Climate Change Data

Environmental Metrics

ESG Focus Areas

• Health & Safety
• Environment
• Community Investment

Environmental Achievements

• Mogale plant achieved a 20% reduction in municipal water consumption and is recycling process water.
• TMS installed a press filter at Tavas to reduce the environmental impact of tailings and water content.
• SA Mining commissioned the shaking table project, recycling material and reducing on-site stockpiles.
• EWW commissioned a de-dusting system to lower dust emissions.

Social Achievements

• Continued work and engagement with host communities, especially in South Africa, supporting various community investments and projects.
• Supported 7 orphans residing at Umephi Jade House, Mogale City.
• Supported various projects at Rietvallei, particularly the Patrick Masego Primary school, providing daily meals to close to 2,000 children.

Governance Achievements

• Implemented Market Abuse Directives.
• Reviewed corporate structures and streamlined management and information flows.
• Strengthened internal processes and procedures, especially those relating to health & safety and the annual budget process.
• Reviewed currency exposures and risk.

Climate Goals & Targets

Environmental Challenges

• Challenging market conditions, particularly in the chrome and ferrochrome market, with deflationary pricing pressures and reduced demand.
• Safety stoppages at mines and temporary closure of Mogale Alloys and EWW.
• Fatality at Afarak Mogale.

Mitigation Strategies

• Focused on prudent capital management, debt collection, optimizing production, and inventory management.
• Temporarily halted production at EWW to reduce inventory and working capital.
• Switched one silicomanganese furnace at Mogale to ferrochrome for better margins.
• Implemented a number of health and safety initiatives at Mogale following the fatality.
• Resumed opencast mining at Mecklenburg and commenced full production at the shaking table project at Ilitha mine.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: Finnish Corporate Governance Code

Certifications: ISO 9001 (EWW and Mogale Alloy)

Environmental Metrics

ESG Focus Areas

• Safety
• Health
• Sustainable Development
• Environmental Responsibility
• Community Relations
• Human Rights

Environmental Achievements

• Reduced tailings through beneficiation, increasing chrome content yield.
• Land rehabilitation projects underway.

Social Achievements

• Implemented measures to mitigate COVID-19 spread, resulting in minimal production impact.
• Continued support for local communities through employment, infrastructure investment, and social programs.
• 21 Lost Time Injuries (LTIs) reported, down from 30 in 2020; no fatalities.

Governance Achievements

• Restructured short-term debt into a longer-term arrangement.
• Actively pursuing new funding opportunities.

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic.
• Increased raw material, energy, and production costs.
• Supply chain disruptions due to geopolitical instability (Ukraine war).
• Reduced mining activity in South African mines.
• Electricity supply and price volatility in South Africa.

Mitigation Strategies

• Implemented work-from-home measures for office employees.
• Continuous monitoring and oversight in accordance with the Group’s risk management policy.
• Planning to resume some mining activities in South Africa.
• Actively pursuing new funding opportunities via divestments.
• Restructured short-term commercial debt into a longer-term arrangement.

Supply Chain Management

Responsible Procurement

• Working closely with local enterprises to support the local economy.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UN SDGs

UN Sustainable Development Goals

• Goal 1 (No Poverty)
• Goal 2 (Zero Hunger)
• Goal 5 (Gender Equality)
• Goal 4 (Quality Education)
• Goal 6 (Clean Water and Sanitation)

Afarak's efforts to minimize ecological footprint, provide employment, support local communities, and invest in infrastructure and healthcare.

Environmental Metrics

ESG Focus Areas

• Safety
• Health
• Sustainable Development
• Environment
• Communities & Human Rights

Environmental Achievements

• Several projects of waste reduction and further reduction of CO2 footprint
• Recycling and yielding more chrome content from mined goods, thus reducing the amount of tailings

Social Achievements

• Providing direct and indirect employment
• Supporting local communities in their needs related to education and infrastructure whilst supporting social causes
• Working closely with local enterprises to support the local economy

Governance Achievements

• Regular Board committees dedicated to health and safety with the aim of integrating the Group operations to address the social, environmental, health and safety position of all stakeholders

Climate Goals & Targets

Environmental Challenges

• Increased electricity prices and/or reduced, or uncertain electricity supply, or allocation may negatively impact Afarak’s current operations, which could have an impact on the Group’s financial performance
• Fluctuating energy costs
• High interest rates and difficult monetary access could present a threat to business development
• Strong pressure on CO2 reductions and creation of sustainable power alternatives

Mitigation Strategies

• Afarak adapted the output of regular grades, and concentrated more on high quality alloys
• Developing new efficiencies and working on various solutions to reduce exposure to fluctuating energy cost
• Resumed a more sustained mining activity in South Africa

Supply Chain Management

Responsible Procurement

• Working closely with local enterprises to support the local economy

Climate-Related Risks & Opportunities

UN Sustainable Development Goals

• Goal 1 (No Poverty)
• Goal 2 (Zero Hunger)
• Goal 5 (Gender Equality)
• Goal 4 (Quality Education)
• Goal 6 (Clean Water and Sanitation)

Afarak vows to deliver its contribution to environmental and social sustainability through its production processes. We believe that our efforts will support several United Nations’ resolutions on sustainability, such as decreasing poverty and hunger, but also increasing gender equality, education and access to clean water.

Environmental Metrics

ESG Focus Areas

• Health and Safety
• Environmental protection (water management, waste management, land rehabilitation, emissions reduction)
• Community engagement and support
• Diversity and Inclusion
• Climate Change

Environmental Achievements

• Started work to establish data collection processes to set benchmarks and introduce long-term targets to measure improved performance.
• Life Cycle Assessment (LCA) study on LC FeCr completed in accordance with ISO 14040 and ISO 14044.

Social Achievements

• Supported employees through inflation compensation aids.
• Provided social support to local communities and those affected by the Turkey earthquake.
• Facilitated travel for TMS workers volunteering in Turkey.

Governance Achievements

• Board and Executive Committee oversee sustainability strategies.
• Clear roles and responsibilities established for ESG risk management.
• ESG policy in development.

Climate Goals & Targets

Environmental Challenges

• High interest rates and freight costs impacting margins.
• Sluggish markets and price pressure from Russian, Indian, and Chinese imported materials in the second half of 2023.
• Energy intensive operations exposed to energy price volatility and supply uncertainty (especially Eskom in South Africa).

Mitigation Strategies

• Continued profitability and cash positivity despite market challenges.
• Actively working towards own generation of renewable energy and waste valorization.
• Continuous monitoring and oversight in accordance with the Group’s risk management policy.
• Review and update of Health & Safety Policy and Procedures.

Supply Chain Management

Responsible Procurement

• Code of Ethics and policies ensure standards are upheld by Afarak and its suppliers.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events impacting infrastructure, equipment, and operations.
• Increased temperatures impacting workforce and machinery.

Transition Risks

• Regulatory changes and increased reporting requirements.
• Reputational risks associated with being an intensive energy user.

Opportunities

• Increased use of chromium due to the transition to a lower-carbon world economy.

Reporting Standards

Frameworks Used: TCFD (partial compliance)

UN Sustainable Development Goals

• Goal 1 (No Poverty)
• Goal 2 (Zero Hunger)
• Goal 5 (Gender Equality)
• Goal 4 (Quality Education)
• Goal 6 (Clean Water and Sanitation)

Afarak's efforts support UN resolutions on sustainability by providing employment, supporting local communities, and contributing to education and infrastructure.