#1For personal use only ΞΙΙΙ IIIE SOUTH 32 27 September 2016 South32 Limited (Incorporated in Australia under the Corporations Act 2001 (Cth)) (ACN 093 732 597) ASX/LSE/JSE Share Code: S32 SOUTH AFRICA ALUMINIUM - ISIN: AU000000S320 south32.net HILLSIDE SITE TOUR PRESENTATION South32 Limited (ASX, LSE, JSE: S32) (South32) will today host an investor and analyst site tour to its South Africa Aluminium Hillside smelter in Richards Bay, South Africa. About South32 South 32 is a globally diversified mining and metals company with high quality operations in Australia, Southern Africa and South America. 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 have a simple strategy to maximise the potential of our assets and shareholder returns by optimising our existing operations, unlocking their potential and identifying new opportunities to compete for capital. FURTHER INFORMATION INVESTOR RELATIONS Alex Volante T +61 8 9324 9029 Rob Ward T +61 8 9324 9340 M +61 431 596 831 M +61 403 328 408 E Alex. [email protected] E MEDIA RELATIONS James Clothier T +61 8 9324 9697 M +61 413 319 031 E [email protected] Robert. [email protected] Further information on South32 can be found at www.south32.net. JSE Sponsor: UBS South Africa (Pty) Ltd 27 September 2016 Registered Office: Level 35, 108 St Georges Terrace, Perth Western Australia 6000, Australia ABN 84 093 732 597 Registered in Australia#2› personal use only ΞΙΙΙ IIIE SOUTH32 HILLSIDE INVESTOR TOUR 27 SEPTEMBER 2016 SIDE 三川 E#3For personal use only IMPORTANT NOTICES ΞΙΙΙ ΙΙΙΞ SOUTH32 The purpose of this presentation is to provide general information about South32 Limited. This presentation should be read in conjunction with the Annual Financial Report as at 30 June 2016, Financial Results and Outlook - Year ended 30 June 2016, Quarterly Report for June 2016 and any other announcements made by South32 in accordance with its continuous disclosure obligations. FORWARD LOOKING STATEMENTS This presentation contains forward looking statements including where the substance involves future matters, expectations or predictions. This may include statements regarding South32's financial position, strategy, dividends, trends in commodity prices and currency exchange rates, demand for commodities, closure or divestment of certain operations or facilities (including associated costs); anticipated production or construction commencement dates; capital costs and scheduling; operating costs and shortages of materials and skilled employees; anticipated productive lives of projects, mines and facilities; provisions and contingent liabilities; tax and regulatory developments. Forward looking statements can be identified by the use of terminology such as 'intend', 'aim', 'project', 'anticipate', 'estimate', 'plan', 'believe', 'expect', 'may', 'should', 'could', 'will', 'continue' or other similar words. These forward looking statements are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond South32's control, and which may cause the actual results to differ materially from those expressed in the statements. Readers are cautioned not to put undue reliance on forward looking statements. Except as required by law: - None of South32, its officers or advisers or any other person gives any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward looking statement in this document will actually occur, in part or in whole. - South32 disclaims any obligation or undertaking to publicly update or revise any forward looking statement in this document, whether as a result of new information or future events. FINANCIAL INFORMATION To assist shareholders in their understanding, pro forma financial information has been prepared to reflect the business as it is now structured and as though it was in effect for the period 1 July 2014 to 30 June 2015. NON-IFRS FINANCIAL INFORMATION This presentation may include certain non-IFRS financial measures, including Underlying earnings, Underlying EBIT and Underlying EBITDA, Underlying effective tax rate, net debt, net operating assets and ROIC. These measures are used internally by management to assess the performance of South32's business, make decisions on the allocation of its 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 construed as either an offer to sell or a solicitation of an offer to buy or sell South32 securities, or be treated or relied upon as a recommendation or advice 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, and we strongly recommend that you seek professional advice. CURRENCY All references to dollars, cents or $ in this document are to US currency, unless otherwise stated. 27 SEPTEMBER 2016 HILLSIDE INVESTOR TOUR SLIDE 2#4For personal use only III SOUTH AFRICA ALUMINIUM HISTORY Hillside South Africa Empangeni • Bayside Aluminium was the first major industry established in Richards Bay and it was the only aluminium producer in South Africa until Hillside was commissioned in 1995 • South African government provided incentives for the construction of Hillside Aluminium in the early 1990s . Hillside Aluminium was intended to: Port Road Town South32 asset - Promote industrial development Support the growth of Richards Bay Absorb excess power generation capacity following the construction of a number of power stations in the late 1980s • Hillside Aluminium is the biggest smelter in the Southern Hemisphere • Major employer in South Africa (directly and indirectly) 27 SEPTEMBER 2016 HILLSIDE INVESTOR TOUR Hillside Aluminium Hillside Bayside Aquadene Alton Brackenham Veld En Vlei Birdswood Wild En Weide Richards Bay Central Arboretum Richards Bay www Richards Bay port ΞΙΙΙ ΙΙΙΞ SOUTH32 Indian Ocean 2km SLIDE 3#5For personal use only III SUSTAINABILITY PERFORMANCE • One fatality at South Africa Aluminium in July 2015 • Working towards an injury-free workplace: - ― Build an inclusive workplace with a strong culture of care and accountability Ensure that work is well designed - Continuously improve and learn Undertake a thorough technical and leadership capability review to define, assess and address potential gaps Total Recordable Injury Frequency Rate¹ (per million hours worked) 3.0 FY15 Greenhouse gas (GHG) emissions² (kt CO2-e) • Excellent focus on reducing occupational illness (zero reported in FY16) GHG emissions reduced by 116kt CO2-e (since FY12) as a direct result of Hillside's initiatives • Construction of a desalination plant (to address shortage of water) completed in September 2016 Scope 13 Scope 24 Total GHG 27 SEPTEMBER 2016 HILLSIDE INVESTOR TOUR 1.0 0.0 FY16 FY17 YTD ΞΙΙΙ ΙΙΙΞ SOUTH32 FY15 FY16 1,455 1,413 10,454 10,224 11,909 11,637 Notes: 1. FY17 YTD total recordable injury frequency rate is zero. 2. GHG emissions measured according to the World Resources Institute/ World Business Council for Sustainable Development Greenhouse Gas Protocol. 3. Scope 1 refers to direct GHG emissions from our operated assets. 4. Scope 2 refers to indirect GHG emissions from the generation of purchased electricity and steam that is consumed by our operated assets. SLIDE 4#6For personal use only • COMMITTED TO TRANSFORMATION Committed to the National Transformation Agenda as enacted in the B-BBEE Act Hillside workforce diversity Accelerated the implementation of key transformation initiatives: - Working towards equitable representation and the upskilling of our historically disadvantaged workforce at all levels Developing black small and medium enterprises and the creation of opportunities for growth for existing black enterprises Increasing our local engagement through focussed and sustainable community development Improving the housing and living conditions of our employees and ensuring our plans are aligned with our values - Recruiting from within our local communities 27 SEPTEMBER 2016 HILLSIDE INVESTOR TOUR 81% 79% Senior Management Total workforce ΞΙΙΙ ΙΙΙΞ SOUTH32 Black South African Women 17% SLIDE 5#7For personal use only COMMUNITY AND ECONOMIC CONTRIBUTION • Strong commitment and contribution to our host communities Community development spend of R290M since 2009, largely focusing on: - - Enterprise development supporting local entrepreneurs Ongoye Carbon Sink project to address local unemployment, youth development, and to offset our carbon footprint Early childhood and education programs benefitting 9,800 children per year in the uThungulu District • Continue to support local beneficiation: - - Bayside Casthouse sold to Isizinda Aluminium, a B-BBEE entity Hillside supply molten metal to Isizinda (which supplies the domestic market via Hulamin) Community spend since 2009 3% 2% 11% 9% 6% 69% MUS 27 SEPTEMBER 2016 HILLSIDE INVESTOR TOUR ΞΙΙΙ ΙΙΙΞ SOUTH32 Enterprise development ■Community development Education Health Environment Other SLIDE 6#8For personal use only ALUMINIUM PROCESSING 1 Raw Material Import Carbon 2 Reduction Fume Treatment Centre - Bake Furnace Emissions Gas Treatment Centre - Potline Emission 1 Raw Material Import Alumina (sourced from Worsley) 2 Reduction • Coke • Pitch • AIF 3 27 SEPTEMBER 2016 HILLSIDE INVESTOR TOUR 3 Cast House 4 Domestic ~20% Export -80% 3 Cast House 4 Domestic use . Power sourced from Eskom Interuptability of power supply to support stability of the grid Aluminium Pechiney AP35 technology Solid Metal Liquid Metal Export use Ingot Bundles ΞΙΙΙ ΙΙΙΞ SOUTH32 SLIDE 7#9For personal use only III KEY METRICS - HILLSIDE Saleable aluminium production (kt) 699 FY15 Number of pots operating Number of load-shed events Number of pots relined 697 FY16 FY15 FY161 720 698 111 40 136 183 Current performance for Hillside potlines² ΞΙΙΙ ΙΙΙΞ SOUTH32 Smelter's relative 2 1 3 efficiency position 99.7 100.0 99.5 Smelter's current Hillside 1 Hillside 2 Hillside 3 Notes: 1. 22 pots suspended in September 2015. Production from these pots will restart for an initial period of 1 year and the ramp-up is expected to be completed by the end of October 2016. Industry benchmark as provided by the AP Club. AP Club include the smelters built using the Aluminium Pechiney technology. 2. 27 SEPTEMBER 2016 HILLSIDE INVESTOR TOUR efficiency relative to benchmark (%) SLIDE 8#10For personal use only Note: KEY METRICS - HILLSIDE Operating unit cost (US$/t) 1,761 FY15 Employee and contractor headcount1 2,800 FY15 1,430 FY16 Operating cost 24% 9% 13% 15% Labour related ■ Alumina Other raw materials & consumables 39% Energy ■Other FY16 Fixed: -23% Variable: ~77% ΞΙΙΙ ΙΙΙΞ SOUTH32 2,625 Closure and rehabilitation provisions FY15 FY16 US$M US$M Hillside Bayside 59 58 178 106 South Africa Aluminium 237 164 FY16 1. Compares end of period average contractors and employees for respective financial years (FY15 and FY16). 27 SEPTEMBER 2016 HILLSIDE INVESTOR TOUR SLIDE 9#11SOUTH 32 ΞΙΙΙ III For personal use only