Elkem Company Overview and Financials

Risk factors (III/VIII) 2.1.10 Elkem's operations are subject to the inherent hazards, disruptions to its business and other risks associated with silicones and metals manufacturing and the associated chemical production processes, as well as mining, which in turn could result in materially increased expenses and decreased production levels Manufacturing generally, and high temperature and chemical production processes, in particular, are inherently dangerous and subject to fire, explosion and sudden major equipment failure. Such manufacturing activities and chemical processes are also vulnerable to other potential hazards such as natural disasters, terrorist attacks, transportation interruptions, pipeline leaks and ruptures, storage tank leaks, chemical spills, discharges of toxic substances, property contamination and remediation and others. These hazards can present major risks to the health and safety of workers, neighbouring populations and the environment. Consequences of such incidents for Elkem could include an interruption, relocation or suspension of operations or disruption of sophisticated manufacturing equipment, decreases in the productivity and profitability of a particular production facility or the Group's business operations as a whole, and governmental enforcement, regulatory shutdowns, the imposition of government fines and penalties and claims brought by governmental entities or third parties. In addition, Elkem uses contractors, over whom it may have less control than it has over its employees, who may perform duties on behalf of the Group in a manner that may cause harm to the health and safety of other workers, neighbouring populations and the environment. The costs associated with any of these events may be substantial and could exceed or otherwise not be covered by the Group's insurance coverage. Since 2015, Elkem has experienced several accidents resulting in serious injury or death of employees and contractors and production shutdowns. These incidents include three fatal accidents and several fires resulting in partial production shutdowns. Given the nature of Elkem's operations there may be further accidents, injuries and fatalities in the future. In addition, Elkem mines quartz at open pit and surface mining operations in Norway and Spain. Quartz mining is inherently dangerous and subject to numerous hazards, including collisions, equipment failure, flooding, collapse, blasting operations and operating in extreme climactic conditions. Elkem's mining activities involve dynamite and heavy machinery, both of which can cause serious or fatal accidents. Certain factors beyond Elkem's control could disrupt its mining operations, adversely affect production and shipments and increase Elkem's operating costs. Regulatory authorities have the authority under certain circumstances following significant health and safety incidents to order a mine to be temporarily or permanently closed. 2.1.11 There are risks to Elkem's global business relating to the countries in which Elkem operates that could materially and adversely impact its earnings or materially and adversely affect an investment in Elkem Elkem has 29 production facilities worldwide, including in Europe, North and South America, Africa and Asia. In addition, Elkem sources and sells products to customers across a wide range of countries. As a result, Elkem's operations are subject to a variety of country, regulatory and political risks, particularly in connection with its operations in emerging markets, including Brazil, Paraguay, South Africa, Malaysia, India and China. These risks include potential political and economic uncertainty, application of foreign exchange controls, price controls, corruption, nationalisation, expropriation, regulatory changes, crime and the lack of enforcement thereof, political insurrection, governmental interference, currency fluctuations, restrictions and devaluations, punitive or unpredictable taxation, anti-dumping duties and trade barriers, export duties and quotas and other restrictive government actions, hostility from local populations, restrictions on the ability to repatriate dividends from subsidiaries, natural disasters and other catastrophic events, and changes in law and government policy. Particular risks in China may include periodic government measures to slow economic growth to a more manageable level and influence industrial production, bank credit and fixed investment, as well as government control over a substantial portion of productive assets, an assertive industrial policy, and the exercise of significant control over growth through the allocation of resources and providing preferential treatment to particular industries or companies. The financial risks of operating in emerging markets also include risks related to inflation, devaluation, price volatility, currency convertibility and country default. Any of these factors could materially and adversely affect Elkem's results of operations and prospects by causing interruptions in its operations, by increasing the costs of operating in these countries or by limiting its ability to repatriate profits from these countries. These factors could have a material adverse effect on Elkem's business, results of operations, financial condition and prospects. 2.1.12 International and geopolitical conflicts, and trade barriers, sanctions and export control may have a negative effect on the Group's operations Because of the global nature of the Group's operations, it is vulnerable to trade barriers, political or legal instability in countries in which it operates, as well as to international and geopolitical conflicts, which may harm its business activities. Such conflicts, trade barriers, sanctions and export controls may interrupt the Groups business, product and supply chain, and entail reputational damage. In particular, as the Group has production facilities and operations in China, the ongoing trade war, and any escalations, between USA and China, may significantly impact the Group's business, both in terms of potential new sanctions imposed by USA or China, or in terms of potential new export or import control restrictions and reputational damage. The former US administration listed ChemChina (as defined below) as a Chinese Communist Military Company in 2020 and imposed restrictions on trading in securities of such companies. Elkem is, through Bluestar (as defined below), an indirect subsidiary of ChemChina and there can be no guarantee that these restrictions will not also apply, directly or indirectly, to Elkem in the future. As of the date of this presentation, the US Treasury department has not listed Elkem as a Chinese Communist Military Company, and no restrictions have been imposed on Elkem as a result of ChemChina being listed on said list. However, should Elkem, as an indirect subsidiary of ChemChina, in the future be considered as a Chinese Communist Military Company, or be affected by new US legislation or other acts resulting from the ongoing trade war, or otherwise, there is a risk that Elkem's operations may be negatively affected due to interruptions in the Groups business, product and supply chain, and/or by reputational damage, which may have a material adverse effect on Elkem's business, results of operations, financial condition and prospects. Elkem 41