Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Increased renewable energy share in European factories: Germany to 69% (from 59% in 2020) and Romania to 72% (from 61% in 2020).
• Reduced waste sent to landfill by over 90%.

Social Achievements

• Introduced a Whistleblower policy.
• Updated Code of Conduct for all personnel.
• Improved communication between employees and management.

Governance Achievements

• Established a Business Risk Committee (BRC) in 2020.
• Upgraded to a global ERP system for improved inventory and logistics tracking.
• Introduced policies for reviewing trading relationships in the context of regional and UN sanctions.

Climate Goals & Targets

Environmental Challenges

• Significant challenges presented by historic price increases for magnesium metal and global logistics services, combined with limitations imposed by COVID-19.
• Three-week shutdown of Chinese CCP factory due to Xi'an lockdown in late December 2021.
• Underperformance of Magontec Qinghai facility due to non-performance of adjacent QSLM electrolytic magnesium smelter.
• High raw material prices and supply chain disruptions.
• Sharp rise in energy prices in Europe (120% increase in Germany).

Mitigation Strategies

• Continuously sourcing scrap and other inputs for European factories to maintain supply to customers.
• Shifting supply agreements to formula-based pricing to improve visibility on product and raw material pricing.
• Developing markets for specialist metals and production efficiencies at recycling facilities.
• Developing new magnesium products for sale into new parts of the supply chain.
• Investing in new processes and technologies to reduce production costs.
• Developing internal processes to manage waste materials and reduce disposal costs.
• Anticipating the restart of the QSLM facility in the second half of 2022 to increase supply of material and generate additional activity for European recycling operations.
• Implementing IT and data usage protocols and practices to address cyber threats.
• Taking out cyber insurance policy in Europe and US.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Low CO2 emission magnesium alloys from Qinghai electrolytic plant

Awards & Recognition

• First prize from the China Nonferrous Metal Industry Science and Technology Institute

Environmental Metrics

ESG Focus Areas

• Climate Change
• Social Responsibility
• Governance

Environmental Achievements

• Overall kWh consumed was down by 5.6% across the Magontec business, largely due to lower levels of production. There was also a 14% shift to renewable energy in terms of kWh consumed (up from 10.7m kWh in 2022 to 12.2m kWh in 2023). Renewable sources in 2023 comprised almost 70% of Magontec’s energy consumption, representing a large increase on 2022 (57%).
• When the Qinghai project comes on stream it will have significantly lower CO2 emissions compared to Pidgeon process pure magnesium production (less than 7 tonnes of CO2 compared with more than 20 tonnes of CO2 per tonne of magnesium produced respectively).

Social Achievements

• One lost-time injury (LTI) sustained among 311 Magontec employees.
• Implementation of initiatives and education programs with a focus on preventative measures with enhanced dedicated support in high-risk areas to ensure the wellbeing of our employees.

Governance Achievements

• Developed a foundation that is integrated across the group, compliant with all jurisdictions and transparent to stakeholders.
• In 2023, all committees undertook detailed internal reviews to assess their effectiveness relative to their Charter.

Climate Goals & Targets

Environmental Challenges

• Lower delivered recycling volumes from a major customer in Europe throughout most of the year.
• Closure of the PRC anodes factory in Xi’an in April and most of May to allow for the installation of new equipment and utilities.
• Production shutdown in Romania to allow for roof repair during the Northern Hemisphere summer.
• Weak demand in EU markets for all products has slowed the process of unwinding this inventory and the Group made a write down of $1.25 million to bring the cost of inventory down to its assessed net realisable value as at 31 December 2023.
• The inability of QSLM to supply Magontec’s Qinghai cast house has had a significant impact on the profitability and cashflows of the Group’s other magnesium alloy businesses.

Mitigation Strategies

• Risk addressed through use of multiple suppliers, a diverse geographic manufacturing base and multiple distribution routes.
• Risk addressed through reward and recognition programs, talent management strategies, employee value propositions and ongoing compliance monitoring of employment laws (including wage compliance).
• Risk addressed through robust internal work health and safety practices, the implementation of initiatives and education programs with a focus on preventative measures with enhanced dedicated support in high-risk areas to ensure the wellbeing of our employees.
• Risk addressed by monitoring and working with the regional teams adjusting working capital to demand and ensure that no excess or surplus inventory is in existence.
• Risk addressed by increasing governance and risk management processes, supported by regular reporting and inspections.
• Risk addressed through continual management updates from QSLM representative on Magontec Board.
• Risk addressed through management communication and meetings with QSLM to monitor technical progress.

Supply Chain Management

Climate-Related Risks & Opportunities

Opportunities

• The emergence of low emission magnesium will be a game- changer for the magnesium industry and allow the metal to compete on a more even playing field.

Sustainable Products & Innovation

• AE44 alloys
• Correx anode system

Awards & Recognition

• International Magnesium Science and Technology Award for 2023