H1 FY21 Finance and Cost Analysis

METALLURGICAL 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

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