#118 February 2021 !! IIIE SOUTH 32 South32 Limited (Incorporated in Australia under the Corporations Act 2001 (Cth)) (ACN 093 732 597) ASX/LSE/JSE Share Code: S32 ADR: SOUHY ISIN: AU000000S320 south32.net 2021 HALF YEAR FINANCIAL RESULTS PRESENTATION South32 Limited (ASX, LSE, JSE: S32; ADR: SOUHY) (South32) will hold a conference call at 7.00am Australian Western Standard Time to discuss the attached 2021 half year financial results presentation materials, the details of which are as follows: Conference ID: 10011672 Please pre-register for this call at link. A presentation is attached. Following the conference call a recording will be available on the South32 website (https://www.south32.net/investors-media/investor-centre/financial-operational-results). Separately a video presentation by South32 Chief Executive Officer, Graham Kerr, will be made available on the South32 website (https://www.south32.net/investors-media/investor-centre/financial-operational-results). About South32 South32 is a globally diversified mining and metals company. 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. We produce bauxite, alumina, aluminium, energy and metallurgical coal, manganese, nickel, silver, lead and zinc at our operations in Australia, Southern Africa and South America. With a focus on growing our base metals exposure, we also have two development options in North America and several partnerships with junior explorers around the world. Further Information Investor Relations Alex Volante T +61 8 9324 9029 M +61 403 328 408 E Alex. [email protected] Media Relations Rebecca Keenan Tom Gallop T +61 8 9324 9030 M +61 439 353 948 E [email protected] T +61 8 9324 9364 M +61 402 087 055 E [email protected] Jenny White T +44 20 7798 1773 M +44 7900 046 758 E [email protected] Further information on South32 can be found at www.south32.net. Registered Office Level 35 108 St Georges Terrace Perth WA 6000 Australia ABN 84 093 732 597 Registered in Australia Approved for release by Nicole Duncan, Company Secretary JSE Sponsor: UBS South Africa (Pty) Ltd 18 February 2021 1#22021 HALF YEAR FINANCIAL RESULTS 18 February 2021 ΙΙΙΞ ΙΙΙΞ SOUTH32#3IMPORTANT NOTICES This presentation should be read in conjunction with the "Financial Results and Outlook - half year ended 31 December 2020" announcement released on 18 February 2021, which is available on South32's website (www.south32.net). Figures in italics indicate that an adjustment has been made since the figures were previously reported. FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements, including statements about trends in commodity prices and currency exchange rates; demand for commodities; production forecasts; plans, strategies and objectives of management; capital costs and scheduling; operating costs; anticipated productive lives of projects, mines and facilities; and provisions and contingent liabilities. These forward-looking statements reflect expectations at the date of this presentation, however they are not guarantees or predictions of future performance or statements of fact. They involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results to differ materially from those expressed in the statements contained in this presentation. Readers are cautioned not to put undue reliance on forward-looking statements. South32 makes no representation, assurance or guarantee as to the accuracy or likelihood or fulfilment of any forward-looking statement or any outcomes expressed or implied in any forward-looking statement. Except as required by applicable laws or regulations, the South32 Group does not undertake to publicly update or review any forward-looking statements, whether as a result of new information or future events. Past performance cannot be relied on as a guide to future performance. South32 cautions against reliance on any forward-looking statements or guidance, particularly in light of the current economic climate and the significant volatility, uncertainty and disruption arising in connection with COVID-19. The denotation (e) refers to an estimate or forecast year. NON-IFRS FINANCIAL INFORMATION This presentation includes certain non-IFRS financial measures, including Underlying earnings, Underlying EBIT and Underlying EBITDA, Basic Underlying earnings per share, Underlying effective tax rate, Underlying EBIT margin, Underlying EBITDA margin, Underlying return on invested capital, Free cash flow, net debt, net cash, net operating assets and ROIC. These measures are used internally by management to assess the performance of our business, make decisions on the allocation of our resources and assess operational management. Non-IFRS measures have not been subject to audit or review and should not be considered as an indication of or alternative to an IFRS measure of profitability, financial performance or liquidity. NO OFFER OF SECURITIES Nothing in this presentation should be read or understood as an offer or recommendation to buy or sell South32 securities, or be treated or relied upon as a recommendation or advice by South32. RELIANCE ON THIRD PARTY INFORMATION Any information contained in this presentation that has been derived from publicly available sources (or views based on such information) has not been independently verified. The South32 Group does not make any representation or warranty about the accuracy, completeness or reliability of the information. This presentation should not be relied upon as a recommendation or forecast by South32. NO FINANCIAL OR INVESTMENT ADVICE - SOUTH AFRICA South32 does not provide any financial or investment 'advice' as that term is defined in the South African Financial Advisory and Intermediary Services Act, 37 of 2002. III SOUTH32 SLIDE 2#4OUR PORTFOLIO Large producer of manganese ore and alumina Multiple growth projects progressing through study phase Pipeline of greenfield exploration partnerships with a bias to base metals Exiting lower returning businesses AMBLER METALS Copper, Zinc, Lead, Silver & Gold Copper & Gold Copper, Zinc, Lead, Silver & Gold Copper & Gold Zinc, Lead, Silver & Copper HERMOSA Zinc, Lead, Silver & Manganese Copper & Gold Upstream operations. Downstream processing facilities Development option Exploration partnership or option Divestment in progress Copper, Gold & Molybdenum CERRO MATOSO Nickel BRAZIL ALUMINA Aluminal MRN Bauxite HOTAZEL MANGANESE MINES Manganese ore Zinc, Lead & Silver SOUTH AFRICA ENERGY COAL Energy Coal Copper, Zinc, Lead, Silver & Gold CANNINGTON Silver, Lead & Zinc Copper & Gold MOZAL ALUMINIUM Aluminium Zinc Copper & Gold GEMCO Manganese ore HILLSIDE ALUMINIUM WORSLEY ALUMINA Alumina Aluminium Copper, Lead, Silver & Zinc ILLAWARRA METALLURGICAL COAL Metallurgical Coal SLIDE 3 III SOUTH32#5OUR STRATEGY A simple strategy underpinned by a disciplined capital management framework III SOUTH32 © OPTIMISE our business by working safely, minimising our impact, consistently delivering stable and predictable performance and continually improving our competitiveness. 6 UNLOCK the full value of our business. IDENTIFY and pursue opportunities to sustainably reshape our business for the future, and create enduring social, environmental and economic value. SLIDE 4#6H1 FY21 PROGRESS Optimise our business • Production records at three operations (Australia Manganese, Brazil Alumina, Worsley Alumina) . • FY21 production guidance increased at three operations (Cannington, Cerro Matoso, Illawarra Met Coal) H1 FY21 Operating unit costs in-line or below guidance for the majority of operations Further simplification of our corporate and marketing structures, including our office footprint, remaining on-track to embed US$50M in annualised savings beyond FY22 0 Unlock the full value of our business Accelerated development of the higher-grade Queresas and Porvenir project (Q&P project) at Cerro Matoso to grow nickel production • Continued to roll out AP3XLE energy efficiency technology at Mozal Aluminium and progressed a study for its use at Hillside Aluminium Progressed Group decarbonisation studies ahead of our next set of emissions reduction targets in CY21 Identify and pursue opportunities to create value Key conditions achieved for the planned divestment of South Africa Energy Coal(a) Sale of GEMCO's shareholding in TEMCO manganese alloy smelter completed subsequent to end of period Divestment of non-core precious metals royalties for US$55M (b) completed subsequent to end of period Pre-feasibility study (PFS) for the Hermosa project's Taylor Deposit expected in Q4 FY21 • Scoping study for the Hermosa project's Clark Deposit expected in H1 FY22 PFS for the Arctic Deposit and planning for the next season's regional exploration program underway at our Ambler Metals Joint Venture Notes: a. Material conditions remain outstanding, refer to the market announcement "Agreement to Divest South Africa Energy Coal" dated 6 November 2019. b. Includes US$40M in cash and US$15M in shares of TSX-V listed Elemental Royalty Corp. SLIDE 5 SOUTH32#7HEALTH & SAFETY PERFORMANCE Notes: a. Fatalities¹ 1 We are committed to working together, continually improving our systems, processes and safety performance at all our operations TRIF¹,2 1,2 TRILF 4.6 4.4 4.2 1.4 1.3 1.1 0 0 FY19 FY20 (a H1 FY21 FY19 FY20 H1 FY21 FY19 FY20 H1 FY21 Incidents are included where South32 controls the work location or controls the work activity. Also in FY20, two people from our contracting companies tragically lost their lives in separate offsite road incidents during transport of our product to shipping ports. These incidents were associated with our Cerro Matoso and South Africa Manganese operations. SLIDE 6 III SOUTH32#8H1 FY21 FINANCIAL SUMMARY Notes: a. b. Net profit after tax US$53M Underlying earnings US$136M Underlying EBITDA US$633M Operating margin 23% Operating unit costs in-line with or below guidance for the majority of operations Free cash flow (a) US$188M Net cash balance US$275M US$160M returned to shareholders (b) Interim ordinary dividend US$67M (1.4 US cents per share) Capital management program expanded by US$250M to US$1.68B US$259M remaining to be allocated Free cash flow from operations including net distributions from our manganese equity accounted investments (EAI). Includes FY20 final ordinary dividend of US$48M and on-market share buy-back of US$112M. SLIDE 7 III SOUTH32#9PRODUCTION OVERVIEW Alumina (Mt) 2.6 2.6 2.7 2.6 Aluminium (kt) Manganese ore (Mwmt) 496 496 497 2.8 490 2.5 2.9 2.6 III SOUTH32 H1 FY20 H2 FY20 H1 FY21 H2 FY21e H1 FY20 H2 FY20 H1 FY21 H2 FY21e H1 FY20 H2 FY20 H1 FY21 H2 FY21e Record year to date production at both alumina refineries with Worsley Alumina exceeding nameplate capacity Both smelters continued to test their maximum technical capacity, despite the impact from load-shedding Record year to date production at Australia Manganese with H2 FY21 volumes in South Africa and Australia subject to market demand and weather Zinc equivalent³ (kt) Nickel (kt) Metallurgical coal (Mt) 179.9 20.6 20.0 18.5 168.7 2.9 167.3 2.7 163.9 16.1 3.3 3.1 H1 FY20 H2 FY20 H1 FY21 H2 FY21e H1 FY20 H2 FY20 H1 FY21 H2 FY21e H1 FY20 H2 FY20 H1 FY21 H2 FY21e Increased FY21 production guidance at Cannington with underground mine performance expected to support the acceleration of a higher-grade mining sequence Increased FY21 and FY22 production guidance at Cerro Matoso following our approval to accelerate the development of the higher-grade Q&P project Metallurgical coal volumes continue to benefit from the return to a three longwall configuration at Illawarra Metallurgical Coal SLIDE 8#10EMISSIONS PROGRESS Scope 1 & 2 emissions 1,4 Scope 1 emissions (%, FY20) 17% 36% • 11% 10.4Mt CO2-e 13% 23% Worsley Alumina Illawarra Metallurgical Coal Hillside Aluminium Mozal Aluminium Other Scope 2 emissions (%, FY20) 2% 9% 4% 12.9Mt CO2-e 85% Hillside Aluminium Mozal Aluminium Illawarra Metallurgical Coal Other We are advancing our climate change initiatives aligned to our strategy and commitment to net zero by 2050 On-track to achieve our five year Scope 1 emissions reduction target in FY21 • New Scope 1 and 2 emissions reduction targets will be released in CY21 • Updating our analysis to assess portfolio resilience under a 1.5°C scenario • Progressing multiple decarbonisation projects and energy studies Increasing our exposure to metals important for the transition to a low-carbon world, with development studies underway at Hermosa and Ambler Metals • Our exit of lower returning businesses will also reduce our emissions intensity SLIDE 9 III SOUTH32#11INCLUSION AND DIVERSITY PROGRESS Percentage of total employees who are women . 19% 19% 18% Targeting continuing improvement ." FY19 FY20 H1 FY21 FY21 We are targeting continuous improvement for the representation of: Employees and leaders who are women Diversity in our workforce and management in South Africa • We are a signatory to 40:40 Vision Women on our Board Women on our Lead Team 38% 38% 38% 44% 44% 40% >40% >33% FY19 FY20 H1 FY21 FY21 Target FY19 FY20 H1 FY21 FY21 Target Women in senior leadership Women in operational leadership? >20% >40% 18% 18% 18% 37% 36% 29% II FY19 FY20 H1 FY21 FY21 Target FY19 FY20 H1 FY21 FY21 Target SLIDE 10 III SOUTH32#12SOCIAL PROGRESS Community investment • Our Community Investment Framework is based on four priority areas aligned with the UN Sustainable Development Goals: o Education and leadership o Economic participation o Good health and social wellbeing o Natural resource resilience • US$17.2M committed to community investment in FY21 Our response to COVID-19 • • Our people continued to respond to the impact of the pandemic's second wave during H1 FY21 • Across all of the jurisdictions where we operate, we remain focussed on keeping our people well, maintaining safe and reliable operations and supporting our communities US$6M of our US$7M COVID-19 Community Investment Fund has now been contributed across the areas of prevention, preparedness, response and recovery Cultural heritage • • During CY20 we undertook a review of our approach to cultural heritage management Whilst we have processes in place to support the preservation of cultural heritage, tailored to the local context, our review identified opportunities to enhance our current practices to move beyond compliance Noting that many legal frameworks are outdated and under review, we are developing our own approach guided by international standards and better aligned with societal expectations We are currently consulting with external stakeholders, and Indigenous and Tribal Peoples across our operating regions on our draft approach Senior management at our operations have accountability for the management of cultural heritage and for building relationships with Indigenous and Tribal Peoples Our cultural heritage management work is supported by cultural awareness and cultural heritage training, which we will continue to improve and update once our approach is finalised ICMM International Council on Mining & Metals UN GLOBA COMPACT MEMBER OF Dow Jones Sustainability Indices SAM In collaboration with b SUSTAINABLE DEVELOPMENT GOALS III SOUTH32 SLIDE 11#13PERFORMANCE AND GUIDANCE Elll SOUTH32#14H1 FY21 PERFORMANCE ANALYSIS Our strong operating result supported an improvement in our H1 FY21 Group operating margin H1 FY21 Underlying EBITDA contribution by commodity(a)(b) Alumina 6% Aluminium & alumina 10% 22% Manganese ore Zinc-lead-silver 19% Nickel Metallurgical coal Group operating margin³ 37% 34% 25% 18% Aluminium EIII SOUTH32 Alumina operating margin(b) Aluminium operating margin Manganese ore operating margin 19% 64% 47% 58% 56% 37% 12% 48% 48% 25% 26% 8% 23% 2% (2%) H1 H2 H1 H2 H1 FY19 FY19 FY20 FY20 FY21 H1 H2 H1 H2 H1 FY19 FY19 FY20 FY20 FY21 H1 H2 H1 H2 H1 FY19 FY19 FY20 FY20 FY21 Zinc-lead-silver operating margin 24% 23% 20% 36% 33% 34% 31% 53% Nickel operating margin 44% 30% 22% 26% Metallurgical coal operating margin (b) 51% 40% 45% 30% 22% 15% FY18 FY19 H1 FY20 H2 FY20 H1 FY21 H1 H2 H1 H2 H1 FY19 FY19 FY20 FY20 FY21 H1 FY19 H2 H1 H2 H1 FY19 FY20 FY20 FY21 H1 H2 H1 H2 H1 FY19 FY19 FY20 FY20 FY21 Notes: a. b. Presented on a proportionally consolidated basis and excludes South Africa Energy Coal, manganese alloys, Hermosa and Group and unallocated costs. Metallurgical coal comprises Illawarra Metallurgical Coal, including energy coal by-product volumes. The Brazil Alumina aluminium smelter is included in alumina operating margin. SLIDE 13#15H1 FY20 Underlying EBIT Sales price 293 233 Royalties and price-linked costs (US$M) 35 55 Controllable costs 121 EARNINGS ANALYSIS Lower controllable costs and higher sales volumes helped to offset weaker prices Foreign exchange 50 Uncontrollable (-US$207M) Inflation 59 59 Sales volume Inventory Cost efficiencies 31 Controllable costs Other⁹ 194 29 Interest & tax (equity accounted investments) 29 Lower marketing and corporate functions controllable costs 20 H1 FY21 Underlying EBIT 15 Production volume 60 282 Underlying net finance costs Underlying income tax expense Net finance costs and income tax expense¹0 SLIDE 14 98 86 H1 FY21 Underlying earnings 136 EIII SOUTH32#16REVENUE ANALYSIS Revenue analysis (US$M) H1 FY20 Revenue (excl. third party product) (a) We have seen a broad based recovery in our commodity basket to start H2 FY21 3,481 South32 commodity basket reference prices 11 (Spot to H1 FY21 average prices for reference index) 150 Spot prices Sales price (-US$233M) Alumina Manganese ore & alloy Metallurgical coal Aluminium 12 Energy coal 24 Base & precious metals Sales volume FX on revenue Ceased & sold revenue H1 FY21 Revenue (excl. third party product) (a) 3,246 47 31 62 I Base & precious metals sales price Silver 53 140 61 Zinc 145 Lead (8) Nickel (18) Sales volume by operation Illawarra Metallurgical Coal Worsley Cannington Manganese ore 20 South Africa Energy Coal (16) 20 20 Cerro Matoso (58) 13 Other operations (17) 31 21 10 60 60 130 120 110 100 EIII SOUTH32 as at 12 February 2021 Energy coal (+43%) Metallurgical coal (+26%) Nickel (+22%) 44% manganese (+19%) Aluminium (+15%) 37% manganese (+14%) Zinc (+13%) Lead (+12%) Silver (+11%) Alumina (+8%) Notes: a. Revenue includes manganese ore and alloy on a proportionally consolidated basis. Revenue for zinc, lead and silver is net of treatment and refining charges. SLIDE 15#17(b)(c) H1 FY20 cost base H1 FY20 third party product cost¹4 350 3,133 (b) H1 FY20 adjusted cost base 2,783 70 70 (21) Caustic soda COSTS ANALYSIS III SOUTH32 We reduced our cost base by 9% (a) with cost efficiencies and weaker FX more than offsetting an increase in power costs (US$M) Price-linked costs 12 51 HoH impact H1 FY21 expenditure Foreign exchange on costs Price-linked costs Uncontrollable (US$46M) Royalties 15% 11% (19) (19) (11) (6) 9% Higher smelter power costs materials Smelter raw Power and diesel Bauxite Other13 17% 13% 25 10 59 194 3 2,546 Inflation Notes: a. b. C. Cost base excluding third party product costs. Consistent with the H1 FY21 and FY20 treatment, H1 FY20 includes a reclass of US$27M for rail related costs which have previously been presented on a gross basis in Other income and Expenses. Cost base includes EAI and excludes Other income. H1 FY21 includes US$385M of statutory adjustments and a US$86M adjustment for Other income and inter-segment manganese sales to reconcile to Revenue minus Underlying EBITDA (H1 FY20 includes US$451M of statutory adjustments and a US$144M adjustment for Other income and inter-segment manganese sales to reconcile to Revenue minus Underlying EBITDA). Controllable costs Other 15 H1 FY21 adjusted cost base H1 FY21 third party product cost¹4 SLIDE 16 35% 235 2,781 (၁) H1 FY21 cost base#18OPERATING UNIT COSTS PERFORMANCE AND GUIDANCE Cost and volume efficiencies are expected to partially offset strengthening producer currencies (a) in H2 FY21 Worsley Alumina (US$/t)16 Brazil Alumina (non-operated) (US$/t) 238 -3% +2% 210 210 204 205 Guidance increased by 2% Stronger Australian dollar partially offset by lower caustic prices FY19 FY20 Hillside Aluminium (US$/t) H1 FY21 FY21e prior FY21e new 2,045 ( +0.3% 1,531 1,536 Guidance not provided FY19 FY20 H1 FY21 FY21e prior FY21e new Australia Manganese ore (US$/dmtu) 16,17 -10% 1.59 1.55 FY19 Notes: a. 1.39 Guidance not provided Cost profile will continue to be influenced by the South African rand and price of raw material inputs ( +1% 1.48 1.49 Guidance increased by 1% Stronger Australian dollar partially offset by equipment productivity FY20 H1 FY21 FY21e prior FY21e new 270 -16% 244 206 Guidance not provided FY19 FY20 H1 FY21 FY21e prior FY21e new Mozal Aluminium (US$/t) 2,026 -11% 1,785 1,585 FY19 Guidance not provided FY20 H1 FY21 FY21e prior FY21e new South Africa Manganese ore (US$/dmtu)16,17 2.69 +1% 2.25 2.28 2.25 EIII SOUTH32 Guidance not provided Cost profile will continue to be influenced by the Brazilian real, price of energy and raw material inputs Guidance not provided Cost profile will continue to be influenced by the South African rand and price of raw material inputs +8% 2.44 Guidance increased by 8% FY19 FY20 H1 FY21 FY21e prior FY21e new Stronger South African rand and on-going use of higher cost trucking partially offset by cost efficiencies and lower price-linked royalties FY21 prior Operating unit cost guidance included an AUD: USD exchange rate of 0.69; a USD:ZAR exchange rate of 17.68; a USD:COP exchange rate of 3,665. FY21 new Operating unit cost guidance includes an AUD:USD exchange rate of 0.75; a USD:ZAR exchange rate of 15.69; a USD: COP exchange rate of 3,594. SLIDE 17#19OPERATING UNIT COSTS PERFORMANCE AND GUIDANCE III Cerro Matoso (US$/lb) 16 South Africa Energy Coal (US$/t)16 +3% +3% 4.10 42 3.99 3.97 3.79 3.69 Guidance increased by 3% 40 Higher price-linked royalties and electricity prices partially offset by increased volumes FY19 FY20 H1 FY21 FY21e prior FY21e new Illawarra Metallurgical Coal (US$/t)16 -17% -1% 1 94 93 I 84 83 77 Guidance lowered by 1% Higher production volumes to more than offset a stronger Australian dollar FY19 FY20 H1 FY21 FY21e prior FY21e new 42 Guidance not provided FY19 FY20 H1 FY21 FY21e prior FY21e new SOUTH32 Guidance not provided Q3 FY21 costs expected to reflect adjustments to production volumes and a stronger South African rand Cannington (US$/t)16,18 +10% +11% 123 124 123 113 111 Guidance increased by 11% FY19 FY20 H1 FY21 FY21e prior FY21e new Stronger Australian dollar and higher price-linked royalties SLIDE 18#20a. Notes: FY20 net cash 298 Free cash flow from operations excluding capital expenditure 426 52 185 CASH FLOW ANALYSIS (US$M) Our disciplined approach to capital allocation balances investment in our business with returns to shareholders Timing differences that are expected to unwind in H2 FY21 I have resulted in excess cash being retained in our manganese EAI Capital expenditure Shareholder returns (US$276M) (US$160M) III SOUTH32 Net distributions from manganese EAI 19 Sustaining capital expenditure (excluding EAI) Major project capital expenditure (excluding EAI) 91 48 48 Dividends paid The Board has resolved to pay a fully franked ordinary dividend of US 1.4 cents per share (US$67M) on 8 April 2021. On-market share buy-back 112 Other20 65 59 H1 FY21 net cash H1 FY21 build in working capital following a temporary increase in inventory and higher commodity prices has partially released to cash in January 2021 as expected 275 January 2021 net cash 452 Proceeds from precious metals royalties sale (e) 40 67 259 Interim ordinary dividend SLIDE 19 Remaining capital management program#21CAPITAL EXPENDITURE ANALYSIS Additional capital to accelerate development of the Q&P project at Cerro Matoso Major capital expenditure weighted to Hermosa in H2 FY21 Sustaining capital expenditure (excluding South Africa Energy Coal) (US$M) Major capital expenditure (excluding South Africa Energy Coal) (US$M) III SOUTH32 Successful divestment of South Africa Energy Coal will meaningfully reduce the Group's capital intensity South Africa Energy Coal capital expenditure (US$M) FY21 guidance unchanged at US$410M despite stronger producer currencies and Q&P project development Dendrobium Next Domain guidance withdrawn while we assess the Independent Planning Commission's decision to refuse the application for the project Q3 FY21 capital expenditure guidance provided for the first time 214 196 445 44 56 49 H1 FY21 H2 FY21e H1 FY21 H2 FY21e H1 FY21 ■Group EAI Hermosa DND Eagle Downs Sustaining 19 Q3 FY21e ■Major SLIDE 20#22PORTFOLIO AND RETURNS OUTLOOK ΙΙΙΞ ΙΙΙΞ SOUTH32#23CAPITAL MANAGEMENT FRAMEWORK Our framework remains unchanged A strong balance sheet is at the core of our strategy Capital management framework Net cash/(debt) (US$M) Maximise cash flow ROIC 2,400 2,000 Competition for excess capital 1,600 Investment in our business Acquisitions 1,200 Greenfield exploration Share buy-backs Special dividends Distribute a minimum 40% of Underlying earnings as ordinary dividends Maintain safe and reliable operations and an investment grade credit rating through the cycle Cash flow priorities 800 400 H1 H2 H1 H2 H1 H2 H1 H2 H1 FY17 FY17 FY18 FY18 FY19 FY19 FY20 FY20 FY21 Framework designed to reward shareholders as financial performance improves Shareholder returns (paid and committed) (US$M) 600 500 400 300 200 100 H1 FY17 H2 FY17 H1 FY18 H2 FY18 H1 FY19 H2 FY19 Remaining capital management program On-market share buy-back Special dividends Ordinary dividends H1 FY20 H2 FY20 H1 FY21 H2 FY21e SLIDE 22 III SOUTH32#24CAPITAL MANAGEMENT PROGRAM Program is flexible to efficiently return excess capital South32 capital management program (US$M, LHS; A$/share, RHS) 250 200 150 100 50 10% US$211M 5% Results blackout US$93M Results blackout Apr-17 Jun-17 Sep-17 Nov-17 Feb-18 US$154M special dividend US$161M On-market share buy-back resumed in October 2020 returning a further US$112M Program expanded by US$250M to US$1.68B US$259M remaining to be allocated Shares on issue reduced by 10% at an average price of A$2.87/share since the program commenced Results blackout US$167M Results blackout US$85M special dividend US$114M Apr-18 Jul-18 Sep-18 On-market share buy-back Dec-18 Feb-19 % daily volume purchased Results blackout US$192M Results blackout US$54M special dividend US$77M 4.50 4.00 3.50 3.00 2.50 2.00 US$112M 1.50 Temporary suspension in response to COVID-19 May-19 Jul-19 Sep-19 Dec-19 Feb-20 May-20 Jul-20 Oct-20 Dec-20 South32 share price SLIDE 23 III SOUTH32#25RESHAPING OUR PORTFOLIO We are simplifying our portfolio, exiting lower returning businesses III SOUTH32 Exited businesses Exiting businesses METALLOYS (60%) Alloy smelter on care and maintenance SOUTH AFRICA ENERGY COAL (100%) Targeting divestment by 31 March 2021(a) Notes: a. Refer to the market announcement "Agreement to Divest South Africa Energy Coal" dated 6 November 2019. EAGLE DOWNS METALLURGICAL COAL (50%) Project placed on hold while we assess options for our joint venture interest PRECIOUS METALS ROYALTY PORTFOLIO (100%) Sale to Elemental Royalties Corp. for US$40M cash & US$15M in Elemental shares completed TEMCO (60%) Divestment completed SLIDE 24#26OUR LIFE EXTENSION AND IMPROVEMENT OPTIONS We are advancing options at our existing operations to compete for capital and grow returns III SOUTH32 CERRO MATOSO (100%) Development of the higher-grade Q&P project approved FS for the low-capital Ore Sorting and Mechanical Ore Concentration (OSMOC) project, which has the potential to increase processing capacity, expected in H2 FY21 ILLAWARRA METALLURGICAL COAL (100%) Assessing the impact of the Independent Planning Commission's decision to refuse the application for the Dendrobium Next Domain project MRN (14.8%) PFS for the bauxite life extension project expected in CY21 GEMCO (60%) FS for Eastern Leases underway with exploration drilling in the Southern Areas restarted in Q2 FY21 Life extension or improvement option HILLSIDE (100%) FS for the AP3XLE project underway with FID expected in H1 FY22 MOZAL (47.1%) AP3XLE energy efficiency technology being rolled out SLIDE 25#27OUR GROWTH OPTIONS & EXPLORATION FOOTPRINT Our pipeline of growth opportunities and greenfield exploration partnerships has a bias to base metals AMBLER METALS (50%) Copper, Zinc, Lead, Silver & Gold Copper & Gold Copper, Zinc, Lead, Silver & Gold Ambler Metals Joint Venture (50%) Arctic (copper, zinc, lead, silver, gold) PFS underway Bornite (copper) is an advanced exploration project Regional exploration prospects and VMS clusters to be tested in CY21 field season Copper & Gold Zinc, Lead, Silver & Copper HERMOSA (100%) Zinc, Lead, Silver & Manganese- Copper & Gold Development option Copper, Gold & Molybdenum Exploration partnership or option Hermosa Project (100%) Zinc, Lead & Silver Taylor (zinc, lead, silver) PFS due in Q4 FY21 Clark (zinc, lead, manganese) scoping study due in H1 FY22 Prospective landholding with identified exploration prospects Exploration partnerships Pipeline of more than 20 greenfield partnerships targeting base metal discoveries Strategy to identify, advance and cycle options Copper, Zinc, Lead, Silver & Gold. Copper & Gold Zinc Copper & Gold Copper, Lead, Silver & Zinc SLIDE 26 EIII SOUTH32#28MARKETS OUTLOOK 三川 Me SOUTH32#29MANGANESE MARKET Global supply remains tight despite rebound, supporting ore prices CY21 outlook to be driven by supply with alloy demand expected to remain strong Long term price to be set by marginal South African supply transitioning underground over time Manganese ore supply (Mt, Mn content unadjusted) Seaborne exports 14,000 12,000 10,000 8,000 6,000 4,000 2,000 Manganese ore price and China port stocks(a) (US$/dmtu; Mt; months) Since Q2 CY20, seaborne exports have recovered, albeit below CY19 levels 8 7 4 6 5 + 3 2 1 Q1 Q2 Q3 Q4 Q1 CY19 CY19 CY19 CY19 CY20 Q2 CY20 Q3 Q4 Jan-19 Jul-19 CY20 CY20 Mn ore port stocks ■Gabon ■Ghana Brazil Rest of world Source: GTIS. ■South Africa Australia Port consumption months based on 12 month normalised demand from alloy producers. Notes: a. III SOUTH32 Despite build in total port stocks, consumption months of inventory are largely unchanged since CY19 Prices continue to respond to supply disruptions Jan-20 Jul-20 Jan-21 Mn ore 44% Mn, CIF China Port consumption months Mn ore 37% Mn, FOB Port Elizabeth Source: South32 industry analysis, Fastmarkets, Ferroalloy.net. SLIDE 28#30ALUMINA MARKET III SOUTH32 Growth in Chinese imports and strong smelter margins have supported price recovery China annualised monthly alumina imports and prices (Alumina price US$/t LHS; kt RHS) Cost curve expected to shift upwards in CY21 due to rising energy and caustic soda costs Cost curve expected to lift in the long term due to raw material cost increases and deterioration of Chinese bauxite quality Alumina cost curve (CY21 and CY30)(a) (US$/t) 350 300 250 200 5-year average at ~2,300ktpa 450 400 350 Seaborne prices have 300 rebounded ~34% off lows 6,000 250 5,000 200 4,000 150 3,000 100 2,000 1,000 50 50 Jul CY19 Sep CY19 Nov CY19 Jan CY20 Mar CY20 May CY20 Jul CY20 Sep CY20 Nov CY20 Jan CY21 Platts CFR China Imports (RHS) Platts China Shanxi Ex-Works (CFR equivalent) Source: GTIS, China Custom, Platts, South32 analysis. CY30 cost curve (b)(c) Spot price at ~US$300/t(d) Australia China (domestic bauxite) Middle East & Africa Americas China (imported bauxite) Other Europe Source: CRU. Notes: a. b. Illustrates business costs which represent cash costs net of premiums (normalised to FOB Australia price). CY30 cost curve in January 2021 real terms. C. Future production volumes include current and planned expansions and projects. SLIDE 29 d. Platts FOB Australia price as at 15 February 2021.#31METALLURGICAL COAL MARKET CY20 prices impacted by disruption in trade flows and weak ex-China demand Trade flow disruption has led to higher demand for Australian coal in ex-China markets Metallurgical coal seaborne trade by major regions(a) (Mt) Exports Imports CY21 outlook supported by strong ex-China demand while trade policy and supply response remain key III SOUTH32 Increasing demand in India and emerging Asian economies expected to provide long term demand growth Metallurgical coal prices (US$/t LHS) Annualised pig iron output (Mt RHS) 80 60 40 20 80 60 60 40 40 20 250 200 150 100 50 50 Ex-China pig iron output continues to recover 600 500 400 300 200 100 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 CY19 CY19 CY19 CY19 CY20 CY20 CY20 CY20 CY19 CY19 CY19 CY19 CY20 CY20 Q3 Q4 CY20 CY20e Jan CY19 Apr Jul Oct Jan Apr Jul Oct Jan CY19 CY19 CY19 CY20 CY20 CY20 CY20 CY21 Australia to Ex-China North America to Ex-China Mongolia ■Australia to China ■North America to China ■Russia ■Mozambique Source: GTIS, IHS India Coal Report and South32 analysis. Notes: a. Metallurgical coal trade flow includes HCC, weak coking coal and PCI, and incorporates Mongolian coal exports to China. ■China Taiwan India ■ Japan ■South Korea ■Europe Brazil Vietnam Ex-China pig iron output (RHS) Platts Premium Low Vol (PLV) HCC FOB Australia China Domestic Prime HCC (CFR equivalent) Source: Platts SBB database, Fenwei, World Steel Association, South32 analysis. SLIDE 30#32H1 FY21 SUMMARY Underlying EBITDA US$633M Operating margin 23% Record production at 3 operations H1 FY21 Operating unit costs in-line with or below guidance for the majority of operations Net cash balance US$275M US$160M returned to shareholders (a) Interim ordinary dividend US$67M (1.4 US cents per share) Capital management program expanded by US$250M with US$259M remaining to be allocated FY21 production guidance increased at 3 operations Operating unit cost outlook well controlled, despite stronger FX Exiting lower returning businesses and progressing our growth options in base metals Notes: a. Includes FY20 final ordinary dividend of US$48M and on-market share buy-back of US$112M. SLIDE 31 III SOUTH32#33SUPPLEMENTARY INFORMATION EIII ΙΙΙΞ SOUTH32#34EARNINGS SENSITIVITIES EIII SOUTH32 EBIT impact +/- 10% Annualised estimated impact on FY21e Underlying EBIT of a 10% change in commodity prices or currency(a) US$M Aluminium (b) 185 Alumina (b) 146 Manganese ore (c) Metallurgical coal Nickel Silver Energy coal (d) Lead Zinc Australian dollar South African rand Colombian peso Brazilian real 86 67 43 34 31 22 15 180 117 19 8 Notes: a. b. C. The sensitivities reflect the annualised estimated impact on FY21e Underlying EBIT of a 10% movement in H1 FY21 actual realised prices and H1 FY21 actual average exchange rates (weakening currency) applied to FY21e volumes and costs. Aluminium sensitivity includes a one month LME price-linked electricity cost impact for Hillside Aluminium but ignores the Group consolidation impact of inter-company alumina sold on index. Aluminium sensitivity is shown without any associated increase in alumina pricing. The sensitivity impacts for manganese ore are on a pre-tax basis. The Group's Manganese operations are reported as EAI. As a result, the Profit after taxation for Manganese is included in the Underlying EBIT of South32. d. Includes South Africa Energy Coal for 9 months to 31 March 2021. SLIDE 33#35OPERATING UNIT COSTS H1 FY21 actual vs. FY21 prior guidance 21 (15%) (5%) FY21 prior guidance 5% 15% Operating unit costs H1 FY20 H2 FY20 H1 FY21 H1 FY21 adjusted Worsley Alumina 225 196 204 202 205 (US$/t) Brazil Alumina (non-operated) (US$/t) 257 231 206 N/A Guidance not provided Illawarra Metallurgical Coal 91 95 77 74 84 (US$/t) Australia Manganese17 1.62 1.48 1.39 1.35 1.48 (FOB, US$/dmtu) South Africa Manganese 17 2.60 1.78 2.28 2.15 2.25 (FOB, US$/dmtu) Cerro Matoso 3.80 3.57 3.79 3.81 3.97 (US$/lb) Cannington 18 121 105 124 117 111 (US$/t) South Africa Energy Coal²² (US$/t) 43 £3 40 40 42 39 36-39 Cost breakdown H1 FY21 Hillside Aluminium (US$/t) 1,657 1,413 1,536 48% Mozal Aluminium 1,904 (US$/t) 1,671 1,585 43% Foreign exchange Price-linked costs (including royalties)23 Controllable costs Raw material inputs Other O H1 FY21 actual vs. FY21 prior guidance % movement O≤ 5% of guidance O>5% of guidance 52% 57% EIII SOUTH32 Commentary to guidance or H1 FY20 Record production volumes, lower caustic soda prices and cost efficiencies, more than offset a stronger Australian dollar (compared to guidance) Guidance not provided Record production volumes, lower caustic soda, energy and bauxite prices (compared to H1 FY20) Additional volumes of coal wash material and improved longwall performance supporting higher metallurgical coal sales, more than offset a stronger Australian dollar (compared to guidance) Record volumes and cost efficiencies more than offset a stronger Australian dollar (compared to guidance) Higher volumes more than offset a stronger South African rand (compared to guidance) Cost efficiencies combined with a weaker Colombian peso and lower price-linked royalties (compared to guidance) Cost efficiencies more than offset by inventory movements, a stronger Australian dollar and higher price-linked royalties (compared to guidance) Stronger South African rand and reduced activity in uneconomic pits (compared to guidance) Lower raw material input costs and a weaker South African rand more than offset higher power costs (compared to H1 FY20) Lower raw material input costs and a weaker South African rand (compared to H1 FY20) SLIDE 34#36OPERATING UNIT COST GUIDANCE EIII SOUTH32 Operating unit costs H1 FY21 actual FY21 prior guidance21 FY21 adjusted guidance FY21 new guidance 16 (15%) (5%) FY21 new guidance vs. FY21 prior guidance 5% Commentary 15% Worsley Alumina 204 205 209 210 (US$/t) Stronger Australian dollar partially offset by lower caustic prices Brazil Alumina (non-operated) (US$/t) 206 Guidance not provided Guidance not provided Cost profile will continue to be influenced by the Brazilian real, prices for energy and raw material inputs Illawarra Metallurgical Coal 77 84 89 83 (US$/t) Increased production guidance to more than offset a stronger Australian dollar Australia Manganese17 (FOB, US$/dmtu) 1.39 1.48 1.56 South Africa Manganese17 2.28 2.25 2.46 2.44 (FOB, US$/dmtu) Cerro Matoso 3.79 3.97 4.15 4.10 (US$/lb) 1.49 Stronger Australian dollar partially offset by equipment productivity Stronger South African rand and on-going use of higher cost trucking partially offset by cost efficiencies and lower price-linked royalties Higher price-linked royalties and electricity prices partially offset by increased volumes Cannington 18 (US$/t) 124 111 123 123 Stronger Australian dollar and higher price-linked royalties Smelter raw material basket cost inflation (% of LME Aluminium) 24 80% Hillside Aluminium (US$/t) 1,536 60% Mozal Aluminium (US$/t) 41% 38% 6 month averages While Operating unit cost guidance is not provided for our aluminium smelters their cost profile will continue to be influenced by the South African rand and the price of raw material inputs 40% 1,585 20% Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Controllable costs Foreign exchange Price-linked costs (including royalties) 23 O FY21 new vs. FY21 prior guidance % movement O≤ 5% of guidance O>5% of guidance SLIDE 35#37CLOSURE & REHABILITATION PROVISIONS EIII SOUTH32 Discount rate assumptions updated to reflect changes to long term outlook for risk free rates Combined with a weaker US dollar and changes to our closure cost estimates to increase provisions by US$568M 73% of the increase relates to South Africa Energy Coal and our long life Worsley Alumina operation Closure and rehabilitation provisions by operation H1 FY21 FY20 (South32 share) US$M US$M South Africa Energy Coal 875 739 Worsley Alumina 737 402 Profit and loss impact (+US$81M) Cannington 233 167 Hillside Aluminium (a) 197 175 55 42 7 23 Illawarra Metallurgical Coal 193 118 Americas Cerro Matoso 116 97 Australia Mozal Aluminium 50 54 Brazil Alumina (non-operated) 41 44 Hermosa 30 28 Southern Africa Eagle Downs Metallurgical Coal 7 6 Total 2,479 1,830 Discount Notes: a. Includes the Bayside aluminium smelter. Balance sheet impact 19% 40% ■Foreign exchange ■ Discount rate 41% Balance sheet25 (+US$568M) ■ Other Americas Australia Southern Africa FY20 release (C&R unwind)26 Discount rate change Foreign exchange Increase during year Balance sheet H1 FY21 SLIDE 36#38EARNINGS ADJUSTMENTS Earnings adjustments Adjustments to Underlying EBIT Exchange rate (gains)/losses on restatement of monetary items Impairment losses (Gains)/losses on non-trading derivative instruments and other investments measured at fair value Major corporate restructures Earnings adjustments included in profit/(loss) of equity accounted investments Total adjustments to Underlying EBIT Adjustments to net finance costs Exchange rate variations on net debt Total adjustments to net finance costs Adjustments to income tax expense Tax effect of other earnings adjustments to Underlying EBIT Tax effect of earnings adjustments to net finance costs Exchange rate variations on tax balances Total adjustments to income tax expense Total earnings adjustments EIII SOUTH32 H1 FY21 US$M H1 FY20 US$M 71 36 - (19) 92 39 17 7 112 42 66 (5) 66 (5) 55 (31) (11) (9) 1 (55) 5 (95) (5) 83 32 SLIDE 37#39UNDERLYING INCOME TAX EXPENSE EIII SOUTH32 Underlying income tax expense reconciliation and Underlying effective tax rate Underlying EBIT Include: Underlying net finance costs Remove: Share of profit/(loss) of equity accounted investments Underlying profit/(loss) before tax Income tax expense/(benefit) Tax effect of earnings adjustments to Underlying EBIT Tax effect of earnings adjustments to net finance costs Exchange rate variations on tax balances Underlying income tax expense Underlying effective tax rate H1 FY21 H1 FY20 US$M US$M 282 293 (60) (69) (59) (100) 163 124 (9) 88 31 11 9 (1) 55 (5) 86 93 52.8% 75.0% SLIDE 38#40UNDERLYING NET FINANCE COSTS III SOUTH32 H1 FY21 H1 FY20 Underlying net finance costs reconciliation Unwind of discount applied to closure and rehabilitation provisions Change in discount rate on closure and rehabilitation provisions Interest on lease liabilities Other US$M US$M (55) (54) 23 (27) (26) (1) 11 Underlying net finance costs (60) (69) Add back earnings adjustment for exchange rate variations on net debt (66) 5 Net finance costs (126) (64) SLIDE 39#41CAPITAL EXPENDITURE GUIDANCE Capital expenditure (excluding exploration and intangibles) (South32 share) US$M Worsley Alumina Brazil Alumina Hillside Aluminium Mozal Aluminium Illawarra Metallurgical Coal Australia Manganese South Africa Manganese Cerro Matoso Cannington South Africa Energy Coal Group & unallocated Sustaining capital expenditure (including EAI) Equity accounted adjustment(a) Sustaining capital expenditure (excluding EAI) Hermosa Illawarra Metallurgical Coal - Dendrobium Next Domain Eagle Downs Metallurgical Coal South Africa Energy Coal Major project capital expenditure Total capital expenditure (including EAI) III SOUTH32 H1 FY21 FY21e 28 57 15 27 6 16 6 10 75 146 29 58 10 17 15 40 29 39 10 20(b) 1 224 430 (39) (75) 185 355 29 75 23 23(c) 4 7 35 44(b) 91 149 315 579 Notes: a. b. The equity accounting adjustment reconciles the proportional consolidation of the South32 manganese operations to the treatment of the manganese operations on an equity accounted basis. Guidance for South Africa Energy Coal is for the 9 months to 31 March 2021. SLIDE 40 C. H2 FY21 guidance for Dendrobium Next Domain withdrawn while we assess the impact of the Independent Planning Commission's decision to refuse the application for the project.#421. 2. 3. 4. 56 7. 8. 9. 10. 11. 12. 231 13. FOOTNOTES III SOUTH32 Metrics describing sustainability and Health, safety, environment and community performance apply to operations that have been wholly owned and operated by South32, or that have been operated by South32 in a joint arrangement. Total Recordable Injury Frequency (TRIF) per million hours worked and Total Recordable Illness Frequency (TRILF) per million hours worked, are all calculated in accordance with the United States Government Occupational Safety and Health Administration (OSHA) guidelines for the recording and reporting of occupational injuries and illnesses. Payable zinc equivalent (kt) was calculated by aggregating revenues from payable silver, lead and zinc, and dividing the total Revenue by the price of zinc. FY20 realised prices for zinc (US$1,416/t), lead (US$1,648/t) and silver (US$16.5/oz) have been used for H1 FY20, FY20, H1 FY21, FY21e and FY22e. Greenhouse gas (GHG) total includes Scope 1 and Scope 2 emissions, measured according to the World Resources Institute/World Business Council for Sustainable Development Greenhouse Gas Protocol (WRI/WBCSD). Refer to the FY20 Sustainability Report for additional information which is available at www.south32.net. Refers to Africans, Coloureds and Indians who are citizens of the Republic of South Africa by birth or descent (as more fully defined in the Broad-Based Black Economic Empowerment Amendment Act 2013, South Africa). H1 FY21 outcome reflects a definitional change (Presidents and Vice Presidents reporting to members of the South32 Lead Team to align with the Optimised Global Model). FY19 and FY20 outcomes are based on the previous definition (South32 leaders who report directly to the Lead Team). The Senior leadership target date is June 2021. Operational leadership refers to all General Managers and Managers reporting to Vice President Operations and all Managers reporting to General Managers at an Operation, excluding Functional Managers. The Operational leadership target date is June 2021. Operating margin comprises Underlying EBITDA excluding third party product EBITDA, divided by revenue excluding third party product revenue. Other includes insurance proceeds, lower depreciation and amortisation, and higher third party product EBIT. Underlying net finance costs and Underlying income tax expense are actual H1 FY21 results, not half-on-half variances. Metallurgical coal (Platts Low-Vol Hard Coking Coal index (FOB Australia)); Energy coal (Argus McCloskey AP14 Coal index 6,000Kcal NAR (FOB Richards Bay, South Africa)); Silver (Silver LME cash index); 44% manganese (Metal Bulletin 44% manganese lump ore index (CIF Tianjin, China)); Nickel (Nickel (LME) cash index); 37% manganese (Metal Bulletin 37% manganese lump ore index (FOB Port Elizabeth, South Africa)); Alumina (Platts Alumina Index (PAX) (FOB Australia)); Aluminium (Aluminium LME cash index); Lead (Lead LME cash index); and Zinc (Zinc LME cash index). Price-linked costs reflects commodity price-linked and market traded consumables costs, including the impact of smelter power costs. Other includes coke, freight and explosives. 14. H1 FY20 third party product cost is US$17M for aluminium, US$14M for alumina, US$176M for coal, $100M for freight services and US$43M for aluminium raw materials. H1 FY21 third party product cost is US$16M for aluminium, US$16M for alumina, US$85M for coal, US$83M for freight services and US$35M for aluminium raw materials. 15. 56 Other includes accounting related adjustments. 16. FY21 new Operating unit cost guidance includes royalties (where appropriate) and the influence of exchange rates, and includes various assumptions for FY21, including: an alumina price of US$270/t; an average blended coal price (including coal wash sales) of US$96/t for Illawarra Metallurgical Coal; a manganese ore price of US$4.55/dmtu for 44% manganese product; a nickel price of US$7.51/lb; a thermal coal price of US$77/t (AP14) for South Africa Energy Coal; a silver price of US$25.15/troy oz; a lead price of US$1,952/t (gross of treatment and refining charges); a zinc price of US$2,597/t (gross of treatment and refining charges); an AUD:USD exchange rate of 0.75; a USD:ZAR exchange rate of 15.69; a USD: COP exchange rate of 3,594; and a reference price for caustic soda; all of which reflected forward markets as at January 2021 or our internal expectations. 17. 18. 19. 20. 21. FOB ore Operating unit cost is Revenue less Underlying EBITDA, freight and marketing costs, divided by ore sales volume. Cannington Operating unit cost is Revenue less Underlying EBITDA divided by ore processed. Periodic movements in finished product inventory may impact Operating unit costs as related marketing costs may change. Distributions include dividends and the net repayment of shareholder loans from manganese EAI. Other includes investments in/proceeds from financial investments and net loan drawdowns from other EAI, the purchase of shares by South32 Limited Employee Incentive Plan Trusts, exchange rate variations on net debt, other movements in leases and capitalised exploration. FY21 prior Operating unit cost guidance included royalties (where appropriate) and the influence of exchange rates, and included various assumptions for FY21, including: an alumina price of US$250/t; an average blended coal price of US$103/t for Illawarra Metallurgical Coal; a manganese ore price of US$4.83/dmtu for 44% manganese product; a nickel price of US$5.78/lb; a thermal coal price of US$56/t (AP14) for South Africa Energy Coal; a silver price of US$18.20/troy oz; a lead price of US$1,788/t (gross of treatment and refining charges); a zinc price of US$2,102/t (gross of treatment and refining charges); an AUD:USD exchange rate of 0.69; a USD:ZAR exchange rate of 17.68; a USD: COP exchange rate of 3,665; and a reference price for caustic soda; all of which reflected forward markets as at June 2020 or our internal expectations. 22. Operating unit cost illustrative comparison based on mid-point of guidance. 23. 2222 24. 25. 26. Price-linked costs reflect commodity price-linked and market traded consumables costs. Sources: LME, Baiinfo, Aladinny, AZ China, CRU, Platts, Jacobs. Calculation assumes 1t of aluminium, 1.9t alumina, 0.35t coke, 0.075t pitch and 0.02t aluminium tri-fluoride. Balance sheet movement (US$568M) reflects net impact of a US$115M increase in provisions as a result of amounts capitalised to the provision as a result of a review of underlying cash flow assumptions relating to open mines, a US$228M increase in provisions associated with the capitalisation of foreign exchange impacts on restatement of closure provisions relating to open sites, a US$235M increase in provisions associated with the capitalisation of discount rate change impacts and a US$10M decrease as a result of utilisation. Unwind of discount applied to closure and rehabilitation provisions. The denotation (e) refers to an estimate or forecast year. The following abbreviations have been used throughout this presentation: aluminium tri-fluoride (ATF); cost, insurance and freight (CIF); equity accounted investments (EAI); free on board (FOB); hard coking coal (HCC); pulverized coal injection (PCI); Illawarra Metallurgical Coal (IMC); Mineração Rio do Norte (MRN); Premium Concentrate Ore (PC02); pre-feasibility study (PFS); and feasibility study (FS). SLIDE 41#43EIII IIIE SOUTH32