation(4)
7
77
67
417
69
–
–
637
Net impairments(5)
–
61
53
233
225
(4)
–
568
Disposals
(2)
–
–
(48)
(54)
–
–
(104)
Reclassified as held for sale(3)
(4)
(72)
(19)
(1,638)
(775)
(47)
(13)
(2,568)
Transfers and other
movements
–
–
–
–
–
132
(132)
–
At the end of the year
19
1,582
481
8,497
2,518
251
–
13,348
Net book value at the end
of the year
18
761
613
3,145
813
1,073
80
6,503
(1) Other mineral assets include US$482 million relating to acquired mineral deposits still in the exploration and evaluation phase.
(2) Refer to note 15 Provisions.
(3) Refer to note 30 Assets and liabilities held for sale and discontinued operations.
(4) Includes depreciation charges relating to discontinued operations of US$81 million. Refer to note 30 Assets and liabilities held for sale and discontinued operations.
(5) Refer to note 13 Impairment of non-financial assets.
FY23
US$M
Land and buildings
Plant and equipment
Other mineral
assets(1)
Assets under
construction
Exploration
and
evaluation
Total
Right-of-use
assets
Owned
assets
Right-of-use
assets
Owned
assets
Cost
At the beginning of the year
37
2,352
943
13,204
4,547
815
212
22,110
Additions
6
–
91
133
–
815
84
1,129
Foreign exchange
movements in closure and
rehabilitation provisions(2)
–
–
–
(68)
–
–
–
(68)
Disposals
–
(3)
–
(112)
(140)
–
(51)
(306)
Transfers and other
movements
–
64
17
251
63
(395)
–
–
At the end of the year
43
2,413
1,051
13,408
4,470
1,235
245
22,865
Accumulated depreciation
and impairments
At the beginning of the year
15
1,438
316
9,239
2,050
51
13
13,122
Depreciation(3)
3
78
64
402
94
–
–
641
Net impairments(4)
–
–
–
–
1,049
119
132
1,300
Disposals
–
–
–
(108)
(140)
–
–
(248)
At the end of the year
18
1,516
380
9,533
3,053
170
145
14,815
Net book value at the end
of the year
25
897
671
3,875
1,417
1,065
100
8,050
(1) Other mineral assets include US$658 million relating to acquired mineral deposits still in the exploration and evaluation phase.
(2) Refer to note 15 Provisions.
(3) Includes depreciation charges relating to discontinued operations of US$141 million. Refer to note 30 Assets and liabilities held for sale and discontinued operations.
(4) Refer to note 13 Impairment of non-financial assets.
Capital expenditure commitments as at 30 June 2024 were US$154 million (FY23: US$193 million).
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SOUTH32 ANNUAL REPORT 2024
11. Property, plant and equipment continued
(a) Property, plant and equipment
Property, plant and equipment is held at cost less accumulated depreciation and impairment charges.
(b) Assets under construction
When Ore Reserves are estimated and development of commercial production is approved, capitalised exploration and evaluation
expenditure is reclassified to assets under construction. All subsequent development expenditure is capitalised and classified as assets
under construction, provided commercial viability conditions continue to be satisfied.
All assets included in assets under construction are reclassified to other categories in property, plant and equipment when the asset is
available and ready for use in the location and condition necessary for it to be capable of operating in the manner intended.
(c) Exploration and evaluation expenditure
Exploration is defined as the search for potential mineralisation after the Group has obtained legal rights to explore in a specific area.
This includes topographical, geological, geochemical and geophysical studies and exploratory drilling, trenching and sampling.
Evaluation is defined as the determination of the technical feasibility and commercial viability of a particular prospect. Activities
conducted during the evaluation phase include the determination of the tonnage and grade and/or quality of the deposit, examination
and testing of extraction methods and metallurgical or treatment process, surveys of transportation and infrastructure requirements,
and market and finance studies.
Exploration and evaluation expenditure (including amortisation of capitalised licence and lease costs) is charged to the Consolidated
income statement as incurred except in the following circumstances, in which case the expenditure may be capitalised:
– The exploration and evaluation activity is within an area of interest which was previously acquired as an asset acquisition or in a
business combination and was measured at fair value on acquisition;
– The right to tenure within the exploration area is current and ongoing; and
– The economics indicates a positive net present value and the region's fiscal terms are established and stable enough to sustain an
expectation that future development is unlikely to be compromised by such fiscal terms.
In addition, drilling costs incurred at a producing mine for the purpose of improving confidence of the existing resource may be
capitalised when the following criteria are satisfied:
– The drilling occurs within the existing physical boundaries of the area defined as the resource; and
– The drilling costs are incurred in resources which are economically recoverable.
Capitalised exploration and evaluation expenditure considered to be a tangible asset is recognised as a component of property,
plant and equipment at cost less impairment charges. Otherwise, it is recognised as an intangible asset (such as certain licence and
lease arrangements). Licences or leases purchased which allow exploration over an extended period of time meet the definition of an
intangible exploration lease asset where they cannot be reasonably associated with a known Mineral Resource.
(d) Other mineral assets
Other mineral assets comprise:
– Capitalised exploration and evaluation expenditure for areas now in production;
– Development expenditure for areas now in production; and
– Mineral rights acquired.
In underground mines, when production and development activity occur concurrently, development activity is separated from
production activity, and is capitalised as development expenditure in other mineral assets. Underground mine development activity
includes the cost associated with gaining access to an ore deposit which gives rise to a substantive change in the future productive
capacity of the mine.
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SOUTH32 ANNUAL REPORT 2024
Notes to financial statements – Operating assets and liabilities continued
11. Property, plant and equipment continued
(e) Leases
At inception of a contract, the Group assesses whether the contract contains a lease.
The Group recognises a right-of-use (ROU) asset and a lease liability at the lease commencement date. The ROU asset is initially
measured at cost, which comprises the initial amount of the lease liability, plus any initial direct costs incurred and estimated future cost
of closure or rehabilitation, less any lease incentives received.
The corresponding lease liability is included within interest bearing liabilities. The lease liability is initially measured based on the value
of lease payments not yet paid at the commencement date, discounted to present value using the interest rate implicit in the lease or, if
that rate cannot be readily determined, the lessee’s incremental borrowing rate.
The nature of the Group’s leases predominantly relates to mining equipment and assets supporting the operations in line with the
Group’s principal activities.
Leased assets are pledged as security for the related lease liabilities.
Short-term, low-value and variable leases
The Group has elected not to recognise ROU assets and lease liabilities for short-term and low-value leases. The Group recognises the
lease payments associated with short-term, low-value and variable leases within expenses excluding finance costs in the Consolidated
income statement on a straight-line basis over the lease term. If variable leases have a fixed component, this component is recognised
as a lease liability within interest bearing liabilities on the Consolidated balance sheet.
Total cash outflows for lease obligations consist of US$108 million (FY23: US$98 million) for lease liabilities recognised on the
Consolidated balance sheet and US$80 million (FY23: US$69 million) for short-term, low-value and variable leases recognised in the
Consolidated income statement.
(f) Depreciation and amortisation
The major categories of property, plant and equipment are depreciated on a units of production or straight-line basis using the
estimated lives indicated below. However, where assets are dedicated to an operation or lease and are not readily transferable, the
below useful lives are subject to the lesser of the asset category’s useful life and the life of the operation or lease.
Category
Useful life
Buildings
25 to 40 years straight-line
Land
not depreciated
Plant and equipment
3 to 30 years straight-line
ROU assets
based on the shorter of the useful life or the lease term (straight-line)
Mineral rights
based on Ore Reserves on a units of production basis
Capitalised exploration, evaluation and development expenditure
based on Ore Reserves on a units of production basis
Key estimates, assumptions and judgements
Useful economic lives of assets
The useful lives of our property, plant and equipment are often dependent, either directly or indirectly, on the reserve life of the
orebody to which they relate. Changes in economic assumptions used to estimate Ore Reserves and/or the timing of closure of
operations, including the Group’s expectations with respect to climate change-related risks and opportunities, may impact the
estimated useful lives of the specific assets concerned.
Refer to note 2(c) Key estimates, assumptions and judgements for further details regarding Mineral Resources and Ore Reserves,
and climate change-related risks and opportunities as sources of estimation uncertainty.
136
SOUTH32 ANNUAL REPORT 2024
12. Intangible assets
FY24
US$M
Goodwill
Other
intangibles
Total
Cost
At the beginning of the year
139
328
467
Exchange rate variations taken to reserves
–
1
1
Additions
–
4
4
Acquisition of a subsidiary(1)
–
20
20
Reclassified as held for sale(2)
–
(1)
(1)
At the end of the year
139
352
491
Accumulated amortisation and impairments
At the beginning of the year
–
225
225
Amortisation
–
10
10
Net impairments(3)
–
36
36
Reclassified as held for sale(2)
–
(1)
(1)
At the end of the year
–
270
270
Net book value at the end of the year
139
82
221
(1) In April 2024, the Group acquired a 50.1 per cent ownership interest in MSA, which holds the Chita Valley copper porphyry exploration prospect. The acquisition was completed
in exchange for cash consideration of US$10 million. As a result of the acquisition, the Group recognised an intangible exploration asset of US$20 million and non-controlling
interest of US$10 million within total equity.
(2) Refer to note 30 Assets and liabilities held for sale and discontinued operations.
(3) Refer to note 13 Impairment of non-financial assets.
FY23
US$M
Goodwill
Other
intangibles
Total
Cost
At the beginning of the year
139
284
423
Additions
–
69
69
Disposals
–
(25)
(25)
At the end of the year
139
328
467
Accumulated amortisation and impairments
At the beginning of the year
–
237
237
Amortisation
–
13
13
Disposals
–
(25)
(25)
At the end of the year
–
225
225
Net book value at the end of the year
139
103
242
Amounts paid for the acquisition of identifiable intangible assets, such as software, licences and contract based intangible assets are
capitalised at the fair value of consideration paid and are recognised at cost less accumulated amortisation and impairment charges.
Identifiable intangible assets with a finite life are amortised on a straight-line basis over their expected useful life from when the asset
is ready for use, except for intangible exploration assets, which are not amortised until the area is in production. The useful lives are as
follows:
Category
Useful life
Software and licences
5 years
Contract based intangible assets
up to 35 years
The Group has no identifiable intangible assets in use for which the expected useful life is indefinite.
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SOUTH32 ANNUAL REPORT 2024
13. Impairment of non-financial assets
In testing for indications of impairment and performing impairment calculations, assets are considered as collective groups and referred
to as CGUs. Impairment tests are carried out annually for CGUs containing goodwill and when there is an indication of impairment or
impairment reversal for all other CGUs. The Group typically uses discounted cash flow valuation ranges to assess whether there is an
indicator of impairment or impairment reversal for its CGUs.
If the carrying value of a CGU exceeds its recoverable amount, the CGU is impaired. Impairment reversals cannot exceed the carrying
value that would have been determined (net of depreciation) had no impairment loss been recognised for the CGU. Goodwill is not
subject to impairment reversal.
For areas not yet in production, any mineral rights acquired, together with subsequent capitalised exploration and evaluation
expenditure, are reviewed to determine the appropriateness of continuing to carry forward costs in relation to that area of interest.
Once the technical feasibility and commercial viability of an area of interest are demonstrated, exploration and evaluation assets
attributable to that area of interest are tested for impairment.
Impairments and impairment reversals for the year, recognised within expenses excluding finance costs in the Consolidated income
statement, are as follows:
US$M
Note
FY24
FY23
Impairment
Property, plant and equipment(1)(2)
11
729
1,300
ROU assets(1)
11
53
–
Intangible assets(1)
12
36
–
Impairment reversal
Property, plant and equipment(3)
11
(214)
–
Total net impairment
604
1,300
(1) FY24 relates to a US$554 million impairment of Worsley Alumina, including US$53 million allocated to ROU assets, and a US$264 million impairment of Cerro Matoso, including
US$36 million allocated to intangible assets.
(2) FY23 relates to a US$1,300 million impairment of the Taylor Deposit at Hermosa.
(3) FY24 relates to a US$197 million impairment reversal included within the Illawarra Metallurgical Coal discontinued operation, and a US$17 million impairment reversal in respect
of Eagle Downs Metallurgical Coal, included within Group and unallocated items/eliminations in the Group's segment results.
(a) Impairments and impairment reversals - 30 June 2024
Worsley Alumina
In 2019, Worsley Alumina commenced the environmental approval process with the Western Australian Environmental Protection
Authority (WA EPA) for the Worsley Mine Development Project to enable access to bauxite to sustain production. On 8 July 2024, the
WA EPA published its recommendation that the proposal may be implemented, subject to conditions. If imposed in their current form,
several of these conditions would create significant operating challenges for Worsley Alumina and impact its long-term viability.
Having regard to the increased uncertainty created by the WA EPA's recommended conditions and the associated operating impacts
for Worsley Alumina, the Group identified an impairment indicator for the Worsley Alumina CGU and recognised a resulting impairment
of US$554 million. The recoverable amount of Worsley Alumina was determined as US$2,027 million based on its fair value less cost of
disposal (FVLCD).
Worsley Alumina, which is also an operating segment, consists of an integrated bauxite mine and alumina refinery in Western
Australia. The impairment of US$554 million of property, plant and equipment includes US$30 million recognised in land and buildings,
US$229 million recognised in plant and equipment and US$295 million recognised in other mineral assets.
The fair value measurement was categorised as a Level 3 fair value based on the inputs in the discounted cash flow valuation model
(refer to note 19 Financial assets and financial liabilities), and was determined using a real US$ post tax discount rate of 7 per cent. The
recoverable amount was informed by a production profile and costs based on management’s planning processes. The key assumptions
used in the determination of the FVLCD were:
– Alumina price;
– Foreign exchange rates;
– Costs of production;
– Discount rate;
– Regulatory approvals; and
– Mineral Resource estimation.
Alumina price and foreign exchange rates – The alumina price, in real terms, and exchange rates used in the FVLCD determinations
were within the following ranges:
FY24
Assumptions used
Alumina price (US$/t)
395 to 480
Foreign exchange rates (AU$ to US$)
0.67 to 0.75
Notes to financial statements – Operating assets and liabilities continued
138
SOUTH32 ANNUAL REPORT 2024
13. Impairment of non-financial assets continued
(a) Impairments and impairment reversals - 30 June 2024 continued
Worsley Alumina continued
Costs of production – Estimated costs of production are based on management's planning processes, which include assumptions on
forecast operating, energy and raw materials expenditures.
The following table illustrates the sensitivity of the recoverable amount of Worsley Alumina to a reasonable possible change in the
aforementioned assumptions. Owing to the complexity of the relationships between each key assumption, the analysis was performed
for each assumption individually (all other assumptions held constant).
Change in key
assumption
Impact on recoverable amount (US$M)
FY24
Favourable
Unfavourable
Alumina price (US$/t)
10%
1,215
(1,215)
Foreign exchange rates (AU$ to US$)
10%
855
(855)
Costs of production
10%
855
(855)
Discount rate
100 basis points
110
(100)
Regulatory approvals – The life of operation plan which informed the production profile includes the assumption that Worsley Alumina
will be able to obtain the necessary future regulatory approvals required to continue operating to plan. This includes the Group's
expectation that the Worsley Mine Development Project will secure environmental approval based on conditions that are reasonable,
aligned with existing legislation and scientifically based.
Mineral Resource estimation – The Mineral Resource estimate of Worsley Alumina is reported in accordance with the JORC Code, and
the ASX Listing Rules (Chapter 5): Additional reporting on mining and oil and gas production and exploration activities. Refer to the
Mineral Resources and Ore Reserves section of note 2(c) for further information on these estimates.
Cerro Matoso
During FY24, the Group commenced a strategic review of Cerro Matoso to evaluate options to enhance the operation’s competitive
position. During this review, the Group identified an impairment indicator for the Cerro Matoso CGU and recognised a resulting
impairment of US$264 million. The recoverable amount of Cerro Matoso was determined as US$54 million based on its FVLCD.
The impairment reflects structural changes observed in the nickel market which are expected to continue to place pressure on nickel
prices and discounts for the Group’s ferronickel product. Furthermore, the impairment reflects a decision of the Group to limit further
capital investment into the region in the light of the uncertainty created by recent tax law increases and the increased frequency of tax
audits.
Cerro Matoso, which is also an operating segment, consists of an integrated laterite ferronickel mine and smelting complex in Colombia.
The impairment of US$264 million includes US$228 million of property, plant and equipment and US$36 million of intangible assets. The
impairment of property, plant and equipment includes US$45 million recognised in land and buildings, US$154 million recognised in
plant and equipment and US$29 million recognised in other mineral assets.
The fair value measurement was categorised as a Level 3 fair value based on the inputs in the discounted cash flow valuation model
(refer to note 19 Financial assets and financial liabilities), and was determined using a real US$ post tax discount rate of 7 per cent with
a country risk premium of 2 per cent. The recoverable amount was informed by a production profile and costs based on management’s
planning processes. The key assumptions used in the determination of the FVLCD were:
– Ferronickel price;
– Foreign exchange rates; and
– Mineral Resource estimation.
Ferronickel price and foreign exchange rates – The ferronickel price, in real terms, and exchange rates used in the FVLCD
determinations were within the following ranges:
FY24
Assumptions used
Ferronickel price (US$/lb)
6.30 to 7.00
Foreign exchange rates (US$ to COP)
4,180 to 4,295
The following table illustrates the sensitivity of the recoverable amount of Cerro Matoso to a reasonable possible change in the
aforementioned assumptions. Owing to the complexity of the relationships between each key assumption, the analysis was performed
for each assumption individually (all other assumptions held constant).
Change in key
assumption
Impact on recoverable amount (US$M)
FY24
Favourable
Unfavourable
Ferronickel price (US$/lb)
10%
140
(165)
Foreign exchange rates (US$ to COP)
10%
70
(95)
Mineral Resource estimation – The Mineral Resource estimate of Cerro Matoso is reported in accordance with the JORC Code, and the
ASX Listing Rules (Chapter 5): Additional reporting on mining and oil and gas production and exploration activities. Refer to the Mineral
Resources and Ore Reserves section of note 2(c) for further information on these estimates.
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SOUTH32 ANNUAL REPORT 2024
13. Impairment of non-financial assets continued
(a) Impairments and impairment reversals - 30 June 2024 continued
Illawarra Metallurgical Coal
In February 2024, the Group announced its decision to enter into a binding agreement to sell Illawarra Metallurgical Coal and reclassified
the disposal group as held for sale.
The recoverable amount of the Illawarra Metallurgical Coal disposal group was assessed and as a result a US$197 million impairment
reversal of property, plant and equipment was recognised. The impairment reversal includes US$14 million of land and buildings,
US$97 million of plant and equipment and US$86 million of other mineral assets.
The recoverable amount of US$1,236 million was determined using the FVLCD methodology, informed by the consideration expected to
be received, less costs of disposal, inclusive of the fair value of contingent price-linked consideration determined to be US$115 million.
Refer to note 30 Assets and liabilities held for sale and discontinued operations for further details.
The fair value of the contingent price-linked consideration is categorised as a Level 3 fair value based on the inputs used in the valuation
(refer to note 19 Financial assets and financial liabilities), including metallurgical coal prices within a range of US$190/t to US$225/t and
a real US$ post tax discount rate of 7 per cent. The following table illustrates the sensitivity of this fair value to a reasonable possible
change in the metallurgical coal price assumption.
Change in key
assumption
Impact on recoverable amount (US$M)
FY24
Favourable
Unfavourable
Metallurgical coal price (US$/t)
10%
150
(115)
As at 30 June 2024, the recoverable amount approximates the carrying value of the disposal group held for sale.
Eagle Downs Metallurgical Coal
In February 2024, the Group announced its decision to enter into a binding agreement to sell its 50 per cent interest in Eagle Downs
Metallurgical Coal and reclassified the disposal group as held for sale.
The recoverable amount of the Group's interest in Eagle Downs Metallurgical Coal was assessed and as a result a US$17 million
impairment reversal of property, plant and equipment was recognised. The impairment reversal includes US$13 million of other mineral
assets and US$4 million of assets under construction.
The recoverable amount of US$16 million was determined using the FVLCD methodology, informed by the consideration expected
to be received, less costs of disposal, inclusive of the fair value of contingent price-linked consideration. The contingent price-linked
consideration was valued at nil based on the Group’s assessment of development risk which is a prerequisite for the contingent
payment and price-linked royalty to be applied. Refer to note 30 Assets and liabilities held for sale and discontinued operations for
further details.
As at 30 June 2024, the recoverable amount approximates the carrying value of the disposal group held for sale.
(b) Impairments - 30 June 2023
Hermosa – Taylor Deposit
In August 2018, the Group completed its acquisition of the Hermosa project located in the United States. The Hermosa project
comprises the zinc-lead-silver sulphide deposit (Taylor Deposit), the manganese-zinc-silver oxide deposit (Clark Deposit) and a land
package with the potential for further polymetallic and copper mineralisation (Land Package). In FY23, the Group advanced the
feasibility study for the Taylor Deposit, completed a pre-feasibility selection study for the Clark Deposit and announced that the US
Federal Permitting Improvement Steering Council, an independent federal agency, had confirmed the Hermosa project as the first
mining project added to the FAST-41 process. Since acquisition, the fair value of the Taylor Deposit had been negatively impacted by
delayed first production as a result of COVID-19 related restrictions and significant dewatering requirements, as well as capital cost
escalation in line with industry-wide inflation.
Study work completed in FY23 confirmed that the Taylor Deposit and the Clark Deposit can be developed independently. As a result,
the Group identified three separate areas of interest within the Hermosa project: the Taylor Deposit, the Clark Deposit and the Regional
Land Package. On separation into three separate areas of interest, the Group allocated the carrying value of the previous single
Hermosa area of interest to each of the newly identified and separate areas of interest.
As a result of the study work, the Group identified an impairment indicator for the Taylor Deposit and recognised a resulting impairment
of property, plant and equipment of US$1,300 million in FY23. The impairment of US$1,300 million includes US$1,049 million recognised
in other mineral assets, US$119 million recognised in assets under construction and US$132 million recognised in exploration and
evaluation. The recoverable amount of the Taylor Deposit was determined as US$482 million based on its FVLCD.
The fair value measurement was categorised as a Level 3 fair value based on the inputs in the discounted cash flow valuation model
(refer to note 19 Financial assets and financial liabilities). The recoverable amount was informed by inputs from the feasibility study in
progress for the Taylor Deposit, including the expected technical performance of the deposit as well as expected capital and operating
costs for the life of the operation. Refer to the Key estimates, assumptions and judgements section of this note for further details on the
key assumptions and sensitivities related to the recoverable amount of the Taylor deposit.
Notes to financial statements – Operating assets and liabilities continued
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SOUTH32 ANNUAL REPORT 2024
13. Impairment of non-financial assets continued
(c) Impairment test for CGUs containing goodwill
The carrying amount of goodwill has been allocated to the following CGU:
US$M
Note
FY24
FY23
Hillside Aluminium
139
139
Total goodwill
12
139
139
The goodwill arose from the acquisition of Alusaf in Hillside Aluminium (Pty) Ltd and has been allocated to the Hillside Aluminium CGU
which comprises the Hillside aluminium smelter. The recoverable amount of the Hillside Aluminium CGU was determined based on a
FVLCD calculation, using a real US$ post tax discount rate of 7 per cent (FY23: 7 per cent), and a country risk premium of 2 per cent
(FY23: 2 per cent) applied to discount future cash flows expressed in real terms, and was categorised as a Level 3 fair value based
on the inputs in the valuation technique (refer to note 19 Financial assets and financial liabilities). The key assumptions used in the
determination of FVLCD were:
– Aluminium and alumina prices;
– Foreign exchange rates;
– Production volumes;
– Carbon pricing and timing; and
– Discount rate.
Aluminium and alumina prices, and foreign exchange rates – The ranges of aluminium prices, alumina prices and exchange rates, in real
terms, used in the FVLCD determinations, along with the sensitivity of the recoverable amount of Hillside Aluminium to a reasonable
possible change in these assumptions, based on unfavourably changing these assumptions by 10 per cent whilst holding all other
variables constant, are shown in the table below:
FY24
Assumptions used
Impact on recoverable
amount (US$M)
Alumina price (US$/t)
395 to 480
(220)
Aluminium price (US$/t)
2,495 to 2,575
(665)
Foreign exchange rates (US$ to ZAR)
17.2 to 18.6
(310)
Production volumes – Estimated production volumes are based on the life of the smelter as determined by management as part of its
long-term planning process. Production volumes are influenced by production input costs such as electricity prices, jurisdiction-based
carbon pricing, and the selling price of aluminium.
Carbon pricing and timing – In determining the FVLCD, the current jurisdiction enacted carbon price, in real terms, of ZAR209 to ZAR454
per tonne CO2-e (FY23: ZAR186 to ZAR474 per tonne CO2-e) was applied for the life of operation for Scope 1 and 2 emissions, net of
operation specific abatement allowances.
The impairment test for the Hillside Aluminium CGU indicated that no impairment was required. At 30 June 2024 the carrying value
approximates its recoverable amount. As such any material long-term unfavourable change in the aforementioned key assumptions
could lead to the carrying value exceeding the recoverable amount. The relationships between each key assumption are complex, such
that a change in one may cause a change in several other inputs.
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SOUTH32 ANNUAL REPORT 2024
13. Impairment of non-financial assets continued
Key estimates, assumptions and judgements
An assessment as to whether there is any indication of impairment and the calculation of a CGU’s recoverable amount requires
management to make estimates and assumptions about expected production and sales volumes, commodity prices, foreign
exchange rates, Mineral Resources and Ore Reserves, regulatory approvals, operating costs, closure and rehabilitation costs,
capital expenditure, allocation of corporate costs, jurisdiction-specific carbon prices and global carbon pricing. These estimates
and assumptions are subject to risk and uncertainty. There is a possibility that changes in circumstances will alter these
projections, which may impact the recoverable amount. In such circumstances, some or all of the carrying amount may be
impaired or a previously recognised impairment charge may be reversed with the impact recognised in the Consolidated income
statement.
The key estimates and assumptions used in the assessment of impairment indicators are as follows:
Future production
Life of operation plans based on Mineral Resource and Ore Reserve estimates, economic life of
smelters and refineries and, in certain cases, Exploration Targets and expansion projects, including
future cost of production. Refer to note 2(c) Key estimates, assumptions and judgements for further
details regarding Mineral Resources and Ore Reserves as sources of estimation uncertainty.
Commodity prices
and market traded
consumables
Short-term price assumptions are based on an assessment of market signposts including observed
prices such as forwards, futures and reported transactions. Long-term price estimates are typically
developed based on the demand and supply drivers of a commodity, refer to note 2(c) Key estimates,
assumptions and judgements for further details regarding our base case commodity price outlook.
Exchange rates
Short-term exchange rate estimates are guided primarily by spot or forward exchange rates. Longer
term estimates are based on an assessment of available market data and economic indicators.
Discount rates
Risk-adjusted cost of capital appropriate to the resource.
Regulatory approvals
Life of operation plans include assumptions associated with the successful application, and timing
thereof, of ongoing and future regulatory approvals.
Carbon prices
Actual enacted schemes less allowable abatements, where applicable, and a long-term base case
estimate of US$67 per tonne CO2-e (real) applied to all Scope 1 and 2 emissions from FY40 onwards.
Where impairment testing is undertaken, a range of external sources are considered as further input to the above assumptions.
Climate change-related risks and opportunities
The Group’s forecast commodity prices and other key assumptions represent management’s expectations on likely outcomes,
with a base case estimation of climate change-related warming of 1.9°C by 2050 and 3.1°C by 2100. When assessing whether
there is any indication of impairment or impairment reversal, management performs a sensitivity analysis by considering a range
of possible scenarios, with no one scenario being conclusive in isolation. Our sensitivity analysis shows that our 1.5°C scenario
would result in an increased risk of impairment at the Hillside Aluminium CGU.
The full costs and benefits of decarbonisation projects are included in the Group’s valuations when it has a high degree of
confidence that a project will achieve an emissions reduction, which typically aligns with the related capital project being
internally approved, or when it is critical for meeting regulatory licensing requirements. The Group’s valuations include the cost
and benefit of initiatives necessary to meet its medium-term target to halve its operational greenhouse gas (GHG) emissions by
2035 compared to its FY21 baseline. ‘Target’ is defined as an intended outcome in relation to which we have identified one or
more pathways for delivery of that outcome, subject to certain assumptions or conditions. The decarbonisation pathway to meet
our goal of net zero GHG emissions by 2050 is not yet fully defined and, as such, the cost and benefit of all associated initiatives
are not included in the Group’s valuations. ‘Goal’ is defined as an ambition to seek an outcome for which there is no current
pathway(s), but for which efforts will be pursued towards addressing that challenge, subject to certain assumptions or conditions.
The Group utilises an internal price on carbon to inform decision-making and valuations, based on actual enacted schemes less
allowable abatements, where applicable, and a long-term base case estimate of US$67 per tonne CO2-e (real) applied to all
Scope 1 and 2 emissions from FY40 onwards. In developing forecast global carbon prices, the Group considers policy and market-
driven carbon prices as well as abatement costs, weighted across developed and developing countries.
When assessing for impairment indicators, the Group has considered the sensitivity of operations to changes in carbon prices.
The Group’s operations are not uniformly impacted by carbon prices. The impact is influenced by the amount of Scope 1 and 2
emissions the operation generates and the jurisdiction in which it operates, in combination with the respective life of operation
plans. The Group’s CGUs with a higher carbon sensitivity include Worsley Alumina, Hillside Aluminium and Mozal Aluminium.
Notes to financial statements – Operating assets and liabilities continued
142
SOUTH32 ANNUAL REPORT 2024
13. Impairment of non-financial assets continued
Key estimates, assumptions and judgements continued
Exploration and evaluation
For areas not yet in production, judgement is required to determine the likelihood of future economic benefits from future
development, and whether sufficient data exists to indicate that, although a development in the specific area is likely to proceed,
the carrying amount of the exploration and evaluation asset (including associated acquired mineral rights) is unlikely to be
recovered in full.
At or before the final investment decision for a given area of interest, and once technical feasibility and commercial viability has
been demonstrated, the Group assesses the carrying value of that area of interest for impairment or, for an area of interest
previously impaired, impairment reversal.
Hermosa - Taylor Deposit
In February 2024, the Directors approved a final investment decision to develop the Taylor Deposit when the project's technical
feasibility and commercial viability was demonstrated. At this time, the Group entered the development and construction phase,
and reclassified the previously capitalised exploration and evaluation expenditure to the assets under construction category
within property, plant and equipment. An impairment assessment was also performed, and the Group concluded that no
impairment or impairment reversal was required.
The Group's discounted cash flow valuation ranges used for ongoing monitoring of possible indicators of impairment or
impairment reversal for the Taylor Deposit relies on a number of highly sensitive assumptions as listed below.
Zinc, lead and silver prices
Long-run commodity prices in real terms
Assumptions used
Zinc (US$/t)
2,820 to 3,240
Lead (US$/t)
2,095 to 2,190
Silver (US$/oz)
21 to 29
Pre-production capital
expenditure
The discounted cash flow calculations include an estimate of pre-production capital to support
the development of the Taylor Deposit to its nameplate capacity of up to 4.3 million tonnes
per annum. Key inputs including steel, cement and electrical components are subject to
uncertainties, including industry-wide inflation.
Mineral Resource estimation
The Mineral Resource estimate of the Taylor Deposit is reported in accordance with the JORC
Code, and the ASX Listing Rules (Chapter 5): Additional reporting on mining and oil and gas
production and exploration activities. Refer to the Mineral Resources and Ore Reserves section
of note 2(c) for further information on these estimates.
Development approvals
Development and construction continues to progress at the Taylor Deposit following the final
investment decision in February 2024. The addition of the Hermosa project to the FAST-41
process has reduced the expected timing of Federal environmental approvals and permits
by approximately two years. A Record of Decision (RoD) to permit surface disturbance
and additional tailings storage on unpatented land will require completion of the National
Environmental Policy Act process with the United States Forest Service.
Discount rate
A real US$ post tax discount rate of 7 per cent was applied to discount future cash flows
expressed in real terms.
The following table illustrates the sensitivity of the recoverable amount of the Taylor Deposit to a reasonable possible change in
key assumptions, and the resulting impairment or impairment reversal that would be recognised. Owing to the complexity of the
relationships between each key assumption, the analysis was performed for each assumption individually (all other assumptions
held constant).
Change in key
assumption
Impact on recoverable amount (US$M)
FY24
Favourable
Unfavourable
Zinc prices
10%
310
(310)
Lead prices
10%
260
(260)
Silver prices
10%
140
(140)
Pre-production capital expenditure
10%
195
(195)
Discount rate
100 basis points
360
(305)
OPERATING AND FINANCIAL REVIEW
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FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
143
SOUTH32 ANNUAL REPORT 2024
13. Impairment of non-financial assets continued
Key estimates, assumptions and judgements continued
Mozal Aluminium
The Group jointly controls Mozal Aluminium together with the Industrial Development Corporation of South Africa Limited and the
Government of the Republic of Mozambique. Electricity supplied to Mozal Aluminium is generated by Hidroeléctrica de Cahora
Bassa, a hydro-electric power generator, and supplied via Eskom, the South African state-owned entity which owns and operates
South Africa’s national electricity grid. Eskom also provides back-up energy to Mozal Aluminium for periods when Hidroeléctrica
de Cahora Bassa produces less than its contractual minimum supply of hydro-electric power.
The Group is working with key stakeholders to extend the supply of power generated by Hidroeléctrica de Cahora Bassa for
Mozal Aluminium beyond 2026. Although an extension and pricing of the existing arrangement with Eskom is uncertain, the
Group has made a reasonable assumption that an extension to 2030 can be achieved on mutually acceptable commercial terms.
Failure to extend the supply of power generated by Hidroeléctrica de Cahora Bassa will have a material impact on the recoverable
amount of Mozal Aluminium.
14. Trade and other payables
US$M
FY24
FY23
Current
Trade creditors
665
854
Other creditors
140
131
Total current trade and other payables
805
985
Non-current
Trade creditors
–
18
Other creditors
1
1
Total non-current trade and other payables
1
19
Trade and other payables generally represent liabilities for goods and services provided to the Group prior to the end of the year which
were unpaid at the end of the year. These amounts are unsecured.
Trade and other payables, other than financial liabilities held at FVTPL, are stated at their amortised cost and are non-interest bearing.
The carrying value of these trade and other payables is considered to approximate fair value due to the short-term nature of the
payables.
15. Provisions
US$M
FY24
FY23
Current
Employee benefits
159
177
Closure and rehabilitation
9
7
Other
11
10
Total current provisions
179
194
Non-current
Employee benefits
7
6
Closure and rehabilitation
1,858
1,931
Post-retirement employee benefits
30
33
Other
9
16
Total non-current provisions
1,904
1,986
Notes to financial statements – Operating assets and liabilities continued
144
SOUTH32 ANNUAL REPORT 2024
15. Provisions continued
FY24
US$M
Employee
benefits
Closure and
rehabilitation
Post-
retirement
employee
benefits
Other
Total
At the beginning of the year
183
1,938
33
26
2,180
Charge/(credit) to the Consolidated income statement:
Underlying
156
12
3
3
174
Discounting(1)
–
132
–
–
132
Change in discount rate
–
(3)
–
–
(3)
Net interest expense
–
–
2
–
2
Released during the year
(15)
(2)
–
–
(17)
Amounts capitalised for change in costs and estimates
–
68
–
–
68
Amounts capitalised for change in discount rate
–
(17)
–
–
(17)
Foreign exchange amounts capitalised
–
(11)
–
–
(11)
Amounts taken to retained earnings
–
–
(4)
–
(4)
Utilisation
(132)
(15)
(4)
(7)
(158)
Reclassified as held for sale(2)
(26)
(235)
–
(2)
(263)
At the end of the year
166
1,867
30
20
2,083
(1) Includes discounting charges relating to discontinued operations of US$7 million. Refer to note 30 Assets and liabilities held for sale and discontinued operations.
(2) Refer to note 30 Assets and liabilities held for sale and discontinued operations.
FY23
US$M
Employee
benefits
Closure and
rehabilitation
Post-
retirement
employee
benefits
Other
Total
At the beginning of the year
175
1,793
34
19
2,021
Charge/(credit) to the Consolidated income statement:
Underlying
167
16
5
7
195
Discounting(1)
–
91
–
–
91
Net interest expense
–
–
3
–
3
Exchange rate variations
(7)
(15)
(3)
1
(24)
Released during the year
(1)
(7)
–
–
(8)
Amounts capitalised for change in costs and estimates
–
149
–
–
149
Amounts capitalised for change in discount rate
–
(16)
–
–
(16)
Foreign exchange amounts capitalised
–
(68)
–
–
(68)
Amounts taken to retained earnings
–
–
(3)
–
(3)
Utilisation
(151)
(5)
(3)
(1)
(160)
At the end of the year
183
1,938
33
26
2,180
(1) Includes discounting charges relating to discontinued operations of US$8 million. Refer to note 30 Assets and liabilities held for sale and discontinued operations.
(a) Employee benefits
Liabilities for unpaid wages and salaries are recognised in other creditors. Current entitlements to annual leave and accumulating sick
leave accrued for services up to the reporting date are recognised in the provision for employee benefits and are measured at the
amounts expected to be paid. Entitlements to non-accumulated sick leave are recognised when the leave is taken.
The current liability for long service leave (for which settlement within 12 months of the reporting date cannot be deferred) is recognised
in the current provision for employee benefits and is measured in accordance with annual leave described above.
(b) Closure and rehabilitation
The mining, extraction and processing activities of the Group normally give rise to obligations for site closure or rehabilitation. Closure
and rehabilitation works can include facility decommissioning and dismantling, removal or treatment of waste materials, site and land
rehabilitation.
Provisions for the cost of each closure and rehabilitation program are recognised at the time that environmental disturbance occurs.
When the extent of disturbance increases over the life of an operation, the provision is increased accordingly. Costs included in the
provision encompass all closure and rehabilitation activity expected to occur progressively over the life of the operation and at, or
after, the time of closure, for disturbance existing at the reporting date. Routine operating costs that may impact the ultimate closure
and rehabilitation activities, such as waste material handling conducted as an integral part of a mining or production process, are not
included in the provision. Costs arising from unforeseen circumstances, such as the contamination caused by unplanned discharges, are
recognised as an expense and liability when the event gives rise to an obligation which is probable and capable of reliable estimation.
OPERATING AND FINANCIAL REVIEW
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FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
145
SOUTH32 ANNUAL REPORT 2024
15. Provisions continued
(b) Closure and rehabilitation continued
The timing of the actual closure and rehabilitation expenditure is dependent upon a number of factors such as: the life and nature of the
asset; the operating licence conditions; and the environment in which the operation operates. Expenditure may occur before and after
closure, and can continue for an extended period of time depending on closure and rehabilitation requirements.
Closure and rehabilitation provisions are measured based on the expected value of future cash flows, discounted to their present value
and determined according to the probability of alternative estimates of cash flows occurring for each operation.
Discount rates used are risk-free interest rates specific to the country in which the operations are located and the expected timing of
the closure and rehabilitation expenditure. Material changes in country specific risk-free interest rates may affect the discount rates
applied. The Group reviews its discount rates used periodically, with any corresponding change in the provision as a result of revising
discount rates capitalised as an asset in the case of open sites or charged/(credited) to the Consolidated income statement in the case
of closed sites.
When provisions for closure and rehabilitation are initially recognised, the corresponding cost is capitalised as an asset, representing
part of the cost of acquiring the future economic benefits of the operation. The capitalised cost of closure and rehabilitation activities
is recognised in property, plant and equipment and depreciated accordingly. The value of the provision is progressively increased over
time due to the effect of discounting unwind and inflation, creating an expense recognised in finance costs.
Closure and rehabilitation provisions are also adjusted for changes in costs and estimates. Those adjustments are accounted for as a
change in the corresponding capitalised cost, except where a reduction in the provision is greater than the depreciated capitalised cost
of the related assets, in which case the carrying value is reduced to nil and the remaining adjustment is recognised in the Consolidated
income statement. In the case of closed sites, changes to estimated costs are recognised immediately in the Consolidated income
statement. Changes to the capitalised cost result in an adjustment to future depreciation. Adjustments to the estimated amount and
timing of future closure and rehabilitation cash flows are a normal occurrence in light of the significant judgements and estimates
involved.
(c) Post-retirement employee benefits
This relates to the provision for post-employment defined benefit pension and medical schemes. Refer to note 28(d) Pension and other
post-retirement obligations.
Key estimates, assumptions and judgements
The recognition of closure and rehabilitation provisions requires judgement and is based on significant estimates and
assumptions, such as:
– The requirements of the relevant local legal and regulatory framework;
– The magnitude of possible contamination;
– The timing, extent and cost of required closure and rehabilitation activity; and
– Potential changes in physical and climate conditions.
These uncertainties may result in future actual expenditure differing from the amounts currently provided.
The Group’s expectations and approach in relation to climate change-related risks and opportunities are reflected in the
estimates and assumptions noted above. For example, our base case estimation of climate change-related warming of 1.9°C
by 2050 and 3.1°C by 2100 impacts our life of operations plans, which in turn impacts assumptions regarding timing and cost of
closure and rehabilitation activities. Physical impacts of climate change have been considered in the estimation of closure and
rehabilitation costs, including timing of relinquishment based on the Group’s assessment to date. These estimates will continue
to be refined as the Group progresses its assessment of physical risks and development of direct adaptation and mitigation
strategies.
The provision recognised for each site is periodically reviewed and updated based on the facts and circumstances available at
the time.
In addition to the uncertainties noted above, certain closure and rehabilitation activities may be subject to legal disputes and
depending on the ultimate resolution of these disputes, the final liability for such matters could vary.
If risk-free interest rates were decreased by 0.5 per cent (in real terms), the provision would increase by approximately
US$258 million.
Notes to financial statements – Operating assets and liabilities continued
146
SOUTH32 ANNUAL REPORT 2024
This section outlines how the Group manages its capital and related financing activities.
16. Cash and cash equivalents
Cash and cash equivalents include cash at bank and on hand as well as short-term deposits.
US$M
FY24
FY23
Cash
663
611
Short-term deposits
179
647
Cash and cash equivalents(1)(2)
842
1,258
(1) Cash and cash equivalents include US$2 million (FY23: US$6 million) which is restricted by legal or contractual arrangements.
(2) Cash and cash equivalents include US$138 million (FY23: US$287 million) consisting of short-term deposits and cash managed by the Group on behalf of its equity accounted
investments. The corresponding amount payable is included in note 17 Interest bearing liabilities.
17. Interest bearing liabilities
US$M
FY24
FY23
Current
Lease liabilities
58
51
Unsecured loans from equity accounted investments(1)
138
287
Unsecured other
27
27
Total current interest bearing liabilities
223
365
Non-current
Lease liabilities
614
623
Senior unsecured notes
692
690
Unsecured other
37
63
Total non-current interest bearing liabilities
1,343
1,376
(1) Refer to note 16 Cash and cash equivalents and note 28 Related party transactions.
In April 2022, the Group completed the issuance of US$700 million of senior unsecured notes pursuant to Rule 144A and Regulation S of
the United States Securities Act of 1933. The notes pay interest in April and October each year at a rate of 4.35 per cent per annum and
mature in 2032.
A reconciliation of movements in interest bearing liabilities to cash flows arising from financing activities is set out below:
FY24
US$M
Lease
liabilities
Other interest
bearing
liabilities
Total interest
bearing
liabilities
At the beginning of the year
674
1,067
1,741
Cash movements:
Proceeds from interest bearing liabilities
–
200
200
Repayment of interest bearing liabilities(1)
(54)
(355)
(409)
Interest paid
(53)
(59)
(112)
Non-cash movements:
Interest expense
53
59
112
Net increase/(decrease) of interest bearing liabilities
72
–
72
Reclassified as held for sale(2)
(20)
–
(20)
Exchange rate variations
–
(18)
(18)
At the end of the year
672
894
1,566
(1) Excludes US$1 million of repayments of liabilities classified as held for sale. Refer to note 30 Assets and liabilities held for sale and discontinued operations.
(2) Refer to note 30 Assets and liabilities held for sale and discontinued operations.
Notes to financial statements – Capital structure and financing
OPERATING AND FINANCIAL REVIEW
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FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
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SOUTH32 ANNUAL REPORT 2024
17. Interest bearing liabilities continued
FY23
US$M
Lease
liabilities
Other interest
bearing
liabilities
Total interest
bearing
liabilities
At the beginning of the year
650
1,177
1,827
Cash movements:
Repayment of interest bearing liabilities
(46)
(87)
(133)
Interest paid
(52)
(57)
(109)
Non-cash movements:
Interest expense
52
59
111
Net increase/(decrease) of interest bearing liabilities(1)
93
(41)
52
Exchange rate variations
(23)
16
(7)
At the end of the year
674
1,067
1,741
(1) The non-cash decrease in other interest bearing liabilities relates an agreement with a subsidiary of Seriti Resources Holdings Pty Ltd (Seriti) to settle the vendor loan facility,
previously recognised within other financial assets, against the related rehabilitation fund liability. Both facilities were originally provided to Seriti as part of the divestment of
South Africa Energy Coal.
18. Net finance income/(costs)
US$M
FY24
FY23
Restated(1)
Finance income
Interest on loans to equity accounted investments
178
160
Other interest income
44
60
Total finance income
222
220
Finance costs
Interest on borrowings
(65)
(68)
Interest on lease liabilities
(52)
(52)
Discounting on provisions and other liabilities
(125)
(84)
Change in discount rate on closure and rehabilitation provisions
3
–
Net interest expense on post-retirement employee benefits
(2)
(3)
Exchange rate variations on net debt
8
9
Total finance costs
(233)
(198)
Net finance income/(costs)
(11)
22
(1) Refer to note 30 Assets and liabilities held for sale and discontinued operations.
Notes to financial statements – Capital structure and financing continued
148
SOUTH32 ANNUAL REPORT 2024
19. Financial assets and financial liabilities
The following table presents the financial assets and liabilities by class at their carrying amounts:
FY24
US$M
Note
Held at FVTPL
Designated as
FVOCI
Amortised cost
Total
Financial assets
Cash and cash equivalents
16
–
–
842
842
Trade and other receivables(1)
9
120
–
403
523
Other financial assets:
Derivative contracts
1
–
–
1
Total current financial assets
121
–
1,245
1,366
Trade and other receivables(1)
9
–
–
1,951
1,951
Other financial assets:
Investments in equity instruments designated as FVOCI
–
89
–
89
Total non-current financial assets
–
89
1,951
2,040
Total financial assets
121
89
3,196
3,406
Financial liabilities
Trade and other payables(2)
14
3
–
782
785
Interest bearing liabilities
17
–
–
223
223
Total current financial liabilities
3
–
1,005
1,008
Interest bearing liabilities
17
–
–
1,343
1,343
Other financial liabilities:
Contingent consideration payable
17
–
–
17
Total non-current financial liabilities(2)
17
–
1,343
1,360
Total financial liabilities
20
–
2,348
2,368
(1) Excludes current input taxes of US$111 million and non-current input and other taxes of US$132 million included in other receivables. Refer to note 9 Trade and other receivables.
(2) Excludes current input taxes of US$20 million and non-current input and other taxes of US$1 million included in other creditors. Refer to note 14 Trade and other payables.
FY23
US$M
Note
Held at FVTPL
Designated as
FVOCI
Amortised cost
Total
Financial assets
Cash and cash equivalents
16
–
–
1,258
1,258
Trade and other receivables(1)
9
105
–
532
637
Other financial assets:
Derivative contracts
1
–
–
1
Total current financial assets
106
–
1,790
1,896
Trade and other receivables(1)
9
–
–
1,802
1,802
Other financial assets:
Investments in equity instruments designated as FVOCI
–
108
–
108
Contingent consideration receivable
10
–
–
10
Total non-current financial assets
10
108
1,802
1,920
Total financial assets
116
108
3,592
3,816
Financial liabilities
Trade and other payables(2)
14
6
–
962
968
Interest bearing liabilities
17
–
–
365
365
Total current financial liabilities
6
–
1,327
1,333
Trade and other payables(2)
14
–
–
18
18
Interest bearing liabilities
17
–
–
1,376
1,376
Other financial liabilities:
Contingent consideration payable
37
–
–
37
Total non-current financial liabilities
37
–
1,394
1,431
Total financial liabilities
43
–
2,721
2,764
(1) Excludes current input taxes of US$141 million and non-current input and other taxes of US$121 million included in other receivables. Refer to note 9 Trade and other receivables.
(2) Excludes current input taxes of US$17 million and non-current input and other taxes of US$1 million included in other creditors. Refer to note 14 Trade and other payables.
For certain investments in equity instruments, the Group has made an irrevocable election to present fair value changes in other
comprehensive income and are therefore designated as FVOCI. Dividends received from these investments are recognised as other
income in the Consolidated income statement unless the dividend clearly represents a recovery of part of the cost of the investment.
Financial assets and liabilities are otherwise held at FVTPL or amortised cost based on the business model for managing the financial
asset or liabilities and the contractual terms of the cash flows.
OPERATING AND FINANCIAL REVIEW
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FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
149
SOUTH32 ANNUAL REPORT 2024
19. Financial assets and financial liabilities continued
(a) Fair value measurement
The carrying values of the Group’s financial assets and liabilities measured at amortised cost are equal to or approximate their
respective fair values, except for senior unsecured notes, which have a fair value of US$636 million (FY23: US$617 million), and lease
liabilities, for which a fair value has not been determined. The fair value of the Group’s senior unsecured notes is estimated based on
quoted market prices at the reporting date and are classified as Level 1 on the fair value hierarchy as shown below.
For financial assets and liabilities measured at fair value, the Group uses quoted marked prices in active markets for identical assets
where available. Where no price information is available from a quoted market source, alternative market mechanisms or recent
comparable transactions, the fair value is estimated based on the Group’s views on relevant future prices, net of valuation allowances to
accommodate liquidity, modelling, credit and other risks implicit in such estimates.
The following table shows the Group’s financial assets and liabilities carried at fair value with reference to the nature of valuation inputs
used:
Level 1
Valuation is based on unadjusted quoted prices in active markets for identical financial assets and liabilities.
Level 2
Valuation is based on inputs (other than quoted prices included in Level 1) that are observable for the financial asset or
liability, either directly (i.e. as unquoted prices) or indirectly (i.e. derived from prices).
Level 3
Valuation includes inputs that are not based on observable market data.
FY24
US$M
Level 1
Level 2
Level 3
Total
Financial assets and liabilities
Trade and other receivables
–
120
–
120
Trade and other payables
–
(3)
–
(3)
Derivative contract assets
1
–
–
1
Investments in equity instruments designated as FVOCI
80
–
9
89
Contingent consideration payable
–
–
(17)
(17)
Total
81
117
(8)
190
FY23
US$M
Level 1
Level 2
Level 3
Total
Financial assets and liabilities
Trade and other receivables
–
105
–
105
Trade and other payables
–
(6)
–
(6)
Derivative contract assets
1
–
–
1
Investments in equity instruments designated as FVOCI
101
–
7
108
Contingent consideration receivable
–
–
10
10
Contingent consideration payable
–
–
(37)
(37)
Total
102
99
(20)
181
The following table shows the movements in the Group’s Level 3 financial assets and liabilities:
US$M
FY24
FY23
At the beginning of the year
(20)
(45)
Addition of financial assets
1
15
Reclassification of financial asset from level 3 to level 2(1)
–
(39)
Unrealised gains recognised in the Consolidated income statement(2)
10
47
Unrealised gains recognised in the Consolidated statement of comprehensive income(3)
1
2
At the end of the year
(8)
(20)
(1) The valuation of the vendor loan facility provided to Seriti as part of the Group's divestment of South Africa Energy Coal no longer included inputs that were based on
unobservable market data. This financial asset was settled in FY23 through an agreement with the vendor to offset this facility against the related rehabilitation fund liability,
recognised within unsecured other interest bearing liabilities. Refer to note 17 Interest bearing liabilities.
(2) Recognised in expenses excluding finance costs in the Consolidated income statement.
(3) Recognised in the financial assets reserve in the Consolidated statement of comprehensive income.
Notes to financial statements – Capital structure and financing continued
150
SOUTH32 ANNUAL REPORT 2024
19. Financial assets and financial liabilities continued
(b) Financial risk management objectives and policies
The Group is exposed to market, liquidity and credit risk. These risks are managed in accordance with the Group’s portfolio risk
management strategy which supports the delivery of the Group’s financial targets while protecting its future financial security and
flexibility by taking advantage of the natural diversification of the Group’s operations and activities. Deterministic analysis across a range
of operational, commodity price and foreign exchange rate scenarios is used to measure the aggregate impact of financial risks and the
potential impact on financial targets.
(i)
Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices.
Market risk comprises interest rate risk, foreign currency risk and other price risk, such as commodity price risk.
The Group’s activities expose it to market risks associated with movements in interest rates, foreign currencies and commodity prices.
The Group predominantly manages currency impacts, input costs and commodity prices on a floating or index basis. This strategy gives
rise to a risk of variability in earnings, which is continually assessed under our deterministic analysis.
In executing the Group’s strategy, financial instruments may be employed for risk mitigation purposes within a strict Board of Directors
approved mandate, or to align the total Group exposure to the relevant index target in the case of commodity sales, operating costs or
debt issuance.
Interest rate risk
The Group has the following exposure to interest rate risk:
US$M
FY24
FY23
Financial assets
Cash and cash equivalents
788
1,218
Trade and other receivables
28
153
Financial liabilities
Interest bearing liabilities
(138)
(286)
Net exposure
678
1,085
The following table demonstrates the sensitivity to a reasonable possible change in interest rates on that portion of financial assets and
liabilities affected. With all other variables held constant, the Group’s profit/(loss) after tax would increase/(decrease) as follows:
US$M
Impact on profit/(loss) after tax
FY24
FY23
Increase of 100 basis points
5
8
Decrease of 100 basis points
(5)
(8)
The sensitivity analysis assumes that the change in interest rates is effective from the beginning of the year and the fixed/floating mix
and balances are constant over the year. However, interest rates and the profile of the Group’s financial assets and liabilities may not
remain constant over the coming year and therefore such sensitivity analysis should be used with care.
Foreign currency risk
The Group’s potential currency exposures comprise:
– Translational exposure in respect of non-functional currency monetary items; and
– Transactional exposure in respect of non-functional currency expenditure and revenues.
The functional currency of the Group’s operations is primarily the US dollar. Certain operating and capital expenditure is incurred by
operations in currencies other than their functional currency. To a lesser extent, certain sales revenue is earned in currencies other than
the functional currency of the operation, and certain exchange control restrictions may require funds to be maintained in currencies
other than the operations functional currency. When required, the Group may enter into forward exchange contracts.
The following table shows the principal foreign currency risk arising from financial assets and liabilities by currency of denomination:
US$M
FY24
FY23
Australian dollar
(779)
(946)
Brazilian real
(52)
(103)
Colombian peso
(8)
(70)
South African rand
16
74
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INFORMATION
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SOUTH32 ANNUAL REPORT 2024
19. Financial assets and financial liabilities continued
(b) Financial risk management objectives and policies continued
(i)
Market risk continued
Foreign currency risk continued
Based on the Group’s net financial assets and liabilities as at 30 June, a weakening of the US dollar against the currencies as illustrated
in the table below, with all other variables held constant, would increase/(decrease) the Group’s profit/(loss) after tax, as follows:
US$M
Impact on profit/(loss) after tax
FY24
FY23
10% strengthening in Australian dollar
(55)
(67)
10% strengthening in Brazilian real
(5)
(10)
10% strengthening in Colombian peso
(1)
(7)
10% strengthening in South African rand
2
7
The Group’s other comprehensive income is not exposed to any significant fluctuations as a result of foreign exchange risk arising from
financial assets and liabilities.
Commodity price risk
Contracts for the sale and physical delivery of commodities are executed whenever possible on a pricing basis intended to achieve a
relevant index target. Where pricing terms deviate from the index, the Group may choose to use derivative commodity contracts to
realise the index price. Contracts for the physical delivery of commodities are not typically financial instruments and are not recognised
on the Consolidated balance sheet.
Provisionally priced commodity sales and purchases contracts
Provisionally priced sales or purchases contracts are those for which price finalisation, referenced to the relevant index, is outstanding
at the reporting date. Provisional pricing mechanisms embedded within these sales and purchases arrangements have the character of
a commodity derivative and are carried at FVTPL as part of trade receivables or trade creditors. Fair value movements on provisionally
priced sale contracts are disclosed as other revenue in the Group’s segment results, refer to note 4(b) Segment results. The Group’s
exposure at 30 June 2024 to the impact of movements in commodity prices on provisionally invoiced sale and purchase volumes was
predominantly around nickel, silver, lead, zinc, aluminium and alumina.
The Group had 4.3kt of nickel, 1.8Moz of silver, 19.2kt of lead, 9.7kt of zinc, 11.2kt of aluminium and 25.8kt of alumina exposure at
30 June 2024 (FY23: 3.7kt of nickel, 2.6Moz of silver, 24.4kt of lead, 5.4kt of zinc, 30.0kt of metallurgical coal, 10.0kt of aluminium and
31.5kt of alumina) that was provisionally priced. The final price of these sales or purchases will be determined during the first half of
FY25. A 10 per cent change in the realised price of these commodities, with all other factors held constant, would increase or decrease
profit/(loss) after tax by US$19 million (FY23: US$19 million). The relationship between commodity prices and foreign currencies
is complex and foreign exchange rates and commodity prices may move concurrently in response to market conditions. These
sensitivities should therefore be used with care.
(ii) Liquidity risk
The Group’s liquidity risk arises from the possibility that it may not be able to settle or meet its obligations as they fall due. Operational,
capital and regulatory requirements are considered in the management of liquidity risk, in conjunction with short and long-term forecast
information.
In line with the Group's policy on counterparty credit exposure, the Group only uses counterparties of a high credit standing for the
investment of any excess cash.
The entities in the Group are funded by a combination of cash generated by the Group’s operations, working capital facilities and
intercompany loans provided by the Group. Intercompany loans may be funded by a combination of cash, short and long-term debt.
Details of the Group’s major standby arrangement are as follows:
FY24
US$M
Available
Used
Unused
Revolving credit facility(1)
1,400
–
1,400
(1) The Group has an undrawn revolving credit facility which expires in December 2028, with the size of the facility in the final year reducing to US$1,300 million.
Notes to financial statements – Capital structure and financing continued
152
SOUTH32 ANNUAL REPORT 2024
19. Financial assets and financial liabilities continued
(b) Financial risk management objectives and policies continued
(ii) Liquidity risk continued
Maturity profile of financial liabilities
The maturity profiles of financial liabilities, based on the contractual amounts, are as follows:
FY24
US$M
Carrying
amount
Total
On demand
or less than 1
year
1 to 5 years
More than 5
years
Trade and other payables(1)
785
785
784
1
–
Senior unsecured notes
692
944
30
122
792
Lease liabilities
672
1,104
111
337
656
Other interest bearing liabilities
202
205
165
40
–
Other financial liabilities - contingent consideration payable
17
22
–
22
–
Total
2,368
3,060
1,090
522
1,448
(1) Excludes current input taxes of US$20 million and non-current input and other taxes of US$1 million included in other creditors. Refer to note 14 Trade and other payables.
FY23
US$M
Carrying
amount
Total
On demand
or less than 1
year
1 to 5 years
More than 5
years
Trade and other payables(1)
986
986
968
–
18
Senior unsecured notes
690
974
30
122
822
Lease liabilities
674
1,148
102
331
715
Other interest bearing liabilities
377
383
315
68
–
Other financial liabilities - contingent consideration payable
37
48
–
48
–
Total
2,764
3,539
1,415
569
1,555
(1) Excludes current input taxes of US$17 million and non-current input and other taxes of US$1 million included in other creditors. Refer to note 14 Trade and other payables.
(iii) Credit risk
Credit risk management
The Group has credit risk management policies in place covering the credit analysis, approvals and monitoring of counterparty
exposures. As part of these processes the ongoing creditworthiness of counterparties is regularly assessed. Credit limits are established
for customers and reviewed annually or with the release of new information materially impacting the customer’s creditworthiness.
Mitigation methods are defined and implemented for higher-risk counterparties to protect revenues, with more than half of the Group’s
sales of physical commodities occurring via secured payment terms including prepayments, letters of credit, guarantees and other risk
mitigation instruments. Mitigation methods include credit exposure management and overdue accounts monitoring. In addition, leading
key risk indicators are actively monitored for all customers to identify any emerging risks.
There are no material concentrations of credit risk, either with individual counterparties or groups of counterparties, by industry or
geography. The carrying amounts of financial assets represent the maximum credit exposure.
Expected credit losses
Impairment allowances are based on a forward-looking expected credit loss model. For trade receivables, the Group uses the simplified
approach to recognise impairments based on the lifetime expected credit loss. For other receivables, the Group applies the general
approach and recognises impairments based on a 12-month expected credit loss.
Exposures are grouped by external credit rating and security options and an expected credit loss rate is calculated accordingly. Where
applicable, actual credit loss experience is also taken into account. For remaining receivables without an external credit rating or
security option, a rating of BB (S&P Global Ratings) is used, on the basis that there is no support that it is investment grade, nor is there
any evidence of default.
Shareholder loan receivable from Sierra Gorda
Purchased credit-impaired financial assets are initially recognised at fair value. They are subsequently measured at amortised cost using
the credit-adjusted effective interest method, less an allowance for changes in lifetime expected credit losses since initial recognition.
The credit-adjusted effective interest rate is determined at initial recognition and not amended for subsequent changes to lifetime
expected credit losses since acquisition. Changes in lifetime expected credit losses are recognised as impairment and reversals of
impairment of financials assets.
The Group’s investment in the Sierra Gorda operation is represented by the carrying value of an equity accounted investment of
US$94 million (FY23: US$101 million), and the carrying value of a purchased credit-impaired receivable of US$1,814 million (FY23:
US$1,711 million) classified as a loan to an equity accounted investment within trade and other receivables on the Consolidated balance
sheet.
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FINANCIAL REPORT
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INFORMATION
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SOUTH32 ANNUAL REPORT 2024
19. Financial assets and financial liabilities continued
(b) Financial risk management objectives and policies continued
(iii) Credit risk continued
Shareholder loan receivable from Sierra Gorda continued
The loan has a contractual interest rate of eight per cent and the repayment of the loan by the Sierra Gorda operation is dependent
on its financial performance. At 30 June 2024, the Group updated its estimated timing of the loan repayments and as a result
recognised an impairment of US$29 million (FY23: impairment of US$71 million) which is included in expenses excluding finance
costs in the Consolidated income statement. The net present value of the expected future cash flows of the loan was determined as
US$1,814 million (FY23: US$1,711 million) using a measurement methodology consistent with a Level 3 fair value based on the inputs in
the valuation technique.
The following table shows the movement in the carrying amount of this receivable:
US$M
FY24
FY23
At the beginning of the year
1,711
1,648
Interest accrued
159
148
Net impairment
(29)
(71)
Repayment of accrued interest
(27)
(14)
At the end of the year
1,814
1,711
The future loan repayments were informed by a production profile and costs based on management’s planning processes. Refer to the
Mineral Resources and Ore Reserves section of note 2(c) for further information on the estimates which underpin the production profile.
An effective interest rate of nine per cent, as determined on the date of acquisition, was applied to discount the future loan repayments.
Determining the net present value requires management to make certain key estimates, assumptions and judgements, which are
consistent with those outlined in note 13 Impairment of non-financial assets.
The net present value of the expected future cash flows of the loan is most sensitive to the Group’s copper price assumption, with a
range of US$4.18/lb - US$4.45/lb used, in real terms. The following table illustrates the sensitivity of the net present value of the loan to
a reasonable possible change in the copper price assumption, based on changing this assumption by 10 per cent while holding all other
variables constant.
FY24
US$M
Impact on profit/(loss) after tax
Face value
Carrying value
Favourable
Unfavourable
Trade and other receivables
Loans to equity accounted investments
2,283
1,814
79
(129)
(c) Capital management
The Group allocates capital in line with its strategy and capital management framework. The Group’s priorities for cash flow are to:
– Maintain safe and reliable operations and an investment grade credit rating through the cycle;
– Distribute to shareholders a minimum of 40 per cent of Underlying earnings attributable to equity holders of South32 Limited as
dividends following each six-month reporting period; and
– Maximise total shareholder returns through other alternatives including special dividends, share buy-backs and high return
investment opportunities which compete for capital.
20. Share capital
FY24
FY23
Shares
US$M
Shares
US$M
Share capital
At the beginning of the year
4,545,413,695
13,251
4,628,431,584
13,469
Shares bought back and cancelled
(16,155,127)
(35)
(83,017,889)
(218)
At the end of the year
4,529,258,568
13,216
4,545,413,695
13,251
Treasury shares
At the beginning of the year
(17,263,473)
(51)
(11,467,507)
(32)
Purchase of shares by ESOP Trusts
(4,345,048)
(11)
(11,676,773)
(33)
Employee share awards vested
5,921,057
19
5,880,807
14
At the end of the year
(15,687,464)
(43)
(17,263,473)
(51)
Shares entitle the holder to participate in dividends and the proceeds on winding up of the Group in proportion to the number of shares
held. On a show of hands every holder of shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll
each share is entitled to one vote. Incremental costs directly attributable to the issuance of shares, net of any income tax effects, are
recognised as a deduction from equity.
Notes to financial statements – Capital structure and financing continued
154
SOUTH32 ANNUAL REPORT 2024
21. Auditor's remuneration
The auditor of the Group is KPMG.
US$'000
FY24
FY23
Fees payable to the Group's auditor for assurance services
Audit and review of financial statements
4,446
4,207
Other assurance services(1)
823
705
Total auditor’s remuneration
5,269
4,912
(1) Primarily comprises assurance services in respect of the Group's sustainability and tax reporting.
22. Employee share ownership plans
At 30 June 2024, the Group had the following employee share ownership plans:
Awards granted to lead team members(1)
Long-term Incentive Plan(2)
FY21, FY22, FY23, FY24
Deferred Short-Term Incentive Plan(3)
FY22, FY23
Executive Transitional Award Plan(2)
FY22, FY24
Management Share Plan(4)
FY21
(1) Awards granted on 4 December 2020, 6 December 2021, 8 December 2022 and 4 December 2023.
(2) Awards subject to performance and service conditions.
(3) Awards subject to service conditions only.
(4) During FY21, Jason Economidis, as acting Chief Operating Officer, participated in the Management Share Plan and not the Long-Term Incentive Plan.
Awards granted to eligible employees(1)
Management Share Plan(2)
FY21, FY22, FY23, FY24
AllShare Plan(3)
2021, 2022, 2023
(1) Awards granted on 4 December 2020, 7 December 2020, 6 May 2021, 6 December 2021, 9 May 2022, 8 December 2022, 15 May 2023, 4 December 2023 and 7 May 2024.
(2) Awards subject to performance and service conditions.
(3) Awards subject to service conditions only.
All awards take the form of rights to receive one share in South32 Limited for each right granted, subject to performance and/or service
conditions being met. Performance conditions include total shareholder return relative to peer groups and, for FY23 and FY24 Long-
Term Incentive Plan and Management Share Plan awards, climate change and portfolio management performance hurdles. Further
information on the vesting conditions of performance rights granted in FY24 is disclosed in the Remuneration Report. A portion of the
2021, 2022 and 2023 AllShare Plan awards (participants located in Colombia and Mozambique) take the form of rights to receive a cash
payment equivalent to the value of South32 Limited shares at the time of payment. Employees in Africa are granted rights on the JSE
and all other employees are granted rights on the ASX.
Awards do not confer any dividend or voting rights until they convert into shares at vesting. In addition, the awards do not confer any
rights to participate in a share issue, however, there is discretion under the plans to adjust the awards in response to a variation in
South32 Limited’s share capital.
The AllShare JSE plan is eligible to receive a payment equal to the dividend amount that would have been earned on the underlying
shares awarded to those participants (Dividend Equivalent Payment). The Dividend Equivalent Payment is made to participants once the
underlying shares are issued or transferred to them. No Dividend Equivalent Payment is made in respect of awards that have lapsed or
have been forfeited. No other awards are eligible for a Dividend Equivalent Payment.
Notes to financial statements – Other notes
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FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
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SOUTH32 ANNUAL REPORT 2024
22. Employee share ownership plans continued
(a) Description of share-based payment arrangements
(i)
Recurring share-based payment plans
The awards listed below are subject to the general conditions noted above and may be granted annually subject to approval by
shareholders at the annual general meeting for awards to the Chief Executive Officer and by the Board of Directors for all other awards.
FY21, FY22, FY23 and FY24 Long-Term Incentive Plan
The Long-Term Incentive Plan is the Group’s long-term incentive plan for Lead Team members.
Awards have a four-year performance period from 1 July 2020 to 30 June 2024, 1 July 2021 to 30 June 2025, 1 July 2022 to 30 June 2026
and 1 July 2023 to 30 June 2027 respectively.
The FY21 Long-Term Incentive Plan award granted to the Chief Executive Officer is subject to a specific vesting cap imposed by the
Board of Directors. For other Lead Team members, the Board of Directors retains the discretion to apply a vesting cap to limit the value
of the rights which may vest in the ordinary course.
FY22 and FY23 Deferred Short-Term Incentive Plan
The Deferred Short-Term Incentive Plan is the Group’s short-term incentive plan for Lead Team members. Awards vest in August 2024
and August 2025 respectively, provided participants remain employed by the Group.
FY21, FY22, FY23 and FY24 Management Share Plan
The Management Share Plan is the Group’s long-term incentive plan for eligible employees below the Lead Team. The Management
Share Plan comprises two elements:
– Retention rights vesting in August 2024, August 2025 and August 2026 provided participants remain employed by the Group; and
– Performance rights vesting in August 2024, August 2025, August 2026 and August 2027 subject to performance conditions and
provided participants remain employed by the Group.
For the FY21 Management Share Plan awards, the Board of Directors retains the discretion to apply a vesting cap to limit the value of
the rights which may vest in the ordinary course.
2021, 2022 and 2023 AllShare Plan
The AllShare Plan is the Group’s employee share plan for employees not eligible to participate in the other employee share plans.
Awards to the value of at least US$1,250 per employee are granted annually. Awards will vest provided participants remain employed by
the Group. The vesting period depends on the participants’ location at the grant date:
– Participants in Africa: August 2024, August 2025 and August 2026; and
– Participants elsewhere: August 2024 and August 2025.
(ii) Transitional share-based payment plans
The awards listed below are subject to the general conditions noted above and are either one-off or will not be granted on an ongoing
basis.
FY22 and FY24 Executive Transitional Award Plan
The Executive Transitional Award Plan is a one-off grant made to Lead Team members in recognition of their adjustment from the
Management Share Plan (three year retention rights and four year performance rights) to the four year plan at the Group. Awards have a
three year performance period from 1 July 2021 to 30 June 2024 and 1 July 2023 to 30 June 2026 respectively.
(b) Employee Share Ownership Plan Trusts
The South32 Limited Employee Incentive Plans Trust (the Australian Trust) and the South32 South African AllShare Trust (the South
African Trust) are discretionary trusts for the benefit of employees of South32 Limited and its subsidiaries.
The trustee for the Australian Trust (CPU Share Plans Pty Ltd) is an independent company, resident in Australia. The trustees for the
South African Trust are made up of employer and employee representatives per the Broad-Based Black Economic Empowerment
(B-BBEE) requirements under South African law. The Trusts use funds provided by South32 Limited and/or its subsidiaries to acquire
shares to enable awards to be made or satisfied under the Group employee share ownership plans.
The shares may be acquired by purchase in the market or by subscription at not less than nominal value.
Notes to financial statements – Other notes continued
156
SOUTH32 ANNUAL REPORT 2024
22. Employee share ownership plans continued
(c) Measurement of fair values
The fair value at grant date of equity-settled share awards is charged to the Consolidated income statement, net of tax, over the period
for which the benefits of employee services are expected to be derived. The corresponding accrued employee entitlement is recorded
in the employee share awards reserve.
Where awards are forfeited because non-market based vesting conditions are not satisfied, the expense previously recognised is
proportionally reversed. If awards do not vest due to a market performance condition not being met, the expense is recognised in full,
and the share awards reserve is released to retained earnings. Where shares in South32 Limited are acquired by on-market purchases
prior to settling the vested entitlement, the cost of the acquired shares is carried as treasury shares and deducted from equity. Where
awards are satisfied by delivery of acquired shares, any difference between their acquisition cost and the cumulative remuneration
expense recognised is charged directly to retained earnings, net of tax.
The fair value of market-based performance rights is measured using a Monte Carlo methodology. This model considers the following:
– Expected life of the award;
– Current market price of the underlying shares;
– Expected volatility (of the individual company and of each peer group);
– Expected dividends;
– Risk-free interest rate; and
– Market based performance hurdles.
The fair value of retention and other non-market-based performance rights is measured using a Black Scholes methodology. This model
considers the following:
– Expected life of the award;
– Current market price of the underlying shares;
– Expected volatility;
– Expected dividends; and
– Risk-free interest rate.
The inputs used in the measurement of the fair values at grant date of the equity-settled share-based payments plans were as follows:
FY24
Fair value at
grant date
(US$)
Share price at
grant date
(US$)
Expected
volatility (%)
Expected life
(in years)
Risk-free
interest rate
based on
government
bonds (%)
Recurring plans
FY24 Long-Term Incentive Plan
1.03
2.08
30
4
4.14
FY23 Deferred Short-Term Incentive Plan
1.92
2.08
30
2
4.36
FY24 Management Share Plan - Retention rights
1.80 - 1.81
2.07 - 2.08
30
3
4.25 - 8.26
FY24 Management Share Plan - Performance rights
1.03 - 1.04
2.07 - 2.08
30
4
4.14 - 8.38
2023 AllShare Plan
1.92 - 2.07
2.07 - 2.08
30
3 - 4
4.36 - 8.26
Transitional plan
FY24 Executive Transitional Award Plan
0.80
2.08
30
3
4.25
FY23
Fair value at
grant date
(US$)
Share price at
grant date
(US$)
Expected
volatility (%)
Expected life
(in years)
Risk-free
interest rate
based on
government
bonds (%)
Recurring plans
FY23 Long-Term Incentive Plan
1.74
2.76
35
4
3.14
FY22 Deferred Short-Term Incentive Plan
2.68
2.76
35
2
3.09
FY23 Management Share Plan - Retention rights
2.59 - 2.63
2.76 - 2.85
35
3
3.12 - 8.32
FY23 Management Share Plan - Performance rights
1.74 - 1.77
2.76 - 2.85
35
4
3.14 - 8.85
2022 AllShare Plan
2.68 - 2.90
2.76 - 2.85
35
2 - 3
3.09 - 8.32
The fair value at grant date, expected life, and risk-free interest rates shown represent the ranges based on the amounts of rights
granted on the ASX or the JSE during the year, and the variations in offer terms and grant dates of each plan where applicable.
Expected volatility is based on the historical South32 Limited share price volatility at the grant date. The risk-free interest rate and
expected volatility does not materially impact service-based awards.
OPERATING AND FINANCIAL REVIEW
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FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
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SOUTH32 ANNUAL REPORT 2024
22. Employee share ownership plans continued
(d) Reconciliation of outstanding share awards
None of the awards listed below have an exercise price or are exercisable at 30 June 2024.
FY24
Number of rights
Rights at
beginning of
the year
Granted
during the
year
Vested during
the year
Forfeited
during the
year
Lapsed
during the
year
Rights at end
of the year
Recurring plans
FY20 Long-Term Incentive Plan
4,333,282
–
–
–
(4,333,282)
–
FY21 Long-Term Incentive Plan
6,283,436
–
–
–
–
6,283,436
FY22 Long-Term Incentive Plan
3,430,278
–
–
–
–
3,430,278
FY23 Long-Term Incentive Plan
2,494,503
–
–
–
–
2,494,503
FY24 Long-Term Incentive Plan
–
3,129,136
–
–
–
3,129,136
FY21 Deferred Short-Term Incentive Plan
728,990
–
(728,990)
–
–
–
FY22 Deferred Short-Term Incentive Plan
949,257
–
–
–
–
949,257
FY23 Deferred Short-Term Incentive Plan
–
1,082,738
–
–
–
1,082,738
FY20 Management Share Plan - Performance Rights
4,900,613
–
–
(19,558)
(4,881,055)
–
FY21 Management Share Plan - Retention Rights(1)
2,481,374
12,376
(2,468,943)
(24,807)
–
–
FY21 Management Share Plan - Performance Rights(1)
6,935,622
168,061
–
(490,803)
–
6,612,880
FY22 Management Share Plan - Retention Rights(1)
2,031,578
78,771
(226,952)
(185,816)
–
1,697,581
FY22 Management Share Plan - Performance Rights(1)
3,308,316
131,867
–
(364,786)
–
3,075,397
FY23 Management Share Plan - Retention Rights(1)
1,829,892
53,434
(59,969)
(182,357)
–
1,641,000
FY23 Management Share Plan - Performance Rights(1)
3,072,258
89,578
–
(331,234)
–
2,830,602
FY24 Management Share Plan - Retention Rights
–
2,416,246
(24,117)
(195,834)
–
2,196,295
FY24 Management Share Plan - Performance Rights
–
4,050,195
–
(338,256)
–
3,711,939
2020 AllShare Plan(1)
2,287,200
7,200
(2,276,000)
(18,400)
–
–
2021 AllShare Plan(1)
3,987,720
7,420
(2,423,690)
(78,440)
–
1,493,010
2022 AllShare Plan(1)
4,416,880
7,800
(69,680)
(241,800)
–
4,113,200
2023 AllShare Plan
–
5,671,200
(42,600)
(182,400)
–
5,446,200
Transitional plans
FY21 Executive Transitional Award Plan
154,702
–
(154,702)
–
–
–
FY22 Executive Transitional Award Plan
195,128
–
–
–
–
195,128
FY24 Executive Transitional Award Plan
–
85,559
–
–
–
85,559
FY20 Management Transitional Award Plan
74,918
–
–
–
(74,918)
–
Total awards
53,895,947
16,991,581
(8,475,643)
(2,654,491)
(9,289,255)
50,468,139
(1)
Retrospective grants related to prior year plans.
23. Contingent assets and liabilities
Contingent assets and liabilities not otherwise provided for in the consolidated financial statements are as follows:
US$M
FY24
FY23
Actual or potential litigation
342
519
Total contingent liabilities
342
519
Actual or potential litigation
102
143
Total contingent assets
102
143
Actual or potential litigation liabilities primarily relate to numerous tax assessments or matters relating to transactions in prior years in
Colombia and Brazil.
Actual or potential litigation assets primarily relate to potential recovery of pre-closing tax liabilities in respect of the Sierra Gorda
acquisition.
The Group’s operations are subject to complex legislative regimes, including various environmental laws and regulations. From time
to time there may be legal and regulatory claims, or potential claims, that have arisen in the course of business against entities in the
Group. The Group only recognises amounts as liabilities when they are probable, or as contingencies when they are possible, and only
where a reliable estimate can be made. The Group is not aware of any non-compliance or potential claims that are unrecognised, or
have not been disclosed, which are expected to result in a material financial impact. Such disclosures are adjusted as new information
develops or circumstances change.
The Group has entered into various counter-indemnities for bank and performance guarantees related to its own future performance
which are in the normal course of business. Additionally, the Group has provided indemnities against certain liabilities as part of
agreements for the disposal of business operations. Having taken appropriate legal advice, the Group believes that a material liability
arising from the indemnities provided is remote.
Notes to financial statements – Other notes continued
158
SOUTH32 ANNUAL REPORT 2024
24. Subsidiaries
The Group's material subsidiaries are as follows:
Material subsidiaries
Country of
incorporation
Principal activity
Effective interest %
FY24
FY23
African Metals (Pty) Ltd
South Africa
Investment holding company
100
100
Cerro Matoso S.A.
Colombia
Integrated laterite ferronickel mining and
smelting complex
99.9
99.9
Dendrobium Coal Pty Ltd(1)
Australia
Metallurgical coal mine
100
100
Endeavour Coal Pty Limited(1)
Australia
Metallurgical coal mine
100
100
Hillside Aluminium (Pty) Ltd
South Africa
Aluminium smelter
100
100
Illawarra Coal Holdings Pty Ltd(1)
Australia
Investment holding company
100
100
Illawarra Services Proprietary Limited(1)
Australia
Coal washery, rail and road transportation
100
100
South32 Aluminium (Holdings) Pty Ltd
Australia
Investment holding company
100
100
South32 Aluminium (RAA) Pty Ltd
Australia
Interest in a joint operation
100
100
South32 Aluminium (Worsley) Pty Ltd
Australia
Interest in a joint operation
100
100
South32 Cannington Proprietary Limited
Australia
Silver, lead and zinc mine
100
100
South32 Eagle Downs Pty Ltd(1)
Australia
Interest in a joint operation
100
100
South32 Finance 1 B.V.
Netherlands
Financing company
100
100
South32 Finance 2 B.V.
Netherlands
Financing company
100
100
South32 Group Operations Pty Ltd
Australia
Administrative, management and support
services
100
100
South32 Hermosa Inc.
United States
Base metals exploration and development project
100
100
South32 Investment 1 B.V.
Netherlands
Interest in a joint operation
100
100
South32 Marketing Pte. Ltd.
Singapore
Sales, marketing and distribution
100
100
South32 Minerals SA
Brazil
Interest in a joint operation
100
100
South32 SA Investments Limited
United Kingdom
Investment holding company
100
100
South32 Sierra Gorda SpA
Chile
Investment holding company
100
100
South32 Treasury Limited
Australia
Financing company
100
100
South32 USA Exploration Inc.
United States
Exploration
100
100
(1) Refer to note 30 Assets and liabilities held for sale and discontinued operations.
OPERATING AND FINANCIAL REVIEW
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FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
159
SOUTH32 ANNUAL REPORT 2024
25. Equity accounted investments
The Group’s material interests in equity accounted investments are as follows:
Material joint ventures
Country of incorporation
Principal activity
Ownership interest %
FY24
FY23
Australia Manganese(1)(2)
Australia
Manganese ore mine
60
60
South Africa Manganese(1)(3)
South Africa
Manganese ore mines
60
60
Manganese Marketing(1)(4)
Singapore
Sales, marketing and distribution
60
60
Sierra Gorda(1)(5)
Chile
Copper mine
45
45
(1) Joint control is contractually achieved as joint venture parties unanimously consent on decisions over the joint venture's relevant activities.
(2) Australia Manganese consists of an investment in GEMCO.
(3) The Group holds a 60 per cent interest in Samancor Holdings (Pty) Ltd (Samancor). Samancor indirectly owns 74 per cent of Hotazel Manganese Mines (Pty) Ltd (HMM), which
gives the Group its indirect ownership interest of 44.4 per cent. The remaining 26 per cent of HMM is owned by B-BBEE entities, of which 17 per cent of the interests were
acquired using vendor finance with the loans repayable via distributions attributable to these parties, pro rata to their share in HMM. Until these loans are repaid, the Group's
interest in HMM is accounted for at 54.6 per cent.
(4) Manganese Marketing consists of an investment in Samancor Marketing Pte Ltd.
(5) Sierra Gorda consists of an investment in Sierra Gorda Sociedad Contractual Minera.
A reconciliation of the carrying amount of the equity accounted investments is set out below:
US$M
FY24
FY23
At the beginning of the year
499
470
Share of profit/(loss)(1)
(60)
246
Share of other comprehensive income
–
6
Dividends received
(90)
(223)
Investments
53
–
Reclassified as held for sale(2)
(6)
–
At the end of the year
396
499
(1) Includes share of profit/(loss) relating to discontinued operations of US$(1) million (FY23: US$5 million). Refer to note 30 Assets and liabilities held for sale and discontinued
operations.
(2) Refer to note 30 Assets and liabilities held for sale and discontinued operations.
Carrying amount of equity accounted investments
US$M
FY24
FY23
Australia Manganese
29
95
South Africa Manganese
189
173
Manganese Marketing
64
72
Sierra Gorda
94
101
Individually immaterial(1)
20
58
Total
396
499
(1) Individually immaterial consists of an investment in Mineração Rio do Norte (33 per cent) in FY24 and consists of investments in Mineração Rio do Norte (33 per cent) and Port
Kembla Coal Terminal Ltd (16.7 per cent) in FY23.
Share of profit/(loss) of equity accounted investments
US$M
FY24
FY23
Restated(1)
Australia Manganese
(44)
120
South Africa Manganese
15
36
Manganese Marketing
6
8
Sierra Gorda
(6)
71
Individually immaterial(2)
(30)
6
Total
(59)
241
(1) Refer to note 30 Assets and liabilities held for sale and discontinued operations.
(2) Individually immaterial consists of an investment in Mineração Rio do Norte (33 per cent).
Notes to financial statements – Other notes continued
160
SOUTH32 ANNUAL REPORT 2024
25. Equity accounted investments continued
The following table summarises the financial information relating to each material equity accounted investment:
FY24
US$M
Joint ventures
Australia
Manganese(1)
South Africa
Manganese(1)
Manganese
Marketing
Sierra Gorda
Reconciliation of the carrying amount of equity accounted investments
Current assets
271
255
125
584
Non-current assets
792
567
67
4,688
Current liabilities
(118)
(129)
(86)
(769)
Non-current liabilities
(897)
(268)
–
(4,295)
Net assets - 100%
48
425
106
208
Net assets - the Group's share
29
189
64
94
Carrying amount of equity accounted investments
29
189
64
94
Reconciliation of share of profit/(loss) of equity accounted investments
Revenue - 100%
649
515
1,318
1,438
Profit/(loss) after tax - 100%
(73)
27
10
(13)
Profit/(loss) after tax - the Group's share
(44)
15
6
(6)
Share of profit/(loss) of equity accounted investments
(44)
15
6
(6)
Other balances of equity accounted investments presented on a 100% basis
Cash and cash equivalents(2)
–
43
–
160
Current financial liabilities (excluding trade and other payables and provisions)
(9)
(29)
–
(426)
Non-current financial liabilities (excluding trade and other payables and provisions)
(290)
(9)
–
(4,156)
Depreciation and amortisation
(195)
(32)
(5)
(294)
Interest income
5
5
5
6
Interest expense
(58)
(36)
–
(421)
Income tax (expense)/benefit (excluding royalty related tax)
6
(14)
(3)
1
Royalty related tax (expense)/benefit
(19)
–
–
(19)
(1) The financial information presented includes sales and purchases between Australia Manganese and South Africa Manganese, and Manganese Marketing.
(2) South Africa Manganese cash and cash equivalents include US$43 million, on a 100 per cent basis, which is restricted by legal or contractual arrangements.
FY23
US$M
Joint ventures
Australia
Manganese(1)
South Africa
Manganese(1)
Manganese
Marketing
Sierra Gorda
Reconciliation of the carrying amount of equity accounted investments
Current assets
351
231
187
590
Non-current assets
837
514
75
4,437
Current liabilities
(235)
(94)
(141)
(322)
Non-current liabilities
(794)
(255)
–
(4,481)
Net assets - 100%
159
396
121
224
Net assets - the Group's share
95
173
72
101
Carrying amount of equity accounted investments
95
173
72
101
Reconciliation of share of profit/(loss) of equity accounted investments
Revenue - 100%
1,028
512
1,706
1,521
Profit/(loss) after tax - 100%
200
64
13
158
Profit/(loss) after tax - the Group's share
120
36
8
71
Share of profit/(loss) of equity accounted investments
120
36
8
71
Other balances of equity accounted investments presented on a 100% basis
Cash and cash equivalents(2)
–
32
–
180
Current financial liabilities (excluding trade and other payables and provisions)
(9)
–
–
(23)
Non-current financial liabilities (excluding trade and other payables and provisions)
(263)
(8)
–
(4,331)
Depreciation and amortisation
(167)
(32)
(5)
(314)
Interest income
4
9
4
3
Interest expense
(39)
(11)
–
(385)
Income tax (expense)/benefit (excluding royalty related tax)
(127)
(37)
(3)
(62)
Royalty related tax (expense)/benefit
(72)
–
–
(27)
(1) The financial information presented includes sales and purchases between Australia Manganese and South Africa Manganese, and Manganese Marketing.
(2) South Africa Manganese cash and cash equivalents include US$32 million, on a 100 per cent basis, which is restricted by legal or contractual arrangements.
The Group uses the term ‘equity accounted investments’ to refer to associates and joint ventures collectively.
The Group’s share of contingent liabilities and capital expenditure commitments of material equity accounted investments as at 30 June
2024 was US$1 million (FY23: US$3 million) and US$75 million (FY23: US$58 million) respectively.
OPERATING AND FINANCIAL REVIEW
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FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
161
SOUTH32 ANNUAL REPORT 2024
26. Interest in joint operations
The Group's material interests in joint operations are as follows:
Material joint
operations
Country of
operation
Effective Interest %
Principal activity
FY24
FY23
Ambler Metals
United States
Base metals exploration and development options
50
50
Brazil Alumina
Brazil
Integrated bauxite mine and alumina refinery
36
36
Brazil Aluminium
Brazil
Aluminium smelter
40
40
Eagle Downs Metallurgical Coal(1)
Australia
Metallurgical coal exploration and development option
50
50
Mozal Aluminium(2)
Mozambique
Aluminium smelter
63.7
63.7
Worsley Alumina(2)
Australia
Integrated bauxite mine and alumina refinery
86
86
(1)
In February 2024, the Group announced its decision to enter into a binding agreement to sell its 50 per cent interest in Eagle Downs Metallurgical Coal and the sale completed
on 12 August 2024. Refer to note 30 Assets and liabilities held for sale and discontinued operations.
(2)
While the Group holds a greater than 50 per cent interest in Worsley Alumina and Mozal Aluminium, participants jointly approve certain matters and are entitled to receive their
share of output from the arrangement.
The consolidated financial statements of the Group include its share of the assets and liabilities, and revenue and expenses arising
jointly or otherwise from those operations and its revenue derived from the sale of its share of the output from the joint operation. All
such amounts are measured in accordance with the terms of each arrangement, which are usually in proportion to the Group’s interest
in the joint operation.
The assets in these joint operations are restricted to the extent that they are only available to be used by the joint operation itself and
not by other operations of the Group. For certain joint operations, the Group has also either pledged, mortgaged or provided a cross
charge to joint operation partners over assets within the joint operation.
27. Key management personnel
(a) Key management personnel compensation
US$’000
FY24
FY23
Short-term employee benefits
6,460
5,419
Post-employment benefits
146
128
Other long-term benefits
277
276
Share-based payments
4,087
4,246
Total
10,970
10,069
(b) Transactions with key management personnel
There were no transactions with key management personnel during the year ended 30 June 2024 (FY23: US$nil).
(c) Loans to key management personnel
There were no loans with any key management personnel as at 30 June 2024 (FY23: US$nil).
(d) Transactions with key management personnel related entities
There were no transactions with entities controlled or jointly controlled by key management personnel and there were no outstanding
amounts with those entities as at 30 June 2024 (FY23: US$nil).
Notes to financial statements – Other notes continued
162
SOUTH32 ANNUAL REPORT 2024
28. Related party transactions
(a) Parent entity
The ultimate parent entity of the Group is South32 Limited, which is domiciled and incorporated in Australia.
(b) Subsidiaries, joint ventures and associates
The interests in subsidiaries, joint ventures and associates are disclosed in note 24 Subsidiaries and note 25 Equity accounted
investments.
(c) Key management personnel
The compensation of, and loans to, key management personnel are disclosed in note 27 Key management personnel.
(d) Pension and other post-retirement obligations
The Group operates or participates in a number of defined benefit pension and medical plans throughout the world. The funding of
the schemes complies with local regulations. The assets of the schemes are generally held separate from those of the Group and are
administered by trustees or management boards.
At 30 June 2024, the Group had post-retirement defined benefit pension net liabilities recognised on the Consolidated balance sheet
of US$12,816 thousand (FY23: US$16,042 thousand), including amounts classified as held for sale. The net liabilities consist of defined
benefit pension obligations of US$51,916 thousand (FY23: US$60,657 thousand) and defined benefit pension scheme assets with a fair
value of US$39,100 thousand (FY23: US$44,615 thousand).
At 30 June 2024, the Group had post-retirement defined benefit medical scheme liabilities recognised on the Consolidated balance
sheet of US$16,723 thousand (FY23: 16,593 thousand). The post-retirement medical scheme is unfunded.
Total contributions to these plans by the Group during the year were US$3,466 thousand (FY23: US$4,003 thousand).
(e) Transactions with related parties
Transactions with related parties
US$’000
Joint ventures
Associates(1)
FY24
FY23
FY24
FY23
Sales of goods and services
228,277
271,141
4,294
3,863
Purchases of goods and services(2)
50,873
531
189,348
163,096
Interest income
178,435
160,288
–
–
Dividend income
90,000
223,468
–
–
Interest expense
12,022
14,977
–
–
Increase/(decrease) in short-term financing arrangements
(177,478)
(47,726)
–
–
Increase/(decrease) in loans with related parties
114,482
113,587
(6,838)
(9,117)
Outstanding balances with related parties
US$’000
Joint ventures
Associates(1)
FY24
FY23
FY24
FY23
Trade and sundry amounts owing to related parties(2)
52,776
928
28,939
18,393
Other amounts owing to related parties(3)
137,891
286,804
–
–
Other amounts owing from related parties(4)
28,565
–
–
–
Trade and sundry amounts owing from related parties
29,127
29,993
380
312
Loan amounts owing from related parties(5)(6)(7)
1,978,235
1,863,753
33,464
40,302
(1)
Includes transactions and outstanding balances related to both continuing and discontinued operations. Refer to note 30 Assets and liabilities held for sale and discontinued
operations.
(2)
Includes amounts related to the Group's captive insurance program provided to Australia Manganese. Refer to note 4(b)(ii) Significant items.
(3)
Relates to the Group's cash management program on behalf of its equity accounted investments. Amounts are repayable at call, and interest is charged based on the three-
month Chicago Mercantile Exchange Term Secured Overnight Financing Rate (CME Term SOFR) plus a margin of 0.21 per cent and the one-month Johannesburg Interbank
Average Rate (JIBAR).
(4)
Relates to the Group's cash management program on behalf of its equity accounted investments. Amounts are repayable at call, and interest is charged based on the one-
month JIBAR plus a margin of 1.65 per cent.
(5)
Includes an interest free loan owing from Australia Manganese, which is repayable by 2 January 2026. The terms of the loan were revised in June 2024, prior to which interest
was paid based on the three-month CME Term SOFR plus a margin of 3.26 per cent.
(6)
Includes a purchased credit-impaired loan owing from Sierra Gorda, which has a face value of US$2,283 million (FY23: US$2,185 million) and incurs interest at a contractual rate
of eight per cent per annum. The loan is repayable by 15 December 2024, subject to review and agreement between the joint venture parties. Refer to note 19 Financial assets
and financial liabilities.
(7)
Includes an interest free loan owing from Port Kembla Coal Terminal which is repayable by 30 June 2030.
Sales to, and purchases from, related parties are transactions at market prices and on commercial terms, or under terms and prices
that are no less favourable to the Group than those arranged with third parties.
Outstanding balances at year end are unsecured and settlement mostly occurs in cash.
South32 Limited has guaranteed its equivalent 45 per cent share of the repayment of a US$700 million revolving credit facility entered
into by Sierra Gorda. At the end of the year, the facility was drawn down by US$400 million (FY23: US$400 million). The facility extends
to 30 September 2024.
A subsidiary of the Group has guaranteed its equivalent 33 per cent share of the repayment of loan facilities totalling US$240 million
entered into by Mineração Rio do Norte, with maturities ranging from April 2025 to June 2025. At the end of the year, a total of
US$150 million was drawn from these facilities (FY23: nil).
No other guarantees are provided for or have been received from any related party.
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
163
SOUTH32 ANNUAL REPORT 2024
29. Parent entity information
(a) Summary financial information
The individual financial statements for the parent entity, South32 Limited, show the following aggregate amounts:
US$M
FY24
FY23
Result of parent entity
Profit/(loss) after tax for the year
(163)
(995)
Total comprehensive income/(loss)
(163)
(995)
Financial position of parent entity at year end
Current assets
375
445
Current liabilities
(402)
(1,375)
Total assets
12,303
12,056
Total liabilities
(1,982)
(1,383)
Net assets
10,321
10,673
Total equity of the parent entity
Share capital
13,216
13,251
Treasury shares
(39)
(47)
Other reserves
38
32
Profit reserve(1)
3,653
3,816
Accumulated losses
(6,547)
(6,379)
Total equity
10,321
10,673
(1)
Prior year profits, net of dividends paid, have been appropriated to a profit reserve for future dividend payments.
(b) Parent company guarantees
The parent entity and South32 SA Investments Ltd have jointly and severally, fully and unconditionally guaranteed the payment of the
principal and premium, if any, and interest, including certain additional amounts that may be payable in respect of the US$700 million
of unsecured notes issued by South32 Treasury Ltd, a 100 per cent owned finance subsidiary of the parent entity, refer to note 17
Interest bearing liabilities. The parent entity and South32 SA Investments Ltd have guaranteed the payment of such amounts when they
become due and payable, whether on an interest payment date, at the stated maturity of the notes, by declaration or acceleration, call
for redemption or otherwise.
The parent entity has also guaranteed a US commercial paper program and a Group revolving credit facility of US$1,400 million. Both
the US commercial paper program and the revolving credit facility are undrawn as at 30 June 2024, refer to note 19 Financial assets and
financial liabilities for further details.
The parent entity is party to a Deed of Support with the effect that the Company guarantees debts in respect of South32 Group
Operations Pty Ltd.
Notes to financial statements – Other notes continued
164
SOUTH32 ANNUAL REPORT 2024
30. Assets and liabilities held for sale and discontinued operations
Non-current assets and disposal groups (inclusive of directly associated liabilities) are classified as held for sale if their carrying amount
is highly probable to be recovered through sale rather than through continuing use, and are available for immediate sale in their present
condition.
A discontinued operation is a component of the Group's business that represents a separate major line of business or geographical area
of operations that has been disposed of or is classified as held for sale. When an operation is classified as discontinued, the comparative
financial results are restated as if the operation had been discontinued from the start of the comparative period.
Amounts classified as held for sale are summarised by disposal group as follows:
US$M
FY24
Assets held for sale
Illawarra Metallurgical Coal
1,794
Eagle Downs Metallurgical Coal
31
Total assets held for sale
1,825
Liabilities directly associated with assets held for sale
Illawarra Metallurgical Coal
558
Eagle Downs Metallurgical Coal
15
Total liabilities directly associated with assets held for sale
573
Illawarra Metallurgical Coal
In February 2024, the Group announced its decision to enter into a binding agreement for the sale of its shareholding in Illawarra
Metallurgical Coal to an entity owned by Golden Energy and Resources Pte Ltd (GEAR) and M Resources Pty Ltd (M Resources) for an
upfront and deferred cash consideration of US$1,300 million plus contingent price-linked consideration of up to US$350 million, subject
to customary working capital, net debt and capital expenditure adjustments. The transaction is expected to complete on 29 August
2024.
Illawarra Metallurgical Coal is classified as held for sale and is presented separately on the Group's FY24 Consolidated balance sheet.
The disposal group represents the entire Illawarra Metallurgical Coal segment, which comprises Illawarra Coal Holdings Pty Ltd and its
subsidiaries, a 16.7 per cent interest in the Port Kembla Coal Terminal, and certain associated external contractual arrangements held
by South32 Marketing Pte Ltd which will be novated to Illawarra Metallurgical Coal on completion.
As a result of the reclassification, the Group assessed the recoverable value of the Illawarra Metallurgical Coal CGU and recognised
a pre-tax impairment reversal of US$197 million, refer to note 13 Impairment of non-financial assets.
Illawarra Metallurgical Coal owns and operates the Appin and Dendrobium metallurgical coal mines, and West Cliff and Dendrobium coal
preparation plants in New South Wales, Australia. As a separate major component of the Group, Illawarra Metallurgical Coal has also
been presented as a discontinued operation in the Group's Consolidated income statement.
The results of the discontinued operation are as follows:
US$M
FY24
FY23
Revenue:
Group production
1,224
1,643
Third party products and services
237
140
1,461
1,783
Other income
10
2
Expenses excluding finance costs
(832)
(1,126)
Share of profit/(loss) of equity accounted investments
(1)
5
Profit/(loss) from a discontinued operation
638
664
Finance income
2
2
Finance costs
(12)
(9)
Net finance income/(costs)
(10)
(7)
Profit/(loss) before tax from a discontinued operation
628
657
Income tax (expense)/benefit
(193)
(212)
Profit/(loss) for the year from a discontinued operation
435
445
Total comprehensive income/(loss) from a discontinued operation attributable to the equity holders of
South32 Limited
435
445
Basic earnings/(loss) per share (cents)
9.6
9.7
Diluted earnings/(loss) per share (cents)
9.6
9.7
OPERATING AND FINANCIAL REVIEW
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FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
165
SOUTH32 ANNUAL REPORT 2024
Notes to financial statements – Other notes continued
30. Assets and liabilities held for sale and discontinued operations continued
Illawarra Metallurgical Coal continued
The cash flows from discontinued operations are as follows:
US$M
FY24
FY23
Net cash flows from operating activities
358
654
Net cash flows from investment activities
(345)
(257)
Net cash flows from financing activities
(5)
(6)
The major classes of assets and liabilities classified as held for sale are as follows:
US$M
FY24
Assets
Trade and other receivables
164
Inventories
109
Property, plant and equipment
1,502
Equity accounted investments
6
Other assets
13
Total assets held for sale
1,794
Liabilities
Trade and other payables
249
Interest bearing liabilities
30
Provisions
268
Deferred tax liabilities
11
Total liabilities directly associated with assets held for sale
558
Net assets of disposal group classified as held for sale
1,236
Eagle Downs Metallurgical Coal
In February 2024, the Group announced its decision to enter into a binding agreement to sell its 50 per cent interest in Eagle Downs
Metallurgical Coal to a subsidiary of Stanmore Resources Limited. The sale completed on 12 August 2024 for consideration comprising
US$15 million cash paid at completion, a contingent payment of US$20 million subject to the project reaching metallurgical coal
production of 100,000 tonnes, and a price-linked royalty of up to US$100 million.
Eagle Downs Metallurgical Coal is classified as held for sale and is presented separately on the Group's FY24 Consolidated balance
sheet. As a result of the reclassification, the Group assessed the recoverable amount of its interest in Eagle Downs Metallurgical Coal
and recognised a pre-tax impairment reversal of US$17 million, refer to note 13 Impairment of non-financial assets. Eagle Downs
Metallurgical Coal is not considered a separate major component of the Group and therefore is not classified as a discontinued
operation, with its results remaining within continuing operations in the Group's Consolidated income statement.
The major classes of assets and liabilities classified as held for sale are as follows:
US$M
FY24
Assets
Property, plant and equipment
31
Total assets held for sale
31
Liabilities
Interest bearing liabilities
8
Provisions
7
Total liabilities directly associated with assets held for sale
15
Net assets of disposal group classified as held for sale
16
166
SOUTH32 ANNUAL REPORT 2024
31. Subsequent events
Capital management
On 29 August 2024, the Directors resolved to pay a fully-franked final dividend of US 3.1 cents per share (US$140 million) in respect of
the 2024 financial year. The dividends will be paid on 17 October 2024. The dividends have not been provided for in the consolidated
financial statements and will be recognised in the 2025 financial year.
On 29 August 2024, the Directors resolved to allocate US$200 million to its on-market share buy-back program, commencing from the
completion of the sale of Illawarra Metallurgical Coal and to be returned to shareholders by 12 September 2025.
No other matters or circumstances have arisen since the end of the year that have significantly affected, or may significantly affect, the
operations, results of operations or state of affairs of the Group in subsequent accounting periods.
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SOUTH32 ANNUAL REPORT 2024
The following table provides a list of all entities included in the Group's consolidated financial statements, prepared in accordance with
the requirements of Section 295(3A) of the Corporations Act. The ownership interest is only disclosed for those entities which are a body
corporate, representing the direct and indirect percentage share capital owned by the Company.
Entity name
Legal structure
Country of incorporation
Country of tax
residency
Ownership
interest %(1)
African Metals (Pty) Ltd
Body Corporate
South Africa
South Africa
100
Aluminium Beneficiation Initiative (NPC)
Body Corporate
South Africa
South Africa
50
Aluminium Management Company of Mozambique (Pty)
Limited
Body Corporate
South Africa
South Africa
66
Ambler Metals LLC
Body Corporate
United States
United States
50
Bare Trusts(2)
Trust
N/A
Australia
N/A
BHP Billiton Aluminium South Africa Trust
Trust
N/A
South Africa
N/A
BHP Billiton Community Development Trust
Trust
N/A
South Africa
N/A
BHP Billiton Community Support Trust
Trust
N/A
South Africa
N/A
BHP Billiton Education Trust
Trust
N/A
South Africa
N/A
Billiton Insurance Mutual Trust
Trust
N/A
South Africa
N/A
Cerro Matoso S.A.
Body Corporate
Colombia
Colombia
99.9
Conicol BVI Limited
Body Corporate
British Virgin Islands
Australia
100
Dendrobium Coal Pty Ltd
Body Corporate
Australia
Australia
100
Dendrobium Community Enhancement Program
Trust
N/A
Australia
N/A
Dendrobium Community Enhancement Program Pty
Ltd(3)
Body Corporate
Australia
Australia
100
Eagle Downs Coal Management Pty Ltd
Body Corporate
Australia
Australia
100
Endeavour Coal Pty Limited
Body Corporate
Australia
Australia
100
Fundación cerro matoso
Body Corporate
Colombia
Colombia
100
Fundación educativa de montelíbano
Body Corporate
Colombia
Colombia
100
Fundación panzenú
Body Corporate
Colombia
Colombia
100
Gengro (Pty) Ltd
Body Corporate
South Africa
South Africa
100
Hillside Aluminium (Pty) Ltd
Body Corporate
South Africa
South Africa
100
Illawarra Coal Community Partnerships Program
Trust
N/A
Australia
N/A
Illawarra Coal Community Partnerships Programme Pty
Limited(3)
Body Corporate
Australia
Australia
100
Illawarra Coal Holdings Pty Ltd
Body Corporate
Australia
Australia
100
Illawarra Services Proprietary Limited
Body Corporate
Australia
Australia
100
Micawber 501 (Proprietary) Limited
Body Corporate
South Africa
South Africa
100
Minera Sud Argentina S.A.
Body Corporate
Argentina
Argentina
50.1
Mozal Community Development Trust
Trust
N/A
Mozambique
N/A
Mozal SA
Body Corporate
Mozambique
Mozambique
63.7
South32 (BMSA) Pty Ltd
Body Corporate
Australia
Australia
100
South32 (BVI) Limited
Body Corporate
British Virgin Islands
Australia
100
South32 Africa (Pty) Ltd
Body Corporate
South Africa
South Africa
100
South32 Aluminium (Holdings) Pty Ltd
Body Corporate
Australia
Australia
100
South32 Aluminium (RAA) Pty Ltd(4)
Body Corporate
Australia
Australia
100
South32 Aluminium (Worsley) Pty Ltd(4)
Body Corporate
Australia
Australia
100
South32 Aluminium SA (Pty) Ltd
Body Corporate
South Africa
South Africa
100
South32 Americas Inc.
Body Corporate
United States
United States
100
South32 Argentina Holdings Pty Ltd
Body Corporate
Australia
Australia
100
South32 Arizona (Holdings) Pty Ltd
Body Corporate
Australia
Australia
100
South32 Australia Investment 3 Pty Ltd
Body Corporate
Australia
Australia
100
South32 Base Metals Ireland Limited
Body Corporate
Ireland
Ireland
100
South32 Canada Inc.
Body Corporate
Canada
Canada
100
South32 Cannington Proprietary Limited
Body Corporate
Australia
Australia
100
South32 Chile Copper Holdings Pty Ltd
Body Corporate
Australia
Australia
100
South32 Eagle Downs Pty Ltd
Body Corporate
Australia
Australia
100
South32 Energy SAS ESP
Body Corporate
Colombia
Colombia
100
South32 Exploracion S.A.S.
Body Corporate
Colombia
Colombia
100
Consolidated entity disclosure statement
as at 30 June 2024
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SOUTH32 ANNUAL REPORT 2024
Entity name
Legal structure
Country of incorporation
Country of tax
residency
Ownership
interest %(1)
South32 Finance 1 B.V.
Body Corporate
Netherlands
Netherlands
100
South32 Finance 2 B.V.
Body Corporate
Netherlands
Netherlands
100
South32 Finance South Africa Limited
Body Corporate
British Virgin Islands
United Kingdom
100
South32 Freight Australia Pty Ltd
Body Corporate
Australia
Australia
100
South32 Gas S.A.S. E.S.P.
Body Corporate
Colombia
Colombia
100
South32 Group (BVI) Limited
Body Corporate
British Virgin Islands
Australia
100
South32 Group Operations Pty Ltd
Body Corporate
Australia
Australia
100
South32 Hermosa Inc.
Body Corporate
United States
United States
100
South32 Holding 1 SpA
Body Corporate
Chile
Chile
100
South32 Holding 2 SpA
Body Corporate
Chile
Chile
100
South32 International Investment Holdings Proprietary
Limited
Body Corporate
Australia
Australia
100
South32 International Investment Proprietary Limited
Body Corporate
Australia
Australia
100
South32 Investment 1 B.V.(5)
Body Corporate
Netherlands
Netherlands
100
South32 Jersey Limited
Body Corporate
Jersey
Australia
100
South32 Limited
Body Corporate
Australia
Australia
100
South32 Limited Employee Incentive Plans Trust
Trust
N/A
Australia
N/A
South32 Marketing Pte. Ltd.
Body Corporate
Singapore
Singapore
100
South32 Minerals SA
Body Corporate
Brazil
Brazil
100
South32 North America Projects ULC
Body Corporate
Canada
Canada
100
South32 Properties (Pty) Ltd
Body Corporate
South Africa
South Africa
100
South32 Royalty Investments Pty Ltd
Body Corporate
Australia
Australia
100
South32 SA Finance (Pty) Ltd
Body Corporate
South Africa
South Africa
100
South32 SA Holdings Ltd
Body Corporate
South Africa
South Africa
100
South32 SA Investments Limited
Body Corporate
United Kingdom
United Kingdom
100
South32 SA Ltd
Body Corporate
South Africa
South Africa
100
South32 SA Manganese Holdings (Pty) Ltd
Body Corporate
South Africa
South Africa
100
South32 Sierra Gorda SpA
Body Corporate
Chile
Chile
100
South32 South African AllShare Trust
Trust
N/A
South Africa
N/A
South32 Sweden Exploration AB
Body Corporate
Sweden
Sweden
100
South32 Treasury (USA) Limited
Body Corporate
Australia
Australia
100
South32 Treasury Limited
Body Corporate
Australia
Australia
100
South32 USA Exploration Inc.(6)
Body Corporate
United States
United States
100
South32 Worsley Alumina Pty Ltd
Body Corporate
Australia
Australia
86
Southern Abatis Pte Ltd
Body Corporate
Singapore
Australia
100
Taragon Valley Pty Limited
Body Corporate
Australia
Australia
100
(1)
The ownership interest percentage has been rounded to one decimal place.
(2)
Bare trusts represent a series of trust deeds that were established to hold assets on behalf of a subsidiary within the Group.
(3)
Trustee of a trust which is consolidated in the consolidated financial statements.
(4)
Participant in the South32 Worsley Alumina Pty Ltd joint operation which is included in the consolidated financial statements.
(5)
Participant in the Mozal SA and Aluminium Management Company of Mozambique (Pty) Limited joint operations which are included in the consolidated financial statements.
(6)
Participant in the Ambler Metals LLC joint operation which is included in the consolidated financial statements.
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SOUTH32 ANNUAL REPORT 2024
Directors’ declaration
In accordance with a resolution of the Directors of the Company, we state that:
1. In the opinion of the Directors:
(a)
The consolidated financial statements and notes that are set out on pages 110 to 167 of the Annual Report are in accordance
with the Corporations Act, including:
(i) Giving a true and fair view of the Group’s financial position as at 30 June 2024 and of its performance for the year ended on
that date; and
(ii) Complying with Australian Accounting Standards and Corporations Regulations 2001.
(b)
The consolidated entity disclosure statement set out on pages 168 to 169 of the Annual Report, as required by Section 295(3A)
of the Corporations Act, is true and correct.
(c)
There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and
payable.
4. The Directors have been given the declarations required by Section 295A of the Corporations Act from the Chief Executive Officer
and Chief Financial Officer for the year ended 30 June 2024.
5. The Directors draw attention to note 2 to the financial statements on page 115 which includes a statement of compliance with
International Financial Reporting Standards Accounting Standards.
Signed in accordance with a resolution of the Board of Directors.
Karen Wood
Chair
Graham Kerr
Chief Executive Officer and Managing Director
Dated 29 August 2024
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SOUTH32 ANNUAL REPORT 2024
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.
Lead auditor’s independence declaration
under Section 307C of the Corporations Act 2001
To the Directors of South32 Limited
I declare that, to the best of my knowledge and belief, in relation to the audit of South32 Limited for the financial year ended
30 June 2024 there have been:
i. no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and
ii. no contraventions of any applicable code of professional conduct in relation to the audit.
KPMG
Graham Hogg
Partner
Perth
29 August 2024
OPERATING AND FINANCIAL REVIEW
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SOUTH32 ANNUAL REPORT 2024
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG
International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks
used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under
Professional Standards Legislation.
Independent auditor’s report
To the shareholders of South32 Limited
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report of South32 Limited (the
Company).
In our opinion, the accompanying Financial Report of the Company
gives a true and fair view, including of the Group’s financial position
as at 30 June 2024 and of its financial performance for the year then
ended, in accordance with the Corporations Act 2001, in compliance
with Australian Accounting Standards and the Corporations
Regulations 2001.
The Financial Report comprises:
•
Consolidated balance sheet as at 30 June 2024;
•
Consolidated income statement, Consolidated statement of
comprehensive income, Consolidated statement of changes in
equity, and Consolidated cash flow statement for the year then
ended;
•
Consolidated entity disclosure statement and accompanying basis
of preparation as at 30 June 2024;
•
Notes, including material accounting policies; and
•
Directors’ Declaration.
The Group consists of the Company and the entities it controlled at
the year end or from time to time during the financial year.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards and International Standards on Auditing. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial Report
section of our report.
We are independent of the Group in accordance with the 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:
•
Asset valuation;
•
Closure and rehabilitation provision; and
•
Sale of Illawarra Metallurgical Coal.
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.
172
SOUTH32 ANNUAL REPORT 2024
Independent Auditor’s Report
Asset valuation (Property, plant & equipment US$6,503m, Intangible assets US$221m, Equity accounted
investments US$396m, and Net impairment of non-financial assets from continuing operations US$801m)
Refer to Note 13 Impairment of non-financial assets and Note 5 Expenses excluding finance costs to the Financial Report
The key audit matter
How the matter was addressed in our audit
The assessment of the existence of impairment or reversal indicators
and the Group’s impairment testing of Cash Generating Units (CGU)
and Areas of Interest (AOI), where required, was a key audit matter. This
is due to the size of property, plant and equipment, intangible assets
and equity accounted investments, and the sensitivity of valuations to
certain assumptions.
The Group had previously impaired the carrying value of several CGUs
to equate to their recoverable amount, as required by accounting
standards. Combined with the volatility in both commodity and foreign
exchange markets, this increases the sensitivity of the current carrying
values of these CGUs to potential impairment or reversal.
The Group has recorded an impairment charge of $554m (pre-tax) in
the Worsley Alumina CGU and of $264m (pre-tax) in the Cerro Matoso
CGU resulting from identification of an impairment indicator.
This further increased our audit effort in this key audit area.
The Group uses discounted cash flow (DCF) models to perform their
assessment of impairment or reversal indicators and fair value less
cost of disposal for impairment testing, where required.
The Group’s models use life of operation and project plans, approved
budgets, and a range of external sources as inputs to the assumptions.
Modelling using forward-looking assumptions tends to be prone to
greater risk for potential bias, error and inconsistent application. These
conditions necessitate additional scrutiny by us to address the
objectivity of inputs and their consistent application.
We focused on the significant forward-looking assumptions the Group
applied in their models, including:
•
Forecast commodity prices and foreign exchange rates – the
current economic climate has resulted in significant volatility in
forecast commodity prices across the Group. The Group’s models
are sensitive to small changes in these price assumptions, as well
as changes to foreign exchange rates.
•
Forecast operating cash flows, production volumes, capital
expenditure and reserve and resource estimates – these are
determined by the Group based on historical performance
adjusted for expected changes or plans for development,
including consideration of regulatory approvals. This drives
additional audit effort specific to the feasibility of the forecasts
and consistency with the Group’s strategy.
•
Discount rates – these are complicated in nature and vary
according to the conditions and environment the CGUs are subject
to from time to time.
•
Carbon price – the Group incorporates carbon price assumptions
in its modelling based on enacted local schemes and assumptions
of longer-term pricing and timing in the jurisdictions they operate
and transact in.
We involved valuation specialists to supplement our senior audit team
members in assessing this key audit matter.
Our procedures included:
•
We considered the appropriateness of the fair value less cost
of disposal method applied by the Group to perform the annual
test for impairment against the requirements of the accounting
standards.
•
On a sample basis, we assessed the integrity and consistency
of the models used for impairment testing and assessment of
impairment or reversal indicators, including the accuracy of the
underlying formulas and consistency of modelling to the prior year.
•
We assessed the Group’s view of the indicators leading to
impairment testing for the Worsley Alumina and Cerro Matoso
CGUs. We recalculated the impairment charge and compared to
the amounts recognised.
•
We compared the forecast operating cash flows, production
volumes, capital expenditure and reserve and resource estimates
contained in the models to the life of operation plans incorporated
in the approved budgets and study estimates incorporated in
project plans. We assessed the accuracy of the Group’s previous
forecasts to assist with this assessment.
•
We considered the sensitivity of the models by varying key
assumptions, such as forecast commodity prices, foreign
exchange rates, costs of production and discount rates, within
a reasonably possible range. We did this to identify those CGUs
at higher risk of impairment or reversal and to focus our further
procedures.
•
We assessed the scope, objectivity, and competence of the
Group’s internal experts responsible for preparation of key
resource and reserve estimates and compared these estimates to
those incorporated in the life of operation and project plans where
applicable.
•
We assessed the preparation of key resource and reserve
estimates against key requirements of the JORC code, including
testing controls over the appointment of Competent Person and
assessed declarations made.
•
We challenged the Group’s significant forecast operating cash
flow, capital expenditure and production volume assumptions.
We compared key events to the Board approved plan and
strategy. We applied increased scepticism to forecasts in the
areas where previous forecasts were not achieved. We compared
key forecast expenditure to published studies of industry
trends and expectations and considered differences for the
Group’s operations. We used our knowledge of the Group, their
past performance, business and customers, and our industry
experience.
•
Working with our valuation specialists, and considering the risk
factors specific to the Group, we compared the discount rates to
publicly available market data. We also compared forecast foreign
exchange rates to published views of market commentators.
•
Working with our valuation specialists, and considering the risk
factors specific to the Group, we compared forecast commodity
prices to published views of market commentators on future
trends.
•
We involved our sustainability specialists and inquired of key
members of the Group’s climate team on their progress of
climate-related strategy. We compared those areas identified by
the Group having an impact on asset valuation to our knowledge
of their industry and business. We tested key climate-related
assumptions incorporated into the financial modelling of carbon
pricing assumptions against locally enacted country specific
schemes and longer term published industry views.
•
We assessed the disclosures in the Financial Report using
our understanding obtained from our testing and against the
requirements of the accounting standards.
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SOUTH32 ANNUAL REPORT 2024
Independent Auditor’s Report
Closure and rehabilitation provision (US$1,938m)
Refer to Note 15 Provisions to the Financial Report.
The key audit matter
How the matter was addressed in our audit
Closure and rehabilitation provisioning was a key audit matter due
to the size of the provision and the judgement involved in
determining the provision estimates across multiple sites the Group
operates.
Closure and rehabilitation activities are governed by Group policies
based on legal and regulatory requirements, which differ across the
multiple jurisdictions.
We focused on the following assumptions the Group applied in
determining the provisions using their closure and rehabilitation
plans:
•
Nature and extent of activities required at sites, including the
magnitude of disturbance and possible contamination, which are
inherently challenging to assess.
•
Timing of when closure and rehabilitation will take place, which
increases estimation uncertainty given the unique nature of each
site and long timeframes involved.
•
Forecast cost estimates incorporating historical experience, which
may not be a reliable predictor of such costs particularly in an
inflationary economy, and risk adjustments. The Group engages
external experts periodically to assist in their determination of
these estimates.
•
Economic assumptions, including country specific discount rates,
which are complicated in nature.
Our procedures included:
•
We compared the basis for recognition and measurement of
the closure and rehabilitation provision for consistency with
environmental and regulatory requirements and criteria in the
accounting standards.
•
We evaluated the methodology applied by the Company’s expert
in determining the nature and extent of closure and rehabilitation
activities by comparison to industry practice.
•
We evaluated key assumptions used in the closure and
rehabilitation provision, relevant to the jurisdictions of the sites the
Group operates, by:
– Comparing the nature and extent of activities costed to a
sample of the Group’s closure and rehabilitation plans and
relevant regulatory requirements.
– Comparing the timing of closure and rehabilitation activities
to the Group’s resources and reserve estimates and the
expected production profile contained in the life of operation
plans.
– Assessing the scope, objectivity and competence of the
Group’s internal and external experts to provide closure and
rehabilitation cost estimates.
– Comparing a sample of cost estimates of the activities,
incorporating allowance for uncertainties, to historical
experience and underlying documentation, the Group’s
external expert estimates, and our knowledge of the Group
and its industry.
– Working with our valuation specialists, comparing country
specific discount rate assumptions to market observable
data, including risk free rates.
•
We assessed the disclosures in the Financial Report using our
understanding obtained from our testing against the requirements
of the accounting standard.
174
SOUTH32 ANNUAL REPORT 2024
Independent Auditor’s Report
Sale of Illawarra Metallurgical Coal (US$1,794m assets and US$558m liabilities and Impairment reversal
of non-financial assets from discontinued operations US$197m)
Refer to Note 30 Assets and liabilities held for sale and a discontinued operation to the Financial Report and Note 13 Impairment of
non-financial assets
The key audit matter
How the matter was addressed in our audit
In February 2024, the Group announced an agreement to sell its
shareholding in Illawarra Metallurgical Coal (IMC).
Several regulatory and third-party approvals needed to be satisfied
prior to completion of the sale. As at balance date these had yet to
be satisfied.
The financial results of IMC are presented as a discontinued
operation and its assets and liabilities are presented as held for sale
in the Financial Report.
The sale is considered a key audit matter due to the:
•
Financial significance of IMC to the Group.
•
Judgement applied by the Group in the identification of the
disposal group held for sale and the presentation of its results as a
discontinued operation.
•
Judgement involved in determining the impairment reversal
recognised related to the cash generating unit.
•
Judgement to determine the value of the deferred and contingent
consideration.
Our procedures included:
•
We examined the relevant transaction documents to understand
the terms and conditions of the sale.
•
We obtained an understanding of the process for identifying net
assets expected to be disposed of. This included walk-through
of the process with the Group’s respective business and finance
teams to check our understanding of the approach and procedures
adopted.
•
We assessed the Group’s classification of assets and liabilities
recognised as Assets Held for Sale by reconciling balances
to underlying records, inspecting required adjustments as
stipulated within the share sale agreement and comparing to the
requirements of the accounting standards.
•
We assessed the Group’s view of the transaction as an indicator
leading to impairment reversal testing for the IMC CGU. We
recalculated the impairment reversal charge and compared to the
amounts recognised.
•
We tested key inputs and forward-looking assumptions used in
the determination of the fair value of the deferred and contingent
consideration to management’s production plan and forecast
commodity prices to published views of market commentators.
•
Using our tax specialists, we evaluated the associated tax
implications against the requirements of the tax legislation.
•
We assessed the integrity and accuracy of the calculated profit
from the discontinued operation, including impairment reversal of
non-financial assets, against the amount recorded and disclosed by
the Group.
•
We assessed the disclosures in the Financial Report using our
understanding obtained from our testing against the requirements
of the accounting standard.
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Independent Auditor’s Report
Other Information
Other Information is financial and non-financial information in South32’s annual report which is provided in addition to the Financial Report
and the Auditor’s Report. The Directors are responsible for the Other Information.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not express an audit opinion or any form of
assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion.
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 in accordance with the Corporations Act 2001, including giving a true and fair view of the financial position and
performance of the Group, and in compliance with Australian Accounting Standards and the Corporations Regulations 2001;
•
Implementing necessary internal control to enable the preparation of a Financial Report in accordance with the Corporations Act 2001,
including giving a true and fair view of the financial position and performance of the Group, and that is free from material misstatement,
whether due to fraud or error; and
•
Assessing the Group and Company’s ability to continue as a going concern and whether the use of the going concern basis of accounting is
appropriate. This includes disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
they either intend to liquidate the Group and Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
•
To obtain reasonable assurance about whether the Financial Report as a whole is free from material misstatement, whether due to fraud or
error; and
•
To issue an Auditor’s Report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing
Standards and International Standards on Auditing will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of the Financial Report.
A further description of our responsibilities for the audit of the Financial Report is located at the Auditing and Assurance Standards Board
website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our Auditor’s Report. These
responsibilities also apply to our audit performed in accordance with International Standards on Auditing.
Report on the Remuneration Report
Opinion
In our opinion, the Remuneration report of South32 Limited for the
year ended 30 June 2024, 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 87 to 108
of the Directors’ report for the year ended 30 June 2024.
Our responsibility is to express an opinion on the Remuneration report,
based on our audit conducted in accordance with Australian Auditing
Standards.
KPMG
Graham Hogg
Partner
Perth
29 August 2024
176
SOUTH32 ANNUAL REPORT 2024
RESOURCES
AND RESERVES
Information
178
Competent Persons
179
Accompanying tables
180
177
SOUTH32 ANNUAL REPORT 2024
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
177
SOUTH32 ANNUAL REPORT 2024
As required by Chapter 5 of the
Australian Securities Exchange (ASX)
Listing Rules, we report Mineral
Resources and Ore Reserves (including
Coal Resources and Coal Reserves) in
accordance with the 2012 Edition of
the Australasian Code for Reporting of
Exploration Results, Mineral Resources
and Ore Reserves (JORC Code).
In this report, information relating to
Mineral Resources and Ore Reserves
is based on, and fairly represents,
information and supporting
documentation prepared by our
Competent Persons listed on page 179.
A Competent Person is defined in the
JORC Code. They must have a minimum
of five years of relevant experience in the
style of mineralisation or type of deposit
under consideration and the activity
being undertaken. Each of our Competent
Persons involved in the preparation of
information relating to Mineral Resources
and Ore Reserves in this report meet
those requirements.
Each of our Competent Persons have
given consent to the inclusion of the
information relating to Mineral Resources
and Ore Reserves in this report in the
form and context in which it appears and
have approved the inclusion of the Mineral
Resources and Ore Reserves statement
as a whole in this report. You can find
more details on each of their professional
affiliations, employer and areas of
accountability on page 179. Unless we
state otherwise, all Competent Persons
listed are full-time employees at South32,
or at one of our related entities.
We report Mineral Resources and Ore
Reserves in 100 per cent terms and
represent estimates as at 30 June
2024, except for Eagle Downs. The Coal
Resource for Eagle Downs is provided as
at 12 August 2024, to align with the date
on which completion of the sale occurred.
A comparison between 30 June 2024
and 12 August 2024 (for Eagle Downs)
is provided on page 186. South32 notes
that the Coal Resources for Eagle Downs
are provided as at 12 August 2024 and
therefore include a portion of FY25.
Accordingly, there will be no further
update provided on the Coal Resources
for Eagle Downs in the FY25 Annual
Report. Our Mineral Resource estimations
include Measured and Indicated Mineral
Resources which, after the application of
all modifying factors, and development of
a mine plan, have been classified as Ore
Reserves.
We report all quantities as dry metric
tonnes, unless stated otherwise.
At a glance - Resources and Reserves (as at 30 June 2024)
Operations, development projects and options
Total Ore/Coal
Reserve (Mt)
Reserve Life
Years(1)
Total Mineral/
Coal Resource
(Mt)
Worsley Alumina
199
12
1,080
Brazil Alumina (MRN)
41
3.6
503
Sierra Gorda
782
16
1,870
Cannington
11
5.0
80
Hermosa
Taylor
65
19
153
Clark
55
Peake
3.3
Ambler
Arctic
43
Bornite
148
Cerro Matoso
29
8.0
300
Australia Manganese
52
5.0
138
South Africa Manganese(2)
93
46
200
Illawarra Metallurgical Coal(2)(3)
97
21
1,170
Eagle Downs(4)
-
(1) Scheduled extraction period in years for the total Ore Reserves in the approved Life of Operation Plan.
(2) Reserve life for South Africa Manganese and Illawarra Metallurgical Coal is reported as the life of scheduled Coal/
Ore Reserves for Wessels and Bulli respectively. The Reserve life for each of the remaining operations is stated in
the detailed disclosures that follow.
(3) Coal Reserves in this table are presented as Marketable Coal Reserves. Process recoveries are reported in the
detailed disclosures that follow for each coal operation.
(4) Coal Resources estimate reported as at 12 August 2024.
It is important to note that Mineral
Resources and Ore Reserves are
estimations, not precise calculations.
We have rounded tonnes and grade
information to reflect the relative
uncertainty of the estimate, which is why
minor computational differences may be
present in the totals.
Our long-range forecasts are the basis for
the commodity prices and exchange rates
used to estimate the economic viability
of Ore Reserves. Our planning processes
consider the impacts of climate change
on our Ore Reserves estimates, including
assessments of operating costs and the
impact of extreme weather events on the
expectation of economic extraction.
Our Ore Reserves are within existing
permitted mining tenements. Our mineral
leases are of sufficient duration, or
convey a legal right to renew the tenure,
to enable all Ore Reserves on the leased
properties to be mined in accordance
with the current production schedules.
These Ore Reserves may include areas
where additional regulatory approvals
are required, and we expect that such
approvals will be obtained within the
timeframe needed for the current
production schedule.Our expectation is
that while future approval conditions may
be more onerous than current operating
conditions, they would be reasonable,
scientifically based and aligned with
prevailing legislation.
Our governance arrangements
and internal controls
We have internal standards and
governance arrangements that cover
regulatory requirements for public
reporting. To facilitate correct and
accurate public reporting with respect to
Mineral Resources and Ore Reserves, our
governance processes are managed by
the Resource and Reserve Governance
function in coordination with the Company
Secretariat function.
Our comprehensive review and audit
program is aimed at assuring our Mineral
Resource and Ore Reserve estimates. This
includes:
–
Annual review of Mineral Resources and
Ore Reserves declarations and reports;
–
Annual review of reconciliation
performance metrics for operating
mines;
–
Periodic internal mine planning and Ore
Reserve audits; and
–
Independent audits of Exploration
Results, Mineral Resources or Ore
Reserves that are new or have
materially changed.
In FY24, we undertook four independent
assurance audits of Mineral Resource or
Ore Reserve estimates and two internal
mine planning and Ore Reserve assurance
audits. The frequency and scope of
the audits are generally a function of
the perceived risks and uncertainties
associated with a particular Mineral
Resource and Ore Reserve.
The accompanying tables, on pages 180
to 186, outline our Mineral/Coal Resources
and Ore/Coal Reserves holdings.
Resources and Reserves continued
178
SOUTH32 ANNUAL REPORT 2024
Our exploration, research and
development
Our operations carry out exploration,
research and development necessary
to support our activities. Our brownfield
exploration activities target the
delineation and categorisation of mineral
deposits connected or adjacent to our
existing operations. Our greenfield
exploration activities focus on the
discovery and delineation of opportunities
outside of our operational footprint, with a
bias to base metals.
During FY24 we continued to expand
our global exploration footprint. We
funded greenfield exploration in
Australia, Argentina, Ireland, Canada
and the United States of America. Our
exploration expenditure for FY24 was
US$89 million (FY23: US$107 million) of
which US$36 million related to brownfield
and US$53 million related to greenfield
(FY23: US$36 million and US$71 million
respectively).
Competent Persons
Mineral Resources
Worsley Alumina: P Soodi Shoar, MAusIMM
Brazil Alumina:
Mineração Rio Do Norte (MRN): R Aglinskas, MAusIMM, employed by MRN
Sierra Gorda: O Cortez, MAusIMM, employed by Sierra Gorda S.C.M.;
Ian Glacken, FAusIMM (CP), employed by Snowden Optiro
Cannington: S Bowman, MAusIMM
Hermosa:
Taylor, Clark and Peake: P Garretson, MAusIMM
Ambler Metals Joint Venture:
Arctic: M Job, FAusIMM, employed by Cube Consulting
Bornite: S Khosrowshahi, MAusIMM (CP), employed by WSP
T Fouet, MAusIMM (CP)
Cerro Matoso: Ian Glacken, FAusIMM (CP), employed by Snowden Optiro
Australia Manganese:
Groote Eylandt Mining Company (GEMCO): J Harvey, MAusIMM
South Africa Manganese:
Wessels and Mamatwan: J Harvey, MAusIMM
Ore Reserves
Worsley Alumina: U Sandilands, MAusIMM
Brazil Alumina:
MRN: L Diniz Costa, MAusIMM, employed by LHD Mineral Consultancy
Sierra Gorda: Paola Villagran, Registered member of Chilean Mining Commission.,
employed by Sierra Gorda S.C.M.
Cannington: R Muller, MAusIMM
Hermosa:
Taylor: P Garretson, MAusIMM
Cerro Matoso: N Monterroza, MAusIMM
Australia Manganese:
GEMCO: C Dekker, MAusIMM
South Africa Manganese:
Wessels and Mamatwan: D Takalani, SAIMM, employed by Consulting Evolution
Mining
Coal Resources
Illawarra Metallurgical Coal:
Bulli and Wongawilli: M Krejci, MAusIMM
Eagle Downs: M Blaik, MAusIMM, employed by JB Mining Services
Coal Reserves
Illawarra Metallurgical Coal:
Bulli and Wongawilli: M Rose, MAusIMM
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
179
SOUTH32 ANNUAL REPORT 2024
Accompanying tables
Alumina
Mineral Resources
As at 30 June 2024
As at 30 June 2023
Measured Mineral Resources
Indicated Mineral Resources
Inferred Mineral Resources
Total Mineral Resources
South32
Interest
Total Mineral Resources
Deposit(1)
Material Type
Mt
% A.Al2O3
% R.SiO2
Mt
% A.Al2O3
% R.SiO2
Mt
% A.Al2O3
% R.SiO2
Mt
% A.Al2O3
% R.SiO2
%
Mt
% A. Al2O3
% R.SiO2
Worsley
Laterite
287
28.6
1.6
412
29.1
2.1
377
28.4
2.1
1,080
28.7
1.9
86
1,100
28.6
1.9
MRN(2)(3)
MRN Washed
465
47.4
5.3
3.6
48.9
2.5
34
47.3
5.2
503
47.4
5.2
33
448
49.6
4.2
Ore Reserves
As at 30 June 2024
As at 30 June 2023
Proved Ore Reserves
Probable Ore Reserves
Total Ore Reserves
Reserve Life
South32
Interest
Total Ore Reserves
Reserve Life
Deposit(1)(6)
Ore Type
Mt
% A.Al2O3
% R.SiO2
Mt
% A.Al2O3
% R.SiO2
Mt
% A.Al2O3
% R.SiO2
Years
%
Mt
% A.Al2O3
% R.SiO2
Years
Worsley(4)(7)
Laterite
168
28.2
1.6
31
28.0
1.6
199
28.2
1.6
12
86
217
28.1
1.6
13
MRN(2)(5)
MRN Washed
38
48.9
4.9
2.9
49.0
4.9
41
48.9
4.9
3.6
33
39
48.7
4.8
4.0
(1) Cut-off grade
Mineral Resources
Ore Reserves
Worsley
Variable ranging from 22-25% A.Al2O3, ≤3% R.SiO2 for mineralised material and
≥28% A.Al2O3, ≤3-5% R.SiO2 for blend material and ≥1m thickness
Variable ranging from 22.5-29% A.Al2O3, <3-5% R.SiO2 and variable thickness ≥1-2m
MRN
A.Al2O3 ≥35% and mass recovery ≥50%, for all reported plateaus
Economic cut-off of US$>0 (considering revenue and all cost assumptions); and R.SiO2 <6.5%.
(2) MRN Washed tonnes and grades represent the expected product based on forecast beneficiation yield.
(3) Change in Mineral Resource estimate following review of mineralised envelope.
(4) Ore delivered to Worsley alumina refinery.
(5) Ore delivered to Alumar alumina refinery.
(6) Metallurgical recovery:
Worsley 92.9%
Alumar 91.0%
(7) On 8 July 2024, the Western Australian Environmental Protection Authority (EPA) published its recommendation that the Worsley Mine Development Project may be implemented, subject to conditions. Worsley Alumina considers that several of the
recommended conditions go beyond reasonable measures for managing environmental risks of the proposal based on scientific assessment and decades of operating experience and have lodged an appeal in relation to the EPA assessment report.
The Competent Person does not foresee any material change to the reported Ore Reserves based on a preliminary assessment of the conditions recommended in the EPA assessment report. The EPA assessment report is available to view on https://
www.epa.wa.gov.au/
Resources and Reserves continued
180
SOUTH32 ANNUAL REPORT 2024
Base Metals
Mineral Resources
As at 30 June 2024
As at 30 June 2023
Measured Mineral Resources
Indicated Mineral Resources
Inferred Mineral Resources
Total Mineral Resources
South32
Interest
Total Mineral Resources
Deposit(1)
Material Type
Mt
% TCu
g/t Au
% Mo
Mt
% TCu
g/t Au
% Mo
Mt
% TCu
g/t Au
% Mo
Mt
% TCu
g/t Au
% Mo
%
Mt
% TCu
g/t Au
% Mo
Sierra Gorda(2)
OC Sulphide
377
0.40
0.07
0.025
534
0.34
0.06
0.013
906
0.37
0.06
0.013
1,820
0.36
0.06
0.016
45
1,890
0.36
0.06
0.016
Stockpile
51
0.28
0.05
0.013
51
0.28
0.05
0.013
-
-
-
-
As at 30 June 2024
As at 30 June 2023
Measured Mineral Resources
Indicated Mineral Resources
Inferred Mineral Resources
Total Mineral Resources
South32
Interest
Total Mineral Resources
Deposit(1)
Material Type
Mt
g/t Ag
% Pb
% Zn
Mt
g/t Ag
% Pb
% Zn
Mt
g/t Ag
% Pb
% Zn
Mt
g/t Ag
% Pb
% Zn
%
Mt
g/t Ag
% Pb
% Zn
Cannington(3)
UG Sulphide
40
165
4.81
2.91
9.8
95
2.80
2.84
3.1
57
2.08
2.52
53
146
4.27
2.88
100
48
155
4.44
2.94
OC Sulphide
20
113
3.45
2.28
4.9
58
2.22
2.00
1.7
55
2.04
1.48
27
99
3.13
2.18
25
90
2.94
2.14
Ore Reserves
As at 30 June 2024
As at 30 June 2023
Proved Ore Reserves
Probable Ore Reserves
Total Ore Reserves
Reserve Life
South32
Interest
Total Mineral Resources
Reserve Life
Deposit(1)(4)(5)(6)
Material Type
Mt
% TCu
g/t Au
% Mo
Mt
% TCu
g/t Au
% Mo
Mt
% TCu
g/t Au
% Mo
Years
%
Mt
% TCu
g/t Au
% Mo
Years
Sierra Gorda
OC Sulphide
344
0.41
0.07
0.025
387
0.37
0.06
0.014
731
0.39
0.06
0.020
16
45
-
-
-
-
-
Stockpile
51
0.28
0.05
0.013
51
0.28
0.05
0.013
-
-
-
-
As at 30 June 2024
As at 30 June 2023
Proved Ore Reserves
Probable Ore Reserves
Total Ore Reserves
Reserve Life
South32
Interest
Total Ore Reserves
Reserve Life
Deposit(1)(4)(6)
Ore Type
Mt
g/t Ag
% Pb
% Zn
Mt
g/t Ag
% Pb
% Zn
Mt
g/t Ag
% Pb
% Zn
Years
%
Mt
g/t Ag
% Pb
% Zn
Years
Cannington
UG Sulphide
9.6
189
5.60
3.30
1.5
257
6.35
2.32
11
198
5.70
3.17
5.0
100
15
183
5.33
3.02
6.0
(1) Cut-off grade
Mineral Resources
Ore Reserves
Cannington
Net smelter return in A$/t
Net smelter return in A$/t
UG Sulphide
130
145
OC Sulphide
58
Sierra Gorda
Net smelter return in US$/t
OC Sulphide
>0
>0
Stockpile
No cut-off grade applied
No cut-off grade applied
(2) First time reporting of Mineral Resources estimate of sulphide stockpiles.
(3) Change to Mineral Resource due to updated model methodology, price protocol and mine optimisation.
(4) Ore delivered to process plant.
(5) First time reporting of Ore Reserve estimate.
(6) Metallurgical recoveries:
Cannington
85.8% Ag, 87.6% Pb and 83% Zn
Sierra Gorda
83% TCu, 54% Mo and 47% Au
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
181
SOUTH32 ANNUAL REPORT 2024
Base Metals continued
Mineral Resources
As at 30 June 2024
As at 30 June 2023
Measured Mineral Resources
Indicated Mineral Resources
Inferred Mineral Resources
Total Mineral Resources
South32
Interest
Total Mineral Resources
Deposit(1)
Material Type
Mt
% Zn
% Pb
% Mn
g/t Ag
Mt
% Zn
% Pb
% Mn
g/t Ag
Mt
% Zn
% Pb
% Mn
g/t Ag
Mt
% Zn
% Pb
% Mn
g/t Ag
%
Mt
% Zn
% Pb
% Mn
g/t Ag
Hermosa
100
Taylor
UG Sulphide
41
4.22
4.25
67
83
3.38
3.91
76
28
2.96
2.97
93
153
3.53
3.83
77
153
3.53
3.83
77
Clark
UG Oxide
0.4
1.77
8.11
56
35
2.40
9.49
58
20
1.61
8.33
115
55
2.11
9.07
78
55
2.11
9.07
78
As at 30 June 2024
As at 30 June 2023
Measured Mineral Resources
Indicated Mineral Resources
Inferred Mineral Resources
Total Mineral Resources
South32
Interest
Total Mineral Resources
Deposit(1)
Material Type
Mt
% Cu
% Zn
% Pb
g/t Ag
Mt
% Cu
% Zn
% Pb
g/t Ag
Mt
% Cu
% Zn
% Pb
g/t Ag
Mt
% Cu
% Zn
% Pb
g/t Ag
%
Mt
% Cu
% Zn
% Pb
g/t Ag
Hermosa
100
Peake
UG Sulphide
3.3
1.64
0.32
0.61
49
3.3
1.64
0.32
0.61
49
3.3
1.64
0.32
0.61
49
As at 30 June 2024
As at 30 June 2023
Measured Mineral Resources
Indicated Mineral Resources
Inferred Mineral Resources
Total Mineral Resources
South32
Interest
Total Mineral Resources
Deposit(1)
Material Type
Mt
% Cu % Zn % Pb g/t Ag g/t Au
Mt
% Cu % Zn % Pb g/t Ag g/t Au
Mt
% Cu % Zn % Pb g/t Ag g/t Au
Mt
% Cu % Zn % Pb g/t Ag g/t Au
%
Mt
% Cu
% Zn
% Pb
g/t Ag g/t Au
Ambler
50
Arctic(2)
OC Sulphide
24
3.14 4.35 0.77
49
0.62
15
2.84 4.46 0.84
46
0.60
3.7
1.84 3.24 0.70
39
0.40
43
2.93 4.30 0.79
47
0.59
37
3.06
4.30
0.77
47
0.60
Bornite
OC Sulphide
40
1.06
38
1.03
78
1.04
78
1.04
UG Sulphide
70
2.29
70
2.29
70
2.29
Ore Reserves
As at 30 June 2024
As at 30 June 2023
Proved Ore Reserves
Probable Ore Reserves
Total Ore Reserves
Reserve life
South32
Interest
Total Mineral Resources
Reserve life
Deposit(1)(3)(4)
Material Type
Mt
% Zn
% Pb
g/t Ag
Mt
% Zn
% Pb
g/t Ag
Mt
% Zn
% Pb
g/t Ag
Years
%
Mt
% Zn
% Pb
g/t Ag
Years
Hermosa
Taylor
UG Sulphide
65
4.35
4.90
82
65
4.35
4.90
82
19
100
-
-
-
-
-
(1) Cut-off grade
Mineral Resources
Ore Reserves
Net smelter return in US$/t
Net smelter return in US$/t
Taylor UG Sulphide
80
90
Clark UG Oxide
175
Peake UG Sulphide
80
Arctic OC Sulphide
62
Bornite
OC Sulphide
0.5% Cu
UG Sulphide
1.5% Cu
(2) Change to Mineral Resource due to additional drilling.
(3) First time reporting of Ore Reserve estimate - refer to market release "Final investment approval to develop Hermosa's Taylor deposit" dated 15 Feb 2024.
(4) Metallurgical recoveries: 85% to 92% for Pb in Pb concentrate; 75% to 92% for Zn in Zn concentrate; 52% to 83% for Ag in Pb concentrate; and 7% to 11% for Ag in Zn concentrate.
Resources and Reserves continued
182
SOUTH32 ANNUAL REPORT 2024
Nickel
Mineral Resources
As at 30 June 2024
As at 30 June 2023
Measured Mineral Resources
Indicated Mineral Resources
Inferred Mineral Resources
Total Mineral Resources
South32
Interest
Total Mineral Resources
Deposit(1)
Material Type
Mt
% Ni
Mt
% Ni
Mt
% Ni
Mt
% Ni
%
Mt
% Ni
Cerro Matoso
Laterite
116
0.9
129
0.8
9.0
0.8
254
0.9
99.9
263
0.9
Stockpile
18
1.0
28
0.8
46
0.9
53
0.9
Ore Reserves
As at 30 June 2024
As at 30 June 2023
Proved Ore Reserves
Probable Ore Reserves
Total Ore Reserves
Reserve Life
South32
Interest
Total Ore Reserves
Reserve Life
Deposit(1)(2)(3)
Ore Type
Mt
% Ni
Mt
% Ni
Mt
% Ni
Years
%
Mt
% Ni
Years
Cerro Matoso
Laterite
13
1.1
2.8
1.1
16
1.1
8.0
99.9
17
1.2
9.0
Stockpile
8.1
1.1
5.1
0.9
13
1.0
16
1.0
(1) Cut-off grade
Mineral Resources
Ore Reserves
Laterite
0.6% Ni
0.6% Ni
Stockpile
0.6% Ni
0.6% Ni
(2) Ore delivered to process plant.
(3) Global recovery: 80%
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
183
SOUTH32 ANNUAL REPORT 2024
Manganese
Mineral Resources
As at 30 June 2024
As at 30 June 2023
Measured Mineral Resources
Indicated Mineral Resources
Inferred Mineral Resources
Total Mineral Resources
South32
Interest
Total Mineral Resources
Deposit(1)
Material Type
Mt
% Mn
% Yield
Mt
% Mn
% Yield
Mt
% Mn
% Yield
Mt
% Mn
% Yield
%
Mt
% Mn
% Yield
Australia Manganese
60
GEMCO
ROM(2)
66
44.8
47
39
41.0
47
21
44.3
45
126
43.5
47
127
43.6
47
Sands(3)
12
19.8
12
19.8
13
20.0
Mt
% Mn
% Fe
Mt
% Mn
% Fe
Mt
% Mn
% Fe
Mt
% Mn
% Fe
Mt
% Mn
% Fe
South Africa Manganese(3)
44.4
Wessels
Lower Body
26
42.8
12.5
13
43.9
16.3
3.5
45.2
15.1
43
43.3
13.9
46
43.4
13.6
Upper Body
6.9
41.9
17.6
70
41.0
18.8
12
40.7
21.5
89
41.0
19.1
88
41.0
19.0
Mamatwan
M, C, N Zones
38
36.8
4.5
5.8
36.9
4.7
-
-
-
44
36.8
4.6
47
36.8
4.5
X Zone
2.9
36.4
4.6
0.1
36.0
5.1
-
-
-
3.0
36.4
4.6
3.2
36.7
4.6
Top Cut (balance I&O)
18
29.6
5.8
2.7
29.9
5.9
-
-
-
21
29.6
5.8
17
29.7
6.1
Ore Reserves
As at 30 June 2024
As at 30 June 2023
Proved Ore Reserves
Probable Ore Reserves
Total Ore Reserves
Reserve Life
South32
Interest
Total Ore Reserves
Reserve Life
Deposit(1)(7)
Ore Type
Mt
% Mn
% Yield
Mt
% Mn
% Yield
Mt
% Mn
% Yield
Years
%
Mt
% Mn
% Yield
Years
Australia Manganese
60
GEMCO(4)(5)
ROM
20
43.2
58
26
41.4
54
46
42.2
56
5.0
42
42.6
56
4.7
Sands
6.1
40.0
20
6.1
40.0
20
7.0
40.0
22
Mt
% Mn
% Fe
Mt
% Mn
% Fe
Mt
% Mn
% Fe
Mt
% Mn
% Fe
South Africa Manganese(6)
44.4
Wessels
Lower Body
6.0
43.2
10.4
7.2
44.1
17.6
13
43.7
14.3
46
15
43.9
13.8
41
Upper Body
3.9
42.1
17.6
39
41.2
18.7
43
41.3
18.6
43
41.2
18.6
Mamatwan
M, C, N Zones
23
36.0
4.4
14
36.2
4.6
37
36.1
4.5
13
41
36.6
4.6
13
(1) Cut-off grade
Mineral Resources
Ore Reserves
GEMCO
ROM
≥35% Mn washed product.
≥36% average Mn washed product per ore mining block.
Sands
No cut-off grade applied.
No cut-off grade applied.
Wessels
≥37.5% Mn
≥ 37.5% Mn
Mamatwan
M, C, N Zones
No cut-off grade applied.
No cut-off grade applied.
X Zone
≥35% Mn
Top Cut (balance I&O)
≥28% Mn
(2) Mineral Resource tonnes are stated as in situ, manganese grades are stated as per washed ore samples and should be read together with their respective mass recovery expressed as yield.
(3) Mineral Resource tonnes and grades are stated as in-situ.
(4) Ore Reserve tonnes are stated as delivered to process plant, manganese grades are stated as expected product and should be read together with their respective mass yields.
(5) Change to Ore Reserve due to change in assumptions to optimise ore recovery above cut-off parameters.
(6) Ore delivered to process plant.
(7) Metallurgical/Plant recoveries:
GEMCO
See yield in Ore Reserves Table.
Wessels
97%
Mamatwan
93%
Resources and Reserves continued
184
SOUTH32 ANNUAL REPORT 2024
Metallurgical Coal
Coal Resources
As at 30 June 2024
As at 30 June 2023
Measured Coal Resources
Indicated Coal Resources
Inferred Coal Resources
Total Coal Resources
South32
Interest
Total Coal Resources
Deposit(1)
Mining
Method
Coal Type
Mt
% Ash
% VM
% S
Mt
% Ash
% VM
% S
Mt
% Ash
% VM
% S
Mt
% Ash
% VM
% S
%
Mt
% Ash
% VM
% S
Illawarra Metallurgical Coal(2)
100
Bulli
UG
Met/Th
173
11.4
24.0
0.36
281
12.3
23.6
0.35
303
13.4
23.0
0.35
757
12.5
23.4
0.36
769
12.5
23.5
0.36
Wongawilli
UG
Met/Th
60
29.1
23.2
0.59
224
29.8
22.2
0.57
129
30.1
22.4
0.57
413
29.8
22.4
0.57
419
29.8
22.2
0.57
Eagle Downs(3)
UG
Met
759
29.4
15.0
0.46
201
28.7
14.7
0.48
183
30.0
14.8
0.47
1,140
29.4
14.9
0.47
50
1,140
29.4
14.9
0.47
Coal Reserves
As at 30 June 2024
As at 30 June 2023
Proved
Coal
Reserves
Probable
Coal
Reserves
Total
Coal
Reserves
Proved Marketable
Coal Reserves
Probable Marketable
Coal Reserves
Total Marketable
Coal Reserves
Reserve
Life
South32
Interest
Total Marketable
Coal Reserves
Reserve
Life
Deposit(1)(4)(5)(6)
Mining
Method
Coal
Type
Mt
Mt
Mt
Mt
% Ash
% VM
% S
Mt
% Ash
% VM
% S
Mt
% Ash
% VM
% S
Years
%
Mt
% Ash
% VM
% S
Years
Illawarra Metallurgical Coal
100
Bulli
UG
Met
14
89
103
11
8.9
24.2
0.36
75
8.9
24.7
0.35
86
8.9
24.6
0.35
21
88
8.9
24.6
0.35
23
Wongawilli
UG
Met/Th
8.0
6.9
15
8.0
8.9
UG
Met
3.9
10.8
23.1
0.58
3.4
10.8
22.8
0.59
7.3
10.8
23.0
0.59
6.9
10.8
23.1
0.58
UG
Th
2.0
28.0
1.7
28.0
3.7
28.0
3.7
28.0
(1) Cut-off grade
Coal Resources
Coal Reserves
No seam thickness cut-off applied, minimum thickness is economic.
No seam thickness cut-off applied, minimum thickness within the mine layout is economic.
(2) Coal Resource tonnes are reported on an in-situ moisture basis, Ash is reported as raw, VM and S are reported as potential product on air-dried basis.
(3) Coal Resource tonnes are reported on an in-situ moisture basis, Ash, VM and S reported as raw.
(4) Total Coal Reserves are at the moisture content when mined (6% Bulli, 8% Wongawilli), Total Marketable Coal Reserves are the tonnes of coal available at moisture content (8.5% Bulli, 15% Wongawilli Met, 6% Wongawilli Th) and air-dried qualities after the
beneficiation of the Total Coal Reserves.
(5) Coal delivered to wash plant.
(6) Process recoveries:
Bulli
84%
Wongawilli
73%
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
185
SOUTH32 ANNUAL REPORT 2024
Metallurgical Coal
Coal Resources
As at 12 August 2024(1)
As at 30 June 2024
Measured Coal Resources
Indicated Coal Resources
Inferred Coal Resources
Total Coal Resources
South32
Interest
Total Coal Resources
Deposit
Mining
Method
Coal Type
Mt
% Ash
% VM
% S
Mt
% Ash
% VM
% S
Mt
% Ash
% VM
% S
Mt
% Ash
% VM
% S
%
Mt
% Ash
% VM
% S
Eagle Downs(2)
UG
Met
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,140
29.4
14.9
0.47
(1) Coal Resource estimate for and Eagle Downs will not be included in FY25 Annual Report.
(2) Eagle Downs Assests divested from South32 on 12 August 2024
Resources and Reserves continued
186
SOUTH32 ANNUAL REPORT 2024
INFORMATION
Shareholder information
188
Glossary of terms and abbreviations
191
Corporate directory
199
187
SOUTH32 ANNUAL REPORT 2024
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
187
SOUTH32 ANNUAL REPORT 2024
Shareholder information
Voting rights for shares
South32 Limited ordinary shares carry voting rights of one vote per share.
Shareholders may hold a beneficial entitlement to South32 Limited dematerialised ordinary shares, United Kingdom (UK) Depositary
Interests and American Depositary Shares (ADS) through the Central Securities Depositories of Strate (Strate), CREST and the
Depository Trust Company, respectively. Each share held dematerialised in Strate, or as a Depositary Interest held in CREST, entitles the
holder to one vote. Each ADS is represented by five ordinary shares, with ADS voting managed by South32 Limited’s ADS Depositary.
Substantial shareholders
The following table shows the substantial shareholders who, together with their associates, hold five per cent or more of the voting
rights in South32 Limited, as notified to South32 Limited under the Corporations Act, as at 31 July 2024.
Name
Date notice received
Number of shares in notice
Percentage of capital in notice
BlackRock Group
8 December 2021
318,403,413
6.84
State Street Corporation
3 May 2024
273,738,762
6.04
Vanguard Group
31 January 2024
276,360,221
6.102
Distribution of shareholdings and number of shareholders
The following table shows the distribution of South32 Limited shareholders by size of shareholding and number of shareholders and
shares as at 31 July 2024.
Size of holding
Number of shareholders
Number of shares
Percentage of capital
1 – 1,000
114,068
54,483,348
1.20
1,001 – 5,000
83,599
205,536,540
4.54
5,001 – 10,000
25,099
184,467,994
4.07
10,001 – 100,000
23,448
541,314,432
11.95
100,001 and over
789
3,543,456,254
78.23
Total
247,003
4,529,258,568
100.00
Distribution of rights holdings and number of rights holders
The following table shows the distribution of rights holders in South32 Limited by size of rights holding and number of rights holders and
rights as at 31 July 2024.
Size of holding
Number of rights holders
Number of rights
Percentage of rights on issue
0 - 1,000
1,000
599,680
1.26
1,001 - 5,000
6,090
7,853,775
16.48
5,001 - 10,000
7
52,572
0.11
10,001 - 100,000
103
5,252,446
11.02
100,001 and over
68
33,890,232
71.13
Total
7,268
47,648,705
100.00
188
SOUTH32 ANNUAL REPORT 2024
Twenty largest shareholders in South32 Limited
The following table sets out the 20 largest shareholders of ordinary shares listed on the South32 Limited share register and the details
of their shareholding as at 31 July 2024.
Name
Number of fully paid shares
Percentage of capital
1
HSBC Custody Nominees (Australia) Limited
1,136,707,884
25.10
2
J P Morgan Nominees Australia Pty Limited
918,427,450
20.28
3
Citicorp Nominees Pty Ltd
421,347,684
9.30
4
South Africa Control A/C\C
316,660,868
6.99
5
BNP Paribas Nominees Pty Ltd
110,014,206
2.43
6
Citicorp Nominees Pty Limited
82,102,155
1.81
7
National Nominees Limited
76,428,547
1.69
8
Computershare Clearing Pty Ltd
55,416,224
1.22
9
BNP Paribas Noms Pty Ltd
47,816,948
1.06
10
HSBC Custody Nominees (Australia) Limited
32,689,685
0.72
11
Citicorp Nominees Pty Limited
19,813,190
0.44
12
BNP Paribas Nominees Pty Ltd
16,740,792
0.37
13
Cpu Share Plans Pty Ltd
14,936,429
0.33
14
BNP Paribas Nominees Pty Ltd
9,483,433
0.21
15
Netwealth Investments Limited
9,142,788
0.20
16
HSBC Custody Nominees (Australia) Limited
8,114,733
0.18
17
HSBC Custody Nominees (Australia) Limited - A/C 2
7,163,555
0.16
18
UBS Nominees Pty Ltd
6,503,121
0.14
19
Prudential Nominees Pty Ltd
6,000,000
0.13
20
Merrill Lynch (Australia) Nominees Pty Limited
5,913,643
0.13
Total
3,301,423,335
72.89
Restricted and escrowed
securities
As at 31 July 2024, South32 Limited does
not have any restricted securities or
securities subject to voluntary escrow on
issue.
Shareholders with less than a
marketable parcel
As at 31 July 2024, there were 12,793
shareholders on the Australian South32
Limited register holding less than a
marketable parcel (A$500) based on the
closing market price of A$$3.07.
On-market purchases of South32
Limited securities for employee
incentive plans
The Group purchased South32 Limited
ordinary shares on-market through the
Company’s employee share plan trusts
for the purposes of the South32 Equity
Incentive Plans.
During FY24, 4,300,000 shares were
purchased on-market for the Australian
ESOP Trust. The average price at which the
shares were purchased was A$3.39.
No shares were purchased for the South
African ESOP Trust during FY24.
In addition, 45,048 shares were purchased
on-market and immediately distributed
to Canadian based employees on vesting
of rights. The average price at which the
shares were purchased was A$3.47.
(1) Numbers in this section are subject to rounding.
Dividend policy
Our dividend policy is determined by the
Board at its discretion. Our priorities for
cash flow are to maintain safe and reliable
operations and an investment grade credit
rating through the cycle.
Our current dividend policy is that South32
Limited intends to distribute a minimum
of 40 per cent of Underlying earnings as
ordinary dividends to our shareholders
following each six-month reporting period.
South32 Limited intends to distribute
dividends with the maximum practicable
franking credits for the purposes of the
Australian dividend imputation system.
Dividend determination and
payment
Our dividends are determined in United
States (US) dollars.
Dividends for shareholders of South32
Limited on the Australian register are
paid by direct credit into shareholders’
nominated bank account in Australian
dollars, UK pounds sterling, New Zealand
dollars or US dollars, provided direct credit
details and currency election information
is submitted no later than close of
business on the dividend record date as
stated in the relevant Australian Securities
Exchange (ASX) announcement.
Dividends for shareholders of South32
Limited on the South African branch
register and UK Depositary Interest
holders are paid by direct credit in South
African rand and UK pounds sterling,
respectively.
Refer to the Investors section at
www.south32.net for further information
about dividends.
Capital management program(1)
In February 2024, to manage our financial
position and retain the right balance of
flexibility, efficiency and prudence, we
cancelled our on-market share buy-back,
which was due to expire on 1 March
2024. The on-market share buy-back
was initially announced on 27 March 2017
and purchasing commenced on 19 April
2017. Between the commencement of
purchasing under the on-market share
buy-back on 19 April 2017 and 30 June
2024, South32 Limited purchased a total
of 794.5 million shares, which represented
15 per cent of share capital at the
commencement of the program. The
total consideration paid for the shares
bought back up to 30 June 2024 was
US$1.7 billion.
During the year ended 30 June 2024,
South32 Limited purchased 16 million
shares under the on-market share buy-
back, which represented two per cent
of share capital at the beginning of the
financial year. Total consideration paid
for these shares was US$35 million. The
shares have no par value. The shares
purchased by South32 Limited under the
on-market share buy-back have been
cancelled.
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
189
SOUTH32 ANNUAL REPORT 2024
Shareholder information continued
As at 30 June 2024, we have returned a
total of US$2.3 billion to our shareholders
under our capital management
program, comprising US$1.7 billion
via our on-market share buy-back and
special dividends of US$154 million
(paid in 2018), US$85 million (paid in
2019), US$53.5 million (paid in 2020),
US$93 million (paid in 2021) and
US$139 million (paid in 2022).
On 29 August 2024, we announced our
intention to allocate US$200 million
through our ongoing capital management
program, to be returned to shareholders
via an on-market share buy-back,
commencing from completion of the
sale of Illawarra Metallurgical Coal.
This will take returns under our capital
management program to US$2.5 billion,
with the US$200 million increase in the
program to be returned to shareholders
by 12 September 2025.
Annual General Meeting (AGM)
Our 2024 AGM is scheduled to be held on
Thursday 24 October 2024 at 12.00pm
(midday) Australian Western Standard
Time as a hybrid meeting, providing
shareholders with the opportunity
to attend physically or online. If it
becomes necessary or appropriate to
make alternative or supplementary
arrangements, we will provide an update.
Further details regarding the AGM will be
made available in September 2024, and
shareholders are encouraged to monitor
securities exchange releases and
www.south32.net for information and
updates.
Addresses delivered at the AGM, together
with the results of voting, will be provided
to all stock exchanges where we are listed
and will be available at www.south32.net.
Stock exchanges
As at 31 July 2024, South32 Limited has a
primary listing on the ASX, a secondary
listing on the Johannesburg Stock
Exchange and is admitted to listing in the
equity shares (international commercial
companies secondary listing) category of
the Official List in the UK and its ordinary
shares are traded on the London Stock
Exchange. South32 Limited also has a
Level 1 American Depositary Receipts
(ADR) program, which trades in the US
over-the-counter market.
Shareholder enquiries
Shareholders can access their current
holding details as well as their transaction
history, view dividend statements and
payments made, download statements
and documents, change their address,
update their communication preferences
and banking details, and check their tax
details online via Computershare’s Investor
Centre at www.computershare.com.
Alternatively, refer to the following
contacts:
Share registries
Australia
Computershare Investor Services Pty
Limited
Yarra Falls 452 Johnston Street
Abbotsford Victoria 3067
Australia
Telephone (Australia):
1800 019 953
Telephone (International): +61 3 9415 4169
Facsimile:
+61 3 9473 2500
South Africa
Computershare Investor Services (Pty)
Limited
Rosebank Towers, 15 Biermann Avenue
Rosebank 2196
South Africa
Telephone:
+27 11 373 0033
Facsimile:
+27 11 688 5217
Email enquiries:
web.queries@computershare.co.za
Holders of shares dematerialised into
Strate should contact their Central
Securities Depository Participant or
stockbroker.
United Kingdom
Computershare Investor Services PLC
The Pavilions, Bridgwater Road
Bristol BS99 6ZZ
United Kingdom
Telephone:
+44 370 873 5884
Facsimile:
+44 370 703 6101
Email enquiries:
web.queries@computershare.co.uk
ADR
ADR holders should deal directly with
Citibank Shareholder Services.
Citibank Shareholder Services
PO Box 43077 Providence
Rhode Island 02940-3077
Telephone:
+1 877 248 4237
(+1-877-CITIADR) (toll-free within US)
+1 781 575 4555 (outside of US)
Facsimile:
+1 201 324 3284
Email enquiries:
citibank@shareholders-online.com
Website: www.citi.com/dr
Branches
In accordance with DTR 4.1.11R(5), South32
Limited, through various subsidiaries,
has established branches in different
jurisdictions in which the business
operates.
Registered office
South32 Limited’s Registered Office is
Level 35, 108 St Georges Terrace, Perth
WA 6000, Australia.
Information regarding South32’s other
office locations is included in the
Corporate directory on page 199.
Electronic communications
Shareholders are encouraged to
access all South32 communications
electronically. Shareholders that wish to
receive electronic communications can
update their preferences online or by
contacting the relevant Computershare
Investor Centre. Refer to the Investors
section at www.south32.net for further
details on how to receive shareholder
communications.
190
SOUTH32 ANNUAL REPORT 2024
Glossary of terms and abbreviations
AASB
Australian Accounting Standards Board.
Adjusted return on invested capital
(ROIC)
Calculated as Underlying EBIT, adjusted
for uncontrollable and one-off impacts in
the current financial year, less the discount
on rehabilitation provisions included in net
finance cost, tax effected by the Group’s
prior period Underlying effective tax
rate (ETR) including our material equity
accounted investments on a proportional
consolidated basis, divided by the sum of
fixed assets (excluding any rehabilitation
assets, the impairment reversal of Brazil
Aluminium, and unproductive capital) and
inventories. Underlying EBIT is adjusted
by excluding the current period impacts
of foreign currency on revenue and cost,
and commodity prices on revenue and
associated price-linked costs, less the
discount on rehabilitation provisions
included in net finance cost, and tax
effected by the Group’s prior period
Underlying effective tax rate.
AGM
Annual General Meeting.
Alumina
Aluminium oxide (Al₂O₃). Alumina is
produced from bauxite in the Bayer
refining process. It’s then converted
(reduced) in an electrolysis cell to produce
aluminium metal.
American Depositary Receipts (ADR)
An ADR is a security that represents
shares of non-U.S. companies that are
held by a U.S. depositary bank outside the
United States.
AO
Officer of the Order of Australia.
Ash
Inorganic material remaining after
combustion of coal.
ASX
ASX Limited or Australian Securities
Exchange.
ASX Listing Rules
The rules governing the listing of an entity
and the quotation of its securities on the
ASX.
ASX Listing Rules (Chapter 5)
This chapter of the ASX Listing Rules sets
out additional reporting and disclosure
requirements for mining entities, oil and
gas entities, and other entities reporting
on mining and oil and gas activities.
Australian Securities and Investments
Commission (ASIC)
The independent Australian Government
body that is Australia’s integrated
corporate, markets, financial services and
consumer credit regulator.
Baseline water stress
The ratio of total annual water withdrawals
to total available renewable surface and
groundwater supplies, accounting for
upstream consumptive use. Higher values
indicate more competition among users.
The values and definition of baseline water
stress have been derived from World
Resources Institute (WRI) Aqueduct 4.0:
Updated Decision-Relevant Global Water.
Bauxite
Principal commercial ore of aluminium.
B-BBEE
Broad-Based Black Economic
Empowerment.
Beneficiation
The process of physically separating
ore from gangue to produce a mineral
concentrate prior to subsequent
processing.
BHP
BHP, formerly known as BHP Billiton, is
the group of companies headed by, and
including, BHP Group Ltd and BHP Group
plc.
Biodiversity
Refers to the variety of life on Earth – the
different animals, plants and micro-
organisms, their genetic diversity and the
ecosystems of which they are a part.
Black People
As defined in the Broad-Based Black
Economic Empowerment Amendment
Act 2013 (South Africa), a generic term
meaning Africans, Coloureds and Indians
who are citizens of the Republic of South
Africa by birth or descent; or who become
citizens of the Republic of South Africa by
naturalisation before 27 April 1994 or on
or after 27 April 1994 and who would have
been entitled to acquire citizenship by
naturalisation prior to that date.
Board
The Board of Directors of South32 Limited.
Brownfield
An exploration or development project
located within an existing mineral
province, which can share infrastructure
and management with an existing
operation.
Catchment
The area of land from which all surface
runoff and subsurface water flows
through a sequence of streams, rivers,
aquifers and lakes into the sea or another
outlet at a single river mouth, estuary,
or delta. Catchments include associated
groundwater areas and might include
portions of waterbodies (such as lakes
or rivers). In different parts of the world,
catchments are also referred to as
‘watersheds’ or ‘basins’ (or sub-basins).
CCAP
Climate Change Action Plan prepared in
FY2022 which can be found in our 2022
Sustainable Development Report available
at www.south32.net.
CEO
Chief Executive Officer.
CFO
Chief Financial Officer.
Coal Reserve
The same meaning as Ore Reserve, but
specifically concerning coal.
Coal Resource
The same meaning as Mineral Resource,
but specifically concerning coal.
CO2-e
Carbon dioxide equivalent.
Coking coal
Used in the manufacture of coke, which is
used in the steelmaking process by virtue
of its carbonisation properties. Coking
coal is a form of, and may also be referred
to as, metallurgical coal.
Competent Person
A minerals industry professional who is
a Member or Fellow of The Australasian
Institute of Mining and Metallurgy, or of the
Australian Institute of Geoscientists, or of
a ‘Recognised Professional Organisation’,
as included in a list available on the JORC
and ASX websites. These organisations
have enforceable disciplinary processes,
including the powers to suspend or expel
a member. A Competent Person must
have a minimum of five years’ relevant
experience in the style of mineralisation or
type of deposit under consideration and in
the activity that the person is undertaking
(JORC Code).
Contextual water target
A contextual water target is a specific
timebound target that is set to deliver
an intended outcome based on the
environmental and social context of the
local catchment.
Contractor
A contractor is an employee of a company
contracted by the employer to do work
on its behalf and under its control with
respect to location, work practices and
application of health and safety standards.
COO
Chief Operating Officer.
Copper equivalent production
Copper equivalent production is
calculated by accumulating revenue using
average realised prices for all operations
and dividing by the average realised price
of copper.
Corporations Act
Corporations Act 2001 (Cth).
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Cost, Insurance, and Freight (CIF)
A contractual term defining
responsibilities and division of cost and
risk between buyer and seller, in which
the seller is responsible for clearing the
goods for export and bears the cost of
freight and insurance to the named port
of destination. The buyer assumes all risks
and costs for unloading the goods and
clearing the goods for import. Risk passes
from seller to buyer once the goods are on
board the vessel at the port of shipment.
COVID-19
Coronavirus disease (COVID-19) is an
infectious disease caused by the SARS-
CoV-2 virus.
CTO
Chief Technical Officer.
Cut-off grade
The lowest grade, or quality, of mineralised
material that qualifies as economically
mineable and available in a given deposit.
It may be defined on the basis of economic
evaluation, or on physical or chemical
attributes that define an acceptable
product specification (JORC Code).
CYXXX
Refers to the calendar year ending
31 December 20XX, where XX is the two-
digit number for the year.
Decarbonisation
Avoiding or reducing the greenhouse gas
emissions associated with an activity.
Demerger
The separation of assets from BHP
effected in May 2015 to create a separate
entity South32 Limited, listed on the ASX,
LSE and JSE.
Dewatering
Dewatering is the interception and
removal of water from operational areas.
DTR
UK Financial Conduct Authority’s
Disclosure Guidance and Transparency
Rules. A reference to DTR followed by a
number is a specific rule under the DTR.
EBIT
Earnings before interest and tax.
EBITDA
Earnings before interest, tax, depreciation
and amortisation.
Effective tax rate (ETR)
Income tax expense/benefit divided by
profit/loss subject to tax.
Employee
Any person in full-time, part-time or casual
employment engaged by South32 on a
temporary or permanent basis pursuant
to a contract of service.
Employee Share Ownership Plan (ESOP)
Trusts
The trusts which purchase and hold
South32 Limited shares for the purpose
of the South32 Equity Incentive Plans.
South32 has an Australian ESOP Trust and
South African ESOP Trust.
Energy coal
Used as a fuel source in electrical power
generation, cement manufacture and
various industrial applications. Energy coal
may also be referred to as steaming or
thermal coal.
Environmental incident
Any event with an impact to land,
biodiversity, ecosystem services, water
resources or air.
ESG
Environmental, social and governance.
EthicsPoint
A 24/7 confidential reporting hotline that is
serviced by an independent provider.
Executive KMP
Lead Team members who are classified
as KMP.
Exploration Results
Exploration Results include data and
information generated by mineral
exploration programs that might be of use
to investors but which do not form part of
a declaration of Mineral Resources or Ore
Reserves (JORC Code).
Exploration Target
An Exploration Target is a statement or
estimate of the exploration potential of
a mineral deposit in a defined geological
setting where the statement or estimate,
quoted as a range of tonnes and range of
grade (or quality), relates to mineralisation
for which there has been insufficient
exploration to estimate a Mineral
Resource.
External Auditor
KPMG.
Fatality
A health or safety event where an injury or
occupational illness has caused the death
of one or more person(s).
FAusIMM
Fellow of the Australasian Institute of
Mining and Metallurgy.
FAusIMM (CP)
Fellow of the Australasian Institute
of Mining and Metallurgy. Accredited
Chartered Professional status of members
of the AusIMM. These members have
undergone an assessment of their
competencies, which are maintained
through continuing professional
development activities.
Flotation
A method of selectively recovering
minerals from finely ground ore using a
froth created in water by specific reagents.
In the flotation process, certain mineral
particles are induced to float by becoming
attached to bubbles of froth and the
unwanted mineral particles sink.
Free cash flow
Free cash flow represents operating cash
flows including distributions received from
equity accounted investments, and after
interest (paid)/received, tax (paid)/received
and capital expenditure.
Free On Board (FOB)
A contractual term defining
responsibilities and division of cost and
risk between buyer and seller, in which the
seller is responsible for clearing the goods
for export and loading them on board the
vessel at the named port of shipment.
The buyer assumes all risks and costs for
goods from this moment forward Including
the cost of freight and insurance.
FX
Foreign exchange.
FYXX
Refers to the financial year ending 30 June
20XX, where XX is the two-digit number
for the year.
Gearing
The ratio of (net debt/(cash)) to (net debt/
(cash)) plus net assets.
GEMCO
Groote Eylandt Mining Company.
Global Reporting Initiative (GRI)
GRI is an international independent
organisation that has established an
international framework and standards for
sustainability reporting. South32 prepares
our Group-level annual Sustainable
Development Report in accordance
with the GRI Sustainability Reporting
Standards.
Goal
The use of this term in the context of
climate change in this report means
an aspiration to deliver an outcome for
which we have not identified a pathway
for delivery, but for which efforts will be
pursued towards achieving that outcome,
subject to certain assumptions or
conditions.
Grade
Any physical or chemical measurement
of the characteristics of the material of
interest in samples or product (JORC
Code).
Glossary of terms and abbreviations continued
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Greenfield
An exploration or development project
that refers to a new venture or operation,
without any association or proximity to a
current operation.
Greenhouse gas (GHG) emissions
For our reporting purposes, GHG
emissions are the combined
anthropogenic emissions of carbon
dioxide (CO2), methane (CH4), nitrous
oxide (N2O), perfluorocarbons (PFCs)
and sulphur hexafluoride (SF6). They are
measured in carbon dioxide equivalent
(CO2-e). Hydrofluorocarbons (HFCs) GHG
emissions are currently not relevant for
our reporting purposes.
–
Scope 1 emissions - GHG emissions
from our own operations, including the
electricity we generate at our sites.
–
Scope 2 emissions - Indirect GHG
emissions from the generation of
purchased electricity.
–
Scope 3 emissions - GHG emissions in
the value chain.
HY1 FYXX
Refers to the 6 months starting on 1 July
20XX and ending on 31 December 20XX,
where XX is the two-digit number for the
year.
HY2 FYXX
Refers to the 6 months starting on
1 January 20XX and ending on 30 June
20XX, where XX is the two-digit number
for the year.
HMM
Hotazel Manganese Mines.
ICMM
ICMM, previously referred to as the
International Council on Mining and
Metals, is an international organisation
that leads through collaboration to
enhance the contribution of mining and
metals to sustainable development. As
a corporate member, South32 commits
to implementing and reporting on the
ICMM Mining Principles, Performance
Expectations and mandatory
requirements set out in the Position
Statements, which define environmental,
social and governance requirements.
IMC
Illawarra Metallurgical Coal.
Indicated Mineral Resource
That part of a Mineral Resource for which
quantity, grade (or quality), densities,
shape and physical characteristics are
estimated with sufficient confidence.
This allows the application of Modifying
Factors in sufficient detail to support mine
planning and evaluation of the economic
viability of the deposit (JORC Code).
Indigenous, Traditional and Tribal
Peoples
We use the defined term ‘Indigenous,
Traditional and Tribal Peoples’ as per the
We use the defined term ‘Indigenous,
Traditional and Tribal Peoples’ as per the
definition and guidance set out in the
Indigenous and Tribal Peoples Convention,
1989 (No. 169). We use this term inclusively
to encompass the diversity of worldwide
Indigenous, Traditional and Tribal Peoples,
including but not limited First Nations,
Native Americans, Traditional Owners,
Aboriginal and Torres Strait Islander
Peoples and other land connected
communities. We recognise that no single
definition can fully capture the diversity of
Indigenous, Traditional and Tribal Peoples.
Inferred Mineral Resources
That part of a Mineral Resource for
which quantity and grade (or quality)
are estimated on the basis of limited
geological evidence and sampling.
Geological evidence is sufficient to imply
but not verify geological and grade (or
quality) continuity (JORC Code).
Injury
An occupational injury occurs during a
single work shift or a single exposure
to an agent(s) causing an acute toxic
effect, which can be identified by time
and place resulting from direct contact
with an object following an instantaneous
event. Examples include cut, puncture,
laceration, abrasion, fracture, bruise,
contusion, chipping tooth, amputation,
insect bite, electrocution, or a thermal,
chemical, electrical or radiation burn.
Sprain and strain injuries to muscles joints
connective tissue are classified as injuries
when they result from a slip, trip, fall or
other similar accidents.
International Financial Reporting
Standards (IFRS)
Accounting standards as issued by the
IASB (International Accounting Standards
Board).
JORC
Joint Ore Reserves Committee comprising
representatives of The Australasian
Institute of Mining and Metallurgy
(AusIMM), Australian Institute of
Geoscientists (AIG) and Minerals Council
of Australia (MCA) as well as the Australian
Securities Exchange (ASX), the Financial
Services Institute of Australasia (FinSIA)
and the accounting profession.
JORC Code
The Australasian Code for reporting of
Exploration Results, Mineral Resources
and Ore Reserves 2012 Edition prepared
by the JORC.
JSE
Johannesburg Stock Exchange.
Just transition
The concept of a just transition reflects the
imperative of managing the social impacts,
risks and opportunities of the transition
to a low-carbon world. It is an approach to
decarbonisation that seeks to centre the
interests of those that are most affected
by it, including workers, communities, and
suppliers of goods and services.
KMP
Key management personnel are people
who have authority and responsibility for
planning, directing and controlling the
activities of South32 either directly or
indirectly.
Laterite
A residual soil or deposit formed by the
leaching of silica from rocks under specific
climatic conditions.
Leaching
The process by which a soluble metal can
be economically recovered from minerals
in ore by dissolution.
Lead Team
All Chief positions within South32.
Life of Operation Plan
The combination of an Optimised Base
Plan and incremental opportunities
available to the operation for maximising
value. Mining related terms continued
Marketable Coal Reserves Represents
beneficiated or otherwise enhanced
coal product where modifications due to
mining, dilution and processing have been
considered (JORC Code).
LME
London Metal Exchange.
Local procurement
Local procurement is the direct purchase
of goods and services within the local
communities in which South32 operates.
Suppliers are deemed as local based on
their proximity to our local communities,
including boundaries defined by local
government areas, provinces and states.
Lost time injury
The sum of work-related (fatalities
+ injuries that caused permanent
impairment >30 per cent of body + lost
time injuries). Lost time injuries include
injuries that result in one or more lost work
day after the day of the event.
Lost Time Injury Frequency (LTIF)
The sum of (Lost Time injuries x 1,000,000)
÷ exposure hours, for employees and
contractors. This is stated in units of per
million hours worked for employees and
contractors. We adopt the United States
Government Occupational Safety and
Health Administration (OSHA) guidelines
for the recording and reporting of
occupational injuries and illnesses.
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Low-carbon
Refers to lower levels of GHG emissions
when compared to the current state.
Where used in relation to South32’s
products or portfolio, it refers to
enhancement of existing methods,
practices and technologies to substantially
lower the level of embodied GHG
emissions as compared to the current
state.
Low-carbon aluminium
Aluminium produced in a process that
results in less than 4t CO2-e Scope 1 and
Scope 2 GHG emissions per tonne of
aluminium.
LSE
London Stock Exchange.
LTI
Long-term incentive.
Management roles
Leadership positions filled by employees,
identified either by job grading (Level 13 or
higher) or by the requirements associated
with their role.
Margin on third party products
Comprises Underlying EBIT on third
party products and services, divided
by underlying revenue on third party
products and services.
Marketable Coal Reserves
Represents beneficiated or otherwise
enhanced coal product where
modifications due to mining, dilution and
processing have been considered (JORC
Code).
Material Health Exposures
Material health exposures include
potential exposure to carcinogens and
airborne contaminants.
Material sustainability topic
Topic that reflects a reporting
organisation’s significant economic,
environmental, and social impacts or that
substantively influences the assessments
and decisions of stakeholders.
MAusIMM
Member of the Australasian Institute of
Mining and Metallurgy.
MAusIMM (CP)
Accredited Chartered Professional
status of members of the AusIMM.
These members have undergone an
assessment of their competencies,
which are maintained through continuing
professional development activities.
Measured Mineral Resource
That part of a Mineral Resource for which
quantity, grade (or quality), densities,
shape and physical characteristics are
estimated with confidence sufficient to
allow the application of Modifying Factors
to support detailed mine planning and
final evaluation of the economic viability of
the deposit (JORC Code).
Metallurgical coal
A broader term than coking coal that
includes all coals used in steelmaking,
such as coal used for the pulverised coal
injection process.
Mineral Resource
A concentration or occurrence of solid
material of economic interest in or on
the Earth’s crust in such form, grade
(or quality), and quantity that there
are reasonable prospects for eventual
economic extraction. The location,
quantity, grade (or quality), continuity
and other geological characteristics of a
Mineral Resource are known, estimated
or interpreted from specific geological
evidence and knowledge, including
sampling. Mineral Resources are sub-
divided, in order of increasing geological
confidence, into Inferred, Indicated and
Measured categories (JORC Code).
Mineralisation
Any single mineral or combination of
minerals occurring in a mass, or deposit, of
economic interest (JORC Code).
Modern slavery
The term modern slavery is used to
describe situations where coercion,
threats or deception are used to exploit
victims and undermine or deprive them
of their freedom. As defined by the
Australian Modern Slavery Act 2018 (Cth)
modern slavery include eight types of
serious exploitation: trafficking in persons;
slavery; servitude; forced marriage;
forced labour; debt bondage; deceptive
recruiting for labour or services; and the
worst forms of child labour. The worst
forms of child labour means situations
where children are subjected to slavery or
similar practices, or engaged in hazardous
work.
Modifying Factors
Considerations used to convert
Mineral Resources to Ore Reserves.
These include, but are not restricted
to, mining, processing, metallurgical,
infrastructure, economic, marketing, legal,
environmental, social and governmental
factors (JORC Code).
MRN
Mineração Rio do Norte.
Nature positive
A high-level goal and concept describing
a future state of nature (e.g., biodiversity,
ecosystem services and natural capital)
that is greater than the current state.
Net cash
Comprises cash and cash equivalents
less interest-bearing liabilities.Net debt
Comprises interest bearing liabilities less
cash and cash equivalents.
Net operating assets
Represents operating assets net of
operating liabilities which predominantly
exclude the carrying amount of non-
material equity accounted investments,
cash, interest bearing liabilities, tax
balances and certain other financial assets
and liabilities.
Net zero
Net zero greenhouse gas emissions are
reached when anthropogenic emissions of
greenhouse gases to the atmosphere are
balanced by anthropogenic removals over
a specified period.
No net loss
The impacts on biodiversity caused as a
result of a development project/activities
are balanced (so that no net loss remains)
by rigorous application of the mitigation
hierarchy:
–
Avoid
–
Minimise and mitigate negative
impacts;
–
Rehabilitate or restore affected areas;
and
–
Offset the residual impacts.
Non-operated joint ventures
Operations which are not wholly owned
by South32 Limited or its subsidiaries and
for which South32 does not manage the
operation, being Brazil Alumina, Brazil
Aluminium, Sierra Gorda S.C.M, Ambler
Metals, Mineração Rio do Norte S.A (MRN)
and Port Kembla Coal Terminal (PKCT).
Details of South32's ownership interest
can be found on page 56 to 66 of this
report, except for Ambler Metals in which
a 50 per cent interest is held and PKCT in
which a 16.67 per cent interest is held.
Net smelter return
An estimate of revenue derived from
the sale of products and concentrates
following the application of metallurgical
recoveries and deducting transport costs,
treatment and refining charges, penalties
and royalties. For Sierra Gorda, mining
cost is also included in the calculation.
Glossary of terms and abbreviations continued
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Occupational Exposure Limit (OEL)
The concentration of a substance or
agent, exposure to which, according to
current knowledge, should not cause
adverse health effects nor cause undue
discomfort to nearly all workers.
Occupational illness
An occupational illness is any abnormal
condition or disorder, other than one
resulting from an occupational injury,
caused or aggravated by exposures to
factors associated with employment.
It includes acute or chronic illnesses
or diseases which may be caused by
inhalation, absorption, ingestion, or direct
contact.
Operated joint ventures
Operations which are not wholly owned
by South32 Limited or its subsidiaries and
for which South32 manages the operation,
being, Australia Manganese, South Africa
Manganese, Mozal Aluminium, Eagle
Downs Metallurgical Coal and Chita Valley.
Details of South32's ownership interest
can be found on page 56 to 66 of this
report, except for Chita Valley in which a
50.1 per cent interest is held.
Operational GHG emissions
Scope 1 and 2 GHG emissions from our
operated assets.
Operational Leadership Team
All General Managers and Managers
reporting to Vice President Operations
including Functional Managers such as
Human Resources, Finance and Supply,
etc. (limited to one per function).
Ore Reserve
The economically mineable part of a
Measured and/or Indicated Mineral
Resource. It includes diluting materials and
allowances for losses, which may occur
when the material is mined or extracted
and is defined by studies at Prefeasibility
or Feasibility level as appropriate that
include application of Modifying Factors.
Such studies demonstrate that, at the time
of reporting, extraction could reasonably
be justified (JORC Code).
Our people
As defined in our Code of Business
Conduct, our people includes South32
Directors, executive management,
employees and contractor staff.
Paris Agreement
A legally binding international treaty on
climate change that aims to bring all
nations into a common cause to undertake
ambitious efforts to combat climate
change and adapt to its effects, with
enhanced support to assist developing
countries to do so.
Payable copper equivalent production
(kt)
Calculated by aggregating revenues from
copper, molybdenum, gold and silver, and
dividing the total Revenue by the price of
copper. FY24 realised prices for copper
(US$3.86/lb), molybdenum (US$20.60/lb),
gold (US$2,129/oz) and silver (US$24.8/
oz) have been used for FY24, FY25e and
FY26e. FY23 realised prices for copper
(US$3.51/lb), molybdenum (US$21.28/lb),
gold (US$1,821/oz) and silver (US$21.9/oz)
have been used for FY23 and FY24.
Payable zinc equivalent (kt)
Calculated by aggregating revenues from
payable silver, lead and zinc, and dividing
the total Revenue by the price of zinc.
FY24 realised prices for zinc (US$2,230/t),
lead (US$2,002/t) and silver (US$24.8/
oz) have been used for FY24, FY25e
and FY26e. FY23 realised prices for zinc
(US$2,151/t), lead (US$1,919/t) and silver
(US$21.1/oz) have been used for FY23 and
FY24.
Probable Ore Reserve
The economically mineable part of an
Indicated and, in some circumstances,
a Measured Mineral Resource. The
confidence in the Modifying Factors
applying to a Probable Ore Reserve is
lower than that applying to a Proved Ore
Reserve (JORC Code).
Proved Ore Reserve
The economically mineable part of a
Measured Mineral Resource. A Proved
Ore Reserve implies a high degree of
confidence in the Modifying Factors (JORC
Code).
Recordable Illnesses
The sum of work-related (fatalities
+ illnesses that caused permanent
impairment >30 per cent of body + lost
time illnesses + restricted work illnesses +
medical treatment illnesses)
Recordable injuries
The sum of work-related (fatalities
+ injuries that caused permanent
impairment >30 per cent of body + lost
time injuries + restricted work injuries +
medical treatment injuries).
Reserve Life
The scheduled extraction period in years
for the Total Ore Reserves in the approved
Life of Operation Plan.
Return on invested capital (ROIC)
Calculated as Underlying EBIT less the
discount on rehabilitation provisions
included in net finance costs, tax effected
by the Group’s Underlying effective tax
rate (ETR) including our material equity
accounted investments on a proportional
consolidation basis, divided by the sum of
fixed assets (excluding any rehabilitation
assets, the impairment reversal of Brazil
Aluminium, and unproductive capital) and
inventories
ROM (Run of Mine product)
Product mined in the course of regular
mining activities.
RPO (Recognised Professional
Organisation)
Accredited organisations to which
Competent Persons must belong for
the purpose of preparing reports on
Exploration Results, Mineral Resources
and Ore Reserves for submission to
the ASX (if they are not members of
the AusIMM or AIG). Chilean Mining
Commission is one of the RPO. (JORC
Code)
SAEC
South Africa Energy Coal.
SAIMM
Member of the Southern African Institute
of Mining and Metallurgy.
‘Safety guarantee’
Our ‘safety guarantee’ is our internal
approach to creating a sense of chronic
unease to enhance our safety culture.
Every day, we ask our people to reflect on
whether they can guarantee both their
safety and that of their colleagues when
executing their role. If the answer is no,
then the challenge is to stop and ask
what would need to be done differently to
provide that guarantee.
Sands
Tailings produced as a by-product during
beneficiation of ore.
Scope 1 emissions
GHG emissions from our own operations,
including the electricity we generate at
our sites.
Scope 2 emissions
Indirect GHG emissions from the
generation of purchased electricity.
Scope 3 emissions
All other indirect GHG emissions not
included in Scope 2 emissions that occur
in our value chain.
Senior Leadership Team
Presidents and Vice Presidents reporting
to members of the South32 Lead Team
and the Company Secretary.
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Significant hazards frequency
(The sum of significant hazards x
1,000,000) ÷ exposure hours. This is
stated in units of per million hours
worked for employees and contractors. A
significant hazard is something that has
the potential to cause harm, ill health or
injury, or damage to property, plant or the
environment.
SMMEs
Small, medium and micro enterprises.
Social investment
Contributions made to support
communities where we operate or have an
interest. Our contributions to community
programs comprise direct investment
(including Enterprise Development), in-
kind support and administrative costs.
South32 Equity Incentive Plan
An equity incentive plan that allows the
Board to make offers to employees to
acquire securities in South32 Limited and
to otherwise incentivise employees.
South32, South32 Group or Group
Refers to South32 Limited and its
subsidiaries and operated joint ventures,
unless otherwise stated.
Stockpile (SP)
An accumulation of ore or mineral built
up when demand slackens or when
the treatment plant or beneficiation
equipment is incomplete or temporarily
unable to process the mine output; any
heap of material formed to create a buffer
for loading or other purposes, or material
dug and piled for future use.
STI
Short-term incentive.
Supply chain
The global network of suppliers
that support South32’s operations,
development options and exploration
programs through the flow of goods,
services and information.
Sustainability, sustainable development,
sustainably, sustainable
Our approach to sustainability aims
to balance environmental, social and
economic considerations in a way
that creates enduring value for our
stakeholders. We recognise that in
many cases these considerations will
be interdependent or may compete or
conflict with each other. In delivering
our strategy we aim to understand and
balance the environmental, social and
economic impacts of our business in a
way that seeks to create value overall.
References to sustainability (including
sustainable development and sustainably)
in the suite or other disclosures do not
mean that there will be no adverse impact,
or an absolute outcome, in any one area.
Tailings
The left-over materials that remain after
the target mineral is extracted from ore.
Target
An intended outcome in relation to which
we have identified one or more pathways
for delivery of that outcome, subject to
certain assumptions or conditions.
TSF
Tailings Storage Facility
Taskforce on Climate-Related Financial
Disclosures (TCFD)
The TCFD developed a framework for
climate-related financial disclosures,
including a set of recommended
disclosures structured around the four
recommendation pillars of governance,
strategy, risk management, and metrics
and targets. The TCFD was disbanded
in October 2023 and the International
Sustainability Standards Board will
monitor progress on the state of climate-
related financial disclosures by companies.
Taskforce on Nature-Related Financial
Disclosures (TNFD)
The TNFD has developed a framework for
nature-related disclosures, including a set
of disclosure recommendations structured
around the four recommendation pillars
of governance, strategy, risk and impact
management, and metrics and targets.
TEMCO
Tasmanian Electro Metallurgical Company
Total Mineral Resources
The sum of Inferred Mineral Resources,
Indicated Mineral Resources and
Measured Mineral Resources.
Total Ore Reserves
The sum of Proved Ore Reserves and
Probable Ore Reserves.
Total Recordable Injury Frequency (TRIF)
(The sum of recordable injuries x
1,000,000) ÷ exposure hours, for
employees and contractors. This is stated
in units of per million hours worked for
employees and contractors. We adopt the
United States Government Occupational
Safety and Health Administration (OSHA)
guidelines for the recording and reporting
of occupational injuries and illnesses.
Total Recordable Illness Frequency
(TRILF)
(The sum of recordable illnesses
x 1,000,000) ÷ exposure hours, for
employees and contractors. This is stated
in units of per million hours worked for
employees and contractors. We adopt the
United States Government Occupational
Safety and Health Administration (OSHA)
guidelines for the recording and reporting
of occupational injuries and illnesses.
Total Shareholder Return (TSR)
TSR measures the return delivered
to shareholders over a certain period
through the change in share price and
any dividends paid. It is a measure used
to compare our performance to that of
relevant peer groups under the LTI.
Transformation
A national strategy in South Africa aimed
at attaining national unity, promoting
reconciliation through negotiated
settlement and non-racism.
TSX
Toronto Stock Exchange.
Underlying earnings
Underlying earnings is profit after tax
and earnings adjustment items. Earnings
adjustments represent items that don’t
reflect our underlying operations. We
believe that Underlying earnings provides
useful information, but shouldn’t be
considered as an indication of, or an
alternative to, profit or attributable profit
as an indicator of operating performance.
Underlying earnings attributable to
members
Underlying earnings attributable to
members is profit after tax attributable to
members and earnings adjustment items.
Earnings adjustments represent items that
don’t reflect our underlying operations.
We believe that Underlying earnings
provides useful information, but shouldn’t
be considered as an indication of, or an
alternative to, profit or attributable profit
as an indicator of operating performance.
Underlying EBIT
Underlying EBIT is profit before net
finance costs, tax and after any earnings
adjustment items, impacting profit.
The underlying information reflects
the Group’s interest in material equity
accounted joint ventures and is presented
on a proportional consolidation basis. It
is not an IFRS measure of profitability,
financial performance or liquidity and
may be defined and used in differing
ways by different entities. We believe
that Underlying EBIT provides useful
information, but should not be considered
as an indication of, or alternative to, profit
or attributable profit as an indicator of
operating performance.
Underlying EBIT margin
Comprises Underlying EBIT excluding third
party product EBIT, divided by underlying
revenue excluding third party product
revenue.
Underlying EBITDA
Underlying EBIT before underlying
depreciation and amortisation.
Glossary of terms and abbreviations continued
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SOUTH32 ANNUAL REPORT 2024
Underlying effective tax rate (ETR)
Underlying income tax expense, including
royalty related tax, divided by Underlying
profit subject to tax.
UG
Underground working in which the working
area is below the surface of the earth.
UN SDGs
United Nations Sustainable Development
Goals.
Water scarcity
Water scarcity refers to the lack of
sufficient available water to meet the water
usage demands of the region. This can be
from the lack of physical water and the lack
of financial means to gain access to water.
Water use efficiency
Water use efficiency is calculated as the
total water recycled and reused divided by
the sum of total water recycled and reused
and total operational inputs/withdrawal.
Yield
The percentage of material of interest
that is extracted during mining and/
or processing. A measure of mining or
processing efficiency (JORC Code). When
used in reference to the Mineral Resource
estimate yield refers to the sample mass
recovery following beneficiation.
Terms used in resources and
reserves
A.Al₂O₃
available alumina
Ag
Silver
Au
Gold
Cu/TCu
Copper/ total copper
Fe
iron
Met
metallurgical coal
Mn
manganese
Mo
molybdenum
Ni
nickel
OC
open-cut/open-pit/opencast
Pb
lead
R.SiO₂
reactive silica
S
sulphur
Th
thermal coal
VM
Volatile Matter
Zn
zinc
Units of measure
%
percentage or per cent
A$/t
Australian dollars per tonne
CuEq
copper equivalent
dmtu
dry metric tonne unit
g/t
grams per tonne
ha
hectare
Kcal/kg
thousand calories per kilogram
kdmt
thousand dry metric tonne
kL
kilolitre
km
kilometre
koz
thousand ounces
ktpa
kilotonnes per annum
kt
kilotonnes (metric)
kW
kilowatt
kwmt
thousand wet metric tonnes
lb
pound
ML
megalitre
m
metre
Moz
million ounces
Mt
million metric tonnes
Mtpa
Million metric tonnes per annum
Mwmt
million wet metric tonnes
MW
megawatt
oz
ounce
t
Metric tonne
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
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SOUTH32 ANNUAL REPORT 2024
tpa
Metric tonnes per annum
tpd
Metric tonnes per day
tph
Metric tonnes per hour
US$B
US dollars in billions
US$/lb
US dollars per pound
US$M
US dollars in millions
US$/oz
US dollars per ounce
US$/t
US dollars per tonne
Glossary of terms and abbreviations continued
198
SOUTH32 ANNUAL REPORT 2024
Corporate directory
Group Headquarters
108 St Georges Terrace
Perth WA 6000
Australia
Telephone:
+61 8 9324 9000
Facsimile:
+61 8 9324 9200
Email:
Company.Secretary@south32.net
South Africa Office
39 Melrose Boulevard
Melrose Arch
Melrose, Johannesburg 2076
South Africa
Telephone:
+27 11 376 2000
Singapore Marketing Office
16 Collyer Quay
#18-00, Collyer Quay Centre
Singapore 049318
Singapore
Telephone:
+65 6679 2600
London Marketing Office
Nova North
11 Bressenden Place
London SW1E 5BY
United Kingdom
Telephone:
+44 20 7798 1700
North America Office
1066 West Hastings Street
Vancouver V6E 3X1
British Colombia
Canada
Telephone:
+1 604 915 5680
Share Registrars and Transfer Offices
Contact details for the Company’s share registries in Australia,
South Africa and the United Kingdom are included on page 190.
Information about the American Depositary Receipts Depositary,
Transfer Agent and Registrar can also be found on page 190.
Printed copies of this Annual Report will only be posted to
those shareholders who have requested a printed copy. Other
shareholders are notified when the Annual Report becomes
available and given details of where to access it electronically.
OPERATING AND FINANCIAL REVIEW
GOVERNANCE
FINANCIAL REPORT
RESOURCES AND RESERVES
INFORMATION
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SOUTH32 ANNUAL REPORT 2024
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SOUTH32 ANNUAL REPORT 2024
This Annual Report is printed on paper that is
FSC® (Forest Stewardship Council) certified and
manufactured from plantation-grown timber.
Both the paper manufacturer and printer are certified
to the highest possible internationally recognised
standard for environmental management.
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