MERAFE RESOURCES LIMITED

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INTEGRATED ANNUAL REPORT 2022

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ABOUT THIS REPORT
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We present to you the Integrated Annual Report for the Merafe Group, which includes Merafe Resources Limited (Merafe), a company listed on the JSE, Merafe Ferrochrome and Mining Proprietary Limited (Merafe Ferrochrome) and its subsidiaries for the year ended 31 December 2022 (in this report referred to as “Merafe”, the “Merafe Group” or “Group” or the “Company”). The scope of this report also includes the Glencore-Merafe Chrome Venture (the Venture).

here has been no significant change in our size, structure or products since our previous Integrated Annual Report and there are no specific limitations on the scope or boundary of this report. T As we did last year, the 2022 summarised financial and sustainability information and the annual general meeting notice, will be sent to shareholders and the 2022 Integrated Annual Report will be available on our website, www.meraferesources.co.za . Printed copies of the Integrated Annual Report will be available on request from the Company Secretary.

We welcome the opportunity that an integrated approach to reporting offers us to break down reporting silos and provide a broader explanation of our performance, underpinned by a strategic focus, connectivity of information, a future orientation and an inclusive and responsible approach to stakeholders.

We use the capitals model (natural, human, social, manufactured and financial capital) for our reporting, as recommended in the International Integrated Reporting Committee’s Integrated Reporting Framework, and by the King IV Report on Corporate Governance[TM] for South Africa, 2016 (King IV).

We depend on a variety of resources and relationships for our success. The extent to which we are depleting these or building them up has an important impact on the availability of the resources at our disposal and the relationships that support our long-term viability.

By seeing these resources and relationships in terms of “capital”, the capital model provides us with a basis for understanding sustainability in terms of the economic concept of wealth creation or “capital” and encourages us to consider how wider environmental and social issues can affect our long-term profitability.

In addition to following the recommendations contained in King IV, the South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves (SAMREC Code) and the JSE Limited Listings Requirements, we are guided by the Global Reporting Initiative’s (GRI) G4 Guidelines and our internally developed policies and procedures in terms of measuring our progress towards sustainability.

Deloitte & Touche audits the Merafe Group’s consolidated and separate annual financial statements (in this report referred to as “annual financial statements”).

Our annual financial statements are in compliance with International Financial Reporting Standards (IFRS), SAICA Financial Reporting Guidelines as issued by the Accounting Practices Committee and financial pronouncements as issued by the Financial Reporting Standards Council, and are drawn up in accordance with the Companies Act, No. 71 of 2008. A copy of our annual financial statements is available on our website. An independent auditor’s report is published in the annual financial statements. Our annual financial statements form part of our online Integrated Annual Report for 2022. They are also available from our Company Secretary in either electronic or printed format.

The data and information relating to the Venture is subject to the annual internal and external reviews, audits and processes of the Venture (set out on page 59 of this report ) to ensure that the information relating to the Venture in this report is accurate and reliable. Merafe’s attributable portion of the data of the Venture reported from page 22 to page 38 is 20.5%.

The board of directors of Merafe (the Board) acknowledges its responsibility for overseeing the integrity and completeness of this Integrated Annual Report, and has applied its collective mind to its preparation and presentation. As a collective, the Board believes that it has appropriately and diligently considered matters material to stakeholders and that the report accurately reflects the performance and strategy of the Group.

About the Capitals model

The Capitals model (Natural, Human, Social, Manufactured and Financial Capital) we have adopted provides a basis for understanding sustainability in terms of the economic concept of wealth creation or “capital”.

A sustainable organisation will maintain and, where possible, enhance these stocks of capital assets, rather than deplete or degrade them.

The model allows us to broaden our understanding of financial sustainability by allowing us to consider how the wider environmental and social issues can affect our long-term profitability.

Glossary

A glossary of terms and definitions forms part of our 2022 Integrated Annual Report available on our website www.meraferesources.co.za . The Company’s compliance with the GRI guidelines is set out in a table on our website and forms part of the Merafe online Integrated Report for 2022. We would welcome your feedback on our reporting for 2022 and any suggestions you may have in terms of what you would like to see incorporated in our report for the year ending 31 December 2023. Please contact our Financial Director, Ditabe Chocho at [email protected].

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022

ABOUT THIS REPORT

IFC

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ORGANISATIONAL OVERVIEW	002
Our business	002
Our shareholders	002
Stakeholder relationships	002
Our Groupstructure	002

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2022 YEAR IN REVIEW	003
Our business model and strategy	003

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STAKEHOLDERS 004

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FIVE-YEAR HISTORICAL REVIEW OF KEY INDICATORS 005

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OUR OPERATING CONTEXT 006

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PERFORMANCE	013
Financial capital	013
Manufactured capital	018
Natural capital	022
Abridged Mineral Resources and Mineral Reserves Statement	027
Human capital	030
Social capital and stakeholder responsiveness	036

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TRANSPARENCY AND ACCOUNTABILITY	039
Governance structure	039
Chairperson’s report	040
Governance	042
Our approach togovernance	044
Social, Ethics and Transformation Committee report	049
Remuneration report	050
Approach to risk management	058
Sustainability: Internal and external reviews, audits andprocesses	059
Directors’ report	060
Report of the Audit and Risk Committee	062
Shareholder information	063
Shareholders’ diary	064
NOTICE OF THE ANNUAL GENERAL MEETING	065
FORM OF PROXY	071

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ADMINISTRATION	073
Appendix 1:Mineral Resources and Mineral Reserves Report	074
Appendix 2:Remuneration Policy	100

MATERIAL ISSUES 008

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CHIEF EXECUTIVE OFFICER’S STRATEGIC REVIEW 010

Icons used in this report

This icon refers to further reading This icon refers to more information available at: www.meraferesources.co.za

Positive performance or occurrence compared to prior year Negative performance or occurrence compared to prior year No change in performance compared to prior year

Forward looking statements

Certain statements in this report constitute “forward-looking statements”. Such statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performances, objectives or achievements of the Merafe Group (as well as the industry in which it operates) to be materially different from future results, performances, objectives or achievements expressed or implied by these forward-looking statements.

The performance of the Merafe Group is subject to the effect of changes in commodity prices, currency fluctuations, uncertainty around the cost and supply of electricity, the risks involved in mining and smelting operations and the operating procedures and performance of the Venture. The Company undertakes no obligation to update publicly or to release any revisions to these forwardlooking statements to reflect events or circumstances after the date of publication of these pages or to reflect the occurrence of unanticipated events.

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022

– 001 –

ORGANISATIONAL OVERVIEW

The Merafe Group and Glencore (formerly Xstrata) formed the Venture in July 2004 when we pooled our chrome operations to create the largest ferrochrome producer in the world.

Our business

We are listed on the Johannesburg Stock Exchange (JSE) in the General Mining sector under the share code MRF. Our business is the 20.5% participation through our wholly-owned subsidiary, Merafe Ferrochrome, in the earnings before interest, tax, depreciation and amortisation (EBITDA) of the Venture in which Glencore Operations South Africa Proprietary Limited (Glencore) has a 79.5% participation.

Our major shareholders are Glencore (Netherlands) B.V. (Glencore BV) and the Industrial Development Corporation of South Africa (IDC). See page 63 for more detailed shareholder information.

The Merafe Group and Glencore (formerly Xstrata) formed the Venture in July 2004 when we pooled our chrome operations to create the largest ferrochrome producer in the world. Glencore’s merger with Xstrata took place in May 2013.

Stakeholder relationships

We believe our commitment and achievements in terms of empowerment, sustainability and good governance have allowed us to establish sound relationships with our stakeholders. A diagram setting out the stakeholders that Merafe and the Venture have identified, together with the issues we have identified that could have a material impact on our stakeholders, is set out on page 4.

Our shareholders

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29%
Glencore BV
SA free 42% 2022
float
7%
Offshore
free float
22%
Industrial
Development
Corporation
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For more information on the assets we pooled, of which we have retained ownership, and the additional assets we have invested in since participating in the Venture, see the tables on pages 21 and 60.

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Merafe Empowerment as at 31 December 2022

78% of our Board members are black

(2021: 78%)

33% of our (2021: 33%) Board members are female

88% of our (2021: 86%) employees are black

63% of our (2021: 57%) employees are female

Governance and sustainability

We are committed to good governance and sustainability as reflected in our report. Merafe continues to apply the principles of King IV and the SRI Index reporting criteria in its business. Please see our King IV register on pages 44 and 45 of this report as well as the sections on Performance and Transparency and Accountability.

Our approach to risk

Our material issues

We recognise that risk is inevitable in business and that it Our material issues goes hand-in-hand with opportunity. We have established a and our materiality risk management system that allows us to pursue business determination process opportunities and grow shareholder value, monitor risk in our are set out on pages 8 investments and develop and protect our people, the environment and 9. in which the Venture operates and our reputation. Our approach to risk management is discussed in the Transparency and Accountability section of this report on page 58.

OUR GROUP STRUCTURE

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100%
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20.5%
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Merafe Merafe Ferrochrome Glencore-Merafe
Merafe Resources Chrome and Alloys and Mining Chrome Venture formed
Limited Proprietary Limited Proprietary Limited 1 July 2004
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100%

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022

– 002 –

2022 YEAR IN REVIEW

Cash balance of

R1.3 billion

(2021: R972 million)

Revenue of

R7.9 billion

(2021: R8.1 billion)

EBITDA[1] of

R2.1 billion

(2021: R2.4 billion) Net profit of

R1.4 billion

(2021: R1.7 billion)

Fatalities

NIL

(2021: NIL)

Final cash dividend of

13 cents per share

(2021: 22 cents per share)

Net cash generated from operating activities increased to

R1.7 billion

(2021: R1.2 billion)

Headline earnings per share of

56.4 cents per share

(2021: 67.0 cents per share)

Ferrochrome sales volumes of

350kt

(2021: 394kt)

Ferrochrome production of

384kt

(2021: 379kt)

Total recordable injury frequency rate (TRIFR) of 2.40

(2021: 2.80[2] )

Average ferrochrome CIF price of

111 USc/lb

(2021: 108 USc/lb)

1 Earnings before interest, taxation, depreciation, amortisation and impairment 2 Restated from 2.75 to 2.80

Successes

Significant EBITDA
Excellent financial performance
No debt at Merafe and positive cash reserves
Nil fatalities and improved safety performance
Platinum Group Metals (PGMs) investment
Venture’s continued response to COVID-19

Challenges

Electricity pricing and availability
Rail and port infrastructure
Community issues
Production costs
Safety
Global conflict and uncertainty
Recession and inflationary fears

Icon reference

Positive performance or occurrence compared to prior year

No change in performance compared to prior year

Negative performance or occurrence compared to prior year

Our business model and strategy

The aim of our business model and strategy is to ensure that our ferrochrome interests are profitable and sustainable and that they add value to all our stakeholders. We achieve this by:

extracting chrome ore from the Venture’s mines and beneficiating it in our smelters in a safe and cost-efficient manner;
investing in projects such as the Bokamoso and Tswelopele pelletising and sintering plants and the Lion ferrochrome plant phases I and II that improve the energy and cost efficiency of the Venture’s ferrochrome operations;
employing the Venture’s proprietary Premus technology to ensure that it is the lowest cost producer of ferrochrome in South Africa and, despite rising energy costs in South Africa,

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FeCr
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remains in the lowest quartile of the global ferrochrome production cost curve;

using the flexibility provided by the Venture’s variety of technologies to meet changing operating circumstances and customer requirements; and
focusing on reducing costs at the operations and head office.
The Company may also consider acquisitions outside of ferrochrome on an opportunistic basis.

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022

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STAKEHOLDERS

In this report we have identified material issues and risks that could impact the stakeholders of Merafe and the Venture. These issues and risks were identified during engagements that Merafe and the Venture had with their stakeholders. We provide an overview of our stakeholders’ issues on this page and a table setting out our stakeholders, our methods of engaging with them and the issues arising from these engagements. This forms part of our online report and can be found in our online report under stakeholders. The material issues are set out on pages 8 and 9 of this report and our approach to risk can be found on page 58 .

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Our
Providers Government Merafe partners in Shareholders and
of debt and regulators employees the Venture Suppliers investors
Impact of Rand/ Job creation Health and safety Sustainability Historically Potential for
US Dollar exchange Disadvantaged future returns
rate on cash flows South Africans
(HDSA) procurement
requirements
Impact of ferrochrome Regulatory compliance Remuneration, incentives Accountability and Contract terms Impact of Rand/
prices on cash flows and benefits transparency US Dollar exchange
rate on cash flows
Risk management Tax compliance Career opportunities Risk management Payment terms Impact of ferrochrome
prices on cash flows
Ability to repay Employment equity Training and skills Financial stability Assurance Project progress and
borrowings development funding
providers
Compliance with Empowerment Empowerment Regulatory compliance Sustainability
covenants credentials credentials
Operational Health and safety Alignment of Governance Impact of industrial
performance interests action
Internal controls Safety record
Transparency Good governance
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The Venture

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Government Venture
Customers and regulators employees Communities Suppliers Trade unions
Pricing Job creation Health and safety Infrastructure Contract terms Training and skills
development development
Product availability Training and Career opportunities Job creation Payment terms Consultation on future
development operational changes
Quality of product Black empowerment Training and skills Enterprise development HDSA procurement Employment equity
credentials development requirements
Contract terms and Employment equity Consultation on future Local employment Assurance Housing benefits
delivery operational changes opportunities
providers
Reliability of supply Environment Employment equity Portable skills Regulatory compliance Workers’ rights
development
Regulatory compliance Housing benefits Local procurement Governance Remuneration,
incentives and benefits
Compliance with Workers’ rights Stakeholder Internal controls Health and safety
Mining Charter responsiveness
Mining rights Remuneration, Corporate social Transparency
incentives and benefits investment
Health and safety Environment
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MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022

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FIVE-YEAR HISTORICAL REVIEW OF KEY INDICATORS

Safety statistics

	2022	2021	202020	202019	02018
Fatalities	–	–	1	1	1
Total recordable injury frequency rate (TRIFR)	2.40	2.80*	3.91	2.56	3.39

* Restated from 2.75 to 2.80

Headline earnings per share

EBITDA margin

Average European benchmark ferrochrome price

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80 40 200
70
60 30 150
50
40
20 100
30
20
10 50
10
0
-10) 0 0
’18 ’19 ’20 ’21 ’22 ’18 ’19 ’20 ’21 ’22 ’18 ’19 ’20 ’21 ’22
.0 181
67
56.4 30.2 152
.0 27.0 131
24 110 111
.0 %
Cents 27 USc/lb
7.1
) 3.5
) -0.8
-3.4
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Net cash generated from operating activities

Attributable ferrochrome production tonnes

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2 000
1 500
1 000
500
0
’18 ’19 ’20 ’21 ’22
1 698
1 156
R million 699
478 495
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500
400
300
200
100
0
’18 ’19 ’20 ’21 ’22
407
371 379 384
Kilo tonnes 265
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3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
’18 ’19 ’20 ’21 ’22
MWh per tonne of ferrochrome
Tonnes of ore per tonne of ferrochrome
2.95 2.93 2.86 2.87 2.95
2.01 2.00 1.98 1.99 2.05
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MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022 – 005 –

OUR OPERATING CONTEXT

Key statistics for 2022

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Global
Ferrochrome
ferrochrome
demand
production
decreased
increased
from 14.4mt
from 14.4mt
in 2021
in 2021 to
to 14.1mt
15.3mt
in 2022
in 2022
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South Africa China
produced imported
approximately approximately
3.9mt of 12.3mt
global chrome ore
ferrochrome from South
production Africa
(2021: 3.7mt) (2021: 12mt)
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South African chrome industry

Chrome is a metallurgical marvel. It brings critical properties to the metals with which it is alloyed.

Facts

Approximately 3.9mt of the world’s ferrochrome production of 15.3mt was supplied by South Africa in 2022
Over 72% of the world’s chrome reserves are in South Africa

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The global position of ferrochrome

Elements influencing the global demand for and pricing of ferrochrome:

Global economic conditions
Exchange rates
Stainless steel demand
Growth of Chinese ferrochrome industry
Chrome ore exports
The industry provides approximately 200 000 direct and indirect jobs in South Africa

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Challenges faced by South African ferrochrome producers

Increasing production costs
−electricity
−labour
Socio-political challenges
Legislative uncertainty
Commodity prices and demand
Chrome ore exports

Ferrochrome production and its role in stainless steel

Produced by high-temperature reduction (smelting) of chromite, ferrochrome contains iron, chrome, minor amounts of carbon and silicon, and impurities such as sulphur, phosphorous and titanium.

Chrome is a metallurgical marvel. It brings critical properties to the metals with which it is alloyed. Add it to carbon steel in the form of ferrochrome and the steel becomes “stainless” – corrosion resistant, mechanically strong, heat resistant, hard wearing and shiny. Stainless steel is used almost everywhere in modern life from nuclear reactors to exhaust pipes, architecture, kitchenware and a host of other applications.

Specialty steels produced for applications such as tools, injection moulds, camshafts, etc also derive the high mechanical strength, hardness and heat resistance required from their chrome content.

Electricity supply
Logistics

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022

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Global
stainless
steel
Production
decreased
from 58.7mt
in 2021 to
56.5mt in
2022
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Our competitive advantage Elements influencing the global demand for and pricing of ferrochrome:

Stainless steel production in China was 32.7 million tonnes (mt) in 2022.

Lowest-cost producer in South Africa
Flexibility provided by variety of cost-efficient technologies
Savings in energy consumption per tonne of alloy produced as a result of major investments in energy efficiency (Lion Complex and two pelletising and sintering plants)
Lion II achieves further energy efficiencies

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• Significant chrome ore reserves and access to UG2
Europe
North
America
South
Korea
India China
Japan
90% of the
ferrochrome
produced
is used in
South
stainless Africa
steel and
speciality
steels
For more information on ferrochrome production, consumption, stainless Stainless steel producers
steel production and chrome ore imports, see the CEO’s strategic review
on page 10 and the graphs on pages 11 to 13.
This source of information set out in our operating context is CRU
The Venture
International Limited (CRU). See pages 11 and 12 of this report and the
note on page 12 .
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This source of information set out in our operating context is CRU International Limited (CRU). See pages 11 and 12 of this report and the note on page 12 .

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022

– 007 –

MATERIAL ISSUES

The directors’ statement regarding the materiality determination process

As the Board of Merafe, we acknowledge our responsibility to ensure the integrity of the Integrated Annual Report, including the determination of material issues. We acknowledge that we have applied our collective mind in determining the material issues for Merafe and have used the materiality process described below.

We believe that this process is suitably designed to identify our material issues. The material issues disclosed in this section accurately reflect the outcome of this process and have taken into consideration our business model, operating context, stakeholder concerns and strategic plan.

Issue Possible impact Our response	Issue Possible impact Our response	Issue Possible impact Our response
Global economic environment	The global economic environment can have a positive or negative impact on the demand for the ferrochrome and chrome ore that the Venture produces. When it is doing well, demand increases and prices tend to follow suit. The volatility of the Rand/US Dollar exchange rate also affects our proftability. In the current fnancial year, for instance, the weakening of the Rand against the US Dollar improved our proftability. All our stakeholders are affected by our ability to be proftable and sustainable. Global confict and the Russia/Ukraine confict might affect markets.	We cannot infuence the Rand/US Dollar exchange rate or the global economy, and market demand dictates the price of ferrochrome. Both Merafe and the Venture can, however, take action to contain costs and remain proftable. The Venture’s investment in increasing the energy effciency of its operations and reducing the cost of the reductants makes it the lowest cost producer in South Africa. The Venture will monitor the Russia/Ukraine and other global conficts and manage any situation which has the potential of affecting operations negatively.
COVID-19	COVID-19 is a pandemic that destabilised nations in 2020 and had a negative impact on our employees, our operations and the global environment. COVID-19 continued into 2022, but the impact on the operations was less severe. However, the zero COVID-19 policy of China is relevant to the industry and might affect the markets.	Our operations’ response to the COVID-19 pandemic in 2020 and 2021 was to create awareness, training and educational videos, as well as providing face masks, personal thermometers and information to all employees and contractors. Operations continue to adapt with a view to working effciently and without much interruption in the face of the pandemic. See pages 10 to 12 as well as pages 20 and 40 of this report for further commentary on the impact of COVID-19 on our operations.
Our social licence to operate	Dissatisfed communities embarking on action to remove the Venture’s social licence to operate would create an unsustainable working environment and cause signifcant reputational damage. Communities, investors, the Department of Mineral Resources (DMRE)emloees and local municialities would all be affected	Community social issues are addressed regularly with goodwill, commitment and leadership. By addressing social issues, the South African mining industry can achieve a more sustainable environment for itself and the communities in which it operates. Seeaes 36 to 38 of this reort
Exposure to one commodity	, py p. Diversifcation into other commodities would provide us with a buffer against the cyclical nature of ferrochrome, which can and has negatively impacted our proftability in certain years. This issue could impact our shareholders, management and employees.	pg p. In August 2014, the Board announced its strategy to focus mainly on ferrochrome and chrome in the medium term and this was the main focus from 2015 to date. The Board, by participating in the Venture, ensures that the competitive advantages enjoyed by the Venture as set out on page 6 mitigate this risk of exposure to one commodity. The Company, however, will also consider acquisitions outside of ferrochrome on an opportunistic basis. See page 10 of the Chief Executive Offcer’s review for the Company’s investment in PGMs in 2022.
Venture in which we do not have a majority stake	By not having a majority stake in the Venture, decisions taken in the best interest of the Venture may on the other hand negatively impact Merafe.	Contractual provisions and partnering with a world-class operator and global ferrochrome leader are all helpful in bolstering our overall sustainability. We continually strive to ensure the interests of both partners in the Venture are aligned and to maintain strong relationships based on mutual respect between both management teams.
Empowerment credentials	These credentials are important to maintain a competitive advantage. Any future acquisitions in the mining industry will require empowerment to be ensured.	In 2015 Glencore BV acquired the shares of Royal Bafokeng Holdings Limited. The “once empowered, always empowered” principle allows the company to beneft from continued recognition of black ownership. The empowerment credentials of Merafe and the Venture continue to be a focus. See the Chairperson’s report on page 40 for more details
Infrastructure and logistics	The deterioration of South African infrastructure and associated services (railways and harbours) impacts the reliability of delivery of the Venture’s products. It also impacts the transportation of raw materials to our operations.	as well as the report of the CEO onpages 10 to 12 . The Venture uses different ports for product delivery. Road haulers are also used to complement other transportation modes. The Venture will continue to engage proactively with key stakeholders to attempt to fnd solutions to critical logistics issues.

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022 – 008 –

Materiality determination process

The Board sets and approves three-year strategic plans for the Company. On an annual basis, the Board reviews and adjusts the strategic plan where necessary.
The Board, through the Audit and Risk Committee and Board strategic workshops, annually considers the risks (see page 58 of this report) the Company may face, and a risk matrix listing the risks and their importance is updated quarterly. There are approximately four Board and separate Board committee meetings during a year and further separate executive, management and Board strategy sessions to set a new strategic plan and/or assess the current plan in operation.
Key to our process is consultation with stakeholders (see page 4 of this report). Stakeholder feedback is then discussed at management, executive and Board strategic meetings and incorporated into the strategic plan and risk register.
The executive and management of Merafe participate in the Venture (including participation in executive committee and Board meetings of the Venture), which assists with the assessment and consideration of the Venture’s material issues (see page 48 of this report).
During the integrated reporting process, the Board and its committees assessed the report to ensure that our reporting is aligned in terms of strategy, key risks and issues material to both Merafe and its stakeholders.

Issue Possible impact Our response	Issue Possible impact Our response	Issue Possible impact Our response
Safety, health and wellbeing of Merafe’s employees and the Venture’s employees and contractors	Maintaining a safe and healthy environment is one of the cornerstones of our success. Employee morale is affected by how we manage this issue. Signifcant reputational damage is also a key factor. This issue could impact employees, contractors and their families, DMRE, Mine Health and Safety Inspectorate, trade unions and investors.	The Venture invests in safety training and efforts to transform its safety culture into one where every employee takes responsibility for their safety and that of their fellow employees. See pages 30 to 32 of this report.
Industrial action in the mining industry and in particular in the operations of the Venture	Loss of production impacts on proftability. We also need to consider increased costs and the possible damage to property. The safety of the Venture’s employees is also at risk; intimidation of employees by strikers and a breakdown in the relationship with Venture employees are all important factors affecting not only Venture employees but their families, communities, the DMRE and shareholders.	Communication and mutual understanding and respect are fostered daily with employees to enhance the working relationship. We also invest time and effort in establishing an understanding with the trade unions. The Venture also abides by the collective agreements in place and negotiates with the unions with the aim of reaching an agreement on annual wage increases. See pages 33 and 34 of this report.
Chrome ore imports into China	Ferrochrome sales to China are impacted by the export of unbenefciated chrome ore from South Africa, which is facilitating the growth of a ferrochrome industry in China (see page 12 of this report). Proftability would be negatively impacted and shareholders, Merafe management, Merafe employees, Venture partners, Venture employees and communities, as well as government stakeholders (for example, South African Revenue Service (SARS)), would feel the effects of this issue.	The strategy of being the lowest cost producer mitigates this risk. The Venture further believes that market forces over the medium term will reduce this risk (see the Chief Executive Offcer’s strategic review on pages 10 to 12 and the graphs on page 12 ). The Venture supports a tax in chrome ore exports, and in October 2020, cabinet announced the introduction of a chrome ore export tax. Details are awaited around implementation by government.
Power prices and the availability of electricity	Loss of sales is highly likely if increased costs make our product prices uncompetitive. A further possible impact is a loss of production because of electricity shortages. Should the Venture be unable to secure electricity supply for new projects, it would be unable to grow its operations. This issue could impact shareholders, Merafe management and employees as well as Venture management, Venture employees, communities and customers.	The Venture’s continued development and application of energy-effcient technology allows it to maintain its position as South Africa’s lowest cost producer of ferrochrome and therefore the most competitive South African producer. The Venture regularly engages with Eskom and is represented on the Energy Intensive User Group. See page 23 of this report.
Climate change	Climate change can impact business continuity, proftability, health and safety and environmental aspects. The Venture’s operations give rise to a signifcant quantity of indirect and direct greenhouse gas (GHG) emissions and are also exposed to the potential impacts of climate change resulting from GHGs.	The Venture continually engages with legislators, researchers and industry bodies to track and evaluate the situation and develop an improved awareness of and preparation for the risks associated with climate change. The Venture continues to take steps to reduce its carbon footprint. These include the development of energy-effcient technology and research into the use of alternative sources of energy. See pages 22 to 26 of this report.
Water	Water is an important input in our operations. All stakeholders are impacted by this issue.	With regard to water, we ensure that we have adequate supply and storage facilities. We have access to different water schemes, we reuse a large proportion of water and we have access to underground water. In 2017, as part of its water conservation and water demand management strategy, the Venture implemented compressive model base water balance at all our sites. All of the mines and two of the smelters were completed during 2017 and the rest of the smelters were completed during 2018. The water reticulation is comprehensively mapped and assimilated into the model to ensure all water streams are covered. The models also have a predictive function, which simulates any process changes to assess the impact on the whole water reticulation. See page 25 of this report.

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022

– 009 –

CHIEF EXECUTIVE OFFICER’S STRATEGIC REVIEW

2022 has been characterised by a number of challenges and uncertainties. The Russia/Ukraine war contributed to the rise in global inflation and supply chain constraints. For the Venture, this led to unit production cost increasing by 30% from the prior year.

Subdued demand due to China’s zero COVID-19 policy led to a decrease in ferrochrome sales volumes whilst logistics challenges contributed to decreased chrome ore sales volumes. Stronger realised prices and a weaker ZAR:USD exchange rate somewhat cushioned the impact.

Safety

The Venture was fatality free for the year 2022 and has remained so for the first two months of 2023. Our total recordable injury frequency rate improved by 14.29% to 2.40 (December 2021: 2.80[*] ).

The safety of our employees is our number one priority and we therefore remain focused on the implementation of SafeWork 2.0 with the aim of continual improvement and the effective implementation of the fatal hazard protocols and safety standards.

Health

COVID-19 continues to be a risk that we need to manage from a health perspective in the workplace and where controls must be implemented to manage the potential spread of the virus. The COVID-19 procedures have now been embedded at our operations as standard operating procedures.

On average a total of 10 023 antigen tests were conducted during 2022, in total 71 506 tests have been conducted on site since we started carrying out tests in January 2021. For the reporting period, 390 members of our workforce tested positive compared to 2 873 positive cases for the full year in 2021. Since the beginning of COVID-19 we have had 4 100 positive cases in total.

We supplied vaccinations at our operations until the end of April 2022. In total, 21 520 vaccines were administered, of which 4 438 were given in 2022.

As previously reported in our interim results, it is with great sadness that we lost two of our colleagues due to COVID-19 in 2022.

Financial review

We recorded a profit after tax of R1 410 million which is a decrease from the prior year. This performance is not quite reflective of challenges and uncertainties the business faced during the year under review.

Ferrochrome volumes sold were negatively impacted by subdued demand as a result of China’s zero COVID-19 policy whilst chrome ore sales volumes were also impacted by logistics challenges.

Operational review

Merafe’s attributable ferrochrome production increased marginally by 1% from 379kt to 384kt for the year ended 31 December 2022. This was despite the electricity supply challenges experienced particularly in the second half of the year.

Lydenburg smelter, Rustenburg furnace 6 and Waterval mine remain under care and maintenance.

Total unit cost of ferrochrome production rose by 30%. The increase was mainly driven by general inflation, higher market ore prices, reductant prices and electricity tariffs. Reductant costs were impacted by higher market cost of coke and anthracite. Inadequate local supply of reductants continues to be a challenge and as a result the Venture had to import at higher prices.

Electricity tariffs increased by 9.61% with effect from 1 April 2022. The National Energy Regulator of South Africa has approved a tariff increase of 18.65% with effect from 1 April 2023. The hike will certainly add more cost pressures. Reliability of electricity supply remains a serious concern. The Venture’s operations were impacted by curtailments stage 3 and stage 4 having to reduce load. The Venture continues to pursue a Negotiated Pricing Agreement with Eskom to mitigate against the unsustainable high energy costs. In addition, the Venture is evaluating proposals for construction of renewable energy facilities.

Massive logistical challenges continue to plague the industry, contributing to increased logistic costs. The increased reliance on road transportation, combined with higher diesel costs has pushed this cost component higher.

* Restated

==> picture [245 x 179] intentionally omitted <==

Our strong balance sheet and the fact that our operations remain the lowest South African cost producer means that the Company is well positioned to take advantage when the market improves.

Market review

Global ferrochrome supply increased by 6.7%[1] year-on-year led by production growth in China. The increase in supply outweighed demand in stainless steel which contracted 3.5%[1] year-on-year to 56.7Mt[1] . Stainless melt rates in China decreased by 1.6%[1 ] to 32.9Mt[1] as the zero COVID-19 policy affected production while high energy costs and weak demand stifled output in Europe as production decreased to 10.5%[1] .

High chrome ore consumption coupled with logistical constraints out of South Africa resulted in a significant drawdown of Chinese port stocks. Chrome ore pricing increased by 44%[2] year-on-year.

The average European ferrochrome benchmark price was US cents 181[3] per pound in 2022, which presents an increase of 19%[3] from the 2021 average price.

Strategic review

Our strategy remains unchanged and we continue to focus on ferrochrome and chrome ore production and maximising cashflows from the Venture.

We continue to evaluate growth opportunities together with our Venture partner. Our investment in the PGMs plant in Western Chrome Mines is already paying off with revenue of R100 million for the year.

Outlook

Global stainless steel production is expected to rebound in 2023, on the back of China abandoning the zero COVID-19 policy. This should lead to an increase in ferrochrome consumption.

The electricity supply challenges are set to continue this year and will have an impact on production.

Our focus for 2023 will still be on the efficiency of safety, operations, cost control and cash preservation.

I would like to thank the company staff and executives, the Board and Venture partner for their contribution to the solid set of results in a challenging environment.

Zanele Matlala

Chief Executive Officer | 17 March 2023

¹ CRU commodity market analysts
² Ferroalloynet
³ Fast Market (Metal Bulletin) – Ferrochrome lumpy Cr charge quarterly, basis 52% Cr (and high carbon), delivered, $c/lb Cr

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022

– 010 –

Key market indicators

Global stainless steel production (mt)

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----- Start of picture text -----

60 58.7
56.5
12.8
12.5
51.5
50 9.1
33.5
32.7
31.5
40
30
20
2.9
10 2.4 2.8
7.2
6.3 6.5
2.2 2.4 2.0
0
FY 2020 FY 2021 FY 2022
USA Western Europe Japan
China Other
Source: CRU
----- End of picture text -----

Global stainless steel production (%)

==> picture [157 x 324] intentionally omitted <==

----- Start of picture text -----

3.6
22.1 11.4
4.9
2022
58.0
4.0
21.8 12.3
4.9
2021
57.0
USA Western Europe Japan
China Other
----- End of picture text -----

Global ferrochrome demand (mt)

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----- Start of picture text -----

15 14.4
14.1
3.4
13.0 3.3
2.3
12
8.8 8.9 8.8
9
6
3
0.5 0.6 0.6
1.1 1.2 1.1
0.3 0.3 0.3
0
FY 2020 FY 2021 FY 2022
USA Western Europe Japan
China Other
Source: CRU
----- End of picture text -----

Global ferrochrome demand (%)

==> picture [156 x 322] intentionally omitted <==

----- Start of picture text -----

2.7
8.7
23.1
4.3
2022
61.1
2.3
23.4 8.2
4.4
2021
61.7
USA Western Europe Japan
China Other
----- End of picture text -----

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022 – 011 –

CHIEF EXECUTIVE OFFICER’S STRATEGIC REVIEW continued

Global ferrochrome production (mt)

==> picture [218 x 274] intentionally omitted <==

----- Start of picture text -----

16 15.3
14.4 6.5
5.9
12.5
12 5.7
3.9
8 3.7
2.8
1.6
1.5
4
1.5
1.3 1.3
1.0
0.7 0.7
0.6 1.2 1.4
0.8
0
FY 2020 FY 2021 FY 2022
China South Africa Kazakhstan
India Europe Other
Source: CRU
----- End of picture text -----

Chrome ore imports into China (mt)

==> picture [218 x 275] intentionally omitted <==

----- Start of picture text -----

16
15.0 15.0
14.3 12.0 12.3
11.7
12
8
4
0.6 1 .0 1 .0
0.20.61.2 0.30.61.0 0.40.50.9
0
FY 2020 FY 2021 FY 2022
South Africa Turkey Albania
Zimbabwe Other
Source: CRU
----- End of picture text -----

Note: The source of information on pages 6, 7, 11 and 12 of this report is CRU. This market information is continually updated by CRU. Such updates may amend previous information or projections. To the extent that there is any significant or material change to information provided by CRU and used in this or previous reports then this will be stated.

UG2 merchant prices (USD/t)

==> picture [191 x 177] intentionally omitted <==

----- Start of picture text -----

300
250
200
150
100
50
0
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
FY2019 FY2020 FY2021 FY2022
Source: CRU
----- End of picture text -----

European benchmark ferrochrome price (USc/lb)

==> picture [191 x 177] intentionally omitted <==

----- Start of picture text -----

240
200
160
120
80
40
0
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
FY2019 FY2020 FY2021 FY2022
Source: CRU
----- End of picture text -----

Ferrochrome merchant prices 49%–70% (USc/lb)*

==> picture [191 x 187] intentionally omitted <==

----- Start of picture text -----

140
120
100
80
60
40
20
0
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
FY2019 FY2020 FY2021 FY2022
Series replaced by 48%–63% from mid-May 2021
Source: CRU
----- End of picture text -----*

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022 – 012 –

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==> picture [296 x 46] intentionally omitted <==

PERFORMANCE

Financial Capital

Financial capital makes it possible for other types of capital to be owned and traded. Financial capital is also representative of how successful we have been at achieving the sustainable development of our natural, human, social and manufactured capitals.

Key points – 2022

Material issues

==> picture [223 x 128] intentionally omitted <==

----- Start of picture text -----

Revenue EBITDA Net Profit
R7.9 R2.1 R1.4
billion billion billion
(2021: (2021: (2021:
R8.1 billion) R2.4 billion) R1.7 billion)
----- End of picture text -----

==> picture [147 x 127] intentionally omitted <==

----- Start of picture text -----

Final and
Cash interim
balance of dividends for
2022
R1.3 billion
R625 million
(2021:
R972 million) (2021: R725
million)
----- End of picture text -----*

Global economic environment
Ferrochrome demand and prices
Energy supply and prices
Rand/US Dollar exchange rate
Production costs

Sustainable organisations need a clear understanding of how financial value is created, in particular, dependence on other forms of capital. We enhance our financial capital by:

effective risk management;
corporate governance structures;
ensuring the equitable use of wealth created; and
assessing the wider economic impact of our activities on society.

he Company’s consolidated financial statements for the year ended 31 December 2022 were approved by the Board on 17 March 2023 and are available on the Company’s website on this link https://www. Tmeraferesources.co.za/ results/annuals-2022/pdf/full-afs.pdf.

The summarised consolidated financial statements on pages 16 and 17 are an extract from audited consolidated financial statements but are not themselves audited. The following individuals were responsible for the preparation of the financial statements: Busisiwe Nteyi CA(SA), Financial Manager and supervised by Ditabe Chocho CA(SA), Financial Director.

Overview

* For a complete appreciation of the financial results, this Financial capital section must be read in conjunction with the complete set of audited consolidated annual financial statements available on the website www.meraferesources.co.za. The Board has used its discretion in determining the material matters to be reported in this section.

2022 was a rollercoaster year. What was expected to be the beginning of a normalisation after the COVID-19 pandemic turned into a year characterised by the Russia/Ukraine conflict, rising inflation, recessionary fears as well as COVID-19 lockdowns in China, among other things. In South Africa, the continued and at times worsening Eskom and Transnet problems in addition to the Kwa-Zulu Natal floods added to the many challenges. The impact on the stainless steel industry was noticeable with a 3.5% year-on-year contraction in demand. Despite these conditions, Merafe’s revenue declined by only 2%. Due mainly to continued efficiencies and plants operating over the winter months, full year production was at 80% of installed capacity. Cost pressures, particularly from electricity as well as reductants prices, negatively impacted the local ferrochrome industry’s competitiveness. Our business continued to focus on managing liquidity and cash flows as evidenced by our financial position.

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022

– 013 –

PERFORMANCE: FINANCIAL CAPITAL continued

We refer you to the material issues affecting Merafe set out on pages 8 and 9 for a review of financial matters that impact the business and our responses thereto.

Merafe recorded basic earnings from operations of R1.41 billion (2021: R1.67 billion). This represents basic earnings per share of 56.4 cents (2021: 66.8 cents). The headline earnings per share for the year were 56.4 cents (2021: 67.0 cents). Favourable commodity prices and the ZAR:USD exchange rate were key contributors to this performance.

Financial performance

Total revenue was R7.94 billion (2021: R8.06 billion) amounting to a year-on-year decrease of 2%. Higher realised ferrochrome prices as well as a weaker ZAR/USD exchange rate led to ferrochrome revenue performance that was only marginally lower than the comparative period. This was in spite of 11% lower volumes of ferrochrome sold at 350kt (2021: 394kt). The average ferrochrome CIF price increased by 3% to 111 USc/lb (2021: 108 USc/lb). Ferrochrome revenue was 3% lower at R6.80 billion (2021: R7.02 billion). Chrome ore sales volumes for the year decreased by 32% to 265kt (2021: 390kt) and, on average, CIF chrome ore prices increased by 37% to USD237.48 (2021: USD173.18). The resultant revenue was 0.4% higher at R1.04 billion (2021: R1.036 billion). For the first time, the Kroondal Platinum Group Metals (PGMs) processing plant operated for the full year. Revenue increased to R100 million (2021: R2.6 million). Although the average basket price of PGMs achieved decreased by 9% to 2 007 USD/oz (2021: 2 216 USD/oz), higher volumes sold of 3 055 oz (2021: 75 oz) as well as a weaker average ZAR:USD exchange rate more than made up for the revenue impact.

Total operating expenses (excluding Merafe head office costs)

Operating expenses increased by 2% to R5.802 billion (2021: R5.668 billion). This increase was in spite of lower sales volumes and was principally due to inflationary pressures as evidenced by our unit production cost that increased by 30% year-on-year.

Key contributors to operating costs were:

increased cost of chrome ore inputs to our production;
increased cost of reductants;
increased cost of electricity due to Eskom’s tariff adjustments; and
general inflationary increases on fixed and variable costs.

The increase in the cost of reductants and fluxes was due mainly to high coal prices as a direct result of the energy crisis arising from the RussiaUkraine conflict. The lack of availability of local anthracite has also led to this stock having to be sourced from abroad.

The adjustments resulting from the impairment of property, plant and equipment in earlier years have resulted in a decrease in the depreciation charge that was capitalised to inventory by R25 million (2021: R44 million increase).

The diesel rebate matter with SARS is ongoing and has yet to be resolved. Accordingly, the disallowed amount (net of income tax) of R17 million (2021: R15 million), as well as interest payable to SARS of R5 million (2021: R5 million), continues to be fully provided for at year end.

Foreign exchange adjustments

The volatility of the Rand against the US Dollar has resulted in a foreign exchange gain of R68 million for the year (2021: R104 million).

EBITDA

All the above factors have resulted in Merafe’s share of the Venture’s EBITDA for the year decreasing to R2.23 billion (2021: R2.50 billion). Merafe’s EBITDA was R2.14 billion (2021: R2.43 billion) after accounting for its corporate costs which were R65 million (2021: R66 million). Corporate costs include a share-based payment expense (which is influenced by the Company’s share price) of R13 million (2021: R9 million), Corporate Social Investment spend of R3 million (2021: R3 million) and a bonus provision of R12 million (2021: R11 million).

Depreciation and impairment

==> picture [245 x 178] intentionally omitted <==

Merafe’s revenue and operating income are primarily generated from the Venture which is one of the global market leaders in ferrochrome production. It has total installed capacity of 2.3mt of ferrochrome per annum.

The directors have concluded that there is no conclusive evidence to support recognising any impairment for the year. There are no operational or market factors identified by management that point to possible impairment other than the market capitalisation of the company being lower than the asset value of the business.

The prior impairment losses have led to a much lower depreciation charge for historical assets for reporting periods since 2020. Capital expenditure made over subsequent years has however gradually been increasing the depreciation expense. Depreciation of R219 million (2021: R111 million) was expensed for the year.

Net finance income

Finance costs, arising mainly from commitment fees from our revolving credit facility, amounted to R1 million (2021: R2 million). The source of finance income of R26 million for the year (2021: R14 million) was interest on cash reserves.

Income from equity-accounted investments

Due to strong chrome ore prices, Impala Chrome (Pty) Ltd, Unicorn Chrome’s only investment, had an improved financial performance in 2022. This led to Merafe’s share of income from equity accounted investment increasing to R4 million (2021: R1 million).

Taxation

The taxation expense includes a deferred tax charge of R36 million (2021: R199 million) arising from temporary differences on property, plant and equipment, receivables, provisions and accruals. Due to its taxable profits exceeding its capital expenditure as at 31 December 2022, Merafe had no unredeemed capital expenditure balance at year end (2021: Rnil). This resulted in current tax expense of R503 million (2021: R454 million).

Profit for the year

Merafe reported a profit after tax of R1.41 billion (2021: R1.67 billion) for the year ended 31 December 2022.

Merafe’s share price at financial year end traded at a discount to its net asset value per share thereby indicating possible impairment. Consequently, a calculation of the recoverable amount had to be made as per IAS 36: Impairment of Assets. The recoverable amount was largely based on Merafe’s share of the value in use of the Venture as the cash-generating unit. The valuation of Unicorn Chrome (Pty) Ltd (Unicorn Chrome) was also included.

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022

– 014 –

Financial position

Ferrochrome production at our operations was 1% higher than the comparative period despite load curtailments experienced. Due to the contraction in stainless steel production and therefore in ferrochrome demand, there was a build-up in ferrochrome finished goods at year end from 76kt to 109kt. The above finished goods levels represent approximately three to four months of sales, an increase from two to three months in the prior year. The closing inventory balance was R2.37 billion (2021: R1.65 billion). What further contributed to the increase in the closing value of inventory was higher production costs for the year. Mainly due to low sales volumes in the last quarter of 2022 and customer payments over the period, the closing trade and other receivables balance was lower at R868 million (2021: R1.55 billion). Working capital remains a key part of our financial position and we continue to focus on optimising its levels.

The Venture’s debt facilities are unutilised, and the business remains ungeared at the financial year end.

Our rehabilitation obligation is assessed periodically by an independent expert. For the year under review, the liability was assessed to be higher due to higher closure costs. As a result, the ringfenced cash was increased to match the increased liability. The ringfenced cash caters for both mine and smelters closure costs. The cash is assessed annually against our obligations to determine if any adjustment is warranted.

The provision for environmental rehabilitation increased by R104 million resulting in total provisions increasing from R190 million to R294 million. Our provisioning already caters for the impact of the National Environmental Management Act.

Boshoek mine, which has been on care and maintenance for a while, is in the process of being sold. It therefore has been classified as an asset held for sale at reporting date.

Cash position

The closing cash balance was R1.27 billion (2021: R972 million). This comprises Merafe’s share of cash in the Venture and Unicorn Chrome of R652 million (2021: R489 million) and Merafe’s own cash of R617 million (2021: R483 million). The cash movement includes net cash outflow from working capital movements, largely influenced by an increase in inventories by R722 million as well as a decrease in trade and other payables by R23 million, countered by the decrease in trade and other receivables by R623 million. Additionally, there was an outflow of cash from investing activities due to sustaining capital expenditure of R466 million (2021: R448 million), expansionary capital expenditure of R18 million (2021: R42 million) and payment of both the 2021 final dividend as well as the 2022 interim dividend which amounted to R849 million (2021: R175 million) in total. Expansionary capital includes R15 million (2021: R32 million) spent on the PGMs processing plant.

As mentioned earlier, the Venture has set aside cash, ringfenced to fund its future environmental rehabilitation obligations. Merafe’s share of this cash now sits at R301 million (2021: R189 million) and is included in its share of the cash in the Venture and Unicorn Chrome of R652 million referred to above.

Debt position

Contingent liability

The Group is subject to direct and indirect tax in the South African jurisdiction. The Group’s subsidiary undertakes various cross-border transactions within the Venture, subject to the Group’s transfer pricing policies. As a result, significant judgement is required in determining the Group’s provision for income taxes. The income tax and annual assessments are subject to examination within prescribed periods by the South African Revenue Services (SARS).

On 16 August 2022, the tax authority issued a letter of findings against the Group’s operating entity, Merafe Ferrochrome. The matter relates to transfer pricing audit findings for the 2016 and 2017 years of assessment which the Group is contesting with SARS. At 31 December 2022, the tax matter was still ongoing and management obtained opinions from external legal and tax advisers to inform and support the significant judgement required in interpreting relevant tax legislation. The matter has been disclosed as a contingent liability as the matter is in the early stages, its outcome remains uncertain and any potential tax exposure cannot be reliably estimated. Accordingly, no adjustment for any effects on the Group has been made in the consolidated financial statements.

Share buy-back

The Board has considered whether the share buy-back programme should be resumed and concluded that at this stage, in light of various factors that include the market cycle as well as the company’s share price, a dividend may be preferable.

Dividend

The Board has declared a final cash dividend of R325 million (2021: R550 million). This amounts to 13 cents (2021: 22 cents) per share and brings the total dividend for the year to R625 million (2021: R725 million).

Outlook

As predicted, 2022 saw a slowdown in economic activity but other factors led to increases in commodity prices. Although there was a contraction in volumes and cost inflation was high, commodity pricing kept the market afloat. We enter 2023 with no less uncertainty and continued volatility. The manner in which events unfold will determine how markets react and the resultant impact on our business. China remains a key force in the global economy and the relaxation of their zero COVID policy spells good news for markets. We will continue with our focus on key identified risks that affect our business and work on mitigating these as best we can. The key risks include electricity availability and pricing, input costs inflation and logistics challenges. The need to manage liquidity and cash flows heightens in uncertain times and thus this will remain an area of focus. We will manage our capital as optimally as possible with priority being on sustaining capital expenditure but not neglecting to consider and fund future-facing projects.

Once more, we will remain vigilant and continue managing the affairs of the Group with sustainability and the creation of value for our stakeholders being our focal points.

DITABE CHOCHO

Financial Director | 17 March 2023

Both Merafe’s own facility with ABSA Bank Limited (ABSA) and Glencore facilities available to the Venture through Glencore Holdings South Africa (Pty) Ltd, were unutilised at year end. Merafe’s R300 million committed revolving credit facility with ABSA was refinanced during the year for another 3-year tenure. The commitment fee has been lowered by 0.1% to 0.4% of undrawn funds and the base rate margin has also been reduced from 2.5% to 2.4%.

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022 – 015 –

PERFORMANCE: FINANCIAL CAPITAL continued

The full set of audited consolidated financial statements from which these summarised consolidated financial statements have been derived, were prepared under the supervision of Ditabe Chocho CA(SA), Financial Director. The directors take full responsibility for the preparation of the summarised consolidated financial statements.

Summarised consolidated statement of fnancial position	As at	As at
	31 December 2022 Audited R’000	31 December 2021 Audited R’000
Assets Property, plant and equipment Intangible assets Investment in associate Deferred tax Long-term receivable Other long-term receivable		712 577 34 060 2 765 3 394 13 444 –
	1 074 971
	29 626
	6 709
	6 210
	38 663
	14 229
Total non-current assets	1 170 408	766 240
Inventories Trade and other receivables Current tax receivable Cash and cash equivalents	2 372 540	1 652 178 1 554 620 16 972 129
	868 122
	–
	1 268 599
	4 509 261	4 178 943
Non-current asset held for sale	963	–
Total assets	5 680 632	4 945 183
Equity Share capital Retained income		1 288 876 2 481 106
	1 288 876
	3 041 413
Total equity attributable to owners of the company	4 330 289	3 769 982
Liabilities Lease obligation Deferred tax Provision Share-basedpayment liability		10 919 92 226 171 164 8 490
	9 059
	131 020
	265 350
	12 518
Total non-current liabilities	417 947	282 799
Trade and other payables Lease obligation Current tax payable Provision Share-basedpayment liability	840 039	862 594 3 988 5 565 18 997 1 258
	3 884
	52 073
	4 345
	7 794
	908 135	892 402
Liabilities directlyassociated with the assets held for sale	24 261	–
Total liabilities	1 350 343	1 175 201
Total equity and liabilities	5 680 632	4 945 183

Summarised consolidated statement of proft or loss and other comprehensive income	For theyear ended
	31 December 2022 Audited R’000	31 December 2021 Audited R’000
Revenue Foreign exchange gain Other expenses Earnings before interest, taxation, depreciation, amortisation and impairment Depreciation and amortisation Impairment Income from equity accounted investment Results from operating activities Finance income Finance expense Income from equity accounted investment Profit before taxation Taxation	7 939 061	8 062 656 104 305 (5 734 901) 2 432 060 (111 185) (5 824) – 2 315 051 13 572 (2 502) 614 2 326 735 (653 070)
	68 310
	(5 866 720)
	2 140 651
	(219 473)
	(236)
	3 944
	1 924 886
	26 078
	(1 487)
	–
	1 949 477
	(539 467)
Total comprehensive income for theyear	1 410 010	1 673 665
Basic earningsper share(cents)	56.4	66.8
Diluted earnings per share (cents)	56.4	66.8

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022

– 016 –

Summarised consolidated statement of changes in equity	For theyear ended	For theyear ended
	31 December 2022 Audited R’000	31 December 2021 Audited R’000
Issued share capital – ordinary shares Shares repurchased and cancelled during the year Balance at the end of the year (issued share capital) Share premium – ordinary shares Shares repurchased and cancelled during the year Balance at the end of the year (share premium) Balance at beginning of the year Total comprehensive income for the year Dividends paid Balance at the end of the year (retained earnings)	24 991	25 107 (116) 24 991 1 269 575 (5 690) 1 263 885 982 380 1 673 665 (174 939) 2 481 106
	–
	24 991
	1 263 885
	–
	1 263 885
	2 481 106
	1 410 010
	(849 703)
	3 041 413
Total equity for the end of the year	4 330 289	3 769 982

	For theyear ended	For theyear ended
Summarised consolidated statement of cash fows	31 December 2022 Audited R’000	31 December 2021 Audited R’000
Profit before tax Depreciation and amortisation Effect of exchange rate fluctuations Income from equity accounted investment Finance income Finance expense Impairment Movement in rehabilitation provision Other non-cash movement Profit on sale of property, plant and equipment Fair value adjustment on provisionally priced revenue Movement in long-term receivable Share grants vested Share-based payment expense Net realisable value inventory adjustment Changes in work capital: Inventories Trade and other receivables Trade and otherpayables	1 949 477	2 326 735 111 185 (213 400) (614) (13 572) 2 502 5 824 18 547 1 329 (116) (27 807) 538 (1 232) 8 869 24 411 (242 908) (648 374) 225 627
	219 473
	49 623
	(3 944)
	(26 078)
	1 487
	236
	11 478
	4 223
	(650)
	63 933
	(25 219)
	(2 284)
	12 848
	1 288

	(721 650)
	622 565
	(22 555)
Cashgenerated from operating activities	2 134 251	1 577 544
Interest received Interest paid Taxationpaid	23 666	11 615 (2 123) (431 112)
	(3 358)
	(456 863)
Net cashgenerated from operating activities	1 697 696	1 155 924
Acquisition of property, plant and equipment – sustaining Acquisition of property, plant and equipment – expansionary Proceeds from the sale of property, plant and equipment Movement in other long-term receivable	(466 396)	(448 149) (42 086) 366 –
	(17 841)
	697
	(14 229)
Net cash utilised in investing activities	(497 769)	(489 869)
Payment for repurchase of shares Costs incurred for the repurchase of shares Repayment of capital portion on lease liabilities Dividendspaid	–	(5 774) (32) (4 210) (174 939)
	–
	(4 131)
	(849 703)
Net cash utilised in financing activities	(853 834)	(184 955)
Total cash movement for theyear	346 093	481 100
Cash at the beginning of the year Effect of exchange rate movement on cash balances	972 129	277 629 213 400
	(49 623)
Total cash at the end of the year	1 268 599	972 129

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022

– 017 –

PERFORMANCE

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Key points – 2022

Manufactured Capital

Manufactured Capital in the mining context relates to the mining and smelting process and how it is conducted as well as the assets which are being mined and beneficiated. It is important to an organisation’s sustainability because its efficient use allows an organisation to be flexible and innovative and increases the speed at which it delivers.

Material issues

Health and safety
Project execution
Pricing and the availability of electricity
Raw material availability

Cost of Merafe’s ferrochrome Fatality attributable ferrochrome production production per tonne NIL increased by 30% 384kt (2021: Nil) (2021: 5% (2021: 379kt) decrease)

Business continuity and profitability
Investing in new technology to increase energy efficiency
Industrial action
Community issues

We enhance our Manufactured Capital by:

employing our infrastructure, technologies and processes to use our resources most efficiently; and
devising technology and management systems that reduce our waste and emissions.

Glencore-Merafe Chrome Venture operations

TRIFR performance of No industrial 2.40 action (2021: 2.80*)

* Restated from 2.75 to 2.80

1 Rustenburg ferrochrome plant and Tswelopele pelletising and sinter plant

2 Boshoek ferrochrome plant and Motswedi pelletising and sinter plant

Boshoek Mine
3
4 Wonderkop ferrochrome plant and Bokamoso pelletising and sinter plant
Waterval (east and west) and Marikana Mines
5
Kroondal Mine and PGMs plant
6
Thorncliffe Mine
7

Railway and port challenges

Pricing and availability of electricity challenges

Lion ferrochrome plant 8

Lydenburg ferrochrome plant 9

Helena Mine 10

Magareng Mine 11

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022

– 018 –

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----- Start of picture text -----

Our operations:
South Africa
Limpopo
Gauteng
8
10
7
11
2 1 9
3 5 4 Mpumalanga
North West 6
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MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022

– 019 –

PERFORMANCE: MANUFACTURED CAPITAL continued

Operational review

Lydenburg smelter, Rustenburg furnace 6 and Waterval mine remain under care and maintenance.

Massive logistic challenges continue to plague the industry, contributing to increased logistic costs. The increased reliance on road transportation, combined with higher diesel cost has pushed this cost component higher.

The Venture’s decarbonisation objectives are aligned with those of Glencore Plc. Our portfolio profile provides the flexibility to decarbonise our footprint with a target of achieving a 50% reduction in our total CO2e emissions by 2035. Some of our strategic elements towards achieving our target include managing our operational footprint as well as taking advantage of opportunities to reduce our scope 3 emissions.

Eskom

Reliability of supply and escalating costs remain key risks for our business. Electricity tariffs increased by 9.61% effective 1 April 2022. The National Energy Regulator of South Africa has approved a tariff increase of 18.65% effective 1 April 2023. The hike will certainly add more cost pressures. The Venture’s operations were impacted by curtailments stage 3 and 4 having to reduce load.

The Venture continues to pursue a Negotiated Pricing Agreement with Eskom to mitigate against the unsustainable high energy costs. In addition, the Venture is evaluating proposals for construction or renewable energy facilities.

Venture safety performance

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5 160
140
4
120
3 100
80
2 60
40
1
20
0 0
’18 ’19 ’20 ’21 ’22
TRIFR LTIFR DISR
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Reductants

The cost of reductants was impacted by increased market prices and a shortage of local supply of anthracite and coke, necessitating imports which are more expensive.

Safety

The Venture was fatality free for the year 2022 and remains so for the first two months of 2023. Our total recordable injury frequency rate (TRIFR) improved by 14.29% to 2.40 (December 2021: 2.80*).

* Restated

Health

We supplied vaccinations at our operations until the end of April 2022. In total, 21 520 vaccines were administered, of which 4 438 were given in 2022.

As previously reported in our interim results, it is with great sadness that we lost two of our colleagues due to COVID-19 in 2022.

Railways and ports

The deteriorating infrastructure of the railways and the ports continues to be a challenge to the South African ferrochrome industry. The inability of the railways to transport our product and inefficiency at the ports causes an excessive reliance on road transport. Inefficiency at the ports also results in backlog and delays at the harbours. This not only results in delays in shipping our product (and impacts the reputation of South African producers as being reliable suppliers), but also creates opportunities for corruption and theft. The Venture continues to engage proactively with the governmental departments in its attempt to find solutions to these critical issues.

Western Chrome mines

Merafe and Glencore reached an agreement in 2021 to construct a Platinum Group Metals (PGMs) plant at the Kroondal mine. The PGMs plant’s main operations is the treatment of material arising from the Venture’s mining operations and tailings facilities in Western Chrome mines. The PGMs plant has the capacity to treat 21kt of PGM-bearing material per month.

For the year under review, the Venture’s feed into the plant ramped up to 159kt from 14kt in 2021.

TRIFR 2008–2022

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----- Start of picture text -----

6
5
4
3
2
1
0
’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 ’20 ’21 ’22
Restated (2.75 to 2.80)
5.36
4.64 4.58 4.63
4.08 4.17 4.15
3.90 3.84 3.74 3.91
TRIFR Behaviour-based safety 3.39
2.56 2.80
2.40
17 Standards Commitment-based safety Safework Safe family campaign Positive reinforcement
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MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022 – 020 –

Chrome ore production

Production

The Chrome mines’ (including UG2) saleable chrome ore production for 2022 is 1% more than the previous year.

Lower tonnages (4%) at the UG2 operations were mainly due to less feed received from external PGMs concentrators.

Chrome produced at the mines in 2022 was 4% more than in 2021 due to better mining efficiencies, more sweepings tons than 2021 and tailings retreatment project included for full year in 2022.

Costs

The Chrome mines’ (including UG2) saleable chrome ore production cost for 2022 were 14% more than the prior year.

Production costs from mines were 9% more than the prior year due to above inflation, diesel, explosive, electricity, steel cost plus higher maintenance cost on TMM equipment.

Production costs from the UG2 platinum tailings were 32% more than the prior year mainly due to higher prices paid for raw material from PGMs producers. (Linked to Chrome ore market prices).

Resources and reserves

The Venture has in excess of 30 years of ore available at the current rate of mining.

Quantitative data of the Venture

The quantitative data of the Venture is set out from pages 22 to 38 of the report. Merafe’s attributable portion of such data is 20.5%

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The Glencore-Merafe Chrome Venture’s operations

Ferrochrome

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----- Start of picture text -----

plants Capacity Technology Mines
Western Limb (North West province)
Wonderkop 553 000 Bokamoso pelletising and sintering plant using
tpa FeCr Outotec technology Kroondal, Waterval and Marikana
6
furnaces Conventional semi-enclosed furnaces
Rustenburg 430 000 Tswelopele pelletising and sintering plant using
tpa FeCr Outotec technology Kroondal, Waterval and Marikana
6
furnaces Conventional semi-enclosed furnaces
Boshoek 240 000 Motswedi pelletising and sintering plant using
tpa FeCr Outotec technology Waterval, Kroondal and Boshoek
2
furnaces Enclosed furnaces
Eastern Limb (Mpumalanga and Limpopo provinces)
Lydenburg 396 000
tpa FeCr Premus – kilns Thorncliffe, Helena and Magareng
4 Three enclosed furnaces and one
furnaces semi-enclosed furnace
Lion Phase I 360 000
tpa FeCr Premus – kilns Thorncliffe, Helena and Magareng
2
furnaces Enclosed furnaces
Lion Phase II 360 000
tpa FeCr Premus – kilns Thorncliffe, Helena and Magareng
2
furnaces Enclosed furnaces
----- End of picture text -----*

* Furnace 6 under care and maintenance.

** Smelter under care and maintenance.

The Venture has access to various UG2 plants in the Western Limb including EPL, Kanana, Kl, K2, K4 and Rowland, and Mototolo in the Eastern Limb. The Venture constructed and operates a PGMs processing plant at the Kroondal mine.

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022

– 021 –

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PERFORMANCE

Natural Capital:

climate change and energy environment
abridged mineral resources and mineral reserves statement

Natural capital includes the natural resources and processes needed by an organisation to produce its products.

Key points – 2022

Energy

Pricing and the availability of electricity

The CO2e The energy generated use per per tonne of tonne of ferrochrome ferrochrome produced produced was was 5.35tCO2e 14.5GJ (2021: (2021: 5.27tCO2e) 14.36GJ)

Business continuity and profitability
Investing in new technologies to increase energy efficiency

Climate change

Environmental aspects of climate change
The Venture’s production of significant quantities of indirect and direct greenhouse gas emissions (GHGs)
Investing in new technologies to reduce emissions

Health and safety

Safety of employees

* restated from * restated from 5.29 to 5.27 14.35 to 14.36

Health of employees
Training
Remuneration

Water

Use and availability
Recycling

Waste

Incidents and compliance
Disposal and recycling

his includes renewable (timber and water) and non-renewable (fossil fuels, minerals and metals) resources and processes such as energy consumption, waste creation, emissions, etc. Without access to the natural capital contained in our mineral reserves and resources, our business would not exist.

T

We maintain and enhance natural capital by:

reducing our dependence on fossil fuels;
reducing waste by reusing or recycling it whenever possible;
protecting biodiversity and ecosystems;
wherever possible, using renewable resources from well-managed and restorative ecosystems; and
managing resources and reserves efficiently.

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022

– 022 –

Natural Capital: climate change and energy

Stakeholder impact

The Venture stakeholders benefit from its energy efficiencies, which have made it one of the lowest cost ferrochrome producers in the world and the lowest cost producer in South Africa.

Managing climate change and carbon emissions

The Venture focuses on understanding the current and future impact of climate change on its operations. Climate change risks are included in each operation’s risk assessment. It measures and interprets energy and GHGs data to identify areas of opportunity. The Venture continuously researches and identifies potential energy and GHG reduction opportunities and evaluates the feasibility of implementing these opportunities. It also actively participates in discussions on climate change legislation via various industry organisations.

The Venture’s efforts to continually evaluate and improve its energy efficiency are in line with the societal demand to reduce the emissions of GHGs. The Venture uses the Greenhouse Gas Protocol as an accounting and reporting standard for our emissions, which uses the 2020 location-based emission factor of 0.92805kgCO²e/kWh from the IEA. This protocol was developed in partnership with the World Resources Institute and the World Business Council for Sustainable Development. It divides GHG emissions into different types, categorising them as either direct (scope 1) or indirect (scope 2) emissions.

A representative of the Venture served on the council of the Energy Intensive User Group during 2022. The Venture, which participates in the Minerals Council of South Africa and the Ferro Alloys Producers Association environmental forum, represents the ferroalloys industry at Business Unity South Africa. The Venture’s representatives play a leading role in these forums and they comment on climate change and carbon tax legislation. The Venture also engages with government via these forums to ensure that the potential impact the proposed legislation will have on our industry and Company is understood.

During 2022, the Venture again played an important role in the engagement process between business and the Department of Fisheries, Forestry and the Environment, DMRE and National Treasury on matters relating to GHG emissions, Carbon Tax, Just Transition and Renewable Energy Generation. Climate change performance is included in the health, safety, environment and community performance indicators that the Venture uses as part of its performance appraisals.

We are working with global specialists and draw on local expertise within our operational teams to identify value accretive abatement opportunities to further reduce our carbon footprint.

The Glencore Alloys Group Environmental Manager is responsible for climate change-related issues in the Venture.

The Venture’s focus for 2023

The Venture will continue with its engagement processes and identify and further evaluate potential GHG mitigation projects.

The Venture’s Climate Change and Energy Strategy strategically provides a systematic approach for the development and tracking of actions that would enable the Venture to achieve its decarbonisation objectives. The strategic elements involve managing its operational footprint, reducing emissions, collaborating with supply chains and having a transparent approach to reporting.

The Venture forms part of Glencore’s 1.5[o] C pathway aligned target of an absolute 15% reduction of total emissions (scopes 1, 2 and 3) by 2026 and a 50% reduction of total emissions (scopes 1, 2 and 3) by 2035 on 2019 levels. These targets are consistent with the midpoint of the Intergovernmental Panel on Climate Change’s 1.5[o] C scenarios and the 1.5[o] C pathways set out by the International Energy Agency. Post 2035, the ambition is to achieve, with a supportive policy environment, net zero total emissions by 2050.

The Venture has appointed a service provider to develop a Rule Book to accurately calculate scope 3 emissions. The Rule Book will be aligned with the Venture’s Greenhouse Gas Protocol. This exercise will be completed in July 2023 and scope 3 emissions data of the Venture will be calculated and reported by the end of 2023.

The Venture has its scope 1 and scope 2 CHG emissions independently verified on an annual basis. The GHG emissions data validation and verification is a legal requirement under the Air Quality Management Act, 2004.

Information on the business costs associated with climate change is being compiled by the Venture and this will be reported on from 2023.

The Venture incorporates ESG in performance KPI’s relating to Executive Employee Remuneration Policies.

Renewable Energy Strategy

The renewable energy strategy to support 50% total CO2e emission reduction by 2035 (as set out above) is reliant on 5 pillars:

Renewable Energy
Offsite renewable energy wheeled over the Eskom Network – combination of wind and solar power
Onsite renewable energy behind the meter – only solar power based on the geographic location of operations
Co-Generation
−Utilising heat/gas from the operations to produce electricity
Eskom optimisation
Utilise available short-term Negotiated Pricing Agreement (NPA) initiatives
Process Energy Improvement
−Optimise process to be as energy efficient as possible
Energy Storage
−Long duration Energy Storage

Understanding the Venture’s carbon footprint

The Venture generates GHG emissions from its smelting processes and from its energy use. The use of fossil fuels in the form of reductants in the furnaces contributes directly to the creation of GHGs, and the electricity supplied from coal-fired power stations contributes indirectly to the creation of GHGs.

The Venture and Merafe are committed to minimising GHG emissions and improving our energy efficiency, and recognise the magnitude and importance of this challenge. The Venture also actively engages in public policy, specifically through collaboration with the DEFF on a carbon process aimed at estimating the country’s annual carbon emissions.

The risks associated with climate change

Climate change remains a key longer-term risk for the Venture. The potential risks are complex in that they include operational risks such as business continuity, health and safety, environmental aspects and regulatory aspects. Risks are both physical and financial. For example, should the Venture’s operations be damaged by flooding and extreme storms, this could cause business interruptions. The reduced availability of water could also interrupt business operations and have health impacts.

Restatements

Restatements occur due to improvements in testing and/or methodology. If there are restatements in this report which are significant or material from prior statements then this will be stated.

See the Stakeholder engagement section on our website for more information on our stakeholder impact and engagement with government, our investors and business partners.

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022

– 023 –

PERFORMANCE: NATURAL CAPITAL: CLIMATE CHANGE AND ENERGY continued

The Venture’s energy consumption

Total energy consumption in the Venture’s operations increased in 2022 as a result of increased production. The energy usage per tonne of ferrochrome produced increased from 14.36GJ/tonne to 14.50GJ/tonne. The energy consumption and performance of the Company in any year is dependent on the production performance in that year and the contribution of the most energy-efficient plants in the Venture to that production.

Total energy use per tonne of ferrochrome produced*

The Venture’s energy usage*

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30 000 000
25 000 000
20 000 000
15 000 000
10 000 000
5 000 000
0
’20 ’21 ’22
Direct energy use
Indirect energy use
Total energy use
2021 restated but not significant or material
reported in 2021.
The Venture’s emissions
GHG emissions
12 000 000
10 000 000
8 000 000
6 000 000
4 000 000
2 000 000
0
’20 ’21 ’22
Scope 1
Scope 2
Total tCO2e generated
26 517 980 27 130 896
23 352 105
22 470 381
19 647 858
GJ 16 059 339
3 588 519 4 047 599 3 778 791
9 739 076 10 010 342
e2
7 034 156
tCO
5 783 378 6 013 239
4 136 205 3 955 698 3 997 103
2 897 951
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20
15
10
5
0
’20 ’21 ’22
15.18
14.36 14.50
GJ/tonne
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* 2021 restated but not material or significant
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Note: There was a restatement processed for Diesel in May 2022 for the 2021 diesel data. The restatement resulted in a minor change of the overall diesel reported in 2021.

The Venture’s total scope 1 (direct) and scope 2 (indirect) emissions increased in 2022 as a result of increased production. The CO2e generated per tonne of ferrochrome produced increased in 2022. The emissions performance of the Company in any year is dependent on the production performance in that year and the contribution of the most energy-efficient plants in the Venture to that production.

Total CO2e generated per tonne of ferrochrome produced*

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6
5
4
3
2
1
0
'20 ’21 ’22
5.44 5.27 5.35
e/tonnetCO2
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2020/2021 restated but not significant or material
2020/2021 restated but not significant or material

Note: There was a restatement processed for Diesel in May 2022 for the 2021 diesel data. The restatement resulted in a minor change of the overall diesel reported in 2021. This would impact the total Scope 1 emissions previously reported. In addition, the IEA publishes an emission factor for

2 years prior i.e. to 2019 emission factor is published in 2021. The previous location based emission factor was 0.932 kgCO2e/kWh which was updated to

0.92805 kgCO2e/kWh by the IEA in 2022.

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022

– 024 –

Natural Capital: environment

Environment includes the natural resources and processes needed by an organisation to produce its products.

Key points – 2022

The Venture’s total water usage decreased due to greater efficiency practices

Water conservation plans are in place at all the operations of the Venture

An integrated approach to environmental responsibilities

The Venture’s long-term success depends on prioritising environmental issues and integrating environmental responsibility into its strategic planning, management systems and day-to-day operations. Management accountability is central to Glencore’s integrated approach, which reviews its environmental risks and opportunities annually as part of its business strategy and planning process. Each site has a comprehensive environmental management system in place. The system provides access to aspects and the impact of all activities, from pre-feasibility to the operational phase, including closure and rehabilitation. The Venture’s objective is to ensure environmental legal compliance, optimise its monitoring and measurement practices and to minimise and manage any waste and emission generation in an environmentally responsible manner. Environmental responsibilities are clearly included into legal appointments and job descriptions.

Material issues

Water
Greenhouse gas emissions
Waste
Biodiversity and land use

As Merafe’s corporate office has a limited impact on the environment, this section of our report focuses on the Venture’s environmental approach, impact and performance. We rely on the Venture’s effective environmental policies and procedures to ensure our investment is managed responsibly.

Water

Water is a finite and precious natural resource essential to the sustainability of the communities in which the Venture operates. It is also necessary for its mining and metallurgical processes.

The Venture’s operations are regulated through its Water Use Licences. One of the key legal compliance requirements is the development and annual updates of operations’ Integrated Water and Waste Management Plan. The plans are underpinned by principles of responsible and sustainable water usage and pollution prevention. Various water treatment technologies including bioremediation have been implemented across the Venture’s operations. The initiatives do not only mitigate water pollution but enable re-use of process water and reduces reliance on municipal potable water. The recent heat wave and interruption of electricity supply prompted operations to review their water risk assessments focusing on water availability and associated corrective measures. Based on the requirements of the Venture’s HSEC & HR Strategic overview, the assets have set catchment context based local targets. The implementation of the enabling actions to achieve the targets will include local partnerships with other companies to improve the water quality in the catchment.

Water use and availability

The Venture’s operations work with the Department of Water and Sanitation, local communities, local authorities, the farming community and other industry users to ensure the sustainability of water resources and equitable access to water resources for stakeholders.

We recognise access to safe and clean water and sanitation as salient human rights. We seek to fully understand and minimise our operational water footprint and manage our activities in a way that protects our shared water resources. We are committed to ensuring good water management is in place at all of our assets and undertake detailed assessments, monitoring and implementation of corrective actions. Our assets consult their host communities and other relevant local water users to understand local priorities and to collaborate on sustainable solutions.

The availability of water is a key consideration when the Venture plans the expansion or construction of an operation. It uses the results of the environmental and social impact assessments it undertakes to guide its decision-making and to ensure it has the least possible impact on local water resources during the various phases of its projects.

All of the Venture’s operations have water conservation plans. They have previously set water intensity targets and have measures in place to help them be as water efficient as possible. In addition, its operations are identifying possible water reduction projects.

The water usage in the Venture decreased in 2022. The key drivers for this decrease was greater efficient water practices.

The Venture’s water usage*

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15 000
12 000
9 000
6 000
3 000
0
’20 ’21 ’22
Water recycled or reused
Total water consumption
14 384
13 533
12 386
MI
5 591
4 644 4 879
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* 2020/2021 restated but not material or significant

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022

– 025 –

PERFORMANCE: NATURAL CAPITAL: ENVIRONMENT continued

Waste management and effluent and biodiversity management

The mineral waste produced by the Venture in 2022 is set out below:

Mineral waste

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2022 2021 2020
Category tonnes tonnes tonnes
Mineral waste – produced 4 335 009 4 401 937 3 431 144
Non-mineral waste – disposed 9 714 12 601 9 898
Non-mineral waste – recycled 7 055 6 476 5 141
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* Restated from 12 899 (not material or significant)

Incidents and compliance

It is always the Venture’s aim to have no environmental incidents at its operations. It monitors, reports, investigates and remediates any incidents that occur and applies lessons learnt to prevent similar incidents in the future. Its operations are required to report any environmental high-potential risk incidents, including near-misses, that could have resulted in a category 4 or 5 incident, even when the actual impact was less significant. Environmental incidents recorded at the Venture’s operations also include incidents that occur as a result of contractor activity.

Environmental incidents

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Category 2022 2021 2020 2019
Category 1 – negligible (causing negligible, reversible environmental impact, requiring
very minor or no remediation) 38 52 38 77
Category 2 – minor (causing minor, reversible environmental impact, requiring minor
remediation) 10 5 10 22
Category 3 – significant (causing moderate, reversible environmental impact with
short-term effect, requiring significant remediation) 1 – 1 –
Category 4 – major (causing serious environmental impact, with medium-term effect,
– – – –
requiring significant remediation)
Category 5 – disastrous (causing disastrous environmental impact, with long-term
effect, requiring major remediation) – – – –
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Note: The Venture received an environmental fine at one of its operations in 2022. There were no Category 4 and 5 incidents in 2022.

NOx and SOx performance

The Venture’s emissions*

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2022 2021 2020 2019
Category tonnes tonnes tonnes tonnes
NOx (oxides of nitrogen)
Stack emissions (total mass) 2 135 1 782 840 1 113
SOx (oxides of sulphur)
Stack emissions (total mass) 4 736 4 876 3 281 3 344
Total particulates
Stack emissions (total mass) 1 832 1 979 1 219 1 729
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Note: A minor restatement was processed for 2021 air emissions (not material or significant)

* The emission data is based on quarterly emission data which is used to calculate emission factors and then applied to the year.

The nature of the operations at the Venture’s semi-closed furnaces means that dilution air enters the air pollution control equipment. NOx is formed as a secondary emission through the air pollution control equipment due to the presence of nitrogen in the air. Small process changes in terms of gas volume and temperature can result in step changes in NOx emissions. The emissions at the Venture do not exceed any ambient standards for NOx or SOx.

Product stewardship

The Venture monitors and addresses the impacts and risks associated with the use of its products throughout their life cycles, including during stages outside of its control, such as use, recovery, recycling and disposal.

It works with national and international industry associations, its customers and suppliers to understand the environmental health and safety risks of its products and to find ways to mitigate these risks.

In terms of Registration, Evaluation and Authorisation and Restriction of Chemicals (REACH), all the products that the Venture exports to countries in the European Union have been pre-registered, with the relevant pre-registration certificates and numbers available. The Venture is also actively involved in REACH. No products produced by the Venture, or their packaging materials, were reclaimed during 2022.

To ensure the quality of its products, the Venture aligns its systems with the requirements of ISO 9001:2015 and some of its smelters are certified. Its laboratories are ISO 17025 accredited, which ensures that the methods and equipment it uses are accurate.

Land use

For further information on land use, see the Mineral Resources and Reserves Statement in our online Integrated Annual Report for 2022 and Appendix 1 to this report.

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Natural Capital: abridged Mineral Resources and Mineral Reserves statement

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Introduction

The purpose of this report is to document an abridged version of the Mineral Resources and Mineral Reserves of Merafe Resources (Merafe) in accordance with the requirements of the South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves, 2016 (SAMREC). All of Merafe’s operations are part of a pooling and sharing venture with Glencore Operations South Africa Proprietary Limited (the Glencore-Merafe Chrome Venture (the Venture)). Merafe has a 20.5% attributable beneficial interest in the Mineral Resources and Mineral Reserves of the Venture. The estimates in this document are as at 31 December 2022. To state the Mineral Resources and Mineral Reserves estimates for 31 December 2022, the budgeted production for July 2022 to December 2022 has been subtracted from the total estimates. The Mineral Resources and Mineral Reserves information in the tables on the following pages is based on information compiled by a Competent Person (as defined by the SAMREC Code).

Type of mining and mining activities

The Venture has chrome mining operations along the Western and Eastern Limbs of the Bushveld Complex. The operations along the Western Limb of the Bushveld Complex comprise the Kroondal Mine. The LG6 Package at Kroondal Mine is mined underground using trackless mining methods on a Bord-and-Pillar lay-out. Kroondal will be targeting a production rate of 146ktpm for 2022. Boshoek Mine is 20km north-west of Rustenburg. The MG1, LG5 and LG6 Chromitite Layers have been mined in several open pits. The opencastable ore has almost been depleted and the mine has been put on care and maintenance. Townlands Extension 9 is an exploration project. The status quo has remained the same since the application for a retention permit in Nov 2017. The DMR accepted the application and the Venture is still awaiting the granting and execution of the application. No exploration costs have to be expended on the project from the date of execution of the application for the subsequent 3 years. Pending the outcome of the application no 3rd party may legally apply for a Prospecting Right over this property. Thorncliffe, Magareng and Helena Mines are situated along the southern portion of the Eastern Limb of the Bushveld Complex.

The MG1 and MG2 Chromitite Layer is being mined underground using trackless mining methods on a Bord-and-Pillar mining lay-out. Thorncliffe, Magareng and Helena Mines are situated within the same Mining Right area but are situated on different farm properties. The farms of St George and Richmond have been incorporated into the Mining Right of the Eastern Chrome Mines Complex. The Venture’s silica deposit lies 15km west of Rustenburg. The quartzite is mined mainly to supply the Venture’s furnaces with silica.

Comparison of Mineral Resources and Mineral Reserves estimates with previous year’s estimates

The annual Mineral Resources and Mineral Reserves estimates are compared with the previous year’s statement and reconciled each year after the estimates have been finalised. Changes in the year-on-year tonnage and grade estimates are mainly due to mining depletion and changes in the Mineral Resources and Mineral Reserves tonnages and grades due to additional geological information. In addition, disposed or lapsed rights will also impact total resources and reserves.

The biggest impact to the year-on-year changes in the Mineral Resource tonnages for the Venture is mainly due to change in targeted reef on the MG2 horizon being changed and the inclusion of Richmond and St George MG2 Resources. The net movement after mining depletion was 14.830Mt.

There is no material difference in the silica Mineral Resource estimate from December 2021 to December 2022 and the change is mostly attributed to mining depletion. The change in the Mineral Reserves for Rietvly is mainly as a result of mining depletion.

Material risk factors

There are no foreseen material risk factors that could affect the validity of the current Mineral Resources and Mineral Reserves statement. All the legislative requirements have been met with respect to the rights to mining and prospecting for which the Mineral Resources and Mineral Reserves have been reported. All the operating mines are mining under new order, executed, Mining Rights. The Prospecting Rights of all the prospecting areas have been converted to new order Prospecting Rights.

Competent Persons

The Competent Persons involved in the Abridged Mineral Resources and Mineral Reserves statement are:

						Years
						with
Competent Person	Job Description	Operation	Highest Qualification	Professional Affiliation	Years of Experience	Alloys
Sulayman Yousuf Vaid	GroupMRM	Head Office	ND Mine Survey	SAGC GTgMS0114	27(Gold/Platinum/Chrome)	15
Lindiwe Nkambule	MRM ECM	ECM	Bsc Hons Geology	SACNASP 121632	7(Platinum/Chrome)	7
Mogomotsi Maputle	MRM WCM	WCM	Bsc Hons Geology	SACNASP 400071/14	20(Platinum/Chrome)	15
Dean Richards	Director	Obsidian Consulting	Bsc Hons Geology	SACNASP 400190/08	31 (Gold/Diamonds/	17
					Platinum/Chrome/Iron Ore)

For the complete Mineral Resources and Mineral Reserves Statement including definitions of the categorisation of mineral resources and reserves as per the SAMREC Code 2016, descriptions and exploration activities, geological settings of the reserves (including maps and diagrams), legal entitlement, methods and assumptions, material risk factors and a summary of environmental funding and management, see Appendix 1 to this report and our online Integrated Annual Report for 2022.

See page 60 for the Directors’ Report and for the statement on mining rights and mining operations.

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PERFORMANCE: NATURAL CAPITAL: ABRIDGED MINERAL RESOURCES AND MINERAL RESERVES STATEMENT continued

Chrome Mineral Resources statement

Bushveld Complex – Western Limb

				Measured	Mineral	Indicated	Mineral	Measured and	Measured and	Inferred	Mineral
				Resources		Resources		Indicated	Resources	Resources
	Attributable	Mining										Competent
Name of operation	Portion	method	Commodity	31.12.22	31.12.21	31.12.22	31.12.21	31.12.22	31.12.21	31.12.22	31.12.21	Person
Western Chrome Mines – LG6 Chromitite Package and		MG1 Chromitite Layer
Waterval	20.5%	UG	Ore (mt)	16.231	16.231	1.03	1.03	17.26	17.26	0.7	0.7	MM/DR
			Cr2O3 (%)	41.31	41.31	42.59	42.6	41.4	41.4	43.0	43.0
Marikana West	20.5%	UG	Ore (mt)	2.974	2.974	1.69	1.69	4.67	4.67	–	–	MM/DR
			Cr2O3 (%)	42.43	42.43	42.60	42.6	42.5	42.5	–	–
Kroondal	20.5%	UG/OC	Ore (mt)	9.104	9.308	0.65	0.61	9.76	9.92	–	–	MM/DR
			Cr2O3 (%)	42.72	42.79	41.54	41.5	42.6	42.7	–	–
Kroondal Gemini	20.5%	UG/OC	Ore (mt)	12.544	13.793	0.80	0.85	13.35	14.64	–	–	MM/DR
			Cr2O3 (%)	42.09	42.30	41.18	41.3	42.0	42.2	–	–
Marikana East	20.5%	UG	Ore (mt)	4.593	4.459	0.53	0.52	5.12	4.98	–	–	MM/DR
			Cr2O3 (%)	42.24	42.23	41.85	41.9	42.2	42.2	–	–
Klipfontein/Waterval	20.5%	UG	Ore (mt)	13.105	13.235	29.90	29.69	43.00	42.93	92.7	92.6	MM/DR
			Cr2O3 (%)	42.01	42.01	41.96	42.0	42.0	42.0	42	42
Boshoek	20.5%	UG/OC	Ore (mt)	–	–	17.09	17.09	17.09	17.09	–	–	MM/DR
			Cr2O3 (%)	–	–	40.53	40.5	40.5	40.5	–	–
Townlands Extension 9	20.5%	UG	Ore (mt)	–	–	12.94	12.94	12.94	12.94	–	–	MM/DR
			CCr2O3 (%)	–	–	41.39	41.4	41.4	41.4	–	–
Total – LG6 and MG1			Ore (mt)	58.55	60.00	64.64	64.43	123.19	124.43	93.4	93.3
			Cr2O3 (%)	41.98	42.05	41.5	41.5	41.7	41.8	42	42
Western Chrome Mines – Tailings
Kroondal Dam	20.5%	Tailings	(mt)	–	–	–	–	–	–	1.89	1.88	MM
			Cr2O3 (%)	–	–	–	–	–	–	17.2	17.2
Waterval East Dam	20.5%	Tailings	(mt)	–	–	–	–	–	–	0.60	0.94	MM
			Cr2O3 (%)	–	–	–	–	–	–	14.9	18.5
Waterval West Dam	20.5%	Tailings	(mt)	–	–	–	–	–	–	–	0.26	MM
			Cr2O3 (%)	–	–	–	–	–	–	–	16.9
Cashan Dam	20.5%	Tailings	(mt)	–	–	–	–	–	–	0.03	0.03	MM
			Cr2O3 (%)	–	–	–	–	–	–	16.9	16.9
Total Tailings			(mt)	–	–	–	–	–	–	2.52	3.12
			Cr2O3 (%)	–	–	–	–	–	–	16.7	17.5
Bushveld Complex – Eastern Limb
Eastern Chrome Mines – MG1 Chromitite Layer
Thorncliffe	20.5%	UG/OC	Ore (mt)	39.329	44.028	3.55	3.47	42.88	47.50	–	–	LUN/DR
			Cr2O3 (%)	40.39	40.03	40.7	40.8	40.4	40.1	–	–
Helena	20.5%	UG/OC	Ore (mt)	21.312	21.473	11.38	13.29	32.69	34.76	8.281	9.6	LUN/DR
			Cr2O3 (%)	39.88	39.81	38.5	38.5	39.4	39.3	38	38
De Grooteboom	20.5%	UG/OC	Ore (mt)	1.037	1.037	0.50	0.50	1.54	1.54	–	–	LUN/DR
			Cr2O3 (%)	40.22	40.22	40.3	40.3	40.2	40.2	–	–
Richmond	20.5%	UG	Ore (mt)	7.461	1.559	17.28	22.27	24.74	23.83	26.536	25.9	LUN/DR
			Cr2O3 (%)	40.53	41.10	40.8	41.0	40.7	41.0	41	41
St George	20.5%	UG	Ore (mt)	0.716	0.716	4.73	4.45	5.44	5.17	13.442	18.6	LUN/DR
			Cr2O3 (%)	40.41	40.41	39.4	39.4	39.5	39.5	39	39
Total – MG1			Ore (mt)	69.855	68.813	37.44	43.99	107.29	112.81	48.3	54.1
			Cr2O3 (%)	40.24	39.99	39.9	40.0	40.1	40.0	40	40
Eastern Chrome Mines – MG2 Chromitite Layer
Thorncliffe	20.5%	UG/OC	Ore (mt)	–	–	17.64	–	17.64	–	32.5	41.8	LUN/DR
			Cr2O3 (%)	–	–	35.1	–	35.1	–	36	38
Helena	20.5%	UG/OC	Ore (mt)	–	–	–	–	–	–	49.2	85.4	LUN/DR
			Cr2O3 (%)	–	–	–	–	–	–	40	38
Richmond	20.5%	UG	Ore (mt)	–	–	–	–	–	–	31.0	–	LUN/DR
			Cr2O3 (%)	–	–	–	–	–	–	36	–
St George	20.5%	UG	Ore (mt)	–	–	–	–	–	–	17.52	–	LUN/DR
			Cr2O3 (%)	–	–	–	–	–	–	39	–
Total – MG2			Ore (mt)	–	–	–	–	–	–	130.3	127.2
			Cr2O3 (%)	–	–	–	–	–	–	38	38
Total – MG1 and MG2			Ore (mt)	69.855	68.813	55.08	43.99	124.81	112.81	178.5	181.3
			Cr2O3 (%)	40.24	39.99	38.4	40.0	39.4	40.0	38	38
Eastern Chrome Mines – Tailings
Thorncliffe Dam	20.5%	Tailings	(mt)	–	–	–	–	–	–	4.88	4.73	SYV
			Cr2O3 (%)	–	–	–	–	–	–	18.9	19.6
Helena Paste	20.5%	Tailings	(mt)	–	–	–	–	–	–	0.16	0.21	SYV
			Cr2O3 (%)	–	–	–	–	–	–	17.2	17.2
Total Tailings	20.5%	Tailings	(mt)	–	–	–	–	–	–	5.04	4.94
			Cr2O3 (%)	–	–	–	–	–	–	18.8	19.5

Notes:

Tonnages are quoted as million metric dry tonnes. Grades are quoted as %Cr2O3.

The measured and indicated Mineral Resources are inclusive of those Mineral Resources modified to produce Mineral Reserves. No cut-off grades are applied to the chromitite layers currently being mined because of the exceptional regional grade consistency and continuity.

The Mineral Resources are estimated as chromitite tonnages and grades to reflect the grades of the various individual chromitite layers. Both the LG6 and MG1 chromitite layers which the Venture is currently mining, are discrete solid chromitite layers.

Competent Persons:

SYV – Sulayman Yousuf Vaid, Glencore Operations SA, (SAGC – MS 0114). Lead Competent Person responsible for Mineral Resources and Mineral Reserves. MM – Mogomotsi Maputle, Glencore Operations SA, Western Chrome Mines, (SACNASP – 400071/14). Responsible for Mineral Resources and Mineral Reserves. LUN – Lindiwe Unity Nkambule, Glencore Operations SA, Eastern Chrome Mines, (SACNASP – 121635). Responsible for Mineral Resources and Mineral Reserves. DR – Dean Richards, Obsidian Consulting Services (SACNASP – 400190/08). Responsible for geostatistical analysis of data, Mineral Resource classification and construction of tonnage and grade block models and reporting of tonnage and grades from block models.

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Chrome Mineral Reserve statement

Bushveld Complex – Western Limb

Bushveld Complex – Western Limb
				Proved Ore		Probable Ore		Total	Ore
				Reserves		Reserves		Reserves
	Attributable	Mining								Competent
Name of operation	portion	method	Commodity	31.12.22	31.12.21	31.12.22	31.12.21	31.12.22	31.12.21	Person
Western Chrome Mines – LG6 Chromitite Package and	MG1 Chromitite Layer
Waterval	20.5%	UG	Ore (mt)	–	–	–	–	–	–	MM/DR
			Cr2O3 (%)	–	–	–	–	–	–
Marikana West	20.5%	UG	Ore (mt)	–	–	–	–	–	–	MM/DR
			Cr2O3 (%)	–	–	–	–	–	–
Kroondal	20.5%	UG/OC	Ore (mt)	2.078	2.251	0.61	0.53	2.69	2.78	MM/DR
			Cr2O3 (%)	29.19	29.11	28.2	28.2	29.0	28.9
Kroondal Gemini	20.5%	UG/OC	Ore (mt)	6.632	7.972	0.65	0.69	7.29	8.66	MM/DR
			Cr2O3 (%)	30.52	30.78	29.9	30.3	30.5	30.7
Marikana East	20.5%	UG	Ore (mt)	–	–	–	–	–	–	MM/DR
			Cr2O3 (%)	–	–	–	–	–	–
Klipfontein/Waterval	20.5%	UG	Ore (mt)	0.075	0.026	0.09	0.17	0.17	0.20	MM/DR
			Cr2O3 (%)	28.21	28.49	28.0	28.4	28.1	28.4
Boshoek	20.5%	UG/OC	Ore (mt)	–	–	0.58	0.58	0.58	0.58	MM/DR
			Cr2O3 (%)	–	–	26.1	26.1	26.1	26.1
Total			Ore (mt)	8.786	10.249	1.94	1.98	10.72	12.22
			Cr2O3 (%)	30.19	30.41	28.1	28.3	29.8	30.1
Bushveld Complex – Eastern Limb
Eastern Chrome Mines – MG1 Chromitite Layer
Thorncliffe	20.5%	UG/OC	Ore (mt)	17.552	20.224	2.51	2.51	22.73	22.73	LUN/DR
			Cr2O3 (%)	34.71	34.78	32.9	32.9	34.6	34.6
Helena	20.5%	UG/OC	Ore (mt)	1.506	1.667	–	–	1.67	1.67	LUN/DR
			Cr2O3 (%)	32.46	29.43	–	–	29.4	29.4
Richmond	20.5%	UG/OC	Ore (mt)	3.745	1.256	1.46	2.57	5.2	3.82	LUN/DR
			Cr2O3 (%)	35.40	34.69	33.5	32.6	34.9	33.3
St George	20.5%	UG/OC	Ore (mt)	–	–	–	–	–	–	LUN/DR
			Cr2O3 (%)	–	–	–	–	–	–
Total – MG1			Ore (mt)	22.803	23.147	5.08	5.08	28.23	28.23
			Cr2O3 (%)	34.67	34.39	32.7	32.7	34.1	34.1
Eastern Chrome Mines – MG2 Chromitite Layer
Thorncliffe	20.5%	UG/OC	Ore (mt)	–	–	3.59	–	3.59	–	LUN/DR
			Cr2O3 (%)	–	–	26.9	–	26.9	–
Total – MG1 and MG2			Ore (mt)	22.803	23.147	7.59	5.08	26.8	28.23
			Cr2O3 (%)	34.7	34.4	30.3	32.7	34.5	34.1

Notes:

Tonnages are quoted as million metric dry tonnes. Grades are quoted as %Cr2O3.

No cut-off grades are applied to the chromitite layers currently being mined due to the exceptional regional grade consistency and continuity. A minimum mining cut of 1.8m is applied to the ore reserve tonnage to accommodate the mechanised mining equipment employed by the underground mining operations. External waste is included to make up the minimum cut where applicable. The chromitite layers are mined mainly underground using trackless mechanised mining methods on a bord-and-pillar mine layout design.

Competent Persons:

DR – Dean Richards, Obsidian Consulting Services (SACNASP – 400190/08). Responsible for geostatistical analysis of data, Mineral Resource classification and construction of tonnage and grade block models and reporting of tonnage and grades from block models.

SYV – Sulayman Yousuf Vaid, Glencore Operations SA, (SAGC – GT g MS 0114). Lead Competent Person responsible for Mineral Resources and Mineral Reserves.

MM – Mogomotsi Maputle, Glencore Operations SA, Western Chrome Mines, (SACNASP – 400071/14). Responsible for Mineral Resources and Mineral Reserves. LUN – Lindiwe Unity Nkambule, Glencore Operations SA, Eastern Chrome Mines, (SACNASP – 121635). Responsible for Mineral Resources and Mineral Reserves.

Statement by Competent Person

This summary has been reviewed and the relevant data extracted and compiled by Sulayman Yousuf Vaid (SYV). SYV is the Lead Competent Person, registered with the South African Geomatics Council (SAGC, P.O Box 752799, Garden View, 2047), Reg. No. -GT gMS 0114 and holds a National Diploma in Mine Surveying. SYV is a Mine Surveyor with 28 years’ experience in Mine Survey, Mine planning and resource and reserve estimations and is directly linked to the mining industry and currently a full-time employee of Glencore Operations South Africa. SYV consents to the inclusion in this report of the matters based on this information in the form and context in which it appears.

Sulayman Yousuf Vaid

Glencore Operations South Africa Proprietary Limited 39 Melrose Blvd, Birnam, Sandton, 2076 PO Box 2131, Rustenberg 0300, NW, RSA Tel: (014) 590 2416 17 March 2023

See Appendix 1 to this report and our online Integrated Annual Report 2022 for the complete Mineral Resources and Mineral Reserves Statement. For Merafe ownership of specific mines contributed to the Venture see page 60 of this report. Prior year restatements are not significant or material.

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Key points – 2022

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----- Start of picture text -----

Total
Lost-time
recordable injury frequency
Fatalities injury rate
frequency rate
NIL (LTIFR)
(TRIFR)
(2021: NIL) 1.20
2.40
(2021: 1.36)
(2021: 2.80)
restated 2.75 to 2.80
The Venture
Disabling injury
had
severity rate
(DISR) No safety
and health
94.06
penalties
(2021: 124.61) in 2022
----- End of picture text -----

PERFORMANCE

Human Capital:

safety health and wellness our employees training and development

The Venture believes in the possibility of a zero-harm operation. We believe that all occupational diseases and injuries can be prevented and that we must therefore all take responsibility to avoid occupational diseases and injuries.

Material issues

The safety and health of our employees and our contractors
The training and development of our employees and our contractors
Fair remuneration

We need a healthy, motivated and skilled workforce. Intellectual Capital and knowledge management are also recognised as key intangible creators of wealth. Damaging Human Capital by abuse of human rights or labour rights or compromising health and safety has financial and reputational costs.

The Venture enhances its Human Capital by:

giving employees and community members access to training, development and lifelong learning, and capturing and sharing knowledge;
ensuring adequate safety arrangements are in place; and
incentives and remuneration.

Stakeholder impact and engagement with stakeholders

The stakeholders most affected by the ability of Merafe and the Venture to keep our employees safe and healthy are their families and dependants.

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022

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Human Capital: safety

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The Venture’s policies and approach to safety management

The Venture’s operations maintain stringent safety and risk management systems, which it aligns with the international standards: ISO 45001 and ISO 31000. Glencore collates best practice from each of its assets and from externally recognised leaders in safety management and shares this knowledge across the Glencore Group. Through Glencore, all the operations of the Venture are members of the International Council of Minerals and Mining.

The Venture takes a proactive and preventative approach towards safety, aiming to instil a positive safety culture in which everyone fully integrates its safety values into their working lives. It reviewed its approach to safety by updating its risk management framework. Glencore’s fatal hazard protocols and high-potential risk incident reporting processes have been rolled out in the Venture. There are weekly meetings and discussions around the reporting of high-potential risk incidents.

Glencore’s Chief HSA Officer is responsible for safety, health and wellness.

Safety programme overview

Objective Supporting actions

Zero fatalities	We reviewed and strengthened our incident investigation process to include 24-hour notifcation of senior management and the Glencore corporate sustainability team for fatal incidents and launched a mandatory on-site fatality investigation process following any fatal incident. The Venture’s senior management must then report to the Glencore Board HSEC Committee on fatalities and the subsequent independent investigations in person. Any lessons learned that could further improve general fatality prevention are shared across the Group. We ensure independent third-party assistance is on-site within 72 hours of a fatal incident. We developed SAFEWORK, a Group initiative to foster a safety culture based on behaviours and consequences at all levels. We rolled out Fatal Hazard Protocols and safety standards (which are reviewed annually) and life-saving behaviours (part of the SAFEWORK programme) across the Group.
Reduction of TRIFR	The Venture focused on reducing the TRIFR. The supporting actions resulted in the TRIFR reducing from 4.58 (2010 baseline) to 2.40 in 2022.

Zero
fatalities

We reviewed and strengthened our incident investigation
process to include 24-hour notifcation of senior
management and the Glencore corporate sustainability
team for fatal incidents and launched a mandatory on-site
fatality investigation process following any fatal incident.
The Venture’s senior management must then report to the
Glencore Board HSEC Committee on fatalities and the
subsequent independent investigations in person.
Any lessons learned that could further improve general fatality
prevention are shared across the Group.
We ensure independent third-party assistance is on-site
within 72 hours of a fatal incident.
We developed SAFEWORK, a Group initiative to foster a
safety culture based on behaviours and consequences at all
levels.
We rolled out Fatal Hazard Protocols and safety standards
(which are reviewed annually) and life-saving behaviours (part
of the SAFEWORK programme) across the Group.

Reduction
of TRIFR

The Venture focused on reducing the TRIFR.
The supporting actions resulted in the TRIFR reducing from
4.58 (2010 baseline) to 2.40 in 2022.

The Glencore Fatal Hazard Protocols and Life Saving Behaviours, which provide a set of tools that are initially focused on the fatal risks, are being rolled out in the Venture as part of SAFEWORK. The life-saving behaviours are aimed at strengthening the focus in the Venture on behaviours and consequences rather than a rules-based culture. The fatal risk categories that Glencore has identified as being most hazardous and responsible for the majority of its fatalities include: energy isolation, working at heights, mobile equipment, ground/strata failure, confined space and electrical safety. Over and above this, the Venture specifically highlights people–vehicle interaction as a key danger area.

In 2022 there were 60 (2021: 67) recorded injuries in a workforce of 9 574 (including contractors). An in-depth analysis by the Venture revealed that no one single factoral cause stood out in 2022, but that “at risk behaviour” remains a major problem. As safety is the number one priority in the Venture, a number of campaigns were rolled out and re-emphasised including SAFEWORK, Life Saving Behaviours and Safework coaching. The effect of COVID-19 and the stop/start of operations as a result of market uncertainty negatively impacted safety at the operations.

The Venture implemented the Fatal Hazard Protocols in 2015 and continually implements positive reinforcement programmes.

Accountability

Safety in the Venture is always the direct responsibility of Glencore’s senior management, who provide the leadership, systems and processes for the prevention of incidents and the elimination of fatalities in the Venture. The formal management structure documents responsibility for safety from the Glencore Board down to each individual Venture employee and contractor.

The Venture puts considerable effort into embedding a safety culture in its operations. Its leaders are aware that they are expected to put safety before production or other considerations and to personally endorse safety initiatives and engage with employees at all levels to discuss safety issues and priorities. It concludes health and safety agreements with the trade unions.

The sustainable development policies in place in the Venture are aligned with the Glencore Group Sustainable Development Standards. They set out its commitment to zero injuries and fatalities.

The role of training

The Venture’s investment in safety training is detailed on page 35 in the Human Capital section of this report. It continues to use virtual reality training, combined with easy-to-read written instructions, on all its different procedures. The training is designed to ensure that employees cannot complete their training on a procedure until they have shown they fully understand it. Training, as can be seen from the detail on page 35 of this report, was a major focus during the year. Focus for 2022 was again on supervisory development training, ensuring that all supervisors understood their legal responsibility, life-saving behaviours, fatal hazard protocols and critical controls.

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Human Capital: health and wellness

Human Capital includes health, safety, knowledge, skills, intellectual outputs, motivation and the capacity for relationships of individuals.

Key points – 2022

Noise-induced hearing losses Employees who test positive THREE for HIV are encouraged to (2021: three) register for treatment

Employees receive HIV and Aids counselling, care and support free of charge

Health programmes at the Venture aim to eliminate occupational illness

Organisations depend on individuals to function. They need a healthy, motivated and skilled workforce. Intellectual capital and knowledge management are also recognised as key intangible creators of wealth. Damaging Human Capital by abuse of human rights or labour rights or compromising health and safety has direct as well as reputational costs.

We enhance our Human Capital by providing healthcare and training and education in health matters.

Our policy and approach

A business needs a healthy workforce that is able to work at its full potential. The health programmes provided by the Venture aim to eliminate and address occupational illnesses, public health issues and the overall wellbeing of its employees and contractors.

COVID-19 pandemic

COVID-19 is a pandemic that destabilised nations in 2020 and had a negative impact on our employees, our operations and the global environment. COVID-19 continued into 2022, but the impact on the operations was less severe.

Our operations’ response to the COVID-19 pandemic in 2020 and 2021 was to create awareness, training and educational videos, as well as providing face masks, personal thermometers and information to all employees and contractors. Operations continue to adapt with a view to working efficiently and without much interruption in the face of the pandemic.

Typically, occupational illnesses such as noise-induced hearing loss (NIHL) are only diagnosed some time after the event that caused them. As a result, the occupational illnesses currently occurring in the Venture’s operations are usually the result of historic mining and smelting practices.

The Venture has identified NIHL as a major occupational health risk for its employees and has employed a full-time audiologist to counteract this risk. Any of its workers exposed to the internationally accepted noise level limit of 85 decibels or above were issued with personalised noise clippers for hearing protection. The equipment it provides includes variphones/noise clippers, which are custom-made for comfort and are 100% leak tight. Employees are trained in the use, maintenance, storage and care of this equipment. Any employees or contractors at risk of being exposed to noise that could damage their hearing are personally monitored and regularly tested as part of our hearing conservation programmes.

Wherever possible, the Venture reduces the noise from the equipment it uses in its operations to levels below the internationally recommended standards using design modifications, exclusive zones and “buy quiet” programmes for new or upgraded equipment. The Venture’s operations have reduced machinery noise to less than 110 decibels. There were three NIHL cases in 2022 (2021: three).

All the Venture’s operations undergo an annual risk assessment of their baseline risks and legal audits are conducted by an external legal company accompanied by subject matter specialists in a three year cycle.

HIV and Aids

HIV and Aids is a human rights issue, which Merafe and the Venture address through their policies and programmes. To ensure these policies are accessible to the Venture’s employees and contractors, they are available in all the languages spoken by its employees.

Employees can choose to receive HIV and Aids counselling, care and support. Any HIV-positive employees of the Venture can receive treatment they need free of charge, together with the support and education that will make it possible for them to maintain their antiretroviral treatment programme through the membership of a medical aid.

All Venture employees who are HIV-positive are encouraged to receive antiretroviral treatment.

The Venture’s HIV and Aids policies commit to:

providing employees and contractors with the knowledge they need to protect themselves and their families from HIV and Aids through workplace education programmes that explain clearly how HIV can be contracted, what can be done to prevent contracting and transferring HIV, and what should be done to enhance the quality and length of life of those who are HIV-positive;
encouraging employees and contractors to know their HIV status and providing counselling and testing facilities for them;
running HIV and Aids campaigns that involve employees at every level of the organisation;
ensuring that every employee attends an HIV and Aids education session during working hours, followed by an individual wellness counselling session with a healthcare provider;
ensuring that testing for HIV is voluntary and that employees are only tested for HIV and Aids after giving their informed consent;
guaranteeing the confidentiality of employees’ medical information;
providing pre- and post-test counselling for employees or contractors wishing to be tested for HIV and Aids;
forming public-private partnerships with local, provincial and national government structures in joint projects to fight HIV and Aids in the communities in which the Venture operates; and
facilitating the training of peer educators and establishing and training home-based care workers through the Venture’s corporate social investment programme.

All the Venture’s occupational health nurses have been trained in the management of HIV and TB and the impact of HIV and TB. All employees who visit its occupational health clinics are screened for TB. Those whose screening tests indicate they may have TB are referred to healthcare facilities for TB investigation and treatment. The Venture’s wellness programme has been incorporated into the annual/periodic medicals conducted at each operation. Medical records remain on site and are only seen by the Occupational Medical Practitioner and the nurses included in the wellness programme.

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Human Capital: our employees

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Organisations depend on individuals to function. They need a healthy, motivated and skilled workforce.

Key points – 2022

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The Venture has
No protected or unprotected strikes recognition agreements in place
at most of its operations
Merafe had a total workforce
18%
of 8 employees
of the Venture’s workforce in 2022 was
and the Venture 6 636 employees
female
at 31 December 2022
100% of Merafe executives, 60% of Merafe executives,
senior and middle management are Black senior and middle management are women
(2021: 100%) (2021: 50%)
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Approximately 70%
of the Venture’s workforce
is unionised
Key focus of the Venture is on
retention strategies
for junior and senior management HDSAs
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Intellectual Capital and knowledge management are also recognised as key intangible creators of wealth. Damaging Human Capital by abuse of human rights or labour rights or compromising health and safety has financial and reputational costs.

Material issues

Industrial action in the mining industry and the Venture

We enhance our Human Capital by:

Meeting our employment equity and human resource development targets and exceeding the Mining Charter scorecard targets
giving employees and community members access to training, development and lifelong learning and capturing and sharing knowledge;
respecting human rights;
Employee work satisfaction
paying fair remuneration to our employees and our business partners; and
Maximising local employment in the Venture
creating satisfying work opportunities.
Retaining skilled employees and securing the next generation of skilled employees

Our approach to our employees

Remuneration

Glencore’s Code of Conduct, which is applied in the Venture, recognises and upholds the rights of employees to a safe workplace, collective representation, just compensation, job security and opportunities for development, all of which are based on the core belief that our people are fundamental to our success.

Collective bargaining and freedom of association is considered a fundamental right for the Venture’s employees. Collective agreements, particularly around terms and conditions of employment and company benefits, are negotiated between the parties with due regard to the relevant legislation. The Venture seeks to reach agreement with the unions on annual wage increases for implementation in July each year.

Glencore’s Human Resources Director is responsible for labour relations in the Venture.

Both Merafe and the Venture are committed to providing a workplace based on:

mutual respect;

The Venture is committed to treating all its employees with dignity and in a manner that is culturally sensitive. Unfair discrimination on the basis of race, gender, religion, political or sexual orientation, national extraction or social origin is not tolerated.

fairness;
integrity;
non-discrimination;

Disciplinary and grievance policies and procedures are in place at Merafe and the Venture.

equal opportunity at all levels; and
open and two-way engagement with our employees and their representatives.

Industrial action at the Venture in 2022

There were no protected or unprotected strikes during 2022.

Labour relations

In 2022, the Venture signed three-year wage agreements with the western smelters and the eastern smelter.

We consult with stakeholders in advance of any significant changes to our business.

Union membership

Engagement and resolving disputes amicably plays a very important role in labour relations. The Venture undertakes to consult with its employees and their recognised representatives in advance of significant operational changes in an effort to reach consensus about any necessary business actions.

The Venture has recognition agreements with NUMSA and approximately 70% of its workforce is unionised.

See our online Integrated Annual Report for 2022 for the Venture’s code of conduct.

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PERFORMANCE: HUMAN CAPITAL: OUR EMPLOYEES continued

The total workforce of the Venture by employment type*

Category	2022	2021
Full-time employees Temporary/fxed-term employees External contractors+	6 182	6 083 341 3 150
	417
	3 993
Total	10 592	9 574

* The numbers are the 2022 average numbers. The number of full-time employees and fixed-term employees at 31 December 2022 was 6 636. + Increase in contractors due to increased production and capital projects resuming after 2020 lockdown.

Maximising local employment

Hiring policies

When hiring employees we give preference, where possible, to members of the local community and, in some instances, the Venture offers training opportunities to community members to develop the skills they need to become our employees.

Diversity and equal opportunity

Management and site employment equity committees monitor employment equity in the Venture’s operations every month and report the results to the Venture, which in turn reports to Glencore and Merafe.

The Venture bases its employment equity policies on providing equal opportunities to all potential and existing employees.

Diversity in the Venture

The term diversity used in this section of the report is based on the Mining Charter Scorecard’s definition of HDSAs, which includes African males and females, coloured males and females, Indian males and females and white females. Ongoing transformation is a priority and is discussed at all levels. The Venture is again focusing on its retention strategies with specific reference to senior management and junior management HDSAs.

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% Mining
Charter % %
target achieved achieved
Venture employment equity 2022 2022 2021
Senior management 60 50 47
Middle management 60 71 69
Junior management 70 65 63
Core skills 60 95 94
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Diversity in Merafe

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% Mining
Charter % %
target achieved achieved
Mining Charter 2022 2022 2021
Top management
(includes Board) 60 87 87
Senior management (Exco) 60 100 100
Middle management 60 100 100
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Employee challenges

Maximising local employment in the Venture
Achieving employment equity that is supported by everyone in the workplace
Making careers in mining more accessible to women in the Venture

There are no junior managers employed by Merafe.

Merafe achieved a Level 5 Broad-Based Black Economic Empowerment (B-BBEE) status under the Codes of Good Practice in 2022. A copy of the certificate is on the Company website together with an explanation and reasons for the rating.

Engaging with the Venture’s employees and the trade union through open communication channels to achieve labour peace

Merafe Executives Merafe Senior and Middle Management Merafe Employees 50% 50% 100% 100% 67% 33% 63% 37% 87% 13% ●Female●Male●Black●White • Providing a workplace that is free from discrimination Venture workforce by employment and gender type at 31 December 2022 Permanent and fixed-term Male Female Total Senior management 77 12 89 Middle management 110 61 171 Supervisors, administrators, technicians 971 422 1 393 Operational, maintenance, production 4 305 678 4 983 Grand total 5 463 1 173 6 636	Merafe Executives Merafe Senior and Middle Management Merafe Employees 50% 50% 100% 100% 67% 33% 63% 37% 87% 13% ●Female●Male●Black●White • Providing a workplace that is free from discrimination Venture workforce by employment and gender type at 31 December 2022 Permanent and fixed-term Male Female Total Senior management 77 12 89 Middle management 110 61 171 Supervisors, administrators, technicians 971 422 1 393 Operational, maintenance, production 4 305 678 4 983 Grand total 5 463 1 173 6 636	Merafe Executives Merafe Senior and Middle Management Merafe Employees 50% 50% 100% 100% 67% 33% 63% 37% 87% 13% ●Female●Male●Black●White • Providing a workplace that is free from discrimination Venture workforce by employment and gender type at 31 December 2022 Permanent and fixed-term Male Female Total Senior management 77 12 89 Middle management 110 61 171 Supervisors, administrators, technicians 971 422 1 393 Operational, maintenance, production 4 305 678 4 983 Grand total 5 463 1 173 6 636	Merafe Executives Merafe Senior and Middle Management Merafe Employees 50% 50% 100% 100% 67% 33% 63% 37% 87% 13% ●Female●Male●Black●White • Providing a workplace that is free from discrimination Venture workforce by employment and gender type at 31 December 2022 Permanent and fixed-term Male Female Total Senior management 77 12 89 Middle management 110 61 171 Supervisors, administrators, technicians 971 422 1 393 Operational, maintenance, production 4 305 678 4 983 Grand total 5 463 1 173 6 636
Permanent and fixed-term
Senior management Middle management Supervisors, administrators, technicians Operational, maintenance, production	77	12	89
	110	61	171
	971	422	1 393
	4 305	678	4 983
Grand total	5 463	1 173	6 636

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Human Capital: training and development

The Venture provides full-time adult education and training for its employees and portable skills training that equips employees for careers beyond the Venture.

Key points – 2022

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An average of R17 682
The Venture invested
was invested in training for each member of the
R187.29 million in training Venture’s workforce (employees and contractors)
(2021: R136.26 million)
(2021: R14 232)
R57.76 million invested R5.96 million
in artisan learnership training invested in bursaries and scholarships
(2021: R38.45 million) (2021: R5.17 million)
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804 751 Venture total training hours (2021: 832 739)

73 average training hours per permanent employee (2021: 85)

323 465 training hours for contractors (2021: 285 350)

81 average training hours per external contractor employee (2021: 91)

Development and training

Both Merafe and the Venture are committed to meeting their human resource development targets and retaining and developing their skilled employees.

The Venture provides:

development and training opportunities for HDSAs that will help them to further their careers;
career development opportunities that allow it to develop and retain high-potential employees;
training that addresses risk-tolerant or ingrained behaviours that impact negatively on our operations; and
training on its Code of Conduct and Sustainable Development Standards and HSEC Standards and Protocols.

Development of staff was a key focus in 2022 across all sites. Increased focus on computer-based training made training more efficient and structured.

Leadership development

The Venture invites senior managers whom it has identified as having leadership potential to participate in leadership programmes at universities. The Venture also provides them with additional training, support and career development opportunities. 70% (2021: 75%) of junior leaders who attended a programme to enhance their supervisory skills were HDSAs. 71% of middle management employees participating in management level programs were HDSAs.

It continually evaluates its training methods and the best way to communicate with the various age groups and cultures in its workforce.

Training hours

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2022 2021
Total training hours 804 751 832 739
Total training hours for permanent employees 481 286 547 379
Average training hours per permanent
employees 73 85
Total training hours for contractors 323 465 285 360
Average training hours per contractor 81 91
Number of health issues training sessions 8 656 14 192
Number of safety issues training sessions 21 550 21 537
Number of human rights issues training sessions 16 847 17 447
Number of environmental training sessions 11 416 12 572
Community health training 137 231
Community environmental training 214 215
Community human rights training 226 281
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* Permanent employees: 6 599 (average)

** Number of contractors: 3 993 (average)

See the table on page 48 of this report for detail of the structure of the Venture’s joint Board and top management of the Venture where executives of Glencore and Merafe are members.

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PERFORMANCE

Social Capital: and stakeholder responsiveness

Social Capital is any value added to the activities and economic outputs of an organisation by human relationships, partnerships and cooperation.

Key points – 2022

Material issues

64% 61%

The Venture spent capital and services R121 million consumable procurement procurement on corporate spend of the spend of the social investment Venture was Venture was B-BBEE spend (2021: B-BBEE spend R73 million) (2021: 73%) (2021: 65%)

Our social licence to operate
Uncertainty of the socio-political environment

Organisations rely on social relationships and interactions to achieve their objectives. Externally, social structures help create a climate of consent or a licence to operate, in which trade and the wider functions of society are possible. Organisations also rely on wider socio-political structures to create a stable society in which to operate, e.g. government and public services, effective legal systems, trade unions and other organisations.

Being responsive to stakeholders enables the Venture to:

contribute to open, transparent and fair governance;
source materials ethically and treat suppliers, customers and citizens fairly;

The Venture The Venture total spent procurement R19 million spend was on Enterprise R28.2 billion Development in 2022 (2021: (2021: R24.6 billion) R17.4 million)

respect and comply with local, national and international law;
pay our taxes;
invest in the social infrastructure;
provide communication;
minimise any negative social impacts on our operations and maximise the positive impacts they can have; and
support the development of the communities in which the Venture operates.

Socio-economic development

Both Merafe and the Venture are committed to working with local authorities, community representatives, inter-governmental and non-governmental organisations and other interested parties to develop and support community investment projects.

Both the Venture and Merafe focus on sustainable projects, with their focus being on education, infrastructure and health issues in the communities in which the Venture operates.

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Corporate social investment

The Venture

The Venture’s corporate social investment (CSI) spend for the 12-month period to December 2022 was R121 million (2021: R73 million). Merafe contributes to 20.5% of this spend.

This included expenditure on inter alia Enterprise and Job Creation Projects, Education, Social and Community Development Projects, Health Projects and Culture and Art Projects.

The Venture projects included:

the construction of South Africa’s first free standing brick and mortar fully-fledged Thuthuzela Care Centre (TCC) at the Dilokong Hospital in Limpopo Province (thus heeding the president’s call in the National Strategic Plan on Gender Based Violence);
refurbishing the TCC’s existing facilities in Rustenburg and Emalahleni;
the construction of an impressive Multi-Purpose Community Centre at Thewane outside Rustenburg;
supporting three local enterprise development poultry farming initiatives;
community portable skills development for 760 unemployed youths;
supporting TVET College in Mashishing with the construction of an additional 8 lecture rooms;
the electrification of 1 800 households in Steelpoort; and
the Sekhukhune Water Project (potable water reticultation to households).

Merafe

In addition to the above, Merafe has been supporting both Meriti Secondary School (Meriti) and Boitekong Secondary School (Boitekong) with the implementation of a variety of infrastructure, curriculum and social welfare projects through Adopt-a-School Foundation (the Foundation). Both schools are in the North West province and are situated within communities that are characterised by poverty, violence, crime, alcohol and substance abuse, family disorganisation and despair.

The communities in which these schools are in Rustenburg are characterised by poverty, violence, crime, alcohol abuse, substance abuse and family breakdowns. These structural impediments have infiltrated themselves into the school environment as identified by the projects and affect the normal functioning of teaching and learning within the schools. The projects are facilitated to address these problems, hence engagement of all stakeholders including learners, educators, service providers from the community, and parents.

Enterprise development

The Venture

Small, medium and micro enterprises play a key role in job creation in South Africa and our investment in their development is an important part of the contribution both Merafe and the Venture make to the socio-economic capacity of communities. It also increases our ability to procure from black-owned enterprises. The Venture has enterprise development commitments in terms of the Mining Charter Scorecard. The Venture spent R19 million (2021: R17.4 million) on enterprise development in 2022.

Merafe

Merafe spent R14 million in 2022 on an enterprise and supplier development fund aimed at supporting small and medium enterprises through responsible investment and ensuring B-BBEE code compliance. Merafe has provided the fund with an interest-free loan and expects repayment of the capital amount on winding up of the fund at the end of a three-year period from the reporting date.

Job creation and skills development

The Venture recognises that its commitment to employing local people whenever possible is to the advantage of both itself and the local communities. Direct employment at the Venture’s operations, indirect employment through contractors and its use of local suppliers provide an income for thousands of families.

Our commitment to employing local people includes providing training opportunities that enable community members to meet the Venture’s competency requirements.

The Merafe CSI spend in 2022 was R3 million in addition to its contribution (20.5%) of the Venture’s CSI spend mentioned above. As previously reported, Merafe supports projects at Meriti and Boitekong Secondary Schools. In 2022, the projects included Health, Sanitation and Sexuality Education projects, Moral Regeneration Projects and Psychosocial Support Services implemented across both schools.

Health, Sanitation and Sexuality Education Projects: The aim and objectives of the Health, Sanitation and Sexuality Education project is to provide a conducive space and platform to educate and empower teenagers (both female and male learners) in schools, to make informed decisions relating to sexual relations in order to curb teenage pregnancy at schools. The programme involves learners as active participants (led by Peer Educators) with the support of educators, parents, and relevant stakeholders within the community.

Moral Regeneration Project: Social ills and violence at communities and schools continue to have an impact on the children’s well-being and their learning opportunity. The overall goal of the project is to engage learners in dialogue sessions on issues pertaining to sound morals and values (address issues of violence), and help learners develop social, ethical, emotional, physical, and cognitive competencies to enable them to set personal goals, as well as participate in the creation of a conducive learning environment.

Psychosocial Support Services: To address the needs of vulnerable learners at school, Psychosocial Support has been added to the projects. The service provider, Hartbeespoort Parent and Child Counselling Centre provides Psychosocial Support services to learners as an addition to the project. The process involves the identification of learners with social problems and creates sustainable referral pathways with external stakeholders, including follow up of all referred cases.

See page 4 of this report for a review of stakeholder engagement.

See page 35 of this report for further information on the range of skills training the Venture provides and its investment in this training.

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PERFORMANCE: SOCIAL CAPITAL AND STAKEHOLDER RESPONSIVENESS continued

Procurement

The Venture’s performance in terms of the discretionary procurement targets of the Mining Charter Scorecard is set out below: In terms of the new Mining Charter, procurement spend by the Venture for 2022 was approximately R28.2 billion. Of this R17.6 billion, was on discretionary spend. R8.68 billion of the discretionary spend was on mining goods (64.2% B-BBEE spend) and R8.9 billion on services (61.57% B-BBEE spend).

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Total procurement Non-discretionary Discretionary B-BBEE
spend spend spend spend
R R R R %
Capital + Consumables (Mining Goods) 8 912 198 423 229 788 055 8 682 410 368 5 573 778 496 64.20
Services 19 292 558 320 10 385 176 872 8 907 381 447 5 483 840 474 61.57
Total 28 204 756 743 10 614 964 927 17 589 791 815 11 057 618 970
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B-BBEE spend as a % of discretionary spend

Public health and HIV and Aids

The Venture favours a united approach to public health, whereby we collaborate with government, international organisations and NGOs to make the most impact at community level. The public-private partnerships formed by the Venture provide communities access to prevention, treatment and care for HIV and Aids as well as other communicable and associated diseases. The Venture supports the government’s HIV counselling and treatment campaign by providing funding and testing sites. It has also funded health clinics and hospices in the communities in which it operates, including an HIV and Aids clinic in Lydenburg in Mpumalanga province. There is also a health clinic at the Lion ferrochrome plant in Limpopo province.

Respecting the rights of communities

Neither Merafe nor the Venture tolerate any form of discrimination and our policies clearly state that we do not tolerate any form of discrimination, and that all our employees and stakeholders are to be treated with dignity and in a manner that is culturally appropriate, irrespective of gender, background or race.

Human rights and ethics

Merafe subscribes to the fundamental principles of human rights as enshrined in our country’s Constitution and Bill of Rights. Our policies and practices have been aligned with both to ensure that all our employees and stakeholders are treated with dignity and in a manner that is culturally appropriate, irrespective of gender, background or race. Furthermore, Glencore is a signatory to and has accepted the Voluntary Principles of Security and Human Rights.

Ethics

The Merafe Code of Ethics governs the way we do business and the way our directors and employees engage with our stakeholders. The Code, which is binding on our directors, employees and contractors, provides guidelines for behaviour which is above reproach.

Stakeholder responsiveness

Merafe and the Venture address material issues we have identified that could impact negatively or positively on our key stakeholders. These stakeholders include national, provincial and local government in their roles as regulators and partners; the trade unions in their role as representatives of the Venture’s employees who are from local communities; and our investors and business partners who are affected by all aspects of our business. The impact of our most material issues in regard to the Human, Natural, Social and Manufactured Capitals on our stakeholders, together with our responsiveness on these issues, is outlined in this report.

While Merafe has direct relationships with certain key stakeholders in connection with community matters, we also have indirect relationships through our partnership with Glencore in the Venture. As managers of the Venture’s day-to-day operations, Glencore takes responsibility for engaging with the Venture’s stakeholders.

All the Venture’s operations and projects are expected to review the stakeholder engagement plans every year which includes Traditional Authorities. The Venture’s operations held formal community stakeholder meetings where possible during the year. Virtual engagements continued during periods of lockdown.

Our corporate social investment and social labour plans are aligned to the objectives outlined in the 2030 UNSDGs, the National Development Plan for South Africa and the Integrated Development Plans for Local Municipalities.

All the Venture’s operations and projects are expected to review the stakeholder engagement plans every year. The Venture’s operations held formal community stakeholder meetings during the year.

In 2015 the Venture identified issues material to communities and stakeholders that assisted its social and labour plans for the five-year period from 2015 to 2020.

Traditional authorities

Merafe supports the International Council on Mining and Metals (ICMM) and upholds the performance expectations associated with Traditional Authorities. Our engagements with Traditional Authorities around our operations assisted the Venture in enhancing transparency, resolving complaints and grievances promptly, and embedding cooperation with doorstep communities.

See the stakeholder engagement table on our website for details of the Venture’s engagement and Merafe’s engagement during 2022.

See our website for further information on governance, social and environmental information of the Venture and Merafe as well as externally developed principles, charters and initiatives to which Merafe and the Venture subscribe.

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TRANSPARENCY AND ACCOUNTABILITY

GOVERNANCE STRUCTURE

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Board of Directors
Chief Executive Officer
Executive Committee
Audit and Risk Remuneration and Social, Ethics and
Committee Nomination Committee Transformation Committee
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TRANSPARENCY AND ACCOUNTABILITY continued

Chairperson’s report

Overview

Due to continued demand for our product, Merafe’s performance in 2022, was again exceptional. This is manifested in our reported revenue, EBITDA, profit after tax and net cash on hand at the end of the reporting period. I am also pleased to report that the operations of the Venture performed well with regard to production and its identified sustainability criteria.

As reported last year, the Judicial Commission of Inquiry into State Capture shone a light on corruption and state capture in our country and the undermining of state institutions and enterprises that took place. The three-part report of the Commission was published in 2022. Hopefully remedial action will follow and those responsible will be held to account. South Africa faced further headwinds in 2022 with devastating floods in the provinces of the Eastern Cape and KwaZulu Natal and the continual issues with Eskom and “loadshedding” as well as problems caused by a failing rail and port infrastructure. Together with on-going corruption and crime it is no easy task to restore the image of South Africa and attract investments in order to grow the economy so the country can address the key challenges it faces of unemployment, poverty and income disparity.

Last year I also mentioned that there were promising offshoots that can still be seen, showing the resiliency of South Africans in dealing with the challenges they face and this resilience will again be tested in 2023. It is only sustained ethical leadership in government, business and society that can lead to a turnaround in sentiment and create a conducive environment for new investments. This however requires decisive action and sustained leadership by government.

On the global front, our Chief Executive Officer mentions in her report, on page 10 , the issues that impacted the performance of the Company in 2022. Of specific importance is that, despite excellent performance, the South African ferrochrome market share will continue to be lost to international ferrochrome production because of the rising energy costs in South Africa and on the back of cheap South African un-beneficiated chrome ore exports. The government and industry need to continue working together to ensure local beneficiation of its resources and efficient use of its existing infrastructure. This is critical for the sustainability of the South African ferrochrome industry and to protect employment whilst ensuring foreign revenue flows into the country. Other countries (China, India, Kazakhstan and Zimbabwe) have and continue to implement tariffs and subsidies to protect their ferrochrome industries. I have previously welcomed the October 2020 announcement by Cabinet of its decision on the introduction of a chrome export tax and remarked that it is our hope that government will, in time, move towards the implementation of this decision. Unfortunately, to date there have been no developments in this regard with dire consequences to this industry.

Despite an ever-changing world and business environment, we will continuously remain focused on making our business a success whilst providing a positive contribution to our stakeholders and the broader society.

COVID-19

As mentioned, the impact of COVID-19 continued into 2022 but to a lesser effect. The impact on our business is commented on in the reports of the Chief Executive Officer (page 10 ), the Financial Director (page 13 ) and in the Manufactured Capital section on page 18 of this report.

Unfortunately, during 2022, two (2) of our employees at the Venture lost their lives to COVID-19 (2021:26).

Financial performance

As I mentioned in the introduction, 2022 was an excellent year in terms of all the key financial indicators such as revenue, EBITDA, profit after tax, net cash generated and net cash on hand.

The financial performance of the Company has been addressed in the Chief Executive Officer’s report on page 10 and the Financial Capital section of this report on page 13 . The Chief Executive Officer has also provided commentary on the strategy of the Company going forward and the benefit the Company has gained from its focus on ferrochrome (and ancillary businesses) and maximising cash flows from the Venture.

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I am pleased to report that in 2022 Merafe again produced an excellent financial and operational performance. This was despite the significant challenges around the availability and pricing of electricity and the failing railway and port infrastructure. On governance, we are pleased to report that the Company in most material respects is compliant with King IV. The Company in 2022 also assessed the JSE’s guidance papers on sustainability and climate change reporting and will be working hard in 2023 with its Venture partner to address any shortfalls identified.

Safety

Safety remains the number one priority of Merafe and the Venture; I am pleased to report that there were no fatalities at the operations in 2022 and there were also improvements in the other areas of safety. In this regard, see the Safety section on page 31 of this report for further details as to the efforts made by the Venture in respect of safety, as well as the Manufactured Capital section on page 18 . The Venture is continuing to do all it can to ensure that 2023 is again a fatality free year and that the high standards of safety are maintained.

Key challenges

Despite the excellent performance of the Company in 2022, power costs and continuous failures at Eskom remain a concern for the Company and our industry. Above average tariff increases together with supply challenges remain serious areas of focus for the Venture and the industry. The Venture continues to be impacted by loadshedding and this hinders the ability of the Venture to be a reliable partner to our global customers. There needs to be a long term and sustainable solution to the country’s power supply and pricing. In order to mitigate this, the Venture is pursuing Negotiated Pricing Agreements with Eskom in terms of the DMRE’s Interim Framework for Long Negotiated Pricing Agreement.

The Venture is continuing the construction of renewable energy facilities and supply of power. For more information, please see the Manufactured Capital section on page 18 of this report.

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As reported in 2021, the deteriorating infrastructure of the railways and the ports continue to be a challenge to the South African ferrochrome industry. The inability of the railways to transport our product and inefficiencies at the ports causes an excessive reliance on road transport resulting in backlogs and delays at the harbours. This not only results in delays in shipping our product (and impacting the reputation of South African producers as being reliable suppliers) but also creates opportunities for corruption and theft. The Venture continues to engage proactively with the governmental departments to attempt to find solutions to these critical issues. For more detail on this challenge to our industry please see the Manufactured Capital section (page 18 ) The Chief Executive’s Review (page 10 ) and the section on Material Issues (page 8 and 9 ) of this report.

Strategy

We continue to take a long-term view of our business. In terms of achieving our strategic objectives, our ferrochrome interests will continue to benefit from investments in low-cost production facilities and technology at its operations. This has improved the Venture’s sustainability by increasing the Venture’s cost efficiency and production capacity in difficult trading conditions, but then also allows the Venture to take advantage of improving global conditions and demand as we saw last year. We remain hopeful that in 2023 the government will follow up on a Cabinet decision, by introducing a tax on the export of chrome ore from South Africa. This would be encouraging for South African ferrochrome producers and it would be some extra revenue for the state, whilst it would also level the playing field with our competitors from China, India, Kazakhstan and Zimbabwe, who for years have enjoyed this benefit from their governments.

We reported last year that we will continue to assess opportunities outside ferrochrome where this makes commercial sense. I am pleased to report that in 2021, we participated and invested in a PGMs plant in our western operations with our Venture partners and the plant performed well in 2022. For further information in this regard see the report of the Chief Executive Officer on page 10 .

We remain committed to ensuring the long-term sustainability of both Merafe and the Venture and complying with legislation and the challenges brought about by amendments to the Mining Charter and to the B-BBEE Codes of Good Practice.

The Board

As Chairperson of our unitary Board, I am responsible for the overall effectiveness of the Board and its committees and for ensuring that we provide Merafe with effective leadership, uphold ethical standards, and are responsible, accountable, fair and transparent. I am also responsible for ensuring that we implement strategies aimed at achieving our economic, social and environmental performance objectives.

There is a clear separation between my responsibilities and those of the Chief Executive Officer, which is documented in our Board Charter. Our Chief Executive Officer is expected to focus on our business and ensure it is run effectively and in accordance with the strategic decisions of the Board.

We interact with our stakeholders at our annual general meetings and at presentations made by our executive management team when our interim and annual results are released. This year we again increased our focus on stakeholder relationships and in particular our relationships with our shareholders and our Venture partner. The Board has delegated the responsibility for engagement with our shareholders and potential investors to the Chief Executive Officer and the Financial Director.

The Board is satisfied that it has discharged its responsibilities as set out in the Board Charter. I look forward with enthusiasm to the members’ contributions to the Board in the coming year.

Merafe team and Glencore

On behalf of the Board, I would like to thank the Merafe management team and our Venture partner, Glencore, for their hard work in delivering another exceptional financial, operational and safety performance in the year under review.

Future outlook

The excellent performance we had this year provides confidence for the future. We are also confident that strategy for cash preservation will also bring future benefits to the Company. I thank all stakeholders for their continued support.

ABIEL MNGOMEZULU

Chairperson | 17 March 2023

Our approach to sustainability and assurance

The directors have followed the materiality determination processes described in this report and have applied the results of these processes to formulate the material issues in this report. Merafe relies on the Venture and Glencore to obtain quantitative data with regard to sustainability indicators. I refer you to the Sustainability review and summary on page 59 of this report for information on Merafe and the Venture’s review processes.

As we indicated last year, on an annual basis, the Board does a gap analysis of how the Company performed in terms of King IV as well as the steps taken to address issues where the Company was non-compliant. We are pleased to report that, while acknowledging that this is a work in progress, the Company in most material respects is compliant with King IV. Where we have fallen short, we have provided an explanation as well as the areas we will focus on in 2023. For more details on our reporting on King IV, I refer you to the Governance section on pages 44 and 45 for the full report and compliance analysis.

During the year, the Board and the relevant committees took note and assessed the JSE’s pro-active financial statement monitoring report, the JSE’s guidance papers on sustainability and climate change reporting and assessed changes to the JSE Listing Requirements.

We agree with the assertion in King IV that good governance has its foundation in effective and ethical leadership and transparency and that integrated thinking and reporting on economic, social and environmental dimensions is key to this. Board decisions need to be made in an integrated manner, understanding the impact on these dimensions as well as the impact on value creation in the short-, medium- and longer-term.

Stakeholder inclusivity and responsiveness is key to the process. We are pleased to note that we have been reporting in an integrated manner and in terms of the Capitals – as recommended by King IV – for some years now and the feedback from stakeholders has been positive.

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TRANSPARENCY AND ACCOUNTABILITY continued

Governance

Directorate at 31 December 2022

Non-executive directors

Abiel Mngomezulu (69)

Abiel is Chairperson of the Merafe Nomination Committee, an invitee to the Audit and Risk Committee and a member of the Social, Ethics and Transformation Committee.

of Mintek, a state-owned enterprise responsible for mineral extraction technologies and beneficiation. Abiel also served on several boards of state-owned institutions involved in the mining sector. He is currently a board Chairperson at the South African Diamond and Precious Metals Regulator (SADPMR) and a director at Tshikululu Social Investment.

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Chairperson (Independent) BSc (Hons), MSc Engineering (Mining)

Abiel joined the Merafe Board as an independent non-executive director in September 2010 and became Chairperson in May 2019. He was previously the President and Chief Executive Officer

He is also a member of the Remuneration Committee.

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Matsotso Vuso (50)

Matsotso is the Chairperson of the Audit and Risk Committee.

of smart electricity meters, energy management, business advisory services, consulting and contracting engineering. She has extensive experience in statutory and IT assurance, financial investments analysis and financial restructurings. She also serves on other boards as an independent director.

(Independent) CA(SA), CD(SA) RA

Matsotso joined the Merafe Board in July 2018. She is the founder of Nyamezela Group of Companies, a multi-disciplinary group of companies with solutions spread across manufacturing

Katlego Tlale (37)

Prior to joining Letsema, Katlego was employed by Gold One Group Limited where he managed group reporting and treasury. He completed his articles at KPMG Inc. where he was a member of the firm’s mining audit practice. Katlego is a member of the Audit and Risk Committee.

(Independent) BCom (Acc), CA(SA)

Katlego joined the Merafe Board in December 2020. He is currently the Group Chief Financial Officer of Letsema Group, a black-owned professional services firm which is part of a diversified investment company.

Jeff Mclaughlan (64)

and a National Diploma in Electrical and Instrumentation. He has more than 38 years’ experience in the South African mining sector including various roles at Middelburg Steel and Alloys Proprietary Limited, Consolidated Metallurgical Industries Limited, Xstrata South Africa Proprietary Limited and Glencore Operations South Africa Proprietary

Limited. Jeff served two terms as President of the International Chrome Development Association and stood down in June 2017. He is a member of the Institute of Electrical and Mechanical Engineers, South Africa. Jeff is Chairperson of the Remuneration Committee and serves on the Nomination Committee.

(Independent) MBA, NDIP Elect, Cert Eng Jeff joined the Merafe Board in May 2019. He holds a Master’s degree in Business Administration and Finance from the Open University, an Advanced Professional Management Programme from the University of South Africa (Unisa)

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Nonhlanhla Mabusela-Aikhuere (47)

(Independent) BCompt, CTA and CA(SA)

Nonhlanhla joined the Merafe Board in July 2021. Nonhlanhla is an exinvestment banker with more than ten years’ experience in project and structured finance transactions. She completed her

accounting articles at KPMG Inc, where she spent a year in the corporate finance department. She spent four years of her career at Nedbank Capital as a senior transactor in the power, oil and gas project finance department. She has also held various Chief Executive Officer positions in the mining and mining services space.

Nonhlanhla is the Chairperson for the Social, Ethics and Transformation Committee and a member of the Audit and Risk Committee.

David is a member of the Social, Ethics and Transformation Committee.

David McGluwa (48)

David joined the Merafe Board in July 2021. David has held various senior roles at the Industrial Development Corporation (IDC) since 1999 where prior to that he worked at First National Bank for four years. David was nominated to be director of the Board by the IDC, which has a 22% shareholding in Merafe.

(Non-Independent) Executive Development Programme (GIBS), Corporate Credit Analysis (New York Institute of Finance)

Daniel Green (35)

past eleven years, the last eight of which have been in a number of roles within the Glencore Group. Daniel is currently the head of Business Development for Glencore’s Ferroalloys and South African Coal divisions. Daniel is a member of the Remuneration and Nomination Committee.

(Non-independent) CA(SA)

Daniel joined the Merafe Board as a non-independent non-executive director in November 2021. Daniel is a CA(SA) and has worked in banking, finance, marketing and mining corporate advisory for the

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Executive directors

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Zanele Matlala (59)

Chief Executive Officer BCom, BCompt (Hons), CA(SA)

Zanele joined the Merafe Board in 2005 as an independent non-executive director. She was appointed Merafe’s Chief Financial Officer on 1 October 2010 and

Chief Executive Officer on 1 June 2012. She is a non-executive director of Dipula Income Fund, Stefanutti Stocks Holdings Limited, RAC Limited and Royal Bafokeng Platinum Limited. Zanele is a member of the Social, Ethics and Transformation Committee and an invitee to the

Audit and Risk Committee and the Remuneration and Nomination Committee.

Ditabe Chocho (52)

Financial Director CA(SA), MSc Financial Management

Ditabe joined Merafe in August 2018 having previously been the Company’s Chief Financial Officer in 2013 and 2014. Ditabe is a qualified South African Chartered Accountant and he has

extensive experience in financial and investment management gained during his tenure at various companies including Uranium One Limited, the Industrial Development Corporation of SA Limited and Zico Capital Proprietary Limited. He also served as Chief Financial Officer of MultiChoice Africa Proprietary Limited (MultiChoice) and subsequently served as

Chief Financial Officer and Chief Operating Officer of DSTV Online, a division of MultiChoice in 2012. Ditabe is a member of the Social, Ethics and Transformation Committee and an invitee to the Audit and Risk Committee and the Remuneration and Nomination Committee.

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Company Secretary

William Somerville (66) CorpStat Governance Services FCIS, ACMA, Dip Corporate Law Appointed as Company Secretary on 1 October 2014.

Note regarding the Company Secretary The Company Secretary fulfils no executive management function and is not a director and provides services on an outsourced basis. Accordingly, the Board is satisfied that the Company Secretary maintains an arm’s length

relationship with the executive team, the Board and the individual directors.

Board statistics as at 31 December 2022

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33% 78% 56% 78%
of our Board members are all of our Board members are black of our Board members are of our Board members are non-
female, all of whom are black independent executive directors who do not
receive share options or incentives
(2021: 33%) (2021: 78%) (2021: 56%) (2021: 78%)
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The Board at 17 March 2023 comprised Abiel Mngomezulu, Matsotso Vuso, Katlego Tlale, Jeff Mclaughlan, David McGluwa, Nonhlanhla Mabusela-Aikhuere, Daniel Green, Zanele Matlala and Ditabe Chocho.

Age of Directors

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60 years or older 51–60 years 50 years or younger
Tenure of Directors
2 1 6
9 years + 5–8 years 0–4 years
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TRANSPARENCY AND ACCOUNTABILITY continued

Our approach to governance

Introduction

Merafe is committed to high standards of corporate governance and it endorses the four governance outcomes set out in the King IV Report on Corporate Governance for South Africa, 2016 (King IV) namely an ethical culture, good performance, effective control and legitimacy.

King IV register

The register set out below provides an overview of Merafe’s application of the principles contained in King IV. The register should be read in conjunction with the 2022 Merafe Integrated Annual Report.

Leadership	Leadership	Leadership
Principle 1 The governing body should lead ethically and effectively.	The Merafe Board (the “Board”) leads ethically and effectively. Disclosure of interests is a standard agenda item at Board and committee meetings and there is an annual declaration by all directors. Further, there is a Code of Ethics in place which applies to all directors and all employees. It is displayed on Merafe’s website. There is also a Director Induction and Training Programme, which is reviewed annually. Further, various aspects of Principle 1 are covered in Merafe’s Board Charter and other key documents. The Code of Ethics and the Board Charter are on Merafe’s website and form part of the 2022 online Integrated Annual Report. The Company has a policy to guide directors on dealing in Company securities and no director or employee maybuyor sell the Company’s shares duringa closedperiod.
Organisational ethics
Principle 2 The governing body should govern the ethics of the organisation in a way that supports the establishment of an ethical culture.	The ethical tone at Merafe is set by the Board and applies throughout the organisation. Merafe’s Code of Ethics applies to all directors, employees and suppliers. There is a Whistle-Blowing Line and reports are provided to the Social, Ethics and Transformation Committee and the Audit and Risk Committee on a confdential basis. In respect of any ethical breaches discovered by staff and the external auditors, the relevant laws and regulations are applied. More information on Merafe and the Venture’s Whistle-Blowing Policyis on our website .
Responsible corporate citizen
Principle 3 The governing body should ensure that the organisation is and is seen to be a responsible corporate citizen.	The Board’s approach to being a responsible corporate citizen is supported by various policies and the work done by the Social, Ethics and Transformation Committee. Various safety, health, environmental and community aspects are covered by the above committee with inputs from the Venture as set out in this report.
Strategy andperformance
Principle 4 The governing body should appreciate that the organisation’s core purpose, its risks and opportunities, strategy, business model, performance and sustainable development are all inseparable elements of the value creation process.	The Board recognises that all these elements are inseparable, and Merafe follows the Six Capitals approach as described in this report. This integrated approach is taken by the Board at its meetings, strategy sessions and committee meetings. All budgets and strategic plans (medium- and longer-term) are approved by the Board. Risks and opportunities are covered in strategy sessions and meetings of the Audit and Risk Committee and the Board in an integrated manner.
Reporting
Principle 5 The governing body should ensure that reports issued by the organisation enable stakeholders to make informed assessments of the organisation’s performance, and its short-, medium- and long-term prospects.	The Board is responsible for the integrity of the information contained in this report and other reports, including the annual fnancial statements and interim and year-end results presentations. It is assisted in this regard by the Board committees which review and recommend their respective reports to the Board in accordance with their terms of reference. Reports are provided in printed and online form. The approved reporting framework is set out on page 1 of this report. Matters material to Merafe are refected in this report on pages 8 and 9 . Please further see page 59 for Merafe’s approach to the reporting of material matters andquantitative data set out in the report.
Primary role and responsibilities of the Board
Principle 6 The governing body should serve as the focal point and custodian of corporate governance in the organisation.	The Board is the focal point and custodian of corporate governance in the Company. Various key policies supporting the Company’s strategy are in place. The Board has an annual strategy session and performance is measured against agreed targets. The Board oversees the implementation and execution of the strategy by management. The Board has a Board Charter, a copy of which is on our website , and which is reviewed annually against best practices. The Board is satisfed that in respect of the 2022 fnancial year, it has discharged its duties as set out in the Board Charter.
Composition of the Board
Principle 7 The governing body should comprise the appropriate balance of knowledge, skills, experience, diversity and independence for it to discharge its governance role and responsibilities objectively and effectively.	Assisted by the Remuneration and Nomination Committee, the Board reviews its knowledge, skills, experience, diversity and independence annually, or as circumstances change as set out on page 49 . The Company has a diversity policy and has set targets in this regard. This policy has been updated to comply with the JSE Listings Requirements, where further diversity criteria, namely race, culture, age, feld of knowledge, skills and experience, have been prescribed. The composition of the Board in terms of race and gender is set out on page 49 . The Board comprises a majority of non-executive members, most of whom are independent. The King IV recommendations for director independence, Board composition, chair, induction and training, managing conficts and nomination and appointments of directors are met. The Chairperson of the Remuneration Committee is the lead independent director of the Company.
Committees of the Board
Principle 8 The governing body should ensure that its arrangements for delegation within its own structures promote independent judgement, and assist with balance of power and the effective discharge of its duties.	Merafe has three standing Board committees (as described in this report on pages 46 and 47 ), to which specifc duties and responsibilities have been delegated. They operate under written terms of reference which are reviewed annually and are on our website. The composition of the Board and committees are in line with King IV, the Companies Act and the JSE Listings Requirements, as applicable.

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Boardperformance evaluation	Boardperformance evaluation
Principle 9 The governing body should ensure that the evaluation of its own performance and that of its committees, its chair and its individual members, support continued improvement in its performance and effectiveness.	The performance and effectiveness of the Board and its committees are reviewed at least every two years in line with King IV. This process comprises a self-evaluation questionnaire and is co-ordinated and reported on by the Company Secretary. Areas for improvement are documented and actioned. Performance reviews of individual directors and the Board Chairperson are done every two years. During the frst quarter of 2022, the committees and the Board conducted an evaluation to assess their effectiveness. Overall, the outcomes of the evaluation were positive with only minor areas for improvement.
Appointment and delegation to management
Principle 10 The governing body should ensure that the appointment of, and delegation to, management contribute to role clarity and the effective exercise of authority and responsibilities.	The Board Charter sets out matters reserved for the Board and is reviewed annually. In addition, there is a Corporate Approvals Framework (approved by the Board and reviewed annually) which sets out matters delegated to management and those reserved for the Board. The Board appoints the CEO and the incumbent is accountable to the Board for leading the implementation of strategy, policy and running the day-to-day business of the Company. The King IV recommendations for the CEO in respect of appointment, roles and responsibilities, succession and performance evaluation are complied with. With regards to the Company Secretary, we refer you to our reporting in accordance with 3.84(h) of the JSE Listings Reuirements onae 49 of this reort
q pg p. Riskgovernance
Principle 11 The governing body should govern risk in a way that supports the organisation in setting and achieving strategic objectives.	The Board governs and is responsible for risk. It is assisted by the Audit and Risk Committee, which evaluates risk and guides the Board. Merafe has a Risk Management Policy and Framework, a detailed Risk Register and also a Tax Risk Register. Risk matters are a standard agenda item at every Audit and Risk Committee. In this regard we refer you to pages 8 and 9 (Material issues) and page 58 (Approach to Risk management) of this report. Opportunities fowing from risk assessments form part of the overall approach to riskgovernance. Emergingrisk trends are identifed and monitored regularly.
Technology and informationgovernance
Principle 12 The governing body should govern technology and information in a way that supports the organisation setting and achieving its strategic objectives.	IT governance is a standard agenda item at meetings of the Audit and Risk Committee. Merafe has a very small head offce but is reliant on technology. Various IT-related policies are in place and due to the small head offce, integration of IT and business occurs. Merafe (as opposed to the Venture) has limited investment in technology but is aware of its importance and also the need to protect information. Merafe regularly assesses the vulnerability of its IT environment through expert third parties. All shortcomings arising from these reviews are addressed.
Compliancegovernance
Principle 13 The governing body should govern compliance with applicable laws and adopted, non-binding rules, codes and standards in a way that supports the organisation being ethical and a good corporate citizen.	The Board governs compliance, which is monitored by a combination of management controls, compliance via_the Venture, external audit, sponsors and the Company Secretary. There is no dedicated in-house compliance function nor is one required, given Merafe’s size and structure. Merafe relies on processes within the Venture. Compliance is a standard agenda item for the Audit and Risk Committee, which reports to the Board. During the year, the Board and the relevant committees took note of the three King IV guidance papers, namely “_Corporate failure and lessons learnt”, “Responsibilities of governing bodies in responding to climate change” and “Effective stakeholder engagement within the context of remuneration”. Changes to the Board Charter and the committees’ terms of reference will be made as required. The Board and committees also considered the draft JSEguidancepapers on sustainabilityand climate change.
Remunerationgovernance
Principle 14 The governing body should ensure that the organisation remunerates fairly, responsibly and transparently so as to promote the achievement of strategic objectives and positive outcomes in the short-,medium- and long-term.	The Board takes responsibility for remuneration governance. It is assisted by the Remuneration and Nomination Committee, which oversees that the organisation remunerates fairly, responsibly and transparently so as to promote the delivery of strategic objectives and the creation of value in a sustainable manner. It makes recommendations to the Board in this regard. The Remuneration Report is set out on pages 50 to 57 of this report.
Assurance
Principle 15 The governing body should ensure that assurance services and functions enable an effective control environment, and that these support the integrity of information for internal decision-making and of the organisation’s external reports.	Merafe follows a combined assurance model, with assurance being provided by management, Merafe’s external auditors, the Venture’s internal audit function and the external auditors. Oversight on assurance is provided by the Audit and Risk Committee which reports to the Board. For more information please see page 46 of this report. During the year, Ligwa Advisory Services (LIGWA) were appointed as Merafe’s independent internal auditors, reporting functionally to the Audit and Risk Committee. In 2022 LIGWA conducted an audit of Merafe’s strategy and governance processes. Overall, the outcome was positive with only minor areas for improvement. Merafe also receives a statement from an Independent Competent Person on the Mineral Resources and Mineral Reserves as well as other assurance as set out onae 59 of this reort
pg p. Stakeholders
Principle 16 In the execution of its governance role and responsibilities, the governing body should adopt a stakeholder-inclusive approach that balances the needs, interests and expectations of material stakeholders in the best interests of the organisation over time.	The Board has identifed its key stakeholders and material issues and risks that could impact the stakeholders of Merafe and the Venture, as set out on pages 4, 8 and 9 of this report. The methods of engaging with stakeholders and issues arising from these engagements are set out in a table referred to in the 2022 integrated online report. There is ongoing engagement with shareholders_via_various mechanisms, including interim and year-end reports, the Integrated Annual Report, presentations, quarterly reports, shareholder meetings and the annual general meeting. A stakeholder framework is in place.

We recognise that King IV is a journey and the Board will continue to spend time in 2023 analysing our practices to support the various principles and outcomes in terms of King IV as well as assessing and implementing the recommendations of the JSE guidance papers on sustainability and climate change.

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TRANSPARENCY AND ACCOUNTABILITY: OUR APPROACH TO GOVERNANCE continued

The structure and roles and responsibilities of the Merafe Board and committees

Board and Board committees Roles and responsibilities Members/invitees Member and attendance	Board and Board committees Roles and responsibilities Members/invitees Member and attendance	Board and Board committees Roles and responsibilities Members/invitees Member and attendance	Board and Board committees Roles and responsibilities Members/invitees Member and attendance
Board meetings 2022
Merafe Board	The Chairperson is responsible for ensuring that: • the Board provides effective leadership; • the Board maintains ethical standards; • Merafe develops and implements strategies aimed at achieving its sustainability; and • the Board and its committees are effective. The Board is responsible for: • governance of the Merafe Group on behalf of its shareholders and stakeholders; • its own governance; • strategy, strategic decision-making and risk tolerance; • assessment of performance; • engagement with stakeholders; • Merafe’s approach to its social responsibility, safety, health, the environment, ethics and risk; and • IT governance. Key issues in 2022 included: Safety, Merafe strategy, stakeholder engagement, Merafe sustainability, the Venture performance and sustainability, IT governance and risk management, approval of annual fnancial statements and Integrated Annual Report, approval of interim results and considering the payment of dividends, impairment considerations, review of Board committee composition, composition review and approval of various charters, policies and mandates and committees’ terms of reference, King IV analysis, review of effectiveness of internal controls, review of compliance and consideration of investment and diversifcation opportunities and conducting new transactions, attending and fnalising transactions involving PGMs, considering changes to the JSE Listing Requirements and JSE guidance papers on sustainability and climate change reporting.	Abiel Mngomezulu (c) Matsotso Vuso Katlego Tlale David McGluwa Nonhlanhla Mabusela-Aikhuere Daniel Green Jeff Mclaughlan Zanele Matlala (CEO) Ditabe Chocho (FD)	3/4 4/4 4/4 4/4 4/4 4/4 4/4 4/4 4/4
Committee meetings 2022
Audit and Risk Committee	All members of this committee are independent non-executive directors (as required by the Companies Act). The committee: • monitors the adequacy of fnancial controls and reporting; reviews the audit plans of the external auditors and adherence to these plans; considers and determines the principles for approving the use of the external auditors for non-audit services; ensures that fnancial reporting complies with IFRS, the Companies Act and tax legislation; reviews and makes recommendations on all fnancial matters; • oversees Merafe’s integrated reporting as well as the assurance function; and • assists the Board in identifying all material risk and sustainability issues to which the Company is exposed. It ensures that the requisite risk management culture, policies, practices, systems and resources are in place and are functioning effectively. Key issues in 2022 included: Review work of external auditors, assess independence of external auditors, review risk register, monitor compliance with statutory requirements, assess adequacy of internal controls and compliance, monitor and consider all tax returns and matters related to SARS, risk management workshop, oversee forex and interest rate hedging policies, IT governance implementation, assess formal tax strategy and policy document, reviewed and approved Integrated Annual Report and assurance process, recommend annual fnancial statements and reviewed interim results and impairment considerations, recommended Integrated Annual Report for approval by Board, assessment of Financial Director, review terms of reference, review internal audit function, King IV analysis and compliance as well as the attestation by the CEO/FD in the annual fnancial statements, review of JSE’s pro-active fnancial statement monitoring report, assessing JSE guidance papers on sustainability and climate change reporting, assessing changes to the JSE Listing Requirements and overseeing internal auditors.	Matsotso Vuso (c) Katlego Tlale Nonhlanhla Mabusela-Aikhuere Abiel Mngomezulu Zanele Matlala (CEO) Ditabe Chocho (FD) _ Invitees_	4/4 4/4 4/4 4/4 4/4 4/4

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Board and Board Member and
committees Roles and responsibilities Members/invitees attendance
Committee
meetings 2022
Remuneration The committee: Abiel Mngomezulu [1] 3/3
and Nomination • makes recommendations to the Board for its consideration and final approval Jeff Mclaughlan [2] 3/3
Committee regarding remuneration strategy and policy; Daniel Green 3/3
Zanele Matlala (CEO) 3/3
• assists the Board in ensuring that directors and executives are remunerated
Ditabe Chocho (FD) 3/3
fairly and responsibly;
• ensures the disclosure of directors and other executive remuneration is * Invitees
accurate, complete and transparent; 1 Chair Nomination Committee
• assists the Board with ensuring that remuneration policies are adopted to 2 Chair Remuneration Committee
promote the achievement of strategic business objectives and encourage
individual performance, and with monitoring remuneration policies;
• makes recommendations on non-executive directors’ fees; and
• develops policy around the appointment of directors, investigates potential
Board members for necessary skills and competence and makes appropriate
recommendations to the Board.
Key issues in 2022 included:
Composition of all committees, attending benchmarking exercise of directors’
executive remuneration, recommended approval of remuneration policy to Board,
approved CEOs (individual) and business performance KPIs, evaluated Executive
Committee’s individual and business performance against objectives, reviewed
executive contracts, reviewed remuneration policy and approval of the Board
diversity policy, King IV analysis and compliance.
Social, The roles and responsibilities of the Social, Ethics and Transformation Committee Nonhlanhla Mabusela-Aikhuere (c) 3/3
Ethics and are set out in the Social, Ethics and Transformation Committee Report on page Abiel Mngomezulu 3/3
Transformation 49 . David McGluwa 3/3
Committee Key issues in 2022 included: Zanele Matlala (CEO) 3/3
Ditabe Chocho (FD) 3/3
The key issues are set out in the Social, Ethics and Transformation Committee
report on page 49 .
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TRANSPARENCY AND ACCOUNTABILITY: OUR APPROACH TO GOVERNANCE continued

The structure and roles and responsibilities of the Venture’s Joint Board

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Management structure Roles and responsibilities Members
Executive Committee The Executive Committee consists of the heads of all the Venture’s divisions Merafe is represented by Zanele Matlala and
of the Venture and the Managing Director of the Venture. The committee meets at least Ditabe Chocho.
once a month, recommends policies and strategies and is responsible for
the implementation of strategy and carrying out the Board’s mandates and
directives. It deals with all executive management business and is responsible
for all material matters that are not the responsibility of the Board. It also
assists with the execution of Merafe’s compliance and disclosure obligations.
The Joint Board The Joint Board meets quarterly with the aim of ensuring proper governance The Joint Board consists of two
of the Venture of the activities of the Venture. Members of Merafe’s management team representatives from Glencore and two
also attend and participate in the Venture’s monthly Executive Committee representatives from Merafe (Zanele Matlala
and sustainable development meetings and quarterly Audit Committee and and Ditabe Chocho). Currently, Glencore
Treasury meetings. appoints the Chairperson of the Joint Board.
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Reporting in terms of Section 3.84 of the JSE Listings Requirements on Board governance processes

Requirement	Principle	Merafe’s approach and compliance
3.84(a)	There must be a policy evidencing a clear balance of power and authority at Board level to ensure that no one director has unfettered powers.	Our Board Charter clearly demonstrates that there is a clear balance of power and authority at Board level and that no one director has unfettered powers. We refer you to pages 42 and 43 of this report.
3.84(b)	Issuers must have a CEO and a Chairperson and these positions must not be held by the same person. The Chairperson must either be an independent director or the issuer must appoint a lead independent director as defned in King IV.	The CEO and Chairperson positions in Merafe are held by different people and Merafe’s Chairperson is an independent non-executive director as defned in King IV. We refer you to pages 42 and 43 of this report. Mr Mngomezulu is the Chairperson. In accordance with King IV, the Board conducted an in-depth review of both his performance and independence. It concluded that his independence has not been affected or impaired by his length of service and that Merafe would continue to beneft from his performance as Chairperson if he were to continue in this role.
3.84(c)	All issuers must in accordance with King IVappoint (i) an audit committee, (ii) a committee responsible for remuneration and (iii) a social and ethics committee. The composition of such committees must comply with the Companies Act and should be considered in accordance with King IV and each committee must consist of three members. The composition of such committees, a brief description of their mandates, the number of meetings held and any other relevant information must be disclosed in the annual report.	Merafe has combined its Audit and Risk Committee. Its membership is set out on page 46 of this report. The committee currently has three members, all of whom are independent non-executive directors, as required by the Companies Act and set out in King IV. The Chairperson of the Board, Chief Executive Offcer and Financial Director are invited to attend committee meetings. As previously indicated, Merafe has appointed a combined Remuneration and Nomination Committee. The committee has three members, two of whom are independent non-executive directors. The Chairperson of the Board is a member of the Remuneration Committee and is Chairperson of the Nomination Committee. Merafe has a Social, Ethics and Transformation Committee. It comprises fve members, with the majority being non-executive directors. The composition of the committees, the mandates, activities and number of meetings held are set out on pages 46 to 47, 49 and 50 to 57 of this report. During 2022, our Chief Executive Offcer and Financial Director became permanent invitees to the Audit and Risk Committee.
3.84(d)	A brief_curriculum vitae_of each director standing for election or re-election must accompany the relevant notice of meeting.	Brief_curricula vitae_of our directors can be found on pages 42 and 43 of this report.
3.84(e)	Capacity of directors in relation to executive, non-executive and independent must be categorised and disclosed in the relevant documentation.	The curricula vitae mentioned at 3.84(d) also contain information as to whether a director is independent, non-executive or executive. The composition of the Merafe committees is in accordance with the requirements of the JSE Listings Requirements, the Companies Act and King IV.
3.84(f)	Issuers must have a full-time executive fnancial director.	Merafe has a full-time Financial Director who does not hold any other position nor does he have any other commitments that could be considered as full or part-time employment.
3.84(g)	The provisions deal with the duties of the Audit Committee which include (i) considering, on an annual basis, and satisfying itself on the appropriateness of the expertise and experience of the fnancial director; (ii) ensuring that the issuer has appropriate fnancial reporting procedures which are operating, which include consideration of all entities included in the group IFRS fnancial statements and ensure that it has access to all the fnancial information of the issuer to allow the issuer to effectively prepare and report on its fnancial statements; (iii) requesting the audit frm (and if necessary consult with the audit frm) on the information detailed in paragraph 22.15(h) in their assessment of the suitability for the appointment of their current or prospective audit frm and designated individual partner and thereafter for every re-appointment; and (iv) ensuring that the appointment of the auditor is presented and included as a resolution at the annual general meeting of the issuer pursuant to section 61(8) of the Companies Act.	Our Audit and Risk Committee annually considers and satisfes itself of the appropriateness of the expertise and experience of the Financial Director, and has reported in its Audit and Risk Committee report that it is satisfed with the appropriateness of the expertise and experience of the Financial Director. The Audit and Risk Committee, as contemplated in paragraphs 3.84(g)(ii) to (iv), also ensured that Merafe has established appropriate fnancial reporting procedures and that those procedures are operating, which included consideration of all entities included in the consolidated group IFRS fnancial statements; ensured that it has access to all the fnancial information of Merafe to allow Merafe to effectively prepare and report on the fnancial statements of Merafe; requested from the audit frm (and if necessary consults with the audit frm on) the information detailed in paragraph 22.15(h) in their assessment of the suitability for appointment of their current or a prospective audit frm and designated individual partner both when they are appointed for the frst time and thereafter annually for every reappointment and notwithstanding the provisions of section 90(6) of the Companies Act; ensured that the appointment of the auditor is presented and included as a resolution at the annual general meeting of Merafe pursuant to section 61(8) of the Companies Act.

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Requirement	Principle	Merafe’s approach and compliance
3.84(h)	The provision deals with the competence, qualifcations and experience of the Company Secretary and the Board responsibility in relation thereto.	The Remuneration and Nomination Committee as well as the Board assessed the competence, qualifcations and experience of the Company Secretary (CorpStat Governance Services, represented by William Somerville) against various criteria and a rating scale, and they have agreed that the frm is suffciently qualifed, competent and experienced to hold the position of Company Secretary. The Board made their assessment in a closed Board meeting with the Company Secretary beingrecused from the meeting.
3.84(i)	The provision deals with a broader diversity policy.	Merafe’s diversity policy prescribes that at least 30% of the Board shall be female. At 31 December 2022, three of the nine directors were female (33%). Merafe’s diversity policy prescribes targets for the racial composition of the Company, namely that the majority of the Board should be black. Seven of the nine directors are black (78%). Please see pages 42 and 43 depicting the Merafe board of directors and which covers the broader diversity information as contemplated by the recent amendments to the JSE Listings Requirements. Merafe has a Board diversity policy which includes additional diversity criteria, namely culture, age, feld of knowledge, skills and experience (in addition to gender and race), as required by the JSE amendments. The Remuneration and Nomination Committee undertakes, when nominating and recommending directors to the Board, to take into account the principles and aims of the diversity policy of the Company.
3.84(j) 3.84(k)	The provision deals with the remuneration policy and implementation report. The provision deals with the CEO	The remuneration policy and implementation report are set out on pages 50 to 57 of this report. See CEO and FD’s responsibility statement on page 3 of the annual fnancial statements and on
	and Financial Director’s responsibility statements in respect of the annual fnancial statements.	page 61 of this report.

Compliance with Companies Act and memorandum of incorporation

Merafe is in compliance with the provisions of the Companies Act, No. 71 of 2008, or relevant laws of establishment, specifically relating to its incorporation and is operating in conformity with its memorandum of incorporation.

Social, Ethics and Transformation Committee Report

The Social, Ethics and Transformation Committee (the Committee) was established by the board of directors on 21 February 2012, in accordance with the requirements of the Companies Act, No. 71 of 2008 (the Act), section 72(4) and Regulation 43(2).

The Committee has an independent role. Its members include three non-executive directors, two of whom are independent and two executive directors. N Mabusela-Aikhuere is chair of the committee.

The Committee assists the Board in monitoring the Group’s activities in terms of legislation, regulation and codes of best practice relating to:

ethics;
stakeholder engagement, including employees, customers, communities and the environment; and
strategic empowerment and compliance with transformation codes and is responsible for:
monitoring the Company’s activities relating to social and economic development, good corporate citizenship, the environment and health and public safety;
ensuring appropriate short- and long-term targets are set by management;
monitoring progress on strategic empowerment and performance against targets;
monitoring changes in the application and interpretation of empowerment charters and codes; and
monitoring functions required in terms of the Act and its regulations.

To meet its responsibilities, the Committee receives reports on the progress that both Merafe and the Venture have made in terms of the issues covered by its terms of reference. A senior representative of the Venture attends specific committee meetings where the focus is on the Venture. In addition to the above, the Committee:

reviewed the Company’s Code of Ethics, the Board Charter, the Committee’s terms of reference, and CSI policy;
reviewed and assessed relevant legislation applicable to Merafe, the Venture and the Committee;
assessed the Company’s compliance with King IV. The Company complies with King IV principles, save as otherwise noted and explained in this Integrated Annual Report;
assessed Merafe’s and the Venture’s transformation performance with specific reference to the Mining Charter and the B-BBEE Codes of Good Practice;
continually assessed Merafe’s corporate social investment; in this regard, the Committee continued to oversee and support the projects as set out on page 37 of this report; and
assessed the Venture’s corporate social investments which Merafe contributes to as set out on pages 37 and 38 of this report.

The focus of the Committee in 2023 will continue to be in the fields of education and health in schools identified in areas within the vicinity of our operations. The Committee will also focus on King IV compliance aiming at continual improvement, as well as the JSE guidance papers on sustainability and climate change reporting, Merafe’s transformation performance with reference to the Mining Charter and the B-BBEE Codes of Good Practice will also be assessed.

The members of the Committee believe that Merafe is substantively addressing the issues it is required to monitor in terms of the Act and that it has discharged its responsibilities as set out in its terms of reference.

Ms Mabusela-Aikhuere Chairperson

17 March 2023

See our website for our Board Charter, Code of Ethics and the Board diversity policy. See the annual financial statements, which form part of our online Integrated Annual Report for 2022 for the Audit and Risk Committee’s report as well as page 62 of this report. For a more detailed overview of the responsibilities of the Board and the committees, see the terms of reference of the Board and committees on our website, which form part of our online Integrated Annual Report for 2022.

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022

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TRANSPARENCY AND ACCOUNTABILITY continued

Remuneration report

This Remuneration Report is in accordance with King IV. A glossary of terms used in this report is contained in our online Integrated Annual Report of 2022 which is on our website. If unable to access the online report please note the following key references used: “Policy” means the remuneration policy of the Company; the “Company” or “Merafe” means Merafe Resources Limited and its subsidiaries; the “Committee” means the Remuneration and Nomination Committee of the Company; the “Board” means the board of directors of the Company; “executive directors” and “non-executive directors” means executive and/or non-executive directors of the Company; the “CEO” means the Chief Executive Officer of the Company; and “FD” means the Financial Director of the Company.

Statement of voting at annual general meeting

The annual general meeting of the Company for the financial year ended 31 December 2021 was held on 18 May 2022 and the requisite ordinary resolutions of a non-binding advisory nature endorsing the Policy and the remuneration implementation report were passed. The Policy resolution (Ordinary Resolution 7.1) was passed by a 96.2% majority, with 75.12% of the Company’s shares being voted. The implementation report resolution (Ordinary Resolution 7.2) was passed by a 96.5% majority, with 75.12% of the Company’s shares being voted. The special resolutions to approve the non-executive remuneration was passed by the required majority (all above 97% which includes for the Board Committees).

The Company continues to engage on the Remuneration Report and the Policy with its stakeholders.

Background statement

Remuneration philosophy, strategy and policy

Remuneration philosophy

The Company’s guiding philosophy is to employ high-calibre, high-performing employees who subscribe to the values and culture of our Company. We recognise that our employees are integral to the achievement of our corporate objectives and they are accordingly remunerated for their contribution and the value they deliver.

Our Company is committed to fair, responsible and transparent remuneration across the business in respect of all employees on all levels. Both the fixed and variable elements of remuneration aim to support Company performance and value creation in the short-, medium- and long-term, as well as to support the achievement of strategic objectives within the Company’s risk appetite.

This Policy is applicable to all employees of the Company.

Our remuneration strategy and policy are regularly reviewed by the Committee to ensure that they are appropriate and relevant in the support of sustainable business performance and in promoting an ethical culture and responsible corporate citizenship.

Remuneration strategy

Our remuneration strategy is designed to be aligned with our business strategy and the execution thereof to promote positive outcomes. Since we strive to attract, retain, motivate and reward employees for executing our business strategy, their remuneration must clearly be market-related and independent third parties are used by the Committee for the purpose of benchmarking to the appropriate segment. The general principle of our remuneration strategy is to structure executive and employee remuneration to include:

a guaranteed annual package and benefits;
an annual variable performance bonus; and
ownership of shares through the long-term incentive scheme, which is based on performance with the aim of creating a strong alignment to shareholder goals.

The remuneration strategy and policy are communicated to all employees during the year, together with our expectations around their contribution to the success of our organisation.

it is Company policy that all employees are members of medical and retirement funds and have Group life and disability cover;
annual salary adjustments are governed by factors such as the consumer price index (CPI), retention strategies, the producer price index (PPI), industry performance, projected growth, contractual arrangements, affordability, and industry average increase surveys, which will be taken into consideration in setting the recommended increase. The Committee will approve or set the overall increase percentage that will be applied on a Company-wide basis. Salary adjustments are at the discretion of the Board;
variable pay is an important component of remuneration at Merafe and both annual and long-term performance-based schemes which support our business strategy are in place;
the short-term incentive scheme performance measures are assessed by the Committee and these measures are determined by taking into account corporate, individual, financial and non-financial criteria. The measures are applicable to the time period to which the scheme relates;
the long-term incentive scheme measures are based on total shareholder return and growth in headline earnings per share;
executive remuneration is aligned to shareholder value creation through the long-term incentive scheme;
where necessary, both short-term and long-term incentive schemes are benchmarked against the appropriate database by the Committee; and
the over-riding principle governing payments for non-executive directors is that they will be made in the context of good governance and aligned to the relevant market.

Remuneration and Nomination Committee

Responsibility for the reward strategy rests with the Board who in turn appoints the Committee. The Committee comprises three members, the majority of whom are independent non-executive directors and is governed by formal terms of reference.

The terms of reference, inter alia , clearly deal with matters such as:

composition of the Committee;
roles and responsibilities;
delegated authority;
tenure and rotation of the Committee members;
reporting requirement and compliance;
access to information and resources;
meeting procedures to be followed; and
arrangements for the evaluation of the Committee’s performance.

The primary role of the Committee is to ensure that the Company’s directors and senior executives are fairly rewarded for their individual contributions to the Company’s overall performance. The Committee also aims to ensure that remuneration is appropriate to attract, retain and motivate the right calibre of directors and senior executives who will strive to achieve the overall goals of the Company. The Committee must demonstrate to all stakeholders that the remuneration of senior executives is set by a committee of Board members who:

have no personal interest in the outcome of their decisions;
give due regard to the interest of the shareholders and the financial and commercial health of the Company;
take cognisance of market-related remuneration, incentive bonuses and share incentive schemes as well as market trends; and
play an active role in succession planning activities, notably for the Chief Executive Officer and executive management.

Remuneration policy

The key principles of the policy are that:

the policies are governed by the Committee which regularly reviews them to ensure that they are relevant and support Company strategy;
guaranteed remuneration is targeted at the median to lower quartile of the relevant market against which pay is benchmarked, in order to attract and retain high-calibre and high-performing employees;

See our online Integrated Annual Report for 2022, under Remuneration Report for our remuneration policy which is also attached as Appendix 2 to this report.

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022 – 050 –

The Committee is responsible for making recommendations to the Board on remuneration policy for directors and, to the extent it deems necessary, makes comparisons between remuneration packages currently available to the Company’s own executive directors and those available to directors of other companies of a similar size in the comparable industry. Comparisons are also made with other companies in South Africa and, if relevant, internationally.

The Committee also takes into account a number of principles, being, inter alia:

industry standards and comparisons with businesses in the same industry;
expertise and qualifications of individuals;
the risks associated with companies in the mining sector;
the importance of the individual to the Company and his/her contribution;
retention measures and motivation for the executive not to leave the Company;
restraint of trade provisions; and
nature of the position (role expectations, workload, etc.).

Remuneration policy

Statement of fair, responsible and transparent remuneration

The Board approves a policy that articulates and gives effect to its direction on fair, responsible and transparent remuneration.

The Policy for the remuneration of executive directors and other senior management is set by taking appropriate account of remuneration and employment conditions of the industry, the Venture and the Company’s specific circumstances.

Key principles

The Policy is governed by the Committee which regularly reviews the Policy to ensure that it is relevant and supports the Company strategy. To this end, see key principles under remuneration policy on page 50 of this report.

Target reward mix for Chief Executive Officer

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100
80
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40
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At stretch On target Below target
target
LTI
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32
29 29
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0 0
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Executive pay mix

Executive pay mix is defined as the balance targeted between the major components of executive remuneration, namely:

Guaranteed pay – based on Total Guaranteed Cost of Employment (TCtC)
Variable pay for performance

– Short-term incentives (STIs) in the form of annual cash incentives; and

– The expected value from long-term incentives (LTIs).

Note: Expected value is defined as the present value of the future reward outcome of an offer, given the targeted future performance of the Company and of its share price. It should not be confused with the term “fair value” which is used when establishing the accounting cost for reflection in a Company’s financial statements. Neither should it be confused with the term “face value” which is used to define the current value of the underlying share at the time of an offer.

Target reward mix for Financial Director

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100
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The Company’s targeted pay mix aims to align the incentives of employees with the interests of shareholders. It is recognised that through acquisitions and business combinations over time, there will always be some deviation from the targeted pay mix structure across the Company.

Guaranteed pay

Merafe aims to establish and maintain an integrated pay line with pay levels that ensure that it is able to remain competitive, while managing costs. Executive remuneration in respect of guaranteed pay is expressed in terms of TCtC.

An employee’s TCtC consists of the following elements:

Basic salary;
Car and other cash allowances and/or pre-requisites;
Employer contributions to the medical aid;
Employer contributions to the retirement fund; and
Employer contributions to risk benefits.

Salaries are reviewed annually and are targeted at the median to lower quartile of the relevant market. The Company conducts benchmarking exercises at least every second year against the top management reward surveys conducted by the large consultancies. The benchmark used is the median to lower quartile total guaranteed cost of employment for similar positions in similarly-sized listed companies.

The Committee has regard principally to companies in the South African market, which are of similar size, complexity and scope to the Company. The Committee also takes into account business performance, salary practices prevailing for other employees in the Company and, when setting individual salaries, the individual’s performance and experience in the role. Although salaries are reviewed annually, the Board reserves the right not to grant increases should circumstances so dictate. In addition, benefits offered are also reviewed on an annual basis to ensure that employees’ needs are addressed fairly, and that schemes are cost effective, well governed and competitive.

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TRANSPARENCY AND ACCOUNTABILITY: REMUNERATION REPORT continued

Short-term incentives

Merafe’s annual incentives are aimed at rewarding a combination of both business and individual performance in order to support a Company-wide performance culture. The bonus pool is determined as a percentage of net profit after tax and the scheme is therefore self-funding. Financial and non-financial criteria as well as individual performance determine the bonus pool’s distribution to individuals. Incentive awards are at the discretion of the Board after due consideration of Company and individual performance.

The Committee follows a less mechanistic approach in determining the bonus awards in order to reward outstanding performance more appropriately and to ensure that undue windfalls are mediated. As indicated above, the incentive scheme performance measures are assessed by the Committee and these measures are determined by taking into account the Company’s financial and non-financial criteria as well as individual performance.

All STI awards are based on performance against, inter alia, the following measures:

Company measures: These include but are not limited to profitability, growth of business, cost management, sustainability and safety.
Individual measures: For the Chief Executive Officer and Financial Director, these are over and above the Company measures and include but are not limited to stakeholder engagement, talent management, leadership and reporting.

Targets are set by the Board on an annual basis as determined by Company strategy, business plan and operating conditions. Targets are set to ensure that performance is measured appropriately in accordance with a five-point rating scale. In addition, the Board will apply appropriate weights to measures in order to focus behaviour and performance, related to the strategic focus for the performance period.

Although measures and targets are determined at the start of the performance period, the Board may revise these measures and targets should prevailing business conditions indicate this to be necessary or in response to any other changes in the operating environment. All such changes, which represent the discretionary aspect of the policy, will be disclosed on an annual basis.

As indicated above, individual performance is primarily assessed from a predetermined criteria of key performance areas or value drivers. The selection of these is informed by the Company’s business plan. These metrics are assessed against a five-point scale as follows:

Rating Description Defnition	Rating Description Defnition	Rating Description Defnition
1	Poor	Indicates poor performance. All or most threshold targets not met.
2	Needs improvement	Performance against target is fair, however, performance against key measures is below threshold or target.
3	Satisfactory	Performance on target in respect of most or all measures.
4	Good	Performance exceeds target on most or all measures. Have reached stretched target on a number of key measures.
5	Outstanding/ excellent	Significant outperformance. All stretched targets met or exceeded.

The total STI pool available is capped at 3% of net profit after tax. No bonuses are payable where the net profit after tax in any financial year is less than R131 million. These parameters are reviewed by the Board on an annual basis for relevance and appropriateness.

In addition, the percentage for STI is capped for the various categories of employees as set out below:

Position Maximum % of TCtC	Position Maximum % of TCtC
Chief Executive Officer Financial Director Senior management Management Administrative staff	100 80 60 50 30

The total pool for incentives that become available for distribution will not be exceeded at any time.

STI potential is benchmarked between the median and 75th percentile of the relevant market, which is deemed appropriate when considered along with the guaranteed pay benchmarked at between the median and 25th percentile of the market.

The final incentive calculation is undertaken by aggregating the bonus claims of all participants and comparing this with the bonus pool derived from Company performance.

Long-term incentives

Background

The purpose of the share incentive scheme is to serve as an incentive and reward to employees of the Company and its subsidiaries for services rendered and to be rendered, aimed at promoting the continued growth of the Company by giving employees an opportunity to acquire shares in the Company and serve as a retention mechanism for employees whose services are regarded by the Company to be crucial to the future growth and sustainability of the Company’s business.

The share incentive scheme further seeks to align employee interests with those of shareholders and to support a culture of ownership, with a focus on Company performance and sustainable growth.

Long-term incentives, in the form of a share incentive scheme, have been in existence in the Company since 1999. The current share scheme was approved on 13 April 2010, under which both share options and share grants may be issued.

Eligibility and participation

All employees of the Company are eligible for share allocations in respect of the share incentive scheme rules, subject to Board approval and the prevailing implementation policy.

Shares to be allocated

Under the rules of the share incentive plan, the following shares may be offered:

Share options which will be granted at the offer price.
Share grants being full value shares.

Vesting rules and settlement

Generally share options vest one-third per year on the third, fourth and fifth anniversaries and are settled by physical delivery of shares against receipt of payment of the option price. The options lapse after seven years if not exercised, while employed within the Group.

Share grants are granted by the Board on the recommendation of the Committee. They vest one-third per year on the third, fourth and fifth anniversaries and are settled by physical delivery of shares. Alternatively, the Company has the right to settle in cash the value of shares granted. Equity settlement will take the form of repurchasing of shares on the open market for the benefit of the employee whose shares have vested. The Company reserves the right to issue new shares for purposes of settlement.

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Participation and termination rules

In the event of an employee leaving the Group for a reason approved by the directors, such as retirement or disability (no fault terminations), all performance shares granted will vest, subject to the application of performance conditions. No proration of shares will apply. All approved terminations will be disclosed on an annual basis.

In the event of the death of an employee, all performance shares allocated will vest with no performance conditions or proration applied.

In the event of either a no-fault termination or an employee’s death, the employee or his/her estate has 12 and 24 months respectively to exercise share options granted to that employee. In the event of retirement at the earliest date allowed by the retirement fund, the employee will have one year to exercise their share options allocated.

In the event of voluntary termination (i.e. resignation) or a fault termination (i.e. those who leave as a result of resignation, dismissal or poor performance), any right to any shares and all allocations will lapse immediately upon termination. No further claims may be laid to such lapsed shares, whether full value or shares options.

In the event of a change in contract of employment, e.g. lateral moves or promotions, the participant will remain entitled to previous share allocations, subject to vesting periods, vesting schedules and prevailing performance conditions and criteria as set out during the initial share allocation.

In the event of a reconstruction or takeover, share allocations will vest on a pro rata basis subject to the Committee evaluating the applicable performance conditions and determining the number of shares per participant.

Performance vs retention shares

In 2018, the Committee revised the allocation policy for more share grants to be subject to performance conditions as opposed to retention shares as illustrated below:

Revised LTI allocation policy

LTI (expected value) % of TCtC Targeted offer value % of TCtC Balance performance/ retention	LTI (expected value) % of TCtC Targeted offer value % of TCtC Balance performance/ retention	LTI (expected value) % of TCtC Targeted offer value % of TCtC Balance performance/ retention	LTI (expected value) % of TCtC Targeted offer value % of TCtC Balance performance/ retention
Chief Executive Officer Financial Director Senior management Management Administration	70 50 40 30 20	60 45 40 35 25	100/0 100/0 100/0 100/0 100/0

Performance measure I: Total Shareholder Return

The comparator group for TSR is made up as follows:

TSR comparator group

TSR comparator group	TSR comparator group
Company Ticker
Thungela Resources Limited Harmony Gold Mining Limited Pan African Resources plc Merafe Resources Limited Tharisa plc MC Mining Limited DRDGOLD Limited Wesizwe Platinum Limited Hulamin Limited ArcelorMittal Limited Northam Platinum Holdings Limited Salungano Group	TGA HAR PAN MRF THA MCZ DRD WEZ HLM ACL NPH SLG

Assuming that a group of 12 (11 + Merafe) companies are adopted as the comparator group of companies, vesting of the performance-based share grants will be in accordance with the following policy:

50% of performance shares allocated will be subject to performance against the TSR measure.
If Merafe’s TSR over the three-year period places it in one of the top four positions, then the full number of performance granted shares subject to this measure will vest in equal proportions on the third, fourth and fifth anniversaries of their grant.
If Merafe’s performance over the three-year period places it in fifth position, then two-thirds of the number of performance granted shares will vest in equal proportions on the third, fourth and fifth anniversaries of their grant.
If Merafe’s TSR over the three-year period places it in sixth position, then one-third of the number of performance granted shares will vest in equal proportions on the third, fourth and fifth anniversaries of their grant.
If Merafe’s TSR over the three-year period places it below sixth position, then none of the performance shares will vest.

The table below provides details of the revised vesting schedule for performance shares subject to the TSR measure:

Revised vesting schedule TSR

Vesting schedule over three years – TSR

Since 2018, all share allocations are performance-based. In order to balance back to the reward mix and expected outcomes, the targeted value of the share allocation as a percentage of TCtC was increased as per the table above.

Performance conditions

The performance conditions for all existing performance-oriented share grants will remain in place, but future grants will be governed by two metrics: (1) comparison of Merafe’s Total Shareholder Return (TSR) over a three-year period with that of a selection of JSE-listed, small cap mining and resources companies, and (2) growth in headline earnings per share (CPI + a specified percentage as determined by the Board) over a three-year period. The two measures will weigh 50/50 or as determined by the Board from time to time. Measures will be applied per performance share allocation and will remain in force for the duration of the performance period. Performance measures and targets are approved for and applicable to a specific performance period. No retesting of performance conditions is allowed.

Revised vesting schedule TSR *Vesting schedule over three years – TSR*	Revised vesting schedule TSR *Vesting schedule over three years – TSR*
Merafe TSR position/ ranking relative to peers Vesting quantity % of allocation*
Position 1–4 Position 5 Position 6 Position 7 and lower	100 66.6 33.3 0

* Vesting over three years in equal portion.

The Committee will assess performance against target once the applicable performance period is completed and approve the vesting of performance shares to the extent that targets are met.

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022

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TRANSPARENCY AND ACCOUNTABILITY: REMUNERATION REPORT continued

Performance measure II: Growth in headline earnings per share

Assuming that the performance targets below are set by the Board as illustrated in the table below, vesting of the performance-based share grants will be in accordance with the following policy:

50% of performance shares allocated will be subject to performance against the growth in headline earnings per share (HEPS) measure.
If performance meets or exceeds target, i.e. CPI + 2% over the performance period, 100% of shares will vest.
If performance is at threshold, i.e. CPI + 1% over the performance period, 50% of shares subject to this measure will vest.
For performance below threshold, 0% of shares subject to this measure will vest.
Linear vesting will take place between different performance milestones.

Vesting schedule for growth in HEPS measure

Vesting schedule over three years – growth in HEPS

HEPS target	Vesting quantity % of allocation* proposed
On target CPI + 2% Threshold CPI + 1% Below threshold	100% 50% 0%

* Vesting over three years in equal portion.

LTI offer policy

The following principles will govern the LTI offer policy:

Share options will only be given at the discretion of the Board as and when circumstances dictate and only to executive management that have direct line of sight in terms of Company performance.
Full value shares, with performance conditions, will be granted to all employees on an annual basis subject to ongoing satisfactory individual performance, the expected value of which will be in accordance with the Company’s reward strategy–pay mix.
Full value shares may be offered to new appointees as an attraction measure, the value of which will be determined and approved by the Committee, and will be subject to a minimum three-year vesting period.
Share grants will be in favour of performance-based shares, with all shares granted subject to performance measures over a three-year period.
Share grants will be offered to employees with only performance and no retention shares.
The value of the share grant will be calculated as a percentage of the current TCtC guaranteed package.
No offer shall be made which together with any other scheme shares would exceed 5% of total issued share capital of the Company.
The maximum aggregate number of shares granted or options allocated to a single participant shall be limited to 1% of the total issued share capital of the Company.
Prior to vesting, no participant will qualify to receive any dividends declared.
The Company will communicate to participants, at least on an annual basis, in terms of shares granted, vesting and/or any changes in rules or conditions of participation.
All share grants and options will be disclosed over its lifetime in the annual Remuneration Report.

Contracts of employment

Senior and executive management are subject to the Company’s standard terms and conditions of employment where notice periods are between three and six months. In line with the recommendations set out in King IV, Company policy prevents any senior or executive manager from being compensated for loss of office.

In the event of a change of control of the Company (as defined in the Companies Act) where the Company no longer requires an executive to fulfil their specific role post the change of control, the Company shall pay to the executive 12 months’ remuneration on the last day of the notice period and after completion of handover of duties. From 2020 onwards all newly appointed executives will have their termination payments aligned to their contractual notice period.

Retention measures

The Committee reserves the right to apply retention measures should circumstances indicate. Retention measures may include cash or equity awards and will be appropriately disclosed on an annual basis.

Malus and clawback

Any remuneration previously paid to executive directors, that is subsequently found to have been as a result of criminal or otherwise illegal activities, must be repaid to the Company.

In the event of a restatement of the Company’s results (other than a restatement caused by a change in accounting policy, standards or interpretation), which results in lower performance-based remuneration had it been calculated on the restated results, the Committee shall review such performance-based remuneration, determine the amount to be recovered from the executive and take steps to recover the amount.

The Board reserves the right to cancel any share allocation for all or individual participants if during the vesting period there is evidence of serious underperformance or misrepresentation of information, e.g. gross negligence, overstatement of performance, unnecessary risk taking, poor governance or non-compliance.

Non-executive directors’ fees

The remuneration of non-executive directors is provided in the context of good governance, and is primarily based upon a methodology which takes into account expertise, contribution by the director and attendance. Standard duties of non-executive directors include preparation for and attendance at Board meetings, annual general meetings and results presentations. If required, the directors may be requested to perform work outside of their standard duties and for this they will be remunerated based upon the time spent and their level of expertise. Non-executive directors’ pay is aimed at aligning with remuneration principles applicable to executive pay.

Independent benchmarks are conducted at least every second year to inform the levels of remuneration for non-executive directors and the intent is to target remuneration between the lower quartile (25th percentile) to the median quartile (50th percentile) of listed companies of similar size (comparator or peer group), in order to ensure that appropriately qualified and experienced directors are appointed.

Non-executive directors’ fees are tabled for approval by the shareholders of the Company on an annual basis. The fees paid to different roles such as chairperson may vary from the fees paid to other non-executive directors.

Fees are split between a retainer (60%) and per meeting fee (40%), which is aligned with industry practice.

Non-executive directors do not participate in any share-based incentive scheme or any other incentive scheme that the Company may implement to avoid any potential conflict of interest.

Review

This policy was approved by the Company in March 2022 and will be reviewed annually against current legislation and practice for approval by shareholders during the annual general meeting.

In the event that either the remuneration policy or the implementation report, or both, are voted against by 25% or more of the votes exercised at the annual general meeting, Merafe undertakes to engage with shareholders to understand their concerns.

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022

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Implementation Report for 2022

The implementation of the Policy approved by shareholders at the annual general meeting in May 2022 is set out below:

Executive pay

	2022 R’000	2021 R’000
ZJ Matlala Salary Bonus Fringe benefits and leave pay Provident contributions Share grants vested		5 283 5 399 250 694 1 023
	5 573
	5 231
	267
	761
	1 473
Total	13 305	12 649

	2022 R’000	2021 R’000
D Chocho Salary Bonus Fringe benefits and leave pay Provident contributions Share grants vested		3 007 2 485 261 375 95
	3 369
	2 550
	269
	389
	462
Total	7 039	6 223

Short-term incentives

The executive directors were assessed by the Committee according to the table set out below which was then used as a basis for awarding bonuses for 2022.

Key factors	Key measurement items
Profitability	EBITDA compared to budget and previous year
Growth of business	Grow assets and revenue
Cost management	Effective cost management at Venture’s and Merafe level
Sustainability	BEE rating to amended scorecard, corporate social investment, environmental incidents
Safety	Total recordable injury frequency rate, fatalities
Stakeholder engagement	Stakeholder engagement programme including interactions with SARS, partners, shareholders, employees, etc.
Talent management	Succession planning, managing employees, training, mentoring
Reporting	Interim and annual reporting

As per the Policy, the Committee applied a less mechanistic and more holistic approach, which has resulted in the following bonus allocation:

Directors’ interests in Merafe Resources Limited

As at 31 December 2022, the directors of the Company are beneficially interested (directly and indirectly) in 3 553 565 (31 December 2021: 3 553 565) shares in the Company. During the financial year no material contracts were entered into in which directors and prescribed officers of the Company had an interest and which significantly affected the Group.

Executive directors of the Company and their immediate families control 0.1% (31 December 2021: 0.1%) of the voting shares of the Company. In addition to their salaries, the Company also contributes to a provident fund (defined contribution plan) and medical aid fund on their behalf. Executive directors also participate in the Company’s share incentive schemes.

	2022 Number of Shares	2021 Number of Shares
	Direct Indirect	Direct Indirect
Z Matlala D Chocho	2 945 000 –	2 945 000 – 608 565 –
	608 565 –
Total	3 553 565 –	3 553 565 –

No additional directors’ interests have been noted post 31 December 2022 until the date of approval of this report, being 17 March 2023.

Long-term incentives – 2022

The award of long-term incentives for 2022 under the Company’s share option and grant schemes are set out below:

Cash-settled share-based payment arrangements

The following share grants relating to executive directors were outstanding at 31 December 2022:

at 31 December 2022:
Vesting date	Z Matlala	D Chocho
01 April 2023	576 692	–
01 April 2023	781 971	337 500
01 April 2023	3 904 903	1 685 363
06 August 2023	–	208 333
01 April 2024	781 971	337 500
01 April 2024	3 904 903	1 685 363
01 April 2024	1 618 480	698 538
01 April 2025	3 904 903	1 685 363
01 April 2025	1 618 480	698 538
01 April 2025	709 641	324 299
01 April 2026	1 618 480	698 538
01 April 2025	709 641	324 299
01 April 2027	709 641	324 299
	20 839 706	9 007 933

	2022 % allocation of cost to Company	2021 % allocation of cost to Company
Chief Executive Officer Financial Director	81%	88% 70%
	65%

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022 – 055 –

TRANSPARENCY AND ACCOUNTABILITY: REMUNERATION REPORT continued

Performance conditions

The performance conditions are set out on pages 53 and 54 of this report.

Share grant allocations were implemented based on the VWAP of the previous day’s trading as follows:

	2022	2022	2022	2021
	% allocation of cost to Company Number of shares Vesting period			% allocation of cost to Company Number of shares Vesting period
Chief Executive Officer	60	2 128 923	1 April 2025 1 April 2026 1 April 2027	60 4 855 440 1 April 2024 1 April 2025 1 April 2026
Financial Director	45	972 896	1 April 2025 1 April 2026 1 April 2027	45 2 095 614 1 April 2024 1 April 2025 1 April 2026

Note: As per the Policy, from 2019, 100% of the grants are subject to performance conditions for the CEO and FD respectively.

Approved non-executive directors’ fees for 2022

The special resolutions to approve the non-executive fees for 2022 at the annual general meeting which were passed by the requisite 75% majority are set out below.

	2022	2022	2022	2022	2022	2022
	Total fees per annum R Retainer 60% R Monthly retainer fees R Retainer per quarter R Fees per attendance 40% R Fees per attendance per meeting R
Board Chairperson Board member	693 895	416 337	34 695	104 084	277 558	69 389
	314 829	188 897	15 741	47 224	125 932	31 483
Audit and Risk Committee Chairperson Audit and Risk Committee member	227 207	136 325	11 360	34 081	90 883	22 721
	142 477	85 486	7 124	21 371	56 991	14 248
Remuneration and Nomination Committee Chairperson Remuneration and Nomination Committee member	132 643	79 585	6 632	19 896	53 058	13 264
	80 965	48 579	4 048	12 145	32 386	8 096
Social, Ethics and Transformation Committee Chairperson Social, Ethics and Transformation Committee member	122 817	73 691	6 141	18 423	49 127	12 282
	80 965	48 579	4 048	12 145	32 386	8 096

Non-executive directors’ fees paid for 2022

	Retainer 2022 R’000 Attendance 2022 R’000 Total 2022 R’000	Retainer 2022 R’000 Attendance 2022 R’000 Total 2022 R’000	Retainer 2022 R’000 Attendance 2022 R’000 Total 2022 R’000
A Mngomezulu M Vuso K Tlale J Mclaughlan N Mabusela-Aikhuere D McGluwa D Green	522 495	264 844	787 339
	325 222	216 815	542 037
	274 383	182 922	457 305
	268 483	178 989	447 472
	348 074	219 767	567 841
	237 477	150 221	387 698
	237 477	158 318	395 795
Total	2 213 611	1 371 876	3 585 487

See the online 2022 Integrated Annual Report and the annual financial statements for additional and supporting information.

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022

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Non-executive directors’ fees proposed for 2023

The 2023 proposed fees in accordance with the policy are set out below. An overall increase of 6% is proposed from the previous year. This increase and the allocation take into account the previous benchmarking exercise and inflation.

	2023	2023	2023	2023	2023	2023
	Total fees per annum R Retainer 60% R Monthly retainer fees R Retainer per quarter R Fees per attendance 40% R Fees per attendance per meeting R
Board Chairperson Board Member	735 528	441 317	36 776	110 329	294 211	73 553
	333 719	200 231	16 686	50 058	133 488	33 372
Audit and Risk Committee Chairperson Audit and Risk Committee Member	240 840	144 504	12 042	36 126	96 336	24 084
	151 025	90 615	7 551	22 654	60 410	15 103
Remuneration and Nomination Committee Chairperson Remuneration and Nomination Committee Member	140 601	84 360	7 030	21 090	56 241	14 060
	85 823	51 494	4 291	12 874	34 329	8 582
Social, Ethics and Transformation Committee Chairperson Social, Ethics and Transformation Committee Member	130 186	78 113	6 509	19 528	52 075	13 019
	85 823	51 494	4 291	12 874	34 329	8 582

Areas of focus for 2023

Key activities for the Committee in 2023 will be, inter alia, the approval of the remuneration and bonuses for executive directors and senior management. The Committee will also assess fees to be paid to non-executive directors. Focus will be placed on the key principles of King IV and the Company’s commitment to these principles and reviewing the remuneration policy. In addition, the Company will, if required, engage with shareholders to discuss issues of mutual concern.

Compliance statement

The Board and the Committee are committed to maintaining high standards of corporate governance and to support and apply the principles of good governance advocated by the Institute of Directors South Africa (IoDSA) and King IV.

The Board and the Committee are of the view that the objectives stated in the Policy have been achieved for the period under review. The Board and the Committee are also satisfied that they have fulfilled their responsibilities in accordance with their terms of reference with regard to remuneration within the Company.

Jeff Mclaughlan Chairperson – Remuneration Committee 17 March 2023

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MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022

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TRANSPARENCY AND ACCOUNTABILITY continued

Approach to risk management

The Merafe Board is responsible for our governance of risk and for setting levels of risk tolerance. It has tasked the Audit and Risk Committee with assisting the Board in carrying out its risk responsibilities. The process of risk management has been delegated to management and the Audit and Risk Committee, acting on behalf of the Board, ensures that there is ongoing assessment and monitoring of our risks. The Merafe Executive Committee is accountable to the Board for designing, implementing and monitoring Merafe’s risk management processes and senior managers are responsible for effectively managing risks within their respective areas of responsibility.

Merafe’s risk management policy and framework (available on our website ) describes our risk management philosophy, approach and process and guides the implementation of our risk management process in a uniform manner across the Company.

Certain risks are inherent in a mining business and these need to be managed effectively. The Venture’s risk management system allows it to pursue business opportunities and grow shareholder value, while at the same time developing and protecting its people, assets, environment and reputation. Its processes are defined within a risk framework that is well understood across its operations.

Both Merafe and the Venture undertake comprehensive quarterly risk reviews, the results of which are included in their annual business plans and regularly reviewed.

The Board will continue in 2023 to focus on the principal risks set out hereunder and also attempt to identify any further emerging risks in a fast-changing environment.

This summary should be read in conjunction with Material issues set out on pages 8 and 9 of this report .

Principal risks

Our principal risks, which include risks related to the Venture, are the following:

The possible negative impact on our earnings of commodity price volatility, currency exchange rate fluctuations and the health of the global economy. Controlling costs is the most effective manner to weather such volatility and the Venture prides itself on being a low-cost producer and cost control is a key management performance measurement. The Venture’s development of cost-efficient proprietary technology plays a significant part in its cost reduction. We are also engaging with government regarding carbon taxes and electricity costs. The preventative actions the Venture takes to reduce the impact of such volatility, which include managing production levels, scaling down mining and smelting activities during downturns in global demand and maintaining its position as the lowest cost ferrochrome producer in South Africa, are described in the principal risks and uncertainties table.
Lack of reliable and competitively priced energy supply could impact the Venture’s ability to operate. The Venture has an ongoing programme, and is engaged with various governmental departments, to assess and monitor energy-related risks, including scenario analyses. We also manage the risk by implementing energy-efficiency plans and assessing the risks associated with energy supply at the design phase of our projects.
The Venture operates in a high-risk safety environment, with potential injuries, illnesses and fatalities being inherent to the Venture’s operations. As such, the company is subject to extensive health, safety and environmental regulations and legislation as well as community expectations. The Venture has invested heavily in workplace safety training, programmes and initiatives to promote and reward safe behaviour at all of our operations by all of our employees and adopting a zero-tolerance policy to non-adherence of these requirements. HIV and Aids and other diseases (such as the current COVID-19 pandemic) remain major healthcare challenges for our industry, and if the Venture’s employees suffer from symptoms associated with any of these diseases it could have a negative impact on its production levels and our profitability. The Venture gives these issues priority and significant resources are committed to providing a safe and healthy workplace, keeping our impact on the environment to a minimum and addressing the impact of HIV and Aids and other diseases on our employees and the communities in the vicinity of our operations.
A possible tailings facility/dam failure as well as any insufficient capacity at any of the facilities represent significant risks to the operations and reputation of the Venture. Our tailings dams are regularly monitored by competent engineers to ensure that any risks of failure are detected promptly to allow corrective measures to be implemented. Capacity monitoring technologies are also employed to ensure that sufficient capacity is available as and when required.
The Department of Water and Sanitation are planning on the implementation of substantial increases in water tariffs over the next three to ten years with increased requests from governmental institutions for mining houses to invest in water infrastructure to assist in providing a secure water supply. This could increase production costs and limit expansion potential of the Venture’s operations. Actions to mitigate this risk are the implementation of contracts undertaken with water providers, as well as the increase of reservoir facilities to ensure constant supply when water is scarce. The Venture has also successfully reduced its water consumption per tonne of product produced.
A breach in the Venture’s Information Technology (IT) system by fraudsters in an attempt to gain confidential information or to sabotage the operation of the company could result in external parties having access to confidential and sensitive information that can be used against the company. Furthermore, systems could become unavailable or not function correctly. The Venture makes significant investments in IT security measures to minimise the risk of potential breaches wherever possible.
The socio-political and economic climate in South Africa (especially in light of the COVID-19 pandemic and the current electricity/energy crisis) has seen a significant increase in unemployment in the country. This scenario creates opportunities for increased crime and industrial unrest, causing the risk of the Venture not winning broad support for its activities from local communities.
Both of these possibilities could result in disruptions affecting our profitability. To reduce these risks, the Venture’s stakeholder engagement and responsiveness efforts play a critical role. In addition, Merafe and the Venture invest in social and labour plan commitments, which include local economic development, healthcare and education projects. We also invest in corporate social responsibility initiatives.
Delays or non-delivery of final product to customers could occur should any breakdowns in the supply chain be experienced. The COVID-19 pandemic and the current electricity/energy crisis has highlighted this uncertainty, with border challenges experienced throughout 2021 which remained uncertain into 2022. Additional storage facilities have been secured at various ports to ensure that stock holdings are available when and as required to meet contractual deliveries.
Any disruption in the supply of raw materials to the production process could have detrimental consequences on the Venture’s ability to operate. Supply contracts are entered into as far as possible to secure delivery and raw material stock holdings have been increased to ensure that enough is available should an industry shortage be experienced.
A lack of key and skilled employees within the business to support the transformation strategy of the Venture could result in financial loss and reputational damage. The Venture continues to implement management retention strategies and staff training programmes to enhance the transformation of the group. Investors’ negative perceptions of the South African mining industry impact on investors’ appetite for investment in South African mining stocks. Merafe focuses on maintaining relationships with our existing investors and building new relationships. To achieve this our team regularly makes presentations and has discussions with investors and potential investors. We also keep investors informed through our reporting and our website.
Inability to obtain debt finance due to a downgrading of Merafe’s credit status could adversely affect our financial position. To counteract this risk we maintain a strong balance sheet, low gearing, a good reputation and relationship with our bankers and have tangible assets to secure financing.
Empowerment credentials: In this regard see our commentary in the Material issues section on page 8 of this report and the Chairperson’s report on page 40 of this report.

See our online Integrated Annual Report for 2022 for more information on Merafe’s and the Venture’s risks and stakeholder engagement.

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022

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Sustainability: Internal and external reviews, audits and processes

Merafe and the Venture

Merafe relies on the Venture and Glencore to obtain quantitative data with regard to sustainability indicators of the Venture as set out in this report. Merafe’s attributable portion of the data of the Venture reported from page 22 to page 38 is 20.5%.

The Venture, via the Glencore Sustainability Database, undergoes a process of internal and independent reviews and processes of their key sustainability indicators.

The sustainability data and information falls under the Sustainability and Human Resources Development departments of both the Venture and Glencore. The information set out in this report is signed off by the Venture and Glencore.

The Venture’s sustainability data and information was subjected to various internal and external reviews and processes during 2022. See our online Integrated Annual Report for 2022 under Sustainability: Internal and external reviews, audits and processes for a schedule detailing the Venture’s internal and external reviews and processes.

As a result of the internal and external reviews and processes as outlined (together with the signing off of the data by the Venture and Glencore), the Merafe Board is satisfied that the information set out in this report in respect of the Venture’s data is reliable, accurate and complete.

The Venture’s Mineral Resources and Mineral Reserves Statement to 31 December 2022 is signed off by a Competent Person as defined by the SAMREC Code, a summary of which is on pages 27 to 29 of this report. The full report is on our website and attached as Appendix 1 to this report.

The Board follows the materiality determination process as set out on page 9 of this report to determine its material matters.

In respect of the Remuneration Policy of the Company and remuneration of the Company’s Board and executives, the Remuneration Committee appoints independent advisors to assist the Committee in ensuring that the policy was in line with best practice and that remuneration was properly benchmarked. For more details in this regard see the Remuneration Report on pages 50 to 57 of this report.

With regard to the above internal and external reviews and processes, the Venture and Glencore have confirmed to the Board of Merafe that there are no material issues arising therefrom which would impact on the reliability, accuracy and completeness of the Venture’s information and data set out in this report.

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See our online Integrated Annual Report for 2022 under Sustainability review and assurance for a schedule detailing the Venture’s internal and external reviews and audits.

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022

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TRANSPARENCY AND ACCOUNTABILITY continued

Directors’ report for the year ended 31 December 2022

The Directors’ Report for the year ended 31 December 2022 is set out on pages 8 to 12 of the annual financial statements and an abridged version is set out below.

Nature of business

Merafe was incorporated in South Africa with interests in the ferrochrome and chrome industry. The activities of the Group are undertaken through the Company and its principal subsidiaries and joint arrangements. The Group operates in South Africa. Merafe owns 100% of the share capital in Merafe Ferrochrome and Mining Proprietary Limited (Merafe Ferrochrome/ MFM) which through a pooling and sharing venture with Glencore Operations South Africa Proprietary Limited (GOSA), participates in chrome mining and the beneficiation of chrome ore into ferrochrome.

The Venture operates five ferrochrome smelters (including pelletising and sintering plants), 22 ferrochrome furnaces, six chrome ore mines, a PGM processing plant, and five UG2 plants, situated in the North West, Limpopo and Mpumalanga provinces of South Africa. The Venture is one of the largest ferrochrome producers in the world with an installed capacity of 2.3 metric tonnes per annum. Merafe Ferrochrome’s share of the EBITDA is 20.5%. Merafe Ferrochrome shares in the revenue, expenses and liabilities at 20.5%.

The Venture comprises assets to which both GOSA and Merafe Ferrochrome have granted the right-of-use but own in different proportions. Listed below are the operations to which Merafe Ferrochrome has granted the right-of-use to the Venture:

Ferrochrome smelters		Chrome mines		UG2plants/pelletisers/PGMplant	UG2plants/pelletisers/PGMplant
	Merafe		Merafe		Merafe
	Ferrochrome’s		Ferrochrome’s		Ferrochrome’s
Asset	interest	Asset	interest	Asset	interest
Wonderkop smelter (furnaces 5 and 6)	50%	Boshoek Mine	100%	Two Impala Kanana UG2 plants	100%
Boshoek smelter	100%	Kroondal and Wonderkop Mine	50%	Three Lonmin UG2 plants	20.5%
Lion I smelter	20.5%	Helena Mine	20.5%	Bokamoso pelletising plant	20.5%
Lion II smelter	20.5%	Magareng Mine	20.5%	Motswedi pelletising plant	100%
		Marikana	26%	Tswelopele pelletising plant	20.5%
				Unicorn Chrome	20.5%
				Western PGMsplant	20.5%

There have been no material changes to the nature of the Group’s business from the prior year.

Group financial results

The financial statements set out the financial results of the Group and Company and have been prepared using appropriate accounting policies, conforming to IFRS and the requirements of the Companies Act of South Africa, supported by reasonable and prudent judgements where required.

Revenue was R7 939m (2021: R8 063m) supported by high commodity prices and a weaker ZAR:USD exchange rate. Both chrome and ferrochrome volumes sold were lower than 2021. Merafe’s portion of the Venture’s EBITDA for the year ended 31 December 2022 is R 2 228m (2021: R2 498m). The EBITDA includes Merafe’s attributable share of standing charges of R108m (2021: R109m) and a foreign exchange gain of R68m (2021: R104m). The Company wrote down inventory by R1m during the year (2021: R24m).

After accounting for corporate costs of R65m (2021: R66m), which include a cash settled share-based payment expense of R13m (2021: R9m), Merafe achieved EBITDA of R2 141m (2021: R2 432m). Corporate costs also include corporate social investment expenses of R3m (2021: R3m), and a bonus provision of R12m (2021: R11m).

Waterval mine and Lydenburg smelter are still under care and maintenance. Boshoek mine which was also on care and maintenance is in the process of being sold, and has been classified as held for sale in terms of IFRS 5.

In 2022, South Africa experienced the worst load shedding year to date. It is estimated that South Africa experienced in excess of 1 900 hours of power cuts. This has disrupted communities and businesses. Although our business was affected by the resultant load curtailments, the impact was not that severe on our operations. Periods of inactivity were used to attend to maintenance on our plants. Cost pressures in general but from Eskom and reductants in particular are a concern. These resulted in our ferrochrome unit production cost increasing by 30% year-on-year. Costs are carefully monitored and every effort is made to bring these under control. While logistical challenges continue, we were able to work around these in delivering products to our customers.

In 2022, the COVID-19 pandemic was not a key feature in our operation. The COVID-19 measures have now been operationalised and we treat all mitigation costs as normal operating expenses. COVID-19’s impact on the Chinese economy has been more severe starting with their zero-COVID policy and resulting in a rise in infections after the policy was lifted. China relaxed its COVID-19 policy in the fourth quarter of 2022. There is an expectation of support from the Chinese government to expand domestic demand, prioritise consumption recovery, and achieve major economic targets in 2023. These initiatives are viewed as positive to markets and are likely to provide much needed support to a global economy that is gripped by recession fears.

We therefore expect the China developments to be supportive of both chrome demand and pricing.

While the 2022 financial performance is lower than the prior year’s, this performance is remarkable in light of the headwinds that our business faced during the year. 2023 is expected to be a difficult year for various reasons including recession fears as a well as a high inflation, an on-going electricity crisis and interest rate environment. Accordingly, Merafe has and will continue to approach the year with caution while ensuring that cash is preserved and key risks that have been identified are well managed for sustainability of its business.

Full details of the financial position and cash flows of the Group and Company are set out in these consolidated and separate annual financial statements.

Loans and borrowings

The Group had a cash balance of R1 269m at 31 December 2022 (31 December 2021: R972m). The Group’s Revolving Credit Facility (RCF) to the value of R300m remains unutilised for the year. Refer to note 27 for the disclosure on the Group’s facilities and for covenants associated to these facilities, which includes the facilities to the Venture.

Going concern

As stated above, the Group has a cash balance amounting to R1.269bn and no debt at the reporting date and a cash balance of R1.53bn and no debt as of the 28th of February 2023.

The Group has the benefit of unutilised debt facilities through its 20.5% share of the Venture, which the board considers sufficient to sustain the business for at least the next 12 months in the event that need arose. The Group’s forecasts and projections of its short- to medium-term profitability, taking account of likely changes in production and performance, show that the Group will be able to operate within the level of its cash resources and facilities for at least 12 months from the approval date of the annual financial statements.

The Group generated EBITDA of R2.140bn and made profit after tax of R1.410bn in the current year. Merafe Group and the Company maintain healthy cash balances as per note 13 with access to banking and other lending facilities. The Group and Company’s credit and liquidity risks have been assessed in note 27.1 and 27.2 of the AFS. Having considered the Group and Company’s key risks, current financial position, solvency and liquidity, debt levels, lending facilities available through the Venture, impairment review as well as the Group and Company’s financial budgets with their underlying business plans, the directors believe that the Group and Company have sufficient resources and cash flows to be able to continue as a going concern at least for the year ahead. The Group and Company’s lending facilities are referenced in note 27.2 of the AFS.

See page 21 of this report for a table on the Venture’s plants, technology and mines and page 27 for further information on the reserves and resources of the Venture.

See our online Integrated Annual Report for 2022 for our annual financial statements.

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022

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Dividend policy and ordinary cash dividend

The Company has a hybrid dividend policy that has features of a stable dividend policy and a residual dividend policy. The Company intends to pay a dividend of at least 30% of headline earnings at least once a year taking into account, inter alia, the annual financial performance, expansionary projects and economic circumstances prevailing at the time. In addition, in any given year, the directors may consider an additional distribution in the form of special dividends and share buy-backs dependent on the Company’s financial position, future cash requirements, future earnings prospects, availability of distributable reserves and other factors. Dividends are recognised when they are declared by the Board of the Company.

For the year under review for dividends paid see under “Events after the reporting period” on page 61 of this report and page 15 of the Financial Capital section.

Share capital

The full details of the authorised and issued share capital of the Company are set out in note 14 to the annual financial statements. Merafe did not issue any shares for cash.

Directorate

Details of transactions with directors and key management are detailed in note 33 of the annual financial statements. The composition of the Board during the year under review is set out on page 10 of the annual financial statements and on pages 42, 43 and 46 of this report.

Major shareholders

The following shareholders were the registered holders of 5% or more of the issued ordinary shares in the Company at 31 December 2022:

Glencore Netherlands B.V. – 28.82%;
Industrial Development Corporation of South Africa Limited – 21.88%;

• Ninety One – 7.53%. The analysis of the ordinary shareholding is given on page 79 of the annual financial statements.

Directors’ interests in Merafe Resources Limited

Refer to note 34 of the annual financial statements and page 55 of this report for the beneficial interests of directors in shares of the Company as well as note 33 for transactions with key management personnel and nonexecutive directors.

Details of investments in subsidiaries, associates and structured entities

Details of material interests in subsidiary companies, associates and structured entities are presented in the annual financial statements in notes 5 and 6. The interests of the Group in the profits and losses of its subsidiaries, associates and joint arrangements for the year ended 31 December 2022 are as follows:

Subsidiaries Total profits after income tax Associates Total share of income from equity accounted investments Total	2022 R’000	2021 R’000
	1 422 541 3 944	1 688 555 614
	1 426 485	1 689 169

Property, plant and equipment

There was no change in the nature of the property, plant and equipment of the Group or in the policy regarding their use during the year.

During the current year the Group recognised an impairment loss of R0.2m (2021: R5.8m) against a specific asset with nil economic value, refer to note 3 and note 37 to the annual financial statements.

Independent external auditor

Deloitte were re-elected as the Company’s independent external auditor on 18 May 2022 in accordance with section 90 of the Companies Act and will again be proposed for re-election in respect of the 2023 financial year at the forthcoming AGM of shareholders.

Audit and Risk Committee

The Audit and Risk Committee’s report is presented on pages 4, 5 and 6 of the annual financial statements and on page 62 of this report.

Related party transactions

Details of related party transactions are set out in note 32 to the annual financial statements.

Electricity challenges

Electricity supply and pricing are serious concerns not only for our operations but for the country in general. Management is pursuing different avenues of dealing with the electricity challenge which include representation in the Minerals Council which has regular engagements with Eskom and government on challenges affecting the mining sector, engagements with Eskom on the Negotiated Pricing Agreement to mitigate against escalating costs as well as consideration of renewable energy sources.

Events after the reporting period

The Board has declared a final cash dividend of R325m (2021: R550m). This amounts to 13 cents (2021: 22 cents) per share and brings the total dividend for the year to R625m (2021: R725m).

The directors are not aware of any other material event which occurred after the reporting date and up to the date of this report is authorised that may require adjustment or disclosure in these annual financial statements.

Contingent liability

Special resolutions

All special resolutions were passed by the shareholders at the 2021 AGM held on 18 May 2022.

The next AGM of the shareholders of the Company will be held (subject to any adjournment or postponement) on Wednesday 17 May 2023.

Environmental and decommissioning provision

The Group’s environmental rehabilitation costs are in accordance with the National Environmental Management Act (NEMA) No. 107 of 1998, Regulations No. 1147 of 20 November 2015. There are proposed amendments to the 2015 financial provisioning regulations of the same Act which were gazetted on 27 August 2021. These had not yet come into effect at the reporting date.

Mining rights and mining operations

The directors are satisfied that there are no legal proceedings or foreseen material risks relating to the resources and reserves of the Venture and the ability of the Venture to conduct its mining operations. The abridged Mineral Resources and Reserves Statement and the detailed Resources and Reserves Statement have been signed off by a Competent Person in accordance with the South African Mineral Reporting Codes (SAMREC Code) and the JSE Listings Requirements.

CEO’s and FD’s responsibility statement

Each of the directors, whose names are stated below hereby confirm that:

(a) the annual financial statements set out on pages 2 to 78 , fairly present in all material respects the financial position, financial performance and cash flows of Merafe Resources Limited in terms of IFRS;
(b) to the best of our knowledge and belief, no facts have been omitted or untrue statements made that would make the annual financial statements false or misleading;
(c) internal financial controls have been put in place to ensure that material information relating to Merafe Resources Limited and its consolidated subsidiaries have been provided to effectively prepare the annual financial statements of Merafe Resources Limited;
(d) the internal financial controls are adequate and effective and can be relied upon in compiling the annual financial statements, having fulfilled our role and function as executive directors with primary responsibility for implementation and execution of controls;
(e) where we are not satisfied, we have disclosed to the Audit and Risk Committee and the auditors any deficiencies in design and operational effectiveness of the internal financial controls and have taken steps to remedy the deficiencies; and
(f) we are not aware of any fraud involving directors.

Zanele Matlala Ditabe Chocho Chief Executive Officer Financial Director 17 March 2023 17 March 2023

Approval of the consolidated and separate annual financial statements of Merafe Resources Limited

The consolidated and separate financial statements of Merafe Resources Limited were approved by the Board on 17 March 2023 and signed by:

Abiel Mngomezulu Zanele Matlala Chairperson Chief Executive Officer 17 March 2023 17 March 2023

The CEO’s and FD’s responsibility statement as required by paragraph 3.84(k) of the JSE Listings Requirements is set out in full and on page 3 in the annual financial statements which forms part of our online Integrated Annual Report for 2022.

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TRANSPARENCY AND ACCOUNTABILITY continued

Report of the Audit and Risk Committee

The report by the Audit and Risk Committee (the Committee) in respect of the 2022 financial year is set out in full in the annual financial statements on pages 4 to 6 and an abridged version is set out below.

Introduction

The Committee is pleased to present its report for the financial year ended 31 December 2022. The Committee confirms that it has adopted formal terms of reference as its Audit and Risk Committee Charter (the Charter), and that it has discharged all of its responsibilities for the current financial year, in compliance with the Charter. The report has been prepared based on the requirements of the Companies Act, No. 71 of 2008, as amended (Companies Act), King IV Report on Corporate Governance for South Africa, 2016 (King IV Code/King IV), the JSE Limited Listings Requirements (Listings Requirements) and other applicable regulatory requirements. The report provides an overview of the work performed by the Committee during the year under review.

Objectives

The overall objectives of the Committee are to: ensure that appropriate financial reporting procedures exist and are operating, which should include consideration of all entities included in the consolidated and separate Group IFRS financial statements, to ensure that it has access to all the financial information of Merafe to allow Merafe to effectively prepare and report on the financial position of the Group and Company; assess the adequacy of the internal financial controls and the accounting systems, including the Company’s authority framework; oversee a process by which internal audit performs assessment of the effectiveness of the Company’s system of internal control and risk management, including internal financial controls; review the summarised financial statements, interim financial statements and annual financial statements and recommend these to the Merafe Board for approval; assess and evaluate the Group and Company’s combined assurance and provide independent oversight to assess its effectiveness; nominate the external auditor who in the opinion of the Committee is considered independent for appointment; determine and approve external audit fees; set the Company’s and its subsidiaries’ (the Group’s) policy on non -audit services provided by the external auditor and ensure that the appointment complies with legislation; ensure that the appointment of the external auditor is presented and included as a resolution at the forthcoming annual general meeting of Merafe shareholders pursuant to section 61(8) of the Companies Act; monitor compliance with legal requirements and debt covenants; recommend budgets and plans to the Board; consider and recommend to the Board any dividend; conduct periodic reviews and assessments of the business risks the Group faces by considering Merafe’s and the Venture’s risk reports; receive and deal with any concerns from within, outside the Company or on its own initiative in relation to accounting practices; internal audit of the Company or any related matter and ensure that all issues are addressed; make submissions to the Board on any matter concerning the Company’s accounting policies, financial control, records and reporting. This includes a review of key matters requiring judgement such as impairment; review the Company’s related party transactions; receive and deal with any concern or complaints from the whistleblowing line, whether from within or outside the Company; perform duties that are attributed to it by the Act, the JSE and King IV Code; and consider the JSE’s proactive monitoring reports. The objectives of the Committee were adequately met during the year under review.

Composition of the Committee

The Committee consists of three independent non-executive directors, all of whom have the necessary qualifications and experience to execute their responsibilities, with two members forming a quorum. Details of the members, the appointments and attendances is set out on page 5 of the annual financial statements and set out on page 46 of this report. The Committee is satisfied that the members thereof have the required knowledge and experience as set out in section 94(5) of the Companies Act and Regulation 42 of the Companies Regulation, 2011. Further details of the permanent invitees to the meeting, and the Merafe nomination and evaluation process, are set out on page 5 of the annual financial statements. At least once a year, a session is held with the independent external auditor where management is not present as a way to strengthen the independent oversight role of the Committee. The session facilitates an exchange of views and concerns about the scope of the audit.

Meetings held by the Committee

The Committee performs the duties laid upon it by section 94(7) of the Companies Act by holding meetings with the key role players on a regular basis and by the unrestricted access granted to the external auditor.

The Committee held four meetings during the year and the quorum was met at all the meetings; refer to the composition of the Committee for meeting attendance.

2022 overview

The CEO and FD have outlined the controls over financial reporting and presented these to the Committee. The Committee believes that Merafe’s internal controls can be relied upon as a reasonable basis for the preparation of the annual financial statements.

The Committee has considered the key audit matter set out in the independent auditor’s report and is satisfied that it is correctly presented. The key audit matter assessed relates to impairment of the Group’s net assets in accordance with the requirements of IAS 36: Impairments of Assets . The Committee reviewed the approach to the impairment assessment as well as the assumptions and sensitivities underlying the model. The Committee is satisfied with the conclusion reached.

The Committee reviewed Merafe’s Risk Policy and Framework with a view to enhancing its risk appetite statements.

The Committee considered the nature of the operations, risks and internal control environment at the Merafe head office and continued to rely on the internal audit function at the Venture which provides reports to the Merafe head office on a quarterly basis. The Committee has satisfied itself with the internal audit function at the Venture through the review of their scope of work, quarterly review of their reports and evaluation of their findings and are satisfied that there were no material areas of concern that would render the function ineffective.

The Committee retained the appointment of an independent internal auditor from an external firm to focus on assignments specific to the Merafe head office. The audit scope for 2022, which was risk-based, was considered and agreed. The Committee has also satisfied itself with the scope of work relating to and the findings and remediations arising from the internal audit assignments specific to Merafe head office which were carried out.

The Committee reviewed the 2023 budgets and 2024/5 plans which were recommended to the Board.

The Committee reviewed the independence, effectiveness and overall performance of the internal audit function. The Committee is of the opinion that nothing has come to the attention of the Committee that caused it to believe that the Group’s system of internal controls and risk management is not effective and that the internal financial controls do not form a sound basis for the preparation of reliable financial statements.

The Committee also reviewed all legal and regulatory matters that could have a significant impact on the Group and is satisfied with the compliance thereof.

The Committee reviewed the summarised financial statements, interim financial statements and annual financial statements and recommend these to the Board for approval.

The Committee is satisfied that it has discharged its duties as set out in its terms of reference for the year under review.

External audit

The Committee, having considered all relevant matters, satisfied itself through enquiry that auditor independence, objectivity and effectiveness were maintained in 2022. The Committee has satisfied itself that the external auditor and lead partner are not included in the JSE’s list of disqualified auditors and has considered the external auditor’s suitability assessment in terms of paragraph 3.84(g)(iii) and section 22.15(h) of the Listings Requirements. The Committee, in consultation with executive management, agreed to the terms of the engagement. The audit fee for the external audit has been considered and approved taking into consideration such factors as the timing of the audit, the extent of the work required and the scope. In line with a documented policy on the nature and extent of non-audit services that the external auditor can provide to the Company, the Committee pre-approves all audit and permitted non-audit services by the external auditor. This is to further ensure that the independence of the external auditor is maintained. For the year, these services comprised tax and transfer pricing reviews. Deloitte & Touche have served as the Company’s external auditor since 4 May 2017. The performance of the external auditor is reviewed by the Committee annually. The Committee also considered and is satisfied with the quality of the audit for the year under review.

JSE proactive monitoring

The Committee is committed to quality financial reporting. Accordingly, the Committee regularly reviews and considers the JSE proactive monitoring

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022

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reports to ensure that, where applicable, the recommendations are implemented in the preparation of the annual financial statements.

Financial reporting

The review of the Integrated Annual Report together with the consolidated and separate financial statements is also the responsibility of the Committee. The Committee has evaluated the consolidated and separate financial statements of the Company for the year ended 31 December 2022 and based on the information provided to the Committee, considers that they comply, in all material respects, with the requirements of the various statutes and regulations governing disclosure and reporting.

Financial Director and finance function

The Committee reviewed the performance, expertise and experience of the Financial Director, Ditabe Chocho, and continues to be satisfied of his

suitability to hold office as the Financial Director in terms of the Listings Requirements. The Committee also considered the appropriateness of the expertise, continued improvement and adequacy of the finance function. The Committee is satisfied that there were no material areas of concern that would render the internal financial controls ineffective.

Consolidated and separate annual financial statements

Having taken all of the above assessments into account, the Committee recommended the approval of the consolidated and separate financial statements as well as the Integrated Annual Report for the year ended 31 December 2022 by the Board.

Matsotso Vuso CA(SA); CD(SA); RA

Chairperson – Audit and Risk Committee

17 March 2023

Shareholder information

SHAREHOLDER INFORMATION AS AT 31 DECEMBER 2022:

1. Analysis of shareholdings

Analysis of shareholdings
Range	Number of members % of all members Number of shares held % of issued capital
1 – 1 000 1 001 – 5 000 5 001 – 10 000 10 001 – 100 000 100 001 – 1 000 000 1 000 001 and more	7 041 49.06% 1 577 249 0.06%
	2 594 18.08% 6 922 984 0.28%
	1 200 8.36% 9 461 582 0.38%
	2 699 18.81% 99 124 658 3.97%
	683 4.76% 195 697 464 7.83%
	134 0.93% 2 186 342 933 87.48%
Totals	14 351 100.00% 2 499 126 870 100.00%

Distribution of shareholders

Distribution of shareholders
Category	Number of members % of all members Number of shares held % of issued capital
Diluted funds Pension funds Private companies Individuals Close corporations Other corporations Nominees & other institutions Banks	38 0.26% 485 031 405 19.41%
	74 0.52% 56 690 195 2.27%
	33 0.23% 92 333 514 3.69%
	13 602 94.78% 309 873 501 12.40%
	79 0.55% 14 567 303 0.58%
	483 3.37% 1 513 761 641 60.57%
	26 0.18% 6 137 516 0.25%
	16 0.11% 20 731 795 0.83%
Totals	14 351 100.00% 2 499 126 870 100.00%

Holders holding 5% or more of shares in issue

The following shareholders have a holding of greater than 5% of the issued shares of the company:

		Number of shares held % of issued capital
Glencore Nederland BV IDC NinetyOne value fund		720 163 887 28.82%
		546 830 100 21.88%
		188 176 769 7.53%
Shareholder spread Category	Number of members % of all members	Number of shares held % of issued capital
Public	14 347 99.97%	1 228 579 318 49.16%
Non-public	4 0.03%	1 270 547 552 50.84%
Directors and Associates of the Company Glencore Nederland BV IDC	2 0.01%	3 553 565 0.14%
	1 0.01%	720 163 887 28.82%
	1 0.01%	546 830 100 21.88%
Totals	14 351 100.00%	2 499 126 870 100.00%

Distribution of local and foreign beneficial shareholding

Distribution of local and foreign benefcial shareholding
Category	% of issued capital
South African Foreign	62.65%
	37.35%

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022

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TRANSPARENCY AND ACCOUNTABILITY: SHAREHOLDER INFORMATION continued

2. Major shareholders

The following shareholders have a holding of greater than 5% of the issued shares of the company:

		Number of shares % of shares held	Number of shares % of shares held
Glencore Netherlands B.V. Industrial Development Corporation of South Africa Limited NinetyOne		720 163 887 28.82%
		546 830 100 21.88%
		188 176 769 7.53%
JSE share performance		2022	2021
Market capitalisation as at 31 December Share Price (cents) High Low Closing Shares traded Volume of shares traded Value of shares (ZAR) Volume of shares traded as a percentage of weighted average of shares in issue (%) Shares in issue as at 31 December Distribution of local and foreign beneficial shareholding (%) South African Foreign	3 298 847 468		2 998 952 244 124 43 120 959 280 904 816 904 469 38 2 499 126 870 63 37

	192
	108
	132

	716 172 359
	1 073 308 064
	29
	2 499 126 870

	63
	37

Meetings

Annual General Meeting for the 2022 financial year will be held on 17 May 2023.

==> picture [511 x 271] intentionally omitted <==

Shareholders’ diary

Reports

Interim results for the six months to 30 June 2023 to be released on Tuesday, 15 August 2023. Annual results for the 12 months to 31 December 2023 to be released and published in March 2024.

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022

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NOTICE OF THE ANNUAL GENERAL MEETING

(Incorporated in the Republic of South Africa)

(Registration number 1987/003452/06) ISIN: ZAE000060000

Share code: MRF

(hereinafter referred to as Merafe Resources or the Company )

Notice is hereby given in terms of section 62(1) of the Companies Act, No. 71 of 2008, as amended (the Companies Act) that the 36th (thirty-sixth) annual general meeting of shareholders of the Company (the annual general meeting) will only be accessible through electronic participation, as permitted in terms of clause 21 of Merafe’s memorandum of incorporation (MOI) and the Companies Act at 11:00 on Wednesday, 17 May 2023 (Notice), subject to any cancellation, postponement or adjournment, for the purpose of transacting the business as outlined in this Notice, and to consider and, if deemed fit, to pass, with or without modification, the ordinary and special resolutions set out below.

Important dates

Record date to receive the Notice: Friday, 31 March 2023 Last date to trade to be eligible to attend, participate in and vote at the annual general meeting: Tuesday, 2 May 2023 Record date to be eligible to attend, participate in and vote at the annual general meeting: Friday, 5 May 2023 Last date for lodging forms of proxy (by 11:00): Monday, 15 May 2023*

Accordingly, the date on which a person must be registered as a shareholder in the register of the Company for purposes of being entitled to attend, participate and vote at the annual general meeting is Friday, 5 May 2023.

* For administrative purposes only. If forms of proxy are not received by this date, they must be submitted to the Chairperson of the annual general meeting electronically before the appointed proxy exercises any of the relevant shareholder rights at the annual general meeting.

Interpretation and definitions

For the avoidance of doubt and to the extent that the terms have not been defined in the Integrated Annual Report for the year ended 31 December 2022 (2022 Integrated Annual Report), reference in this Notice to the following words and expressions:

“ Group ” means the Company and all its subsidiaries at the date of this Notice;
“ Listings Requirements ” means the Listings Requirements of the JSE Limited;
“ King IV ” means the King IV Report on Corporate Governance for South Africa, 2016;
“ MOI ” means Memorandum of Incorporation of the Company; and
“ Companies Act ” means the Companies Act, No. 71 of 2008, as amended.

Any words and expressions defined in the Companies Act or the Listings Requirements, as the case may be, which are not defined in this Notice, shall bear the same meanings in this Notice as those ascribed to them in the Companies Act or the Listings Requirements, as the case may be.

Section A: Ordinary Resolutions

For Ordinary Resolutions 1 to 6 (inclusive) to be duly adopted, the support of more than 50% (fifty percent) of the voting rights exercised on each ordinary resolution by shareholders present or represented by proxy at the annual general meeting and entitled to exercise voting rights on the relevant resolution, must be exercised in favour of such resolution.

Ordinary Resolution Number 1: Adoption of annual financial statements
“Resolved that the Group audited annual financial statements, including the reports of the directors, the auditor and the Audit and Risk Committee, for the financial year ended 31 December 2022, be and are hereby considered and accepted.”

The summarised form of the financial statements is included in the 2022 Integrated Annual Report. A copy of the complete Group audited annual financial statements for the financial year ended 31 December 2022 can be obtained from www.meraferesources.co.za or on request during normal business hours at the Company’s registered address, Building B, 2[nd] Floor, Ballyoaks Office Park, 35 Ballyclare Drive, Bryanston, 2191.

Note to Ordinary Resolution Number 1

In terms of the provisions of section 61(8)(a)(ii) of the Companies Act, a company’s annual financial statements must be presented to its shareholders at the first shareholders’ meeting after the annual financial statements have been approved by the board of directors of the Company ( Board ).

Ordinary Resolution Numbers 2.1 to 2.3: Re-election of retiring directors Ordinary Resolution 2.1
“Resolved that Ms M Vuso who, in terms of the MOI, retires by rotation at this annual general meeting, and, being eligible, stands and offers herself for re-election, be and is hereby re-elected.”

Ordinary Resolution 2.2

“Resolved that Mr J Mclaughlan who, in terms of the MOI, retires by rotation at this annual general meeting, and, being eligible, stands and offers himself for re-election, be and is hereby re-elected.”

Ordinary Resolution 2.3

“Resolved that Mr K Tlale who, in terms of the MOI, retires by rotation at this annual general meeting, and, being eligible, stands and offers himself for re-election, be and is hereby re-elected.”

Notes to Ordinary Resolution Numbers 2.1 to 2.3

The reason for Ordinary Resolutions numbers 2.1 to 2.3 is that in terms of the provisions of the MOI, one-third of the non-executive directors, or if their number is not a multiple of three, then the number nearest to, but not less than one-third, are required to retire at each annual general meeting and, being eligible, may offer themselves for re-election.
The Board has evaluated the performance and contribution of the directors standing for re-election and has recommended the re-election of the directors.
Abridged curricula vitae of the directors of the Company standing for re-election are set out on page 42 of the 2022 Integrated Annual Report.

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NOTICE OF THE ANNUAL GENERAL MEETING continued

Ordinary Resolution Numbers 3.1 to 3.3: Re-appointment of members to the Audit and Risk Committee for the forthcoming financial year

“Resolved that the following members, by separate Ordinary Resolutions numbered 3.1 to 3.3 (inclusive), being eligible and offering themselves for re-election, be and are hereby re-appointed as members of the Audit and Risk Committee for the financial year ending 31 December 2023:

3.1 Ms M Vuso (subject to her re-election under Ordinary Resolution 2.1);
3.2 Mr K Tlale; (subject to his re-election under Ordinary Resolution 2.3); and
3.3 Ms N Mabusela-Aikhuere.

Notes to Ordinary Resolution Numbers 3.1 to 3.3

Ordinary Resolutions numbered 3.1 to 3.3 (inclusive) above constitute separate and divisible ordinary resolutions and will be considered by separate vote.
The reason for Ordinary Resolutions numbered 3.1 to 3.3 (inclusive) is that in terms of the provisions of section 94(2) of the Companies Act, a company shall at every annual general meeting elect an Audit Committee comprising at least three members.
The Nomination Committee conducted an assessment of the independence and performance, where applicable, of each of the directors proposed to be members of the Audit and Risk Committee and the Board considered and accepted the findings of the Nomination Committee. The Board is also satisfied that the proposed members meet the provisions of section 94(4) of the Companies Act, that they are independent according to King IV (Principle 7; recommended practice 28) and that they possess the required qualifications and experience as prescribed in Regulation 42 of the Companies Regulations, 2011 and therefore recommends their re-appointment.
Abridged curricula vitae of each of the independent non-executive directors proposed to be re-appointed to the Audit and Risk Committee appear on page 42 of the 2022 Integrated Annual Report.
Ordinary Resolution Number 4: Re-appointment of external auditors of the Company

“Resolved that the re-appointment of Deloitte & Touche as the external registered auditors of the Company, and being independent from the Company, be and is hereby approved and Ms Tumellano Lavhengwa (IRBA No. 389401) be and is hereby appointed as the designated audit partner for the financial year ending 31 December 2023.”

Notes to Ordinary Resolution Number 4

The reason for this resolution is that in terms of section 90(1) of the Companies Act a company is required to appoint an auditor at every annual general meeting.
The duty to nominate auditors for appointment lies with the Audit and Risk Committee.
The Audit and Risk Committee conducted an assessment of the performance and independence of the external auditors and considered whether or not the external auditors comply with the provisions of the Companies Act and section 22 of the Listings Requirements, and the Board considered and accepted the findings. The Board is satisfied that the proposed external auditors and Ms Tumellano Lavhengwa comply with the relevant provisions of the Companies Act and the Listings Requirements.
Ordinary Resolution Number 5: Authority to sign all documents required to give effect to all resolutions in this Notice

“Resolved that any one of the directors of the Company or Company Secretary be and is hereby authorised to do all such things and sign all such documents and procure the doing of all such things and the signature for all such documents as may be necessary or incidental to give effect to all ordinary and special resolutions passed at the annual general meeting.”

Section B: Ordinary Resolutions of a non-binding nature

Non-binding Advisory vote: Remuneration Policy and Remuneration Implementation Report

For Ordinary Resolutions numbered 6.1 and 6.2 to be duly adopted, the support of more than 50% (fifty percent) of the voting rights exercised on each ordinary resolution by shareholders present or represented by proxy at the annual general meeting and entitled to exercise voting rights on the relevant resolution, must be exercised in favour of such resolution.

Ordinary Resolution Number 6.1: Non-binding advisory vote on Remuneration Policy

“Resolved that the Company’s Remuneration Policy be and is hereby endorsed by way of a non-binding advisory vote.”

Ordinary Resolution Number 6.2: Non-binding advisory vote on Remuneration Implementation Report

“Resolved that the Company’s Remuneration Implementation Report be and is hereby endorsed by way of a non-binding advisory vote.”

The Remuneration Policy and Remuneration Implementation Report of the Company are set out on pages 50 to 57 of the 2022 Integrated Annual Report and the Remuneration Policy and Remuneration Implementation Report can be obtained from www.meraferesources.co.za or on request during normal business hours at the Company’s registered address, Building B, 2[nd ] Floor, Ballyoaks Office Park, 35 Ballyclare Drive, Bryanston, 2191. Notes to Ordinary Resolution Numbers 6.1 and 6.2

The Listings Requirements require and Principle 14: sub-practice 37 of King IV recommends that companies table their remuneration policy and implementation report at every annual general meeting for a non-binding advisory vote by shareholders. This vote enables shareholders to express their views on the remuneration policies adopted and on their implementation.
These resolutions are of an advisory non-binding nature only and failure to pass these resolutions will therefore not have any legal consequences relating to existing arrangements. However, the Board will take the outcome of the vote into consideration when considering the Company’s Remuneration Policy and Remuneration Implementation Report.
Shareholders are reminded that in terms of the Listings Requirements and King IV, should 25% (twenty-five percent) or more of the votes cast be against one or both of these non-binding ordinary resolutions, the Company undertakes to engage with shareholders as to the reasons therefore and undertakes to make recommendations based on the feedback received.

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022

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Section C: Special Resolutions

For Special Resolutions numbered 1.1 to 1.8, 2 and 3 to be duly adopted, the support of at least 75% (seventy-five percent) of the voting rights exercised on each special resolution must be exercised by shareholders present or represented by proxy at the annual general meeting and entitled to exercise voting rights on the resolution concerned in favour of such resolution.

7. Special Resolution Numbers 1.1 to 1.8: Approval of non-executive directors’ fees

“Resolved that the fees, which will be payable to the non-executive directors for their services to the Board and committees of the Board with effect from 1 January 2023, as set out below, be and are hereby approved by separate Special Resolutions numbered 1.1 to 1.8 (inclusive).”

Special Resolution Number	2023	2023	2023	2023	2023	2023
	Total fees per annum R Retainer 60% R Monthly retainer fees R Retainer per quarter R Fees per attendance 40% R Fees per attendance per meeting R
Board Chairperson 1.1 Board Member 1.2	735 528	441 317	36 776	110 329	294 211	73 553
	333 719	200 231	16 686	50 058	133 488	33 372
Audit and Risk Committee Chairperson 1.3 Audit and Risk Committee Member 1.4	240 840	144 504	12 042	36 126	96 336	24 084
	151 025	90 615	7 551	22 654	60 410	15 103
Remuneration and Nomination Committee Chairperson 1.5 Remuneration and Nomination Committee Member 1.6	140 601	84 360	7 030	21 090	56 241	14 060
	85 823	51 494	4 291	12 874	34 329	8 582
Social, Ethics and Transformation Committee Chairperson 1.7 Social, Ethics and Transformation Committee Member 1.8	130 186	78 113	6 509	19 528	52 075	13 019
	85 823	51 494	4 291	12 874	34 329	8 582

The 2023 proposed fees in accordance with the Remuneration policy are set out above. An overall increase of 6% is proposed from the previous year. This increase and the allocation take into account the previous benchmarking exercise and inflation.

The above fees are exclusive of value added tax (VAT).

Notes to Special Resolution Numbers 1.1 to 1.8

Special Resolutions numbered 1.1 to 1.8 (inclusive) above constitute separate and divisible special resolutions and will be considered by separate vote.
The reason for and the effect of these resolutions is to approve the remuneration payable by the Company to its non-executive directors for their services as non-executive directors of the Company. In terms of the provisions of section 66(8) and section 66(9) of the Companies Act, remuneration may only be paid to the directors for their services as directors in accordance with the MOI and only by a special resolution approved by the shareholders within the previous two years.

The 2022 non-executive fees are set out in the table below for comparative purposes:

	2022	2022	2022	2022	2022	2022
	Total fees per annum R Retainer 60% R Monthly retainer fees R Retainer per quarter R Fees per attendance 40% R Fees per attendance per meeting R
Board Chairperson Board Member	693 895	416 337	34 695	104 084	277 558	69 389
	314 829	188 897	15 741	47 224	125 932	31 483
Audit and Risk Committee Chairperson Audit and Risk Committee Member	227 207	136 325	11 360	34 081	90 883	22 721
	142 477	85 486	7 124	21 371	56 991	14 248
Remuneration and Nomination Committee Chairperson Remuneration and Nomination Committee Member	132 643	79 585	6 632	19 896	53 058	13 264
	80 965	48 579	4 048	12 145	32 386	8 096
Social, Ethics and Transformation Committee Chairperson Social, Ethics and Transformation Committee Member	122 817	73 691	6 141	18 423	49 127	12 282
	80 965	48 579	4 048	12 145	32 386	8 096

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022 – 067 –

NOTICE OF THE ANNUAL GENERAL MEETING continued

8. Special Resolution Number 2: Loans or other financial assistance to related or inter-related companies

“Resolved that, subject to compliance with the provisions of the MOI and the Companies Act each as presently constituted and as amended from time to time, the Board be and is hereby authorised, for a period of two years from the date of the annual general meeting, on such terms and conditions that the Board may determine, to provide any direct or indirect financial assistance (financial assistance will herein have the meaning attributed to such terms in section 45(1) of the Companies Act) to a related or inter-related company or corporation (or to a member of a related or inter-related corporation) or any person related to any of them.”

Notes to Special Resolution Number 2

In terms of section 45 of the Companies Act, a company is required to obtain shareholder approval, by way of passing a special resolution for the provision by it of direct or indirect financial assistance to a related or inter-related company or corporation, or any person related to any such company or corporation. The Company has at all relevant times and prior to the effective date of the Companies Act, being 1 May 2011, provided financial assistance to its subsidiaries and related and inter-related companies. To facilitate the achievement by the Group of its strategic goals, it is necessary that this assistance continues. The main purpose for this authority is therefore to grant the Board the authority to authorise the Company to provide inter-group loans and other financial assistance for purposes of funding the activities of the Group. However, in accordance with the provisions of section 45 of the Companies Act, the Board undertakes that it will not adopt a resolution to authorise such financial assistance, unless the Board is satisfied that:

immediately after providing any direct or indirect financial assistance approved in terms of this resolution, the Company would satisfy the solvency and liquidity test as contemplated in section 45(3)(b) of the Companies Act;
the terms under which the financial assistance is proposed to be given are or will be fair and reasonable to the Company; and
written notice of any such resolution by the Board shall be given to all shareholders of the Company and any trade union representing its employees:
within 10 business days after the Board adopted the resolution, if the total value of the financial assistance contemplated in that resolution, together with any previous such resolution during the financial year, exceeds 0.1% (zero point one percent) of the Company’s net worth at the time of the resolution; or
within 30 business days after the end of the financial year, in any other case.

9. Special Resolution Number 3: General authority to repurchase Company shares

“Resolved that, the Company, or a subsidiary of the Company, be and is hereby authorised, by way of a general authority, to acquire ordinary shares of 1 cent each (ordinary shares) issued by the Company in terms of the provisions of sections 46 and 48 of the Companies Act and in terms of the Listings Requirements, it being recorded that the Listings Requirements currently require, inter alia, that the Company may make a general repurchase of securities only if:
any such repurchase of ordinary shares is effected through the order book operated by the JSE trading system and done without any prior understanding or arrangement between the Company and the counterparty (reported trades are prohibited);
authorised by the MOI;
the general authority shall be valid until the next annual general meeting of the Company, provided that it shall not extend beyond 15 months from the date of this Special Resolution Number 3;
when the Company has cumulatively repurchased 3% (three percent) of the number of ordinary shares in issue on the date of passing of Special Resolution Number 3, and for each 3% (three percent) thereof, in aggregate acquired thereafter, an announcement is published as soon as possible, in terms of the Listings Requirements;
at any one time, only one agent is appointed to effect any repurchase on the Company’s behalf;
the Company or its subsidiary will not repurchase securities during a prohibited period as defined in terms of the Listings Requirements unless the Company has a repurchase programme in place where the dates and quantities of securities to be traded during the relevant period are fixed (not subject to any variation) and have been submitted to the JSE in writing prior to the commencement of the prohibited period;
the Company will instruct only one independent third party, which makes its investment decisions in relation to the Company’s securities independently of, and uninfluenced by, the Company, prior to the commencement of the prohibited period to execute the repurchase programme submitted to the JSE in writing and including the details required in terms of paragraph 5.72(h) of the Listings Requirements;
any general repurchase by the Company of its own ordinary shares shall not, in aggregate, in any one financial year exceed 10% (ten percent) of the Company’s issued ordinary shares as at the date of passing of this Special Resolution Number 3;
in determining the price at which the ordinary shares are repurchased by the Company or its subsidiary in terms of this general authority, the maximum price at which such shares may be repurchased will not be greater than 10% (ten percent) above the weighted average of the market value for such ordinary shares for the 5 (five) business days immediately preceding the date of repurchase of such shares; and
in case of an acquisition by a subsidiary of the Company, of shares in the Company under this authority, such acquisition shall be limited to a maximum of 10% (ten percent) in aggregate of the number of issued shares of any class of shares of the Company, taken together with all ordinary shares held by all the subsidiaries of the Company.

Further information pertinent to Special Resolution Number 3

The directors of the Company confirm that no repurchase will be implemented in terms of this authority unless, after each such repurchase:

the Company and the Group will be able to pay its debts as they become due in the ordinary course of business for a period of 12 months after the date of the Notice;
the consolidated assets of the Company and the Group, fairly valued in accordance with the accounting policies used in the latest audited annual Group financial statements, will exceed its consolidated liabilities for a period of 12 months after the date of the Notice;
the share capital and reserves of the Company and the Group will be adequate for ordinary business purposes for a period of 12 months after the date of the Notice;
the working capital of the Company and the Group will be adequate for ordinary business purposes for a period of 12 months after the date of the Notice; and
the directors of the Company pass a resolution that they have authorised the repurchase, that the Company and its subsidiaries have passed the solvency and liquidity test and since the test was performed, there have been no material changes to the financial position of the Group.

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022

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In terms of paragraph 11.26(c) of the Listings Requirements, the directors of the Company hereby state that the intention of the Company and its subsidiaries is to utilise the general authority to repurchase Company shares, if at some future date the cash resources of the Company are in excess of its requirements.

The Listings Requirements require the following disclosures with respect to general repurchases, some of which appear elsewhere in the 2022 Integrated Annual Report:

Major shareholders – pages 63 and 64 of the 2022 Integrated Annual Report
Share capital of the Company – page 61 of the 2022 Integrated Annual Report and note 14 of the 2022 Group audited annual financial statements

Directors’ responsibility statement

The directors, whose names are given on pages 42 and 43 of the 2022 Integrated Annual Report, collectively and individually accept full responsibility for the accuracy of the information pertaining to the general repurchase resolution and certify that to the best of their knowledge and belief there are no facts that have been omitted which would make any statement false or misleading, and that all reasonable enquiries to ascertain such facts have been made and that the aforementioned resolution contains all information required by law and the Listings Requirements.

No material changes to report

Other than the facts and developments reported on in the 2022 Integrated Annual Report, there are no material changes in the financial or trading position of the Company and its subsidiaries that have occurred subsequent to the 31 December 2022 year end until the date of this Notice.

Reason and effect

The reason for and effect of Special Resolution Number 3 is to authorise the Company and/or its subsidiaries by way of a general authority to acquire the Company’s issued shares on such terms, conditions and in such amounts as determined from time to time by the directors of the Company subject to the limitations set out above and in compliance with section 48 of the Companies Act.

10. General

To transact such other business that may be transacted at an annual general meeting.

11. Actions required by Merafe Resources’ shareholders

11.1 The actions, which shareholders of the Company are required to take in order to follow their rights, to pass and adopt, with or without modification, the ordinary and special resolutions set out in this Notice are as set out below. If you are in any doubt as to the action you should take in relation to this Notice, please contact your stockbroker, Central Securities Depository Participant ( CSDP ), legal advisor, accountant, banker or other professional advisor immediately.
11.2 Record dates
11.2.1 The record date for shareholders to be recorded on the securities register of the Company in order to receive notice of the annual general meeting is Friday, 31 March 2023.
11.2.2 The record date for shareholders to be recorded on the securities register of the Company in order to be able to attend, participate in and vote at the annual general meeting is Friday, 5 May 2023 ( Record Date ).
11.2.3 The last date to trade in the Company’s shares in order to be recorded on the securities register of the Company in order to be able to attend, participate in and vote at the annual general meeting is Tuesday, 2 May 2023.
11.3 Voting and attendance at the annual general meeting
11.3.1 If you are a shareholder on the Record Date, you are entitled to attend, participate in and vote at the annual general meeting or may appoint one or more proxies to attend, participate in and vote thereat instead. A proxy need not be a shareholder of the Company. A form of proxy, in which the relevant instructions for its completion are set out, is enclosed for the use of a certified shareholder or “own-name” registered dematerialised shareholder who wishes to be represented at the annual general meeting. Completion of a form of proxy will not preclude such shareholder from attending and voting at the annual general meeting (in preference of that proxy).
11.3.2 Forms of proxy must be lodged with the Company’s transfer secretaries or at the Company’s registered offices not less than 48 hours before the commencement of the annual general meeting (for administrative purposes only) or submitted to the Chairperson of the annual general meeting electronically, as set out in the Notice, before the appointed proxy exercises any of the relevant shareholder rights at the annual general meeting.
11.3.3 Shareholders who have dematerialised their shares, other than those shareholders who have dematerialised their shares with “own-name” registration, who wish to attend the annual general meeting in person should contact their CSDP or broker to provide them with the necessary Letter of Representation in terms of their custody agreement.
11.3.4 Dematerialised shareholders, other than “own-name” registered dematerialised shareholders, who are unable to attend the annual general meeting and who wish to be represented thereat, must provide their CSDP or broker with their voting instructions in terms of the custody agreement entered into between themselves and the CSDP or broker in the manner and time stipulated therein.
11.3.5 In terms of Schedule 14.10 of the Listings Requirements, equity securities held by a share trust or scheme will not have their votes at general or annual general meetings taken into account for purposes of resolutions passed or to be passed in accordance with the Listings Requirements. Accordingly, votes cast by the Merafe Resources Limited Share Incentive Scheme (such scheme constituted by the document as approved by shareholders on 13 April 2010) will not have its votes taken into account for purposes of the adoption of such resolutions.

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022

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NOTICE OF THE ANNUAL GENERAL MEETING continued

11.4 Representation by proxy

In compliance with the provisions of section 58(8)(b)(i) of the Companies Act, a summary of the rights of a shareholder to be represented by proxy is set out below:
11.4.1 A shareholder entitled to attend and vote at the annual general meeting may appoint any individual (or two or more individuals) as a proxy or as proxies to attend, participate in and vote at the annual general meeting in the place of the shareholder. A proxy need not be a shareholder of the Company.
11.4.2 A proxy appointment must be in writing, dated and signed by the shareholder appointing a proxy, and, subject to the rights of a shareholder to revoke such appointment (as set out below), remains valid only until the end of the annual general meeting.
11.4.3 A proxy may delegate the proxy’s authority to act on behalf of a shareholder to another person, subject to any restrictions set out in the instrument appointing the proxy.
11.4.4 The appointment of a proxy is suspended at any time and to the extent that the shareholder who appointed such proxy chooses to act directly and in person in the exercise of any rights as a shareholder.
11.4.5 The appointment of a proxy is revocable by the shareholder in question cancelling it in writing, or making a later inconsistent appointment of a proxy, and delivering a copy of the revocation instrument to the proxy and to the Company. The revocation of a proxy appointment constitutes a complete and final cancellation of the proxy’s authority to act on behalf of the shareholder as of the later of (a) the date stated in the revocation instrument, if any; and (b) the date on which the revocation instrument is delivered to the Company as required in the first sentence of this paragraph.
11.4.6 If the instrument appointing the proxy or proxies has been delivered to the Company, as long as that appointment remains in effect, any notice that is required by the Companies Act or the Company’s existing MOI to be delivered by the Company to the shareholder, must be delivered by the Company to (a) the shareholder; or (b) the proxy or proxies, if the shareholder has:
(i) directed the Company to do so in writing; and
(ii) paid any reasonable fee charged by the Company for doing so.
11.4.7 Attention is also drawn to the Notes to the form of proxy.
11.4.8 The completion of a form of proxy does not preclude any shareholder attending the annual general meeting.

Identification

In terms of section 63(1) of the Companies Act, any person attending or participating in the annual general meeting must present reasonably satisfactory identification and the person presiding at the annual general meeting must be reasonably satisfied that the right of any person to participate in and vote (whether as a shareholder or as proxy for a shareholder) has been reasonably verified. A barcoded identification document issued by the South African Department of Home Affairs, a driver’s licence or a valid passport will be accepted as a form of identification at the annual general meeting.

Electronic participation

Shareholders who wish to participate in and/or vote electronically at the annual general meeting should contact The Meeting Specialists ( TMS ) on [email protected] or on +27 11 520 7952/0/1 as soon as possible and by no later than 11:00 on Monday, 15 May 2023. Shareholders may still register to participate in and/or vote electronically at the annual general meeting after this date, provided, however, that those shareholders are fully verified (as required in terms of section 63(1) of the Companies Act) and are registered at the commencement of the annual general meeting. Dematerialised shareholders would still need to submit proxies via their CSDP or obtain a letter of representation to attend the meeting. TMS will assist shareholders with all the requirements for electronic participation and is obliged to validate the information of each shareholder’s entitlement to participate in and/or vote at the annual general meeting before providing it with the necessary means to access the annual general meeting electronically and/or the electronic voting platform.

Shareholders will be liable for their network charges in relation to electronic participation in and/or voting at the annual general meeting and it will not be for the expense of the JSE Limited ( JSE ), Merafe or TMS. Neither the JSE, Merafe or TMS can be held accountable in the case of loss of network connectivity or network failure due to insufficient airtime/internet connectivity/power outages which would prevent a shareholder from participating in and/or voting at the annual general meeting electronically.

Notwithstanding the availability of the electronic voting platform, shareholders may still submit forms of proxy to TMS (in the case of certificated shareholders and dematerialised shareholders with “own-name” registration) or provide instructions to their appointed CSDP or broker (in the case of dematerialised shareholders without “own-name” registration) by no later than 11:00 on Monday, 15 May 2023 or the time and date stipulated by the CSDP or broker, respectively.

By order of the Board

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W Somerville (on behalf of CorpStat Governance Services)

Company Secretary

17 March 2023

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022 – 070 –

FORM OF PROXY

Merafe Resources Limited

(Incorporated in the Republic of South Africa)

(Registration number 1987/003452/06) ISIN: ZAE000060000

Share code: MRF ( Merafe Resources or the Company )

Only for use by shareholders who have not dematerialised their shares or shareholders who have dematerialised their shares with “own-name” registration. All other dematerialised shareholders must contact their Central Securities Depository Participant ( CSDP ) or broker to make the relevant arrangements concerning voting and/or attendance at the annual general meeting.

==> picture [72 x 66] intentionally omitted <==

L I M I T E D

A shareholder is entitled to appoint one or more proxies (none of whom need to be shareholders of Merafe Resources) to attend, speak and vote or abstain from voting in the place of that shareholder at the annual general meeting.

Form of proxy for the thirty-sixth annual general meeting

I/We (name in block letters)

of (address)

(contact number)
(email address)
Beingthe holder/s of	ordinaryshares in the Companyherebyappoint(see note 1)
1.	or failinghim/her
2.	or failinghim/her

The Chairperson of the Company, or failing him, the Chairperson of the annual general meeting, as my/our proxy to vote on my/our behalf at the annual general meeting of the Company to be held by electronic communication at 11:00 on Wednesday, 17 May 2023, subject to any cancellation, postponement or adjournment.

We desire to vote as follows (see note 2):

2. or failinghim/her 3. The Chairperson of the Company, or failing him, the Chairperson of the annual general meeting, as my/our proxy to vote on my/our behalf at the annual general meeting of the Company to be held by electronic communication at 11:00 on Wednesday, 17 May 2023, subject to any cancellation, postponement or adjournment. We desire to vote as follows (see note 2):	2. or failinghim/her 3. The Chairperson of the Company, or failing him, the Chairperson of the annual general meeting, as my/our proxy to vote on my/our behalf at the annual general meeting of the Company to be held by electronic communication at 11:00 on Wednesday, 17 May 2023, subject to any cancellation, postponement or adjournment. We desire to vote as follows (see note 2):	2. or failinghim/her 3. The Chairperson of the Company, or failing him, the Chairperson of the annual general meeting, as my/our proxy to vote on my/our behalf at the annual general meeting of the Company to be held by electronic communication at 11:00 on Wednesday, 17 May 2023, subject to any cancellation, postponement or adjournment. We desire to vote as follows (see note 2):	2. or failinghim/her 3. The Chairperson of the Company, or failing him, the Chairperson of the annual general meeting, as my/our proxy to vote on my/our behalf at the annual general meeting of the Company to be held by electronic communication at 11:00 on Wednesday, 17 May 2023, subject to any cancellation, postponement or adjournment. We desire to vote as follows (see note 2):	2. or failinghim/her 3. The Chairperson of the Company, or failing him, the Chairperson of the annual general meeting, as my/our proxy to vote on my/our behalf at the annual general meeting of the Company to be held by electronic communication at 11:00 on Wednesday, 17 May 2023, subject to any cancellation, postponement or adjournment. We desire to vote as follows (see note 2):
Number of votes
Ordinary and Special Resolutions		For	Against	Abstain
1	Ordinary Resolution Number 1: Adoption of annual fnancial statements
2	Ordinary Resolution Numbers 2.1 to 2.3: Re-election of retiring directors:
	2.1 Ms M Vuso
	2.2 Mr J Mclaughlan
	2.3 Mr K Tlale
3	Ordinary Resolution Numbers 3.1 to 3.3: Re-appointment of members to the Audit and Risk Committee for the forthcoming fnancial year
	3.1 Ms M Vuso
	3.2 Mr K Tlale
	3.3 Ms N Mabusela-Aikhuere
4	Ordinary Resolution Number 4: Re-appointment of external auditors of the Company, Deloitte & Touche and appointment of Ms Tumellano Lavhengwa as the designated audit partner
5	Ordinary Resolution Number 5: Authority to sign all documents required to give effect to all resolutions in the notice of annual general meeting
6	Ordinary Resolution Numbers 6.1 and 6.2: Non-binding advisory vote
	6.1: Remuneration Policy
	6.2: Remuneration Implementation Report
7	Special Resolution Numbers 1.1 to 1.8: Approval of non-executive directors’ fees
	1.1 Board Chairperson
	1.2 Board member
	1.3 Audit and Risk Committee Chairperson
	1.4 Audit and Risk Committee member
	1.5 Remuneration and Nomination Committee Chairperson
	1.6 Remuneration and Nomination Committee member
	1.7 Social, Ethics and Transformation Committee Chairperson
	1.8 Social, Ethics and Transformation Committee member
8	Special Resolution Number 2: Loans or other fnancial assistance to related or inter-related companies
9	Special Resolution Number 3: General authority to repurchase Company shares
Signed at on 2023
Signature(assisted byme – where applicable)
Please see notes overleaf.

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022

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FORM OF PROXY continued

Notes to the form of proxy

A shareholder may insert the name of a proxy or the names of two alternative proxies of the shareholder’s choice in the space(s) provided, with or without deleting “the Chairperson of the annual general meeting”, but any such deletion must be initialled by the shareholder. The person whose name stands first on the form of proxy and who is present at the annual general meeting of shareholders will be entitled to act as proxy to the exclusion of those whose names follow.
A shareholder’s instructions to the proxy must be indicated by the insertion of the relevant number of votes exercisable by that shareholder in the appropriate box provided. Failure to comply will be deemed to authorise the proxy to vote or to abstain from voting at the annual general meeting of shareholders as he/she deems fit with respect to all the shareholder’s votes exercisable thereat. A shareholder or the proxy is not obliged to use all the votes exercisable by the shareholder or by his proxy, but the total of the votes cast and in respect of which abstention is recorded may not exceed the total of the votes exercisable by the shareholder or by the proxy.
Exchange Square, 2 Gwen Lane, Sandown, Sandton, 2196 (PO Box 4844, Johannesburg 2000) or +27 11 713 0800, or the Company’s registered offices: Building B, 2[nd] Floor, Ballyoaks Office Park, 35 Ballyclare Drive, Bryanston, 2191 (PO Box 652157, Benmore, 2010), or email [email protected] to be received by no later than 11:00 on Monday, 15 May 2023. If forms of proxy are not received by this date, they must be submitted to the Chairperson of the annual general meeting electronically, as set out in the notice of the annual general meeting, before the appointed proxy exercises any of the relevant shareholder’s rights at the annual general meeting.
The completion and lodging of this form of proxy shall not preclude the relevant shareholder from attending the annual general meeting and speaking and voting in person thereat to the exclusion of any proxy appointed in terms hereof, should such shareholder wish to do so.
Documentary evidence establishing the authority of a person signing this form of proxy in a representative or other legal capacity (such as power of attorney or other written authority) must be attached to this form of proxy unless previously recorded by Merafe Resources.
Any alteration or correction made to this form of proxy must be initialled by the signatory/ies.
On a show of hands, every shareholder shall have only one vote, irrespective of the number of shares he/she holds or represents, provided that a proxy shall, irrespective of the number of shareholders he/she represents, have only one vote.
On a poll, every shareholder present in person or represented by proxy shall have one vote for every Merafe Resources share held by such shareholder.
A resolution put to the vote shall be decided on a poll.
In terms of section 58 of the Companies Act:
a shareholder of a company may, at any time and in accordance with the provisions of section 58 of the Companies Act, appoint any individual (including an individual who is not a shareholder) as a proxy to participate in, and speak and vote at, a shareholders’ meeting on behalf of such shareholder;
a proxy may delegate her or his authority to act on behalf of a shareholder to another person, subject to any restriction set out in the instrument appointing such proxy;
irrespective of the form of instrument used to appoint a proxy, the appointment of a proxy is suspended at any time and to the extent that the relevant shareholder chooses to act directly and in person in the exercise of any of such shareholder’s rights as a shareholder;
any appointment by a shareholder of a proxy is revocable, unless the form of instrument used to appoint such proxy states otherwise;
if an appointment of a proxy is revocable, a shareholder may revoke the proxy appointment by (i) cancelling it in writing, or making a later inconsistent appointment of a proxy and (ii) delivering a copy of the revocation instrument to the proxy and to the relevant company;
a proxy appointed by a shareholder is entitled to exercise, or abstain from exercising, any voting right of such shareholder without direction, except to the extent that the relevant company’s memorandum of incorporation, or the instrument appointing the proxy, provides otherwise;
if the instrument appointing a proxy has been delivered by a shareholder to a company, then, for so long as that appointment remains in effect, any notice that is required in terms of the Companies Act or such company’s memorandum of incorporation to be delivered to a shareholder must be delivered by such company to:
the relevant shareholder; or
the proxy or proxies, if the relevant shareholder has: (i) directed such company to do so, in writing and (ii) paid any reasonable fee charged by such company for doing so; and
if a company issues an invitation to its shareholders to appoint one or more persons named by the company as a proxy, or supplies a form of proxy instrument:
the invitation must be sent to every shareholder entitled to notice of the meeting at which the proxy is intended to be exercised;
the invitation or form of proxy instrument supplied by the company must:
- º bear a reasonably prominent summary of the rights established in section 58 of the Companies Act;
- º contain adequate blank space, immediately preceding the name(s) of any person(s) named in it, to enable a shareholder to write the name and, if desired, an alternative name of a proxy chosen by the shareholder; and
- º provide adequate space for the shareholder to indicate whether the appointed proxy is to vote in favour of or against any resolution(s) to be put at the meeting, or is to abstain from voting;
the company must not require that the proxy appointment be made irrevocable; and
the proxy appointment remains valid only until the end of the meeting, or any adjournment thereof, at which it was intended to be used.

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022 – 072 –

ADMINISTRATION

Merafe Resources Limited

Company registration number: 1987/003452/06

Business address and registered office

Building B, 2[nd] Floor Ballyoaks Office Park 35 Ballyclare Drive Bryanston 2191 Telephone: +27 11 783 4780 Email: [email protected] www.meraferesources.co.za

Company Secretary

CorpStat Governance Services Proprietary Limited Bryanston Gate Block 4 1[st] Floor Homestead Avenue Bryanston 2191 Telephone: +27 11 326 0975 Email: [email protected]

Auditors

Deloitte & Touche 5 Magwa Crescent Waterfall City Gauteng 2090

Attorneys

Bowman Gilfillan Inc. 11 Alice Lane Sandhurst Sandton 2196 PO Box 785812 Sandton 2146

Bankers

Absa Bank Limited 180 Commissioner Street Johannesburg 2001

Transfer secretaries

JSE Investor Services Proprietary Limited One Exchange Square 2 Gwen Lane Sandown Sandton 2196 PO Box 4844 Johannesburg 2000 Telephone: +27 11 713 0800

Sponsor

One Capital Sponsor Services Proprietary Limited 17 Fricker Road Illovo 2196 PO Box 784573 Sandton 2146

Directorate

A Mngomezulu (Chairperson), D McGluwa, D Green, N Mabusela-Aikhuere, M Vuso, K Tlale, J Mclaughlan*, Z Matlala (Chief Executive Officer), D Chocho (Financial Director)

* Independent

MERAFE RESOURCES LIMITED INTEGRATED ANNUAL REPORT 2022 – 073 –

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APPENDIX 1 MINERAL RESOURCES AND MINERAL RESERVES REPORT

31 DECEMBER 2022

MINERAL RESOURCES AND MINERAL RESERVES STATEMENT

INTRODUCTION

The purpose of this report is to document the Mineral Resources and Mineral Reserves of Merafe Resources (Merafe) which is done in accordance with the requirements of the SAMREC Code 2016 (The South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves 2016) and where applicable the relevant section 12 of the JSE Limited Listings requirements and the SAMREC Code (2016) Table 1 requirements. Merafe’s operations are part of a pooling and sharing venture (PSYV) with Glencore Operations South Africa (Pty) Ltd (hereafter called the Venture). Merafe has a 20.5% participation interest in the Mineral Resources and Mineral Reserves of the Venture. The estimates in this document are as at the 31[st] December 2022 and reported on a total basis. The mined-out limits have been surveyed as at the 30[th] June 2022 . To arrive at a Mineral Resource and Mineral Reserve estimate for 31[st] December 2022 , the re-adjusted production for July 2022 to December 2022 has been deducted from the total estimates. The Mineral Resource and Mineral Reserve information in the tables on the following pages is based on information compiled by Competent Persons (as defined by the SAMREC Code). The references in the side column refers to the applicable requirement for the JSE listing requirements, Section 12 (Mineral Companies).

12.13 (i) (2) 12.13 (i) (3)

STATEMENT BY COMPETENT PERSON

The Mineral Resource and Mineral Reserve statement has been reviewed and the relevant data extracted and compiled by Sulayman Yousuf Vaid (SYV). SYV is the Lead Competent Person, registered with the South African Geomatics Council (SAGC, P.O Box 752799, Garden View, 2047), Reg. No. -GT gMS 0114 and holds a National Diploma in Mine Surveying. SYV is a Mine Surveyor with 28 years’ experience in Mine Survey, Mine planning and resource and reserve estimations and is directly linked to the mining industry and currently a full-time employee of Glencore Operations SouthAfrica. SYV consents to the inclusion in this report of the matters based on this information in the form and context in which it appears. The information disclosed in this report is compliant with the SAMREC CODE and where relevant to Section 12 of the JSE Listing Requirements and SAMREC Table 1 requirements and can be published in this form.

12.13 (i) (5)

12.13 (i) (6)

Sulayman Yousuf Vaid Glencore Operations South Africa (Pty) Ltd 39 Melrose Blvd, Birnam, Sandton, 2076 PO Box 2131, Rustenburg 0300, NW, RSA Tel: (014) 590 2416

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DEFINITIONS

The following definitions (as per the SAMREC Code 2016), have been applied in estimation and categorization of the Mineral Resources and Mineral Reserves disclosed within this document.

A ‘ Mineral Resource’ is a concentration or occurrence of solid material of economic interest in or on the Earth’s crust in such form, grade or quality and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade, continuity and other geological characteristics of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling.

An Inferred Mineral Resource is that part of a Mineral Resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade or quality continuity. An Inferred Resource has a lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.

An Indicated Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics are estimated with sufficient confidence to allow the application of Modifying Factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Geological evidence is derived from adequately detailed and reliable exploration, sampling and testing and is sufficient to assume geological and grade or quality continuity between points of observation.

A Measured Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality, densities, shape, and physical characteristics are estimated with confidence sufficient to allow the application of Modifying Factors to support detailed mine planning and final evaluation of the economic viability of the deposit. Geological evidence is derived from detailed and reliable exploration, sampling and testing and is sufficient to confirm geological and grade or quality continuity between points of observation. A Measured Mineral Resource has a higher level of confidence than that applying to either an Indicated Mineral Resource or an Inferred Mineral Resource. It may be converted to a Proved Mineral Reserve or to a Probable Mineral Reserve.

A Mineral Reserve is the economically mineable part of a Measured and/or Indicated Mineral Resource. It includes diluting materials and allowances for losses, which may occur when the material is mined or extracted and is defined by studies at Pre-Feasibility or Feasibility level as appropriate that include application of Modifying Factors. Such studies demonstrate that, at the time of reporting, extraction could reasonably be justified. The reference point at which Mineral Reserves are defined, usually the point where the ore is delivered to the processing plant, must be stated. It is important that, in all situations where the reference point is different, such as for a saleable product, a clarifying statement is included to ensure that the reader is fully informed as to what is being reported.

A Probable Mineral Reserve is the economically mineable part of an Indicated, and in some circumstances, a Measured Mineral Resource. The confidence in the Modifying Factors applying to a Probable Mineral Reserve is lower than that applying to a Proved Mineral Reserve.

A Proved Mineral Reserve is the economically mineable part of a Measured Mineral Resource. A Proved Mineral Reserve implies a high degree of confidence in the Modifying Factors.

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BRIEF DESCRIPTION OF EXPLORATION ACTIVITIES

The Venture’s exploration activities aim to increase geological knowledge and confidence in its Mineral Resource base and to comply with legislative requirements. Exploration is done on two fronts; exploration drilling ahead of operations in current mining areas to support the mining activities, and secondly project areas are explored to define and quantify new resources.

12.13 (iii) (1)

Exploration is carried out on an annual basis, primarily through the drilling of vertical exploration drillholes. Geophysical surveys (mainly airborne magnetic surveys) have been conducted on all major operating mines and projects. The bulk of the exploration drillholes are drilled, as far as possible, on a pre-determined grid whilst further drillholes are drilled to target geological anomalies and to provide geological and geotechnical information to support effective mine planning.

A total of 55 diamond core drillholes were drilled in FY2022 with a total meterage of 18 916 m and at a cost of R19.455m. Assay expenditure amounted to R0.457m. The exploration drilling is outsourced to a third party and all assay work is done by an SANAS accredited 3[rd] party laboratory.

No feasibility studies were conducted during the reporting period on any of the Venture’s mines or projects.

12.13 (iii) (1)

12.13 (iii)(1) and (9)

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GEOLOGICAL SETTING AND GEOLOGICAL MODEL

The Venture’s chrome ore-bodies occur in the Bushveld Complex and its silica deposit occurs in the Magaliesberg Formation of the Transvaal Super Group (Figure 1). Both these geological occurrences are found in South Africa. Chrome ore is mined from both underground (mostly) and opencast workings, whilst silica is mined opencast only. The Venture’s operations are indicated below.

12.13 (iii) (2) 12.13 (iii) (12)

==> picture [492 x 340] intentionally omitted <==

Figure 1: Location of the Venture’s Operations

The Bushveld Complex

The 2 billion year old Bushveld Complex (“the Complex”) is the world’s largest known layered igneous intrusion and covers an area of 65 000km[2] . The Complex is host to the majority of the world’s PGM, chromite and vanadium resources.

The Complex is divided into five compartments; the western limb, the eastern limb, the northern limb, the far western limb and the Bethal limb (Figure 1). Merafe has operations on the Eastern - and Western Limbs of the complex. The Bushveld Complex is divided vertically into four suites of rocks; the Rooiberg Group, the Rustenburg Layered Suite, the Rashoop Granophyre Suite and the Lebowa Granite Suite. The mafic Rustenburg Layered Suite hosts the chromite deposits of the complex in the highly continuous chromitite layers of the Critical Zone. The complex reaches a vertical thickness of up to 9 000m. The Critical Zone contains 14 individually recognisable chromitite layers with varying thicknesses and grades.

The primary chromitite layers targeted for chromite extraction are the LG6A and LG6 Chromitite Layers, usually mined as a package, and the MG1 Chromitite Layer. The LG6 Package consists of the lower LG6 Chromitite Layer, which is separated from the LG6A Chromitite Layer by a pyroxenite (waste) middling. The

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MG1/2 Chromitite Layers consists of a single chromitite layer, with occasional discontinuous internal waste lenses.

The lithological units comprising the chromitite layers are modelled separately in terms of tonnage and grades for the purposes of mine planning and resource and reserve estimation.

==> picture [193 x 350] intentionally omitted <==

Figure 2: Schematic stratigraphy of the Rustenburg Layered Suite with special reference to the chromitite layers.

Magaliesberg Formation

The Magaliesberg Formation is made up of a package of individual layers of shale, quartzite and hornfels, which form a sub-formation of the Pretoria Group of the Transvaal Supergroup. The quartzite layers of the formation were formed by the deposition of sandstone sediments into the Transvaal Basin around 2.2 billion years ago. The Magaliesberg Formation is a massive sequence of quartzite and minor hornfels lithologies reaching a few hundred meters in thickness. The predominantly quartzite rocks form a prominent topographical ridge (mountain range) around the rim of the Bushveld Complex.

The Rietvly deposit is situated just to the west of Rustenburg town. The ore-body strikes north-south and dip towards the east at dip angles varying between 32[0] and 62[0] . Jointing throughout the formation is prominent. The quartzite is very pure, with an average SiO2 content of over 90%. There are no indications on surface of major geological disturbances. The Rustenburg Fault is developed to the southeast of the mine (just off the mine property).

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12.13 (iii) (3)

TYPE OF MINING AND MINING ACTIVITIES

The Venture has chrome mining operations along the Western - and Eastern Limbs of the Bushveld Complex. The operations along the Western Limb of the Bushveld Complex comprise the Waterval - and Kroondal Mines. Kroondal started in the early 80’s with production and Waterval started off as a merger of the Purity and Cashan Mines in 1989 with the addition of Waterval West area. The Waterval Mine has been placed on care and maintenance during 2020. The LG6 Package is mined at Kroondal Mine employing a trackless mining method on a Bord-and-Pillar lay-out. Kroondal is targeting a production rate of 146ktpm.

Boshoek Mine is 20km north-west of Rustenburg. The MG1, LG5 and LG6 Chromitite Layers have been mined in several open pits. The opencastable ore has almost been depleted and the mine has been put on care and maintenance.

Townlands Extension 9 is an exploration project. A Retention Permit has been applied for in November 2017. The DMRE accepted the application and the Venture is awaiting the granting and execution of the retention application. No exploration costs have to be expanded on the project from the date of execution of the application for the subsequent 3 years. Pending the outcome of the application no 3[rd] party may legally apply for a Prospecting Right over this property.

Thorncliffe -, Magareng - and Helena Mines are situated along the southern portion of the Eastern Limb of the Bushveld Complex. The MG1 plus MG2 Chromitite Layer is being mined underground using trackless mining methods on a Bord-and-Pillar mining lay-out. Thorncliffe Mine started mining in March 1997, building up to a steady state production of 115ktpm ROM (current 3-year budget). Helena Mine started producing in November 2008 and Magareng in October 2010. Both Magareng and Helena Mines are currently producing at a steady state of ~114ktpm of ROM (current 3-year budget). Thorncliffe, Magareng and Helena Mines are situated within the same Mining Right area but are situated on different farm properties. St George and Richmond farm areas are now part of the Eastern Chrome Mines Mining Rights area. The resources and reserves for the Eastern Mines Complex are reported per farm area.

The Venture’s silica deposit lies 15km west of Rustenburg. Rietvly Silica is an opencast mine that started mining in 1979. The quartzite is mined mainly to supply the Venture’s furnaces with silica. The budget production rate is 32ktpm.

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ORE PRODUCTION
The Venture has mined 5.638Mt ROM ore from 1stJanuary 2022 to 31stDecember
2022 against a budget of 5.793Mt. The main ROM production losses for 2022 were
due to mechanical breakdowns, geological conditions, and external power failures
ROM production for the 2021 financial year was 5.510Mt.
Saleable chrome concentrate amounted to 3.588Mt against a budget of 3.669Mt. This
lower than budget figure is directly linked to the lower than budget ROM production.
The estimates in this statement reflect the Mineral Resources and Mineral Reserves
as at the 31stDecember 2022.

12.13 (iii) (4)

LEGAL ENTITLEMENT
The Venture has the legal entitlement to the minerals being reported upon and there
are no known impediments.
Certain Section 102 and Section 11 applications under the MPRDA (Minerals and
Petroleum Resources Development Act) remain in the ordinary administrative
process, and the Venture has little reason to believe these will not be granted in due
course.
No material risks are known which can negatively impact the Mineral Resource and
Mineral Reserve Statement.

12.13 (iii) (5)
12.13 (iii) (10)

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DESCRIPTION OF THE METHOD AND ASSUMPTIONS MADE TO ESTIMATE MINERAL RESOURCES AND MINERAL RESERVES

Chrome

Raw geological data is validated through various steps and routines before finally being compiled into a final corporate network based database. The database data is statistically and geostatistically analysed to determine the inherent characteristics and variability of the data. The ore-body characteristics that are analysed are the distribution and variability of the thickness and SG’s of the various chromitite layers as well as all the critical grade elements (Cr2O3, FeO total and SiO2). The results of the geostatistical analysis are used as input parameters for the creation of grade and thickness block models covering the entire mining or project areas. The block models form the basis from which the tonnage and grades are reported for the various Mineral Resource and Mineral Reserve blocks and categories.

12.13 (iii) (7)

The Mineral Resource categories are based on the data point density as well as the structural geology. A data point density of approximately 200m x 200m and less is used for the classification of Measured Mineral Resources. For Indicated Mineral Resources a density of between 200m and 400m is used. Inferred Mineral Resources is classified where the sample point density is wider than 400m x 400m, but within 800m from existing drillhole intersections. Geologically complex areas where high variability is anticipated, are downgraded to reflect the confidence in the geoscientific knowledge and certainty. In certain cases the mining extraction and geological loss rates are increased to reflect the anticipated mining and geological complexities. The geostatistical analysis of the exploration data in all the mines and projects have indicated semi-variogramme ranges varying from 250m to 2 000m for the various reef parameters. Geological structural characteristics are used in addition to support the drilling density. Geologically complex areas are drilled at denser drill spacing’s. Other factors that are taken into consideration are regional geology and the proximity of other operating or work-out mines and projects. All the non-mineralised areas, and areas that may not be mined for various legislative or other reasons are excluded from the Mineral Resources, e.g. boundary pillars, crown pillars, large potholes, transgressive geological bodies, fault zones, etc.

The Mineral Reserves are estimated by applying modifying factors to convert the Indicated Mineral Resources to Probable Mineral Reserves and the Measured Mineral Resources to Proved Mineral Reserves. The following modifying factors are used; - an estimated geological loss factor (determined by losses in historically mined-out areas and projected forward), the predetermined mining extraction rate as supplied by the Rock Engineering practitioners, ore losses and ore contamination resulting from mining over break. The Mineral Reserve areas are restricted to the 5- year detailed mine plan footprint, except in some instances of Thorncliffe and Kroondal mining areas. In these cases portions of the Mineral Reserves fall outside the 5 year mining footprint.

The Mineral Resources and Mineral Reserves are reported per Mining Right and/or farm boundary areas and not necessarily per mine as some of the mines straddle more than one Mining Right.

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Silica

The silica Mineral Resources are estimated by modelling the quartzite hill that is being mined. The volume of the quartzite hill is determined from the 1340m level (amsl) to the topographical surface as at the end of June every year. During 2022 the mined surface was surveyed on the 30[th] June 2022. The remaining topographical surface is reconstructed every year by removing the mining depletion. The remaining volume represents the remaining in-situ quartzite resources.

The quartzite is exposed by the opencast mine workings as well as along the original slopes of the hill. The exploration core drillholes, the beneficiation process, the quartzite exposed along the slopes of the hill as well as rock exposures due to mining activities have been used as criteria for classifying the deposit as an Indicated Mineral Resource. The Mineral Reserves have been declared for an opencast mining period of 5 years.

COMPARISON OF MINERAL RESOURCES AND MINERAL RESERVES ESTIMATES WITH THE PREVIOUS YEAR’S ESTIMATES

12.13 (iii) (8)

The annual Mineral Resource and Mineral Reserve estimates are compared with the previous year’s statement and reconciled each year after the estimates have been finalised. Changes in the year-on-year tonnage and grade estimates are mainly due to mining depletion and changes in the Mineral Resource and Mineral Reserves tonnages and grades due to additional geological information. In addition, disposed or lapsed rights will also impact total resources and reserves.

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Mineral Resource Reconciliation

The biggest impact to the year-on-year changes in the Mineral Resource tonnages for the Venture is mainly due to the change in the targeted reef on the MG2 horizon being changed ,the Inclusion of Richmond and St George MG2 Resources and the removal of inferred areas south of Helena. The net movement after mining depletion is a gain of 14.830Mt.

The graphs below indicate the year-on-year net Mineral Resource movements.

==> picture [526 x 241] intentionally omitted <==

There is no material difference in the silica Mineral Resource estimate from December 2021 to December 2022 and the change is mostly attributed to mining depletion. The graph below shows the year-on-year Mineral Resource movement of Rietvly Silica.

==> picture [423 x 244] intentionally omitted <==

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Mineral Reserve Reconciliation

The most significant changes in the year on year estimation of the Mineral Reserves is due to the mining depletion of 5.522 Mt of ROM. The net change excluding mining depletion is an increase of 6.326 Mt. There is a gain at Magareng due to the mining of MG2 and a gain of 1.781 Mt at Richmond due to increased mining on Richmond Farm.

The graphs below indicate the year-on-year Mineral Reserve movements.

==> picture [535 x 228] intentionally omitted <==

The change in the Mineral Reserves for Rietvly is mainly as a result of mining depletion. The graph below shows the year-on-year Mineral Reserve movement for the Rietvly Silica operation. There is a gain of 0.351Mt due to change in the 5 year plan.

==> picture [423 x 211] intentionally omitted <==

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AUDITING

An internal audit was conducted on the 2022 resource and reserves estimation process during November 2022. A few minor issues were identified. All these findings have been addressed and corrected for the final estimation report. The internal audit focused mainly on the calculations of the estimation process.

T7.1

STATEMENT REGARDING INFERRED MINERAL RESOURCES AND FEASIBILITY STUDIES

No feasibility studies were conducted during the reporting period on any of the mines or projects and hence no Inferred Mineral Resources have been included in any feasibility studies.

No Inferred Mineral Resources have been modified to Mineral Reserves for the stated final Mineral Reserves. The 30-year Life of Mine (LOM) plans which is used internally for financial purposes include Inferred Mineral Resources.

12.13 (iii) (1) 12.13 (iii) (9)

MATERIAL RISK FACTORS

There are no foreseen material risk factors that could affect the validity of the current Mineral Resource and Mineral Reserve statement. All the legislative requirements have been met with respect to the rights to mining and prospecting for which the Mineral Resources and Mineral Reserves have been reported. All the operating mines are mining under new order, executed, Mining Rights. The Prospecting Rights of all the prospecting areas have been converted to new order Prospecting Rights.

SUMMARY OF ENVIRONMENTAL FUNDING AND MANAGEMENT

12.13 (iii) (10)

12.13 (iii) (13)

All Venture operations have developed and implemented their own environmental management programs (EMP), and systems which are fully aligned with ISO 14001 and the ICMM principles of sustainable development.

Baseline environmental, biodiversity and landscape function studies are conducted at the feasibility or exploration phase of projects and environmental risk assessments associated with impacts on environment, biodiversity and landscape functions are undertaken for new operations or major changes to existing operations. Information from these studies is used, in consultation with the affected parties and concerned external stakeholders, for the development and implementation of environmental, biodiversity and landscape function management systems and programmes.

All operations report in a centralised database on all the Global Reporting Index (GRI4) requirements, which include energy consumption, water, waste, soil and air emissions. Various audits are conducted across the operations. These range from internal audits to third party external audits which includes legal compliance. The Venture also makes use of specialist reports where necessary.

The Venture sets targets and effectively measures environmental performance against such targets and benchmarks their performance against leading practices in

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the industry. Such targets and performances are reviewed at regular intervals to ensure continual improvement of environmental performance. The Venture has introduced KPI’s on the implementation of water and energy management plans.

All employees are coached and trained regarding the efficient use of natural resources, reducing input material and waste.

All mining operations closure plans and quantified closure cost were originally estimated by an external consultant as per the DMR Quantum Regulations.

Merafe Ferrochrome and Mining (Pty) Ltd 20.5% share of the Venture’s provision for rehabilitation is set out in note 16 in the Merafe 2022 Annual Financial Statements on page 52. The Merafe 2022 Annual Financial Statements are available on the Merafe website and/or from the Company Secretary of Merafe.

The Closure and Rehabilitation plans for all operations were updated during 2022 to determine the associated closure cost and required provision for rehabilitation. The provision has been audited by an external auditor during 2022.

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MINERAL RESOURCES AND MINERAL RESERVES STATEMENT

The reporting date for the Mineral Resources and Mineral Reserves is the 31[st] December 2022.

The Mineral Resources and Mineral Reserves are reported as ROM (pre beneficiation plant) on a total basis with the attributable interests indicated.

12.13 (i) (6)

Chrome Mineral Resources

*Chrome Mineral* *Resources*
Attributable Portion Name of operation Mining method Commodity	Measured Mineral Resources 31.12.22 31.12.21	Indicated Mineral Resources 31.12.22 31.12.21	Measured and Indicated Resources 31.12.22 31.12.21	Inferred Mineral Resources 31.12.22 31.12.21 Competent Person

BUSHVELD COMPLEX - WESTERN LIMB
WESTERN CHROME MINES - LG6 Chromitite Package and MG1 Chrom	itite Layer
Waterval 20.50% UG Ore(Mt)	16.231 16.231	1.03 1.03	17.257 17.26	0.675 0.7 MM/DR
Cr2O3(%)	41.31 41.31	42.59 42.6	41.4 41.4	43 43
Marikana West 20.5% UG Ore(Mt)	2.974 2.974	1.69 1.69	4.67 4.67	- - MM/DR
Cr2O3(%)	42.43 42.43	42.60 42.6	42.5 42.5	- -
Kroondal 20.5% UG/OC Ore(Mt)	9.104 9.308	0.65 0.61	9.756 9.92	- - MM/DR
Cr2O3(%)	42.72 42.79	41.54 41.5	42.6 42.7	- -
Kroondal Gemini 20.5% UG/OC Ore(Mt)	12.544 13.793	0.80 0.85	13.346 14.64	- - MM/DR
Cr2O3(%)	42.09 42.30	41.18 41.3	42.0 42.2	- -
Marikana East 20.5% UG Ore(Mt)	4.593 4.459	0.53 0.52	5.123 4.98	- - MM/DR
Cr2O3(%)	42.24 42.23	41.85 41.9	42.2 42.2	- -
Klipfontein/Waterval 20.5% UG Ore(Mt)	13.105 13.235	29.90 29.69	43.004 42.93	92.717 92.6 MM/DR
Cr2O3(%)	42.01 42.01	41.96 42.0	42.0 42.0	42 42
Boshoek 20.5% OC/UG Ore(Mt)	- -	17.09 17.09	17.093 17.09	- - MM/DR
Cr2O3(%)	- -	40.53 40.5	40.5 40.5	- -
Townlands Extension 9 20.5% UG Ore (Mt)	- -	12.94 12.94	12.945 12.94	- - MM/DR
Cr2O3(%)	- -	41.39 41.4	41.4 41.4	- -
Total Ore (Mt)	58.551 60.000	64.64 64.43	123.19 124.43	93.4 93.3
Cr2O3(%)	41.98 42.05	41.5 41.5	41.7 41.8	42 42
BUSHVELD COMPLEX - EASTERN LIMB
EASTERN CHROME MINES - MG1 Chromitite Layer
Thorncliffe 20.5% UG/OC Ore(Mt)	39.329 44.028	3.55 3.47	42.880 47.50	- - LUN/DR
Cr2O3(%)	40.39 40.03	40.7 40.8	40.4 40.1	- -
Helena 20.5% UG/OC Ore(Mt)	21.312 21.473	11.38 13.29	32.687 34.76	8.281 9.6 LUN/DR
Cr2O3(%)	39.88 39.81	38.5 38.5	39.4 39.3	38 38
De Grooteboom 20.5% UG/OC Ore(Mt)	1.037 1.037	0.50 0.50	1.542 1.54	- - LUN/DR
Cr2O3(%)	40.22 40.22	40.3 40.3	40.2 40.2	- -
Richmond 20.5% UG Ore(Mt)	7.461 1.559	17.28 22.27	24.742 23.83	26.536 25.9 LUN/DR
Cr2O3(%)	40.53 41.10	40.8 41.0	40.7 41.0	41 41
St George 20.5% UG Ore(Mt)	0.716 0.716	4.73 4.45	5.442 5.17	13.442 18.6 LUN/DR
Cr2O3(%)	40.41 40.41	39.4 39.4	39.5 39.5	39 39
Total - MG1 Ore (Mt)	69.855 68.813	37.44 43.99	107.29 112.81	48.3 54.1
Cr2O3(%)	40.24 39.99	39.9 40.0	40.1 40.0	40 40
EASTERN CHROME MINES - MG2 Chromitite Layer
Thorncliffe 20.5% UG/OC Ore(Mt)	- -	17.64 -	17.639 -	32.5 41.8 LUN/DR
Cr2O3(%)	- -	35.1 -	35.1 -	36 38
Helena 20.5% UG/OC Ore(Mt)	- -	- -	- -	49.22 85.4 LUN/DR
Cr2O3(%)	- -	- -	- -	40 38
De Grooteboom 20.5% UG/OC Ore(Mt)	- -	- -	- -	- - LUN/DR
Cr2O3(%)	- -	- -	- -	- -
Richmond 20.5% UG Ore(Mt)	- -	- -	- -	31.0 - LUN/DR
Cr2O3(%)	- -	- -	- -	36 -
St George 20.5% UG Ore(Mt)	- -	- -	- -	17.52 - LUN/DR
Cr2O3(%)	- -	- -	- -	39 -
Total - MG2 Ore (Mt)	- - -	17.6 - -	17.6 -	130.3 127.2
Cr2O3(%)	- - -	35 - -	35 -	38 38
Total - MG1 and MG2 Ore (Mt)	69.855 68.813	55.08 43.99	124.93 112.81	178.5 181.3
Cr2O3(%)	40.24 39.99	38.4 40.0	39.4 40.0	38 38
BUSHVELD COMPLEX - TOTAL
Total Chrome - East and West Chrome Ore (Mt)	128.406 128.813	119.72 108.42	248.12 237.23	271.9 274.6
Cr2O3(%)	41.04 40.95	40.1 40.9	40.6 40.9	40 40

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Chrome Ore Reserves

Attributable Portion Name of operation Mining method Commodity	Proved Ore Reserves 31.12.22 31.12.21	Probable Ore Reserves 31.12.22 31.12.21	Total Ore Reserves 31.12.22 31.12.21 Competent Person

BUSHVELD COMPLEX - WESTERN LIMB
WESTERN CHROME MINES - LG6 Chromitite Package
Waterval 20.5% UG Ore (Mt)	- -	- -	- - MM/DR
Cr2O3(%)	- -	- -	- -
Marikana West 20.5% UG Ore (Mt)	- -	- -	- - MM/DR
Cr2O3(%)	- -	- -	- -
Kroondal 20.5% UG/OC Ore (Mt)	2.078 2.251	0.609 0.534	2.69 2.78 MM/DR
Cr2O3(%)	29.19 29.11	28.2 28.2	29.0 28.9
Kroondal Gemini 20.5% UG/OC Ore (Mt)	6.632 7.972	0.654 0.689	7.29 8.66 MM/DR
Cr2O3(%)	30.52 30.78	29.9 30.3	30.5 30.7
Marikana East 20.5% UG Ore (Mt)	- -	- -	- - MM/DR
Cr2O3(%)	- -	- -	- -
Klipfontein/Waterval 20.5% UG Ore (Mt)	0.075 0.026	0.092 0.173	0.17 0.20 MM/DR
Cr2O3(%)	28.21 28.49	28.0 28.4	28.1 28.4
Boshoek 20.5% UG/OC Ore (Mt)	- -	0.58 0.58	0.58 0.58 MM/DR
Cr2O3(%)	- -	26.1 26.1	26.1 26.1
Townlands Extension 9 20.5% UG Ore (Mt)	- -	- -	- - MM/DR
Cr2O3(%)	- -	- -	- -
Total Ore (Mt)	8.786 10.249	1.94 1.98	10.72 12.22
Cr2O3(%)	30.19 30.41	28.1 28.3	29.8 30.1
BUSHVELD COMPLEX - EASTERN LIMB
EASTERN CHROME MINES - MG1 Chromitite Layer
Thorncliffe Mine 20.5% UG/OC Ore (Mt)	17.552 20.224	2.54 2.51	20.09 22.73 LUN/DR
Cr2O3(%)	34.71 34.78	33.2 32.9	34.5 34.6
Helena Mine 20.5% UG/OC Ore (Mt)	1.506 1.667	- -	1.51 1.67 LUN/DR
Cr2O3(%)	32.46 29.43	- -	32.5 29.4
De Grooteboom 20.5% UG/OC Ore (Mt)	- -	- -	- - LUN/DR
Cr2O3(%)	- -	- -	- -
Richmond 20.5% UG/OC Ore (Mt)	3.745 1.256	1.46 2.57	5.20 3.82 LUN/DR
Cr2O3(%)	35.40 34.69	33.5 32.6	34.9 33.3
St George 20.5% UG Ore (Mt)	- -	- -	- - LUN/DR
Cr2O3(%)	- -	- -	- -
Total - MG1 Ore (Mt)	22.803 23.147	4.00 5.08	26.80 28.23
Cr2O3(%)	34.67 34.39	33.3 32.7	34.5 34.1
EASTERN CHROME MINES - MG2 Chromitite Layer
Thorncliffe Mine 20.5% UG/OC Ore (Mt)	- -	3.59 -	3.59 - LUN/DR
Cr2O3(%)	- -	26.9 -	26.9 -
Helena Mine 20.5% UG/OC Ore (Mt)	- -	- -	- - LUN/DR
Cr2O3(%)	- -	- -	- -
De Grooteboom 20.5% UG/OC Ore (Mt)	- -	- -	- - LUN/DR
Cr2O3(%)	- -	- -	- -
Richmond 20.5% UG/OC Ore (Mt)	- -	- -	- - LUN/DR
Cr2O3(%)	- -	- -	- -
St George 20.5% UG Ore (Mt)	- -	- -	- - LUN/DR
Cr2O3(%)	- -	- -	- -
Total - MG2 Ore (Mt)	- -	3.59 -	- -
Cr2O3(%)	- -	26.9 -	- -

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Total - MG1 and MG2 Ore (Mt)	22.803 23.147 7.59 5.08 26.80 28.23
Cr2O3(%) 34.7 34.4 30.3 32.7 34.5 34.1
BUSHVELD COMPLEX - TOTAL
Total - Chrome Chrome Ore (Mt)	31.588 33.396 9.52 7.05 37.52 40.45
Cr2O3(%) 33.43 33.17 29.8 31.5 33.1 32.88

BUSHVELD COMPLEX - WESTERN LIMB

WESTERN CHROME MINES - Tailings	WESTERN CHROME MINES - Tailings
Kroondal Dam	20.5%	Tailings	(Mt)	-	-	-	-	-	-	1.89	1.88	MM
			Cr2O3(%)	-	-	-	-	-	-	17.2	17.2
Waterval East Dam	20.5%	Tailings	(Mt)	-	-	-	-	-	-	0.60	0.94	MM
			Cr2O3(%)	-	-	-	-	-	-	14.9	18.5
Waterval West Dam	20.5%	Tailings	(Mt)	-	-	-	-	-	-		0.26	MM
			Cr2O3(%)	-	-	-	-	-	-		16.9
Cashan Dam	20.5%	Tailings	(Mt)	-	-	-	-	-	-	0.03	0.03	MM
			Cr2O3(%)	-	-	-	-	-	-	16.9	16.9
Subtotal			Tailings (Mt)	-	-	-	-	-	-	2.52	3.12
			Cr2O3(%)	-	-	-	-	-	-	16.7	17.5

BUSHVELD COMPLEX - EASTERN LIMB

EASTERN CHROME MINES - Tailings	EASTERN CHROME MINES - Tailings
Thorncliffe Dam	20.5%	Tailings	(Mt)	-	-	-	-	-	-	4.88	4.73	SYV
			Cr2O3(%)	-	-	-	-	-	-	18.9	19.6
Helena Paste	20.5%	Tailings	(Mt)	-	-	-	-	-	-	0.16	0.21	SYV
			Cr2O3(%)	-	-	-	-	-	-	17.2	17.2
Subtotal			Tailings (Mt)	-	-	-	-	-	-	5.04	4.94
			Cr2O3(%)	-	-	-	-	-	-	18.8	19.5

Notes :

Tonnages are quoted as million metric dry tonnes for the chromitite layers.

Grades are quoted as %Cr2O3.

The Measured and Indicated Mineral Resources are inclusive of those Mineral Resources modified to produce Mineral Reserves.

No cut-off grades are applied to the chromitite layers currently being mined. The chromitite layers show exceptional regional grade consistency and continuity.

The Mineral Resources are estimated as chromitite tonnages and grades to reflect the grades of the various individual chromitite layers. Both the LG6 and MG1 Chromitite Layers which the Venture is currently mining, is discrete solid chromitite layers. Along the Western Limb of the Bushveld Complex, the LG6 Chromitite Package is mined on the Waterval and Kroondal properties. The Klipfontein/Waterval property is an extension area for both the Waterval and Kroondal Mines. Thorncliffe, Magareng and Helena Mines, along the Eastern Limb of the Bushveld Complex are mining the MG1 Chromitite Layer.

Changes in the year-on-year Mineral Resource tonnage and grade estimates are mainly due to mining depletion and changes due to additional geological information gained through exploration.

The Mineral Reserves are estimated and declared for a mining footprint of 5 years. Some areas have footprints that extend beyond 5 years. The LOM periods for the operating mines based on all the Mineral Resources (excluding Inferred Mineral Resources) converted to Mineral Reserves vary from 13 years to over 30 years. The Mining Rights expire from 2022 to 2039 for the various operating mines.

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Competent Persons:

SYV – Sulayman Yousuf Vaid, Glencore Operations SA, (Professional Affiliation: SAGC Reg. No. -GT gMS 0114). Highest qualification ND Mine Survey and 27 years of experience. Lead Competent Person responsible for Mineral Resources and Mineral Reserves.

MM – Mogomotsi Maputle, Glencore Operations SA, Western Chrome Mines, (Professional Affiliation: SACNASP – 400071/14). Highest qualification Bsc Hons Geology. 20 years of experience. Responsible for Mineral Resources and Mineral Reserves.

LUN – Lindiwe Unity Nkambule, Glencore Operations SA, Eastern Chrome Mines, (Professional Affiliation: SACNASP – 121635). Highest qualification Bsc Hons Geology. 7 years of experience. Responsible for Mineral Resources and Mineral Reserves.

DR –Dean Richards, Obsidian Consulting Services (Professional Affiliation: SACNASP – 400190/08). Highest qualification Bsc Hons Geology. 31 years of experience. Responsible for geostatistical analysis of data, Mineral Resource classification and construction of tonnage and grade block models and reporting of tonnage and grades from block models.

Chrome Mineral Reserve Statement

Notes:

Tonnages are quoted as million metric dry tonnes for the chromitite layers.

Grades are quoted as %Cr2O3

No cut-off grades are applied to the chromitite layers currently being mined due to the exceptional regional grade consistency and continuity. A minimum mining cut of 1.8m is applied to the Mineral Reserve tonnage to accommodate the mechanized mining equipment employed by the underground mining operations. External waste is included to make up the minimum cut where applicable.

The chromitite layers are mined mainly underground using trackless mechanized mining methods on a board-and-pillar mine lay-out design.

Changes in the year-on-year Mineral Reserves tonnage and grade estimates are mainly due to mining depletion and changes due to additional geological information gained through exploration.

Competent Persons:

SYV – Sulayman Yousuf Vaid, Glencore Operations SA, (SAGC Reg. No. -GT gMS 0114). Lead Competent Person responsible for Mineral Resources and Mineral Reserves.

MM – Mogomotsi Maputle, Glencore Operations SA, Western Chrome Mines, (SACNASP – 400071/14). Responsible for Mineral Resources and Mineral Reserves.

LUN – Lindiwe Unity Nkambule, Glencore Operations SA, Eastern Chrome Mines, (SACNASP – 121635). Responsible for Mineral Resources and Mineral Reserves.

DR –Dean Richards, Obsidian Consulting Services (SACNASP – 400190/08). Responsible for geostatistical analysis of data, Mineral Resource classification and construction of tonnage and grade block models and reporting of tonnage and grades from block models.

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Silica Mineral Resources

Silica Mineral Resources
Name of operation Attributable Portion Mining method Commodity	Measured Mineral Resources Indicated Mineral Resources Measured and Indicated Resources Inferred Mineral Resources Competent Person 31.12.22 31.12.21 31.12.22 31.12.21 31.12.22 31.12.21 31.12.22 31.12.21

MAGALIESBERG QUARTZITE FORMATION
Rietvly Silica Mine - Quartzite
Rietvly 20.5% OC Ore (Mt)	- - 20.97 21.52 20.97 21.52 - - MM
SiO2(%)	- - 90.76 90.76 90.76 90.76 - -
Total Ore (Mt)	- - 20.97 21.52 20.97 21.52 - -
SiO2 (%)	- - 90.76 90.76 90.76 90.76 - -

Stockpiles
Rietvly 20.5% Product (Mt)	0.09 0.10 - - - - - - MM
SiO2(%)	90.76 90.76 - - - - - -
Total Product (Mt)	0.09 0.10 - - - - - -
SiO2 (%)	90.76 90.76 - - - - - -

Grand Total Product (Mt)	0.09 0.10 20.97 21.52 20.97 21.52 - -
SiO2 (%)	90.76 90.76 90.8 90.8 90.8 90.8 - -

Silica Mineral Reserves

Name of operation Attributable Portion Mining method Commodity	Proved Ore Reserves Probable Ore Reserves Total Ore Reserves Competent Person 31.12.22 31.12.21 31.12.22 31.12.21 31.12.22 31.12.21

MAGALIESBERG QUARTZITE FORMATION
Rietvly Silica Mine - Quartzite
Rietvly 20.5% OC Ore (Mt)	- - 1.79 1.78 1.79 1.78 MM
SiO2(%)	- - 91 91 91 91
Total Ore (Mt)	- - 1.79 1.78 1.79 1.78
SiO2 (%)	- - 91 91 91 91

Stockpile
Rietvly 20.5% Product (Mt)	- - - - - - MM
SiO2(%)	- - - - - -
Total Product (Mt)	- - - - - -
SiO2 (%)	- - - - - -

Total Ore (Mt)	- - 1.79 1.78 1.79 1.78
SiO2 (%)	0.00 0.00 90.8 90.8 90.8 90.8

Notes:

Tonnages are quoted as million metric dry tonnes

Grades are quoted as %SiO2.

The Rietvly silica ore is mined through opencast mining methods and the ROM (Run-of-Mine) ore is crushed, washed and sized on site to produce a final sized and quality graded product. No silica cut-off grades are applied to the Mineral Resource estimation. The quartzite is mined mainly to supply the Ventures furnaces with silica.

Changes in the year-on-year tonnage and grade estimates are mainly due to mining depletion, reclassification of the Mineral Resource categories and changes in the Mineral Resource tonnages and grades due to additional geological information gained through exploration.

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No significant changes have been recorded in the year-on-year Mineral Resource estimation.

The LOM for Rietvly Silica is 5 years based on the declared Mineral Reserves and a production rate of ~31.0ktpm Plant Feed. The Mining Right expires in 2037.

Competent Persons:

SYV – Sulayman Yousuf Vaid, Glencore Operations SA, (SAGC Reg. No. -GT gMS 0114). Lead Competent Person responsible for Mineral Resources and Mineral Reserves.

MM – Mogomotsi Maputle, Glencore Operations SA, Western Chrome Mines, (SACNASP – 400071/14). Responsible for Mineral Resources and Mineral Reserves.

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MINERAL RESOURCES AND MINERAL RESERVES MAPS

The plans below indicate the various Mineral Resource and Mineral Reserve categories 12.13 (iii) (12) of the Venture

Chrome - Bushveld Complex, Western Limb.

Waterval and Kroondal Mines - LG6 Chromitite Package Mining.

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Boshoek Mine- LG6 Chromitite Layer.

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Boshoek Mine - MG1 Chromitite Layer.

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Extension 9 - LG6 Chromitite Package.

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Chrome - Bushveld Complex, Eastern Limb

Thorncliffe, Magareng and Helena Mines – MG1 Chromitite Layer Mining.

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Thorncliffe, Magareng and Helena Mines – MG2 Chromitite Layer Mining.

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Silica

Rietvly Silica Mine

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APPENDIX 2 REMUNERATION POLICY

31 DECEMBER 2022

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1.	_REMUNERATIONPOLICY .........................................................................................................................._3
1.1.	REMUNERATION PHILOSOPHY, STRATEGY AND POLICY ............................................... 3
1.2.	REMUNERATION AND NOMINATION COMMITTEE ............................................................ 5
1.3.	EXECUTIVE PAY MIX ............................................................................................................. 6
1.4.	GUARANTEED PAY ............................................................................................................... 7
1.5.	SHORT TERM INCENTIVES (STI) .......................................................................................... 8
1.6.	LONG TERM INCENTIVES ................................................................................................... 10
1.7. CONTRACTS OF EMPLOYMENT ........................................................................................ 16
1.8. RETENTION MEASURES ..................................................................................................... 16
1.9. MALUS AND CLAWBACK ................................................................................................... 16
1.10.	NON-EXECUTIVE DIRECTORS’ FEES ............................................................................ 17
1.11.	REVIEW ............................................................................................................................. 17

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1. Remuneration Policy

1.1. REMUNERATION PHILOSOPHY, STRATEGY AND POLICY

Remuneration philosophy

Merafe Resources Limited’s (the “Company’s”) guiding philosophy is to employ high-calibre, highperforming employees who subscribe to the values and culture of our Company. We recognise that our employees are integral to the achievement of our corporate objectives and they are accordingly remunerated for their contribution and the value they deliver.

Our Company is committed to fair, responsible and transparent remuneration across the business in respect of all employees on all levels. Both the fixed and variable elements of remuneration, aim to support Company performance and value creation in the short, medium and long term, as well as to support the achievement of strategic objectives within the Company’s risk appetite.

This policy is applicable to all employees of Merafe Resources Limited.

Our remuneration strategy and policy are regularly reviewed by the Remuneration and Nomination Committee (“Committee”) to ensure they are appropriate and relevant in the support of sustainable business performance and in promoting an ethical culture and responsible corporate citizenship.

Remuneration strategy

Our remuneration strategy is designed to be aligned with our business strategy and the execution thereof to promote positive outcomes. Since we strive to attract, retain, motivate and reward employees for executing our business strategy, their remuneration must clearly be market-related and independent third parties are used by our Committee for the purpose of benchmarking to the appropriate segment. The general principle of our remuneration strategy is to structure executive and employee remuneration to include:

A guaranteed annual package and benefits;
An annual variable performance incentive;
Ownership of shares through the long-term incentive scheme which is based on performance with the aim of creating a strong alignment to shareholder goals.

The remuneration strategy and policy are communicated to all employees during the year, together with our expectations around their contribution to the success of our organisation.

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Remuneration policy

The key principles of the remuneration policy are that:

The policies are governed by the Committee which regularly reviews them to ensure they are relevant and support Company strategy;
Guaranteed remuneration is targeted at the median to lower quartile of the relevant market against which pay is benchmarked, in order to attract and retain high-calibre and high performing employees;
It is Company policy that all employees are members of medical and retirement funds and have group life and disability cover;
Annual salary adjustments are governed by factors such as the consumer price index (CPI), retention strategies, the producer price index (PPI), industry performance, projected growth, contractual arrangements, affordability, and industry average increase surveys, which will be taken into consideration in setting the recommended increase. The Committee will approve or set the overall increase percentage that will be applied on a Company basis. Salary adjustments are at the discretion of the Board;
Variable pay is an important component of remuneration at Merafe and both annual and long term performance-based schemes which support our business strategy are in place;
The short-term incentive scheme performance measures are assessed by the Committee and these measures are determined by taking into account corporate, individual, financial and non-financial criteria. The measures are applicable to the time period to which the scheme relates;
The long-term incentive scheme measures are based on total shareholder return and a financial measure, appropriately weighted, as determined by the Committee from time to time, aligned to business requirements;
Executive remuneration is aligned to shareholder value creation through the long-term incentive scheme;
Where necessary, both short-term and long-term incentive schemes are benchmarked against the appropriate database by the Committee; and
The over-riding principle governing payments for non-executive directors is that they will be made in the context of good governance and aligned to the relevant market.

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1.2. REMUNERATION AND NOMINATION COMMITTEE

Responsibility for the reward strategy rests with the Company’s Board of Directors (“Board”) who in turn appoint the Committee. The Committee comprises at least three members, the majority of whom are independent non-executive directors and is governed by formal Terms of Reference.

The Terms of Reference inter alia clearly deal with matters such as (1) composition of the Committee, (2) roles and responsibilities, (3) delegated authority, (4) tenure and rotation of the Committee members, (5) reporting requirement and compliance, (6) access to information and resources, (7) meeting procedures to be followed and (8) arrangements for the evaluation of the Committee's performance.

The primary role of the Committee is to ensure that the Company’s directors and senior executives are fairly rewarded for their individual contributions to the Company’s overall performance. The Committee also aims to ensure that remuneration is appropriate to attract, retain and motivate the right calibre of directors and senior executives, who will strive to achieve the overall goals of the Company. The Committee must demonstrate to all stakeholders that the remuneration of senior executives is set by a committee of Board members who:

Have no personal interest in the outcome of their decisions;
Give due regard to the interest of the shareholders and the financial and commercial health of the Company;
Take cognizance of market related remuneration, incentive bonuses and share incentive schemes as well as market trends; and in addition
Play an active role in succession planning activities, notably for the chief executive officer and executive management.

The Committee is responsible for making recommendations to the Board on remuneration policy for directors and, to the extent it deems necessary, makes comparisons between remuneration packages currently available to the company’s own executive directors and those available to directors of other companies of a similar size in the comparable industry. Comparisons are also made with other companies in South Africa and, if relevant, internationally.

The Committee shall also take into account a number of principles, being inter alia:

Industry standards and comparisons with businesses in the same industry;
Expertise and qualifications of individuals;
The risks associated with companies in the mining sector;
The importance of the individual to the Company and his/her contribution;

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Retention measures and motivation for the executive not to leave the Company;
Restraint of trade provisions; and
Nature of the position (role expectations, work load, etc.).

1.3. EXECUTIVE PAY MIX

Executive pay mix is defined as the balance targeted between the major components of executive remuneration, namely:

Guaranteed pay – based on Total Guaranteed Cost of Employment (“TCtC”)
Variable pay for performance
Short term incentives in the form of annual cash incentives (“STI”); and
The expected value from long term incentives (“LTI”).

The Company’s targeted pay mix aims to align the incentives of employees with the interests of shareholders. It is recognized that through acquisitions and business combinations over time, there will always be some deviation from the targeted pay mix structure across the Company. However the balance between TCtC, STI and LTI for executive directors are shown for illustrative purposes in the schematic below, at various performance levels.

Table 1: Target reward mix for Chief Executive Officer (%)

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----- Start of picture text -----

Chief Executive Officer
42
At stretch target 29
29
32
On target 23
45
Below target
100
LTI STI TCtC
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Table 2: Target reward mix for Financial Director (%)

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Financial Director
35
At stretch target 29
36
26
On target 21
53
Below target
100
LTI STI TCtC
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1.4. GUARANTEED PAY

An employee’s TCtC consists of the following elements:

Basic salary;
Car and other cash allowances and/or perquisites;
Employer contributions to the medical aid;
Employer contributions to the retirement funding; and
Employer contributions to risk benefits.

Salaries are reviewed annually and are targeted at the median to lower quartile of the relevant market. The Company conducts benchmarking exercises at least every second year against the top management reward surveys conducted by large consultancies. The benchmark used is the median to lower quartile total guaranteed cost of employment for similar positions in similarly sized listed companies.

The Committee has regard principally to companies in the RSA market which are of similar size, complexity and scope to the Company. The Committee also takes into account business performance, salary practices prevailing for other employees in the Company and, when setting individual salaries, the individual’s performance and experience in the role.

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Although salaries are reviewed annually, the Board reserves the right not to grant increases should circumstances so dictate. In addition, benefits offered are also reviewed on an annual basis to ensure that employees’ needs are addressed fairly, schemes are cost effective, well governed and competitive.

1.5. SHORT TERM INCENTIVES (STI)

Merafe’s annual incentives are aimed at rewarding a combination of both business and individual performance in order to support a Company-wide performance culture. The incentive pool is determined as a percentage of Net Profit after Tax and the scheme is therefore self-funding. Financial and non-financial criteria as well as individual performance determine the distribution of the pool to individuals. Incentive awards are at the discretion of the Board after due consideration of Company and individual performance.

All STI awards are based on performance against inter alia, the following measures:

Company measures: These include but are not limited to profitability, funding, growth of business, cost management, sustainability and safety; and
Individual measures: For the Chief Executive Officer and Financial Director, these include but are not limited to stakeholder engagement, talent management, leadership and reporting.

Although measures and targets are determined at the start of the performance period, the Board may revise these measures and targets should prevailing business conditions indicate this to be

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necessary or in response to any other changes in the operating environment. All such changes, which represent the discretionary aspect of the policy, will be disclosed on an annual basis.

As indicated above, individual performance is primarily assessed from predetermined criteria of key performance areas or value drivers. The selection of these is informed by the Company’s business plan.

These metrics are assessed against a five point scale as follows:

Rating	Description	Definition

1	Poor	Indicates poor performance. All or most threshold targets not met.
2	Needs improvement	Performance against target is fair, however, performance against key measures is below threshold or target.
3	Satisfactory	Performance on target in respect of most or all measures.
4	Good	Performance exceeds target on most or all measures. Have reached stretched target on a number of key measures.
5	Outstanding/ excellent	Significant out performance. All stretched targets met or exceeded.

The total STI pool available is capped at 3% of Net Profit after Tax. No incentives are payable where the Net Profit after Tax in any financial year is less than R131 million. These parameters are revised by the Board on an annual basis for relevance and appropriateness.

In addition, the percentage of STI is capped for the various categories of employees

as set out below:

Position	Maximum% TCtC

CEO	100%
FD	80%
Senior management	60%
Management	50%
Administrative staff	30%

The total pool for incentives that become available for distribution will not be exceeded at any time. STI potential is benchmarked between the median and 75[th] percentile of the relevant market which is deemed appropriate when considered along with the guaranteed pay benchmarked at between the median and 25[th] percentile of the market.

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The final incentive calculation is undertaken by aggregating the incentive claims of all participants and comparing this to the pool derived from company performance.

1.6. LONG TERM INCENTIVES

Background

The purpose of the share incentive scheme is:

To serve as an incentive and to reward employees of the Company and its subsidiaries for services rendered and to be rendered;
To promote the continued growth of the Company by giving employees an opportunity to acquire shares in the Company;
To serve as a retention mechanism for employees whose services are regarded by the Company as crucial to the future growth and sustainability of the business.

The share incentive scheme further seeks to align employee interests with those of shareholders and to support a culture of ownership, with a focus on Company performance and sustainable growth.

Long term incentives, in the form of a share incentive scheme, have been in existence in the Company since 1999. The current share scheme was approved on 13 April 2010, under which both share options and share grants may be issued.

Eligibility and participation

All employees of the Company are eligible for share allocations in respect of the share incentive scheme rules, subject to Board approval and the prevailing implementation policy.

Shares to be allocated

Under the rules of the share incentive plan, the following shares may be offered:

Share options which will be granted at the offer price; and
Share grants being full value shares.

Vesting rules and settlement

Generally, share options vest one third per year on the 3rd, 4th & 5th anniversaries and are settled by physical delivery of shares against receipt of payment of the option price. The options lapse after seven (7) years if not exercised, whilst employed within the group.

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Share grants are granted by the Board on the recommendation of the Committee. They vest one third per year on the 3rd, 4th & 5[th] anniversaries and are settled by physical delivery of shares. Alternatively, the Company has the right to settle in cash the value of shares granted.

Equity settlement will take the form of repurchasing of shares on the open market for the benefit of the employee whose shares have vested. The Company reserves the right to issue new shares for purposes of settlement.

Participation and termination rules

In the event of an employee leaving the group for a reason approved by the directors, such as retirement or disability (no fault terminations), all performance shares granted will vest, subject to the application of performance conditions. No pro-ration of shares will apply. All approved terminations will be disclosed on an annual basis.

In the event of the death of an employee, all performance shares allocated will vest with no performance conditions or pro-ration applied.

In the event of either a no fault termination or an employee’s death, the employee or his/her estate has 12 and 24 months respectively to exercise share options granted to that employee. In the event of retirement at the earliest date allowed by the retirement fund, the employee will have one year to exercise their share options allocated.

In the event of voluntary termination (i.e. resignation) or a fault termination (i.e. those that leave as a result of a dismissal or poor performance), any right to any shares and all unvested allocations will lapse immediately upon termination. No further claims may be laid to such lapsed shares, whether full value or shares options.

In the event of a reconstruction or takeover, share allocations will vest on a pro-rata basis subject to the Committee evaluating the applicable performance conditions and determining the number of shares per participant.

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Performance vs. retention shares

During 2013 a decision was made by the Committee to vary for the balance between performance and retention oriented grants or options and also to simplify the performance criteria that determine the vesting of the performance grants.

The balance between performance oriented share grants and the retention oriented share grants for the CEO was weighted 70% in favour of the performance oriented share grants. For executive directors and senior managers these percentages were (respectively) 60% and 50%. All other participants received only retention oriented share grants.

In response to shareholder requirements for more share grants to be subject to performance conditions as opposed to retention shares, the allocation policy was revised in 2018 as follows:

Table 3: Revised LTI allocation policy

	Merafe LTI offer policy
	LTIP (expected value) % of TCtC Targeted offer value % of TCtC Balance performance/ retention
Employee group

Chief Executive Officer Chief Financial Officer Senior Management Management Administration	70% 60% 100/0 50% 45% 100/0 40% 40% 100/0 30% 35% 100/0 20% 25% 100/0

All future share allocations will be performance based. In order to balance back to the reward mix and expected outcomes, the targeted value of the share allocation as a percentage of TCtC was increased as per Table 3 as it is not expected that all performance based shares will vest at the end of the period.

Performance criteria

The performance criteria for all existing performance oriented share grants will remain in place, but future grants will be governed by two metrics, (1) Comparison of Merafe’s Total Shareholder Return (“TSR”) over a three year period with that of a selection of JSE listed, small cap mining and resources companies, and (2) Growth in Headline Earnings per share (CPI + a specified percentage as determined by the Board) over a three year period. The two measures will weigh 50/50 or as determined by the Board from time to time. Measures will be applied per performance share allocation and will remain in force for the duration of the performance period. Performance

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measures and targets are approved for and applicable to a specific performance period. No retesting of performance conditions is allowed.

The Committee will assess performance against target once the applicable performance period is completed and approve the vesting of performance shares to the extent that targets are met.

Performance measure I: Total Shareholder Return

The comparator group for Total Shareholder Return (“TSR”) is constituted as follows:

Table 4: TSR Comparator Group (revised for 202 3 )

No Company Ticker	No Company Ticker	No Company Ticker
1 2 3 4 5 6 7 8 9 10 11	Thungela Resources Limited Harmony Gold Mining Company Pan African Resources plc Merafe Resources Ltd Tharisa plc MC Mining Limited DRDGold Ltd Wesizwe Platinum Ltd Hulamin Ltd Arcelor Mittal Ltd Northam Platinum Ltd	TGA HAR PAN MRF THA MCZ DRD WEZ HLM ACL NHM SLG
12	Salungano Group

Assuming that a group of 12 (11 + Merafe) companies are adopted as the comparator group of companies, vesting of the performance based share grants will be in accordance with the following policy:

50% of performance shares allocated will be subject to performance against the TSR measure;
If Merafe’s TSR over the three-year period places it in one of the top four positions, then the full number of performance granted shares subject to this measure will vest in equal proportions on the 3rd, 4th, & 5[th] anniversaries of their grant;
If Merafe’s performance over the three-year period places it in 5[th] position, then two thirds of the number of performance granted shares will vest in equal proportions on the 3rd, 4th, & 5th anniversaries of their grant;
If Merafe’s TSR over the three-year period places it in 6th position, then one third of the number of performance granted shares will vest in equal proportions on the 3rd, 4th, & 5[th] anniversaries of their grant; and

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If Merafe’s TSR over the three-year places it below 6[th] position, then none of the
performance shares will vest.

Table 5 below provides details of the revised vesting schedule for performance shares subject to the TSR measure:

Table 5: Revised vesting schedule TSR

Vesting schedule over	three years - Total
Shareholder Return (TSR)
Merafe TSR position/	Vesting quantity
ranking relative to peers	% of allocation*
Position 1 - 4	100%
Position 5	66.6%
Position 6	33.3%
Position 7 - 10	0%
Position less than 10	0%
* Vestingover threeyears in equalportion

Performance measure II: Growth in Headline Earnings per share (HEPS)

Assuming that the performance targets below are set by the Board as illustrated in Table 6 , vesting

of the performance based share grants will be in accordance with the following policy:

50% of performance shares allocated will be subject to performance against the growth in HEPS measure;
If performance meets or exceeds target, i.e. CPI + 2% per annum over the performance period, 100% of shares will vest;
If performance is at threshold, i.e. CPI + 1% per annum over the performance period, 50% of shares subject to this measure will vest;
For performance below threshold, 0% of shares subject to this measure, will vest; and
Linear vesting will take place between different performance milestones.

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Table 6: Vesting schedule for Growth in HEPS measure

	Vesting schedule over three years - Growth in HEPS	Vesting schedule over three years - Growth in HEPS
		Vesting quantity
	HEPS target	% of allocation*
		Proposed
	On target CPI + 2%p.a.	100%
	Threshold CPI + 1% p.a.	50%
	Below threshold	0%
	* Vestingover threeyears in equalportion

LTI offer policy

The following principles will govern the LTI offer policy:

Share options will only be given at the discretion of the Board as and when circumstances dictate and only to executive management that have direct line of sight in terms of Company performance;
Full value shares, with performance conditions, will be granted to all employees on an annual basis subject to ongoing satisfactory individual performance, the expected value of which will be in accordance with the Company’s reward strategy – pay mix;
Full value shares may be offered to new appointees as an attraction measure, the value of which will be determined and approved by the Committee, and will be subject to a minimum of three years vesting period;
Share grants will be in favour of performance based shares, with all shares granted subject to performance measures over a three year period;
Share grants will be offered to employees with only performance based shares and no retention shares;
The value of the share grant will be calculated as a percentage of the current TCtC guaranteed package;
No offer shall be made which together with any other scheme shares would exceed 5% of total issued share capital of the Company;
The maximum aggregate number of shares granted or options allocated to a single participant, shall be limited to 1% of the total issued share capital of the Company;
Prior to vesting, no participant will qualify to receive any dividends declared;
The Company will communicate to participants, at least on an annual basis, in terms of shares granted, vesting and/or any changes in rules or conditions of participation; and
All share grants and options will be disclosed over its lifetime in the annual Remuneration Report.

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1.7. CONTRACTS OF EMPLOYMENT

Senior and executive management are subject to the Company’s standard terms and conditions of employment where notice periods are between three and six months. In line with the recommendations set out in the King reports, company policy prevents any senior or executive manager from being compensated for loss of office.

None of the senior or executive management have extended employment contracts or special termination benefits or balloon payments.

In the event of a change of control of the Company (As defined in the Companies Act) where the Company no longer required an executive to fulfil their specific role post the change of control, the Company shall pay to the executive 12 months remuneration on the last day of the notice period and after completion of handover of duties, for existing executives as at 2019. From 2020 onwards all newly appointed executives will have their termination payments aligned to their contractual notice period.

1.8. RETENTION MEASURES

The Committee reserves the right to apply retention measures should circumstances so indicate. Retention measures may include cash or equity awards and will be appropriately disclosed on an annual basis.

1.9. MALUS AND CLAWBACK

Any remuneration previously paid to executive directors that is subsequently found to have been the result of criminal or otherwise illegal activities, must be repaid to the Company.

In the event of restatement of the Company’s results (other than a restatement caused by a change in accounting policy, standards or interpretation) which results in lower performance based remuneration calculated on the restated results, the Committee shall review such performancebased remuneration, determine the amount to be recovered from the executive and take steps to recover the amount.

The Board reserves the right to cancel any share allocation for all or individual participants if during the vesting period there is evidence of serious underperformance or misrepresentation of

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information e.g. gross negligence, overstatement of performance, unnecessary risk taking, poor governance and non-compliance.

1.10. NON-EXECUTIVE DIRECTORS’ FEES

The remuneration of non-executive directors is provided in the context of good governance, and is primarily based upon a methodology which takes into account expertise, contribution by the director and attendance. Standard duties of non-executive directors include preparation for and attendance at Board meetings, AGMs and results presentations. If required, the directors may be requested to perform work outside of their standard duties and for this they will be remunerated based upon the time spent and their level of expertise. Non-executive directors’ pay is aimed at aligning with remuneration principles applicable to executive pay.

Independent benchmark advice is sought on an annual basis as to levels of remuneration for nonexecutive directors and the intent is to target remuneration between the lower quartile (25[th] percentile) to the median quartile (50[th] percentile) of listed companies of a similar size (comparator or peer group), in order to ensure that appropriately qualified and experienced directors are appointed.

Non-executive directors’ fees are tabled for approval by the shareholders of the company on an annual basis. The fees paid to different roles such as chairman may vary from the fees paid to other non-executive directors.

Fees are split between a retainer (60%) and per meeting fee (40%), which is aligned to industry practice.

Non-executive directors will not participate in any share based incentive scheme or any other incentive scheme that the company may implement, to avoid any potential conflict of interest.

1.11. REVIEW

This policy was approved by the Company and will be reviewed annually against current legislation and practice for approval by shareholders during the Annual General Meeting.

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AI assistant

MERAFE RESOURCES LIMITED — Annual Report 2022

48759_rns_2023-04-14_d09f46b1-b6b7-4bfd-b5da-4c8301c0ec3e.pdf

About the Capitals model

Glossary

CONTENTS

Icons used in this report

Forward looking statements

ORGANISATIONAL OVERVIEW

Our business

Stakeholder relationships

Our shareholders

Merafe Empowerment as at 31 December 2022

63% of our (2021: 57%) employees are female

Governance and sustainability

Our approach to risk

Our material issues

OUR GROUP STRUCTURE

2022 YEAR IN REVIEW

R7.9 billion

R2.1 billion

NIL

13 cents per share

R1.7 billion

350kt

384kt

111 USc/lb

~~Successes~~

~~Challenges~~

Icon reference

Our business model and strategy

STAKEHOLDERS

The Venture

FIVE-YEAR HISTORICAL REVIEW OF KEY INDICATORS

Safety statistics

Headline earnings per share

Average European benchmark ferrochrome price

Net cash generated from operating activities

Attributable ferrochrome production tonnes

OUR OPERATING CONTEXT

Key statistics for 2022

South African chrome industry

The global position of ferrochrome

Challenges faced by South African ferrochrome producers

Ferrochrome production and its role in stainless steel

MATERIAL ISSUES

The directors’ statement regarding the materiality determination process

Materiality determination process

CHIEF EXECUTIVE OFFICER’S STRATEGIC REVIEW

Safety

Health

Financial review

Operational review

Market review

Strategic review

Outlook

Zanele Matlala

Key market indicators

Global stainless steel production (%)

Global ferrochrome demand (%)

UG2 merchant prices (USD/t)

PERFORMANCE

Financial Capital

Material issues

Overview

Financial performance

Total operating expenses (excluding Merafe head office costs)

Foreign exchange adjustments

EBITDA

Depreciation and impairment

Net finance income

Income from equity-accounted investments

Taxation

Profit for the year

Financial position

Cash position

Debt position

Contingent liability

Share buy-back

Dividend

MERAFE RESOURCES LIMITED Annual Report 2022

Successes

Challenges